SJW (US:SJW)2021-10-29 19:21Financial Data and Key Metrics Changes - Third quarter revenue was $166.9 million, a $1 million or 1% increase compared to $165.9 million in the third quarter of 2020 [21] - Net income for the third quarter was $19.1 million or $0.64 per diluted share, down from $26.1 million or $0.91 per diluted share in the same period last year [21][22] - Year-to-date revenue for 2021 was $433.9 million, a 1% increase over the same period in 2020 [29] Business Line Data and Key Metrics Changes - Revenue increase was primarily driven by $7.6 million in cumulative rate increases and $3.3 million from regulatory mechanisms in Connecticut and Maine, offset by a $12.9 million decrease in customer usage [22][23] - Water production expenses increased by $2.4 million compared to Q3 2020, mainly due to higher costs for purchased and groundwater [24] Market Data and Key Metrics Changes - The California water shortage emergency remains in effect, impacting customer usage and prompting conservation efforts [13][15] - The California Public Utilities Commission approved a water conservation memorandum account to track revenue impacts due to conservation efforts [14] Company Strategy and Development Direction - The company is focused on investing in high-quality water systems and has authorized a $223 million capital spending plan for 2022, with nearly half allocated to pipeline replacement projects [38][39] - The company aims to minimize regulatory lag on infrastructure investments through various recovery mechanisms [39] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism regarding settlement discussions with the public advocate in California, indicating a potential fair resolution for customers and the company [55] - The company remains cautiously optimistic about achieving a normalized earnings growth trajectory of around 5% over time, despite current challenges [59] Other Important Information - The company is actively engaged in water equity initiatives, including financial assistance programs for low-income customers [11][12] - Cybersecurity is a critical focus, with the company participating in discussions at the White House's cybersecurity summit [19] Q&A Session Summary Question: What are the expectations for the earnings power of San Jose Water in California? - Management is optimistic about settlement discussions and believes a fair resolution will be achieved [55] Question: Can you remind us of the revenue level for Connecticut Water in 2021? - The authorized revenue is approximately $29 million [57] Question: Do you continue to see a 5% earnings trajectory despite current challenges? - Management maintains that the combined company structure has been beneficial and remains optimistic about future growth [59] Question: How will water procurement differ in 2022 compared to current rates? - Management deferred the answer until the settlement process is completed, emphasizing the importance of adequate water supply [64]