American States Water pany(AWR)2024-08-07 23:10Financial Data and Key Metrics Changes - Consolidated earnings for Q2 2024 were 1.04 per share in Q2 2023, largely due to higher operating expenses and interest costs [11][12] - Adjusted consolidated earnings for the first half of 2024 were 1.46 per share for the same period in 2023, indicating a slight increase [18] - The annualized dividend rate increased to 1.72 per share [10] Business Line Data and Key Metrics Changes - Water Utility segment earnings decreased to 0.91 per share in Q2 2023, primarily due to nonrecurring regulatory adjustments in the previous year [12] - Electric segment earnings were 0.03 per share in the same period last year, attributed to the absence of new rates and increased operating expenses [13] - ASUS earnings increased to 0.12 per share in Q2 2023, driven by higher management fee revenues and new military base operations [26] Market Data and Key Metrics Changes - Consolidated revenue for Q2 2024 decreased by 6.5 million due to regulatory adjustments [14][15] - Electric revenues slightly decreased as the company awaited a decision on the electric general rate case [15] - ASUS revenues increased by 573.1 million in capital infrastructure over the next three years, contingent on regulatory approval [7][21] - The company aims to maintain a compound annual growth rate in dividends of over 7% in the long term, reflecting confidence in sustainable earnings growth [10][27] - The company is focused on expanding its military base operations and leveraging its expertise in utility management [8][26] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism regarding the potential reauthorization of fully decoupled rates by the CPUC, following favorable developments in the California Supreme Court [31] - The company anticipates a decision on the electric general rate case by the end of 2024, with new rates expected to be retroactive to January 2023 [25][40] - Management acknowledged challenges in engaging with the Public Advocates Office due to resource constraints, impacting the timing of rate case decisions [36][39] Other Important Information - The company has maintained a strong credit rating, with American States Water rated stable by S&P and Golden State Water rated A+ stable [20] - The company has a long history of paying dividends, having increased them for 70 consecutive years [10] Q&A Session Summary Question: What are the prospects of the CPUC reauthorizing fully decoupled rates? - Management noted uncertainty but highlighted positive developments, including the Governor signing a bill allowing requests for full decoupling and a favorable Supreme Court ruling [31][32] Question: Any updates on the timing of the Bear Valley GRC? - Management indicated that a decision is expected in September but acknowledged potential delays due to the commission's workload [34] Question: How significant is the impact of the delayed Bear Valley GRC on EPS? - Management stated that the impact is significant, especially considering the long duration without rate increases [42][45] Question: Any insight into potential new base additions at ASUS? - Management suggested that while there may not be immediate new contracts, there is interest in moving forward with utility privatizations in the future [47][48]