Good afternoon, everyone. Welcome to the Janney Virtual Water Utilities Conference. I'm Michael Gaugler, the sector analyst. Next, we have Middlesex Water, President and CEO, Nadine Leslie, and Senior Vice President, CFO, and Treasurer, Rally Zerhouni. I'll turn the floor over here to management briefly for some opening remarks, and then we'll come back to Q&A. Thank you, Michael. Hello, everyone. I would like to begin by thanking Michael and Janney for inviting Middlesex Water Company to participate in this virtual water conference. I started as President and CEO of Middlesex in March, and since then, it has been an exciting transition, getting to know our talented team, conducting site visits at our facilities, and experiencing firsthand our commitment to excellence, and connecting with our valued stakeholders and industry leaders. As for a little of my background, I have been in the water utility business for over twenty-five years, and prior to joining Middlesex Water, I served as CEO of Suez North America, the water and wastewater provider of regulated business in six states, New Jersey and Delaware being two of them, and contract operations throughout the US and Canada. With me today, as mentioned by Michael, is our Chief Financial Officer, Rally Zerhouni, who joined the company a little bit after me at the end of the Q2. Rally has over 15 years of regulated utility experience in various jurisdictions and brings strong expertise in rate-making process, acquisitions, and finance transformation. We are both very excited about our new roles at Middlesex. The company has a long and impressive history of operational excellence in the regulated water and wastewater operations, and continuous growth since it was founded in 1897. We continue to focus on building quality, reliability, and resiliency for our customers, environmental and regulatory compliance, to professional growth and development of our employees, and delivering value to our shareholders through investment in the regulated business infrastructure and regulated like contract operations under our business model, which we have termed Operate to Own. Middlesex has a strong record of paying dividends continuously for over a century, of which the last 51 years of consecutive increases. I would like to add that our focus is on selective and sustainable growth while delivering high quality and cost-effective life-sustaining water utility service. With this, Michael, I will hand it over to you. Thank you. All right. Thank you. Let's start off with Delaware rate case. So $150 million invested over the last 10 years, not reflected in the bills. Seems like a lot without recovery. So going forward, is there a trigger amount where you'd think about another filing, or is $150 million the right amount, given rate case costs and the size of that system? Thank you, Michael. I will start, and Rally will provide more insight as needed, so there is no set trigger amount. What we do is we continuously monitor growth and our return, so the combination of increasing operating costs, capital investment, and ever-increasing regulatory requirements triggered our recent rate filing. Rally, I don't know if you want to add some more? Absolutely. And when you think about from a growth standpoint of what we had over the course of the last 15 plus years, and specifically in the last 10 years, we had growth on average of 5% of our customer base, and that was also helping us with the revenue and supporting our earnings growth during that period. Okay. And staying on the rate case here a bit. I noticed a commentary in the filing about backup generation at 30 or so facilities being installed. Were those diesel gen sets, natural gas units, or something else? And the follow-up question to that is, can you run the entire system now if you lose the grid? Thank you, Michael. So in Delaware, as part of our system resiliency program, we have installed 30 small backup generators, and the majority of them are running on diesel. These generators, they have automatic transfer switches at all our 85 plus, so they will be able to run in the event of a power outage. So the system in Delaware is a fragmented system. I told you 85 plus. So those generators were needed and therefore justifying the number that you're seeing. Right. And then, as you look forward, for the Tidewater operations, beyond your regular CapEx, what are the priorities for new investment there? We are very excited about the growth that is happening in Delaware, and we are on a regular basis we evaluate our water system network to identify system interconnection to consolidate adjacent systems. I spoke to you about the fragmented system on that right now, additional storage capacity as we expand our franchise, and select upgrades to create resiliency and meet new, more stringent regulatory compliance. Thank you. And, staying on the Delaware operations a bit longer, we've heard from both Artesian and Chesapeake, that the service areas they cover are experiencing strong economies and customer growth. That's given, you know, a variety of factors, favorable taxes, relative to those, in the surrounding region and up into the Northeast. What are you seeing in your service territories? Similarly to Artesian and Chesapeake, we are experiencing the same level of growth in our franchise area. Over the last 10 years, our growth rate has been at 5% on average, and we have no indication currently of any changes. Okay. Are you aware of any big commercial or industrial customers that might be moving into the service territories that could impact your water supply or your send out? Specifically in Delaware, we are seeing expansion of residential communities. That's primarily the making of our customer base. So, as of now, that has been what we have experienced, and we don't have any indication of any major commercials at this time. Okay. Next, we'll move back to the Middlesex system. What are you seeing from a high level in terms of the economy and the overall customer financial health? Mike, as you know, the Middlesex Water system in the New Jersey State, and at a high level, from an economic standpoint, New Jersey typically ranks from a GDP standpoint in the top ten in the US. But more specifically, as it affects our customer base, we see that the unemployment rate remains relatively low. And as we look specifically at our customers and when it comes to write-offs, we're not really seeing any significant trends at this time, and we see more of stability of our customer base. That's good, and that seems to be what we're hearing from some of the other companies that we've talked to this morning as well. The general economic health seems to be pretty good, perhaps on par or a little better than last year, and one topic I'm asking everyone about during the conference is the operating environment. Last year, it was brutal with inflation impacts, and that drove expenses higher in a variety of areas. How does that look for you now? So overall, when you look at it year over year, from prior year to the current year, we're seeing lesser of an impact. As you may be aware, our New Jersey rates have gone into effect in the Q1 of 2024, and we have just filed for our Tidewater rate case in Delaware, and that cadence of the filings and settlements in an expeditious manner will help us into mitigating some of the operational costs, regulatory lag. I'd say once the Delaware rate cases is over with, you feel pretty good about how your revenues and your OpEx would be matching up at that point? Given the cadence that we've been following, especially in New Jersey, over the course of almost every two years or so, that is helping us tremendously with the regulatory lag on that side. And then also on the CapEx side, when we're not in a rate case, we are using our DSIC to help us continue to minimize the lag of the investment that is being made. And for our Delaware rate case, we expect within the Q2 of 2025, the settlement and the completion of that filing. One area where we're beginning to focus on is power costs. If you were listening into some of our other fireside chats this morning, you heard some of where I'm going to take the questioning to. Latest PJM auction, certainly an eye-opener, given the forward prices. Is this something you can largely hedge out, or is it a concern? Historically, as a company, we've generally negotiated multi-year power supply agreements and so forth, and those arrangements help us between two to four years to minimize the volatility in our power costs. The other thing, we continue to monitor those costs among other costs and ensure timely rate recovery, and by getting into the cycle that we are on and expect to continue, that will help us mitigate some of those impacts of these increases. And then, beyond the impact on your power bills, something we've been thinking about is the impact power prices are gonna have on customer electric bills. Some of the electric rate cases are certainly generating pushback. Our question is, are these electric rate cases, the increases that come from them, making water utility rate cases more difficult because of the size of the electric increases? So, Michael, we are really proud to have established a strong, open, and constructive relationship with our regulators. And, all costs, including the power costs, are reviewed for prudency, and also consideration for affordability for customers is a part of that review process. So, we are confident that with the cadence that we are establishing for refiling, that we will be able to achieve the return without having a what we call a rate increase shocker for our customers. And then, next, I'll move on to CapEx. PFAS certainly got the bulk of the attention over the last several quarters, given the investment made for treatment. Perhaps you could update us on that. And what I'm looking for here is, you know, are you finished with the CapEx and now just treating, you know, the contaminant as you would any other, or is there more to do? Michael, thank you for that question. I would say that, if you had asked that question in 2019, we would say that we had identified all, the facilities that needed, a capital investment to meet the New Jersey state, requirements as well as Delaware. But as you know, in March of this year, the EPA, had, implemented a new regulation lowering the state requirements. So while we are moving from thirteen parts per trillion to now four parts per trillion. So the good news is our Park Avenue Wellfield that was recently, treated for PFAS, all the results are at a non-detect, so the treatment is working very well. We also have four of our, wells in Delaware. That's a four, it's a small number, compared to the total number of plants. And those treatments are working well and also showing non-detect. So in light of that new regulation from the EPA, we are currently reassessing the need and to what extent the PFAS investment will be required to comply with the new EPA requirements. But it's also an opportunity for us, based on the experience that we have achieved in the installation of the PFAS at Park Avenue and also in the wells in Tidewater, to help our current clients as well as potential ones, to resolve this problem. That is a nationwide issue. Hmm. And then the couple of follow-ups on this. The PFAS settlement funds, when do you expect all funds will be collected? So I am pleased to say that, in July 2024, Middlesex received the settlement fund, as disclosed in our Q2 thank you- Mm-hmm ... for the, one of the lawsuits that we had filed, in, 2023. So these funds were used to offset the cost related to the remediation of our Park Avenue wellfield treatment plant that I just discussed. And it was, also something that, the New Jersey Board of Public Utilities, instructed us to do. But additionally, we are also a party in a class action settlement multi-district litigation that is currently before the US District Court for the District of South Carolina, and this litigation is still ongoing. Any future proceeds for this settlement will be used for the benefit of its customers as directed by the NJBPU. So those would be credits on customer bills? It varies, Mike. So for the first one that we already had reached a settlement, we were instructed in our last order from the New Jersey Board of Public Utilities to apply a portion of it to offset some of our O&M costs that were previously incurred by the company, and we have reflected those costs in our financial information. And a portion of the proceeds was used to reduce the capital costs that was made as an investment in the Park Avenue plant. So ultimately, the customers had already received the benefit by reducing the amount of dollars invested in the capital program for the remediation. And then, I guess we'll stay on contaminants a little bit longer. Is EPA looking at any others that might create additional investment opportunities over the next few years for you? As the EPA regulates additional contaminants in source of supply, I do believe that it's reasonable to say that there will likely be additional investment opportunities in the next several years. Okay. And then, I guess more near term, but where's your future focus going forward in terms of new investment in the Middlesex system? We will continue, Michael, to invest in our infrastructure. We have an established and strong RENEW program that is focused on our distribution network, with assessment of our pipes and also valves, hydrants, pumping station. So we will continue to have that focus. And additionally, compliance requirements is always in the forefront, and system resiliency to ensure that we have the ability to have a reliable, reliable water service to our customers in case of a power outage or other natural causes. We'll move on here and discuss what's probably one of the more relevant topics this year, and that's affordability. I see more and more of your peers are providing statistics on where their customer bills are relative to median income in their service territories. Just wondering where your bills are in terms of this metric in New Jersey and Delaware, if you have them. Thanks, Mike. Affordability topic is really top of mind for our company with regards to all the communities that we serve here. Based on our analysis of the average residential customer as a percentage of the median income, we still see that those percentages are less than 1%. Good place to be. Next, so we'll move on to a little bit more in the M&A sphere. Wondering if you've been following the drama associated with the Chester Water Authority. The bankruptcy receiver is putting the assets out for RFP, but they don't want the assets in private hands. The receiver indicated that he'd like to see a regional authority created, but the only operations big enough to merge with that we can see would be Philadelphia, and the water operations there don't appear to have the funds to match the Chester Water Authority's value. Is there an opportunity for your utility services to perhaps manage the assets under contract, and with perhaps some type of cash infusion paid back through rates? So Michael, I will start, and I'll ask Rally to chime in if he has anything else to add. But, what I can confirm is that we will evaluate opportunities as they come, but our focus is on selective and sustainable growth that will create value for our shareholders. Great. I do have one backup question, and that would be, since I was asking about the utility services part of your business, would you consider responding to an RFP if it was put up for sale without restrictions? Could you, Mike, please, repeat that one more time? Sure. The first part of my question was, it had to do with your utility services, and if you'd be interested in some kind of an arrangement with Chester from that side of your business. But I was wondering if the system is outright put up for sale, and anyone could bid for the system, would that be of interest to Middlesex? Yeah. As Nadine mentioned, Mike, as part of our strategy and growth strategy that we are putting in place, we will be evaluating opportunities as they come, including the opportunity to acquire a particular system. As we evaluate that, some of the criteria we consider are related to the regulatory environment that we will be operating in from a regulated business or regulated assets that will be acquired, and also the evaluation of the creation of long-term value, as well as the sustainable growth. Any opportunity that will come, we will be considering that as part of our overall process. One focus is making sure that it is creating that long-term value, and we are investing in areas where it supports our growth. Thank you. Next, I'd like to move on to corporate strategy. You're both new in your positions, and I'm sure investors are curious as to what new directions you might take the company in. I'll let you both comment. Thank you, Michael. I'll probably have some follow-ups as well. Thank you. I will start. So as I mentioned earlier, Rally and I, being recent additions to the company in a leadership position, we were very excited to have an off-site meeting in July, early July, with our key leadership team to develop a strategy and roadmap with Horizon 2030. But this strategy will be presented to the board in the next few days, early next week. I can share with you a few points without going into too much details that we'll be happy to share with you once approved. We will definitely leverage our management team's expertise. We have a great, talented team that is focused on operational excellence, discipline in the execution of our CapEx, constructive relationships with our regulators that I highlighted before. And we have a strong financial profile to drive selective and sustainable growth. And we will do all that while maintaining a high quality, because that's what a reliable service, that's what our customers are expecting from us. And with a special attention to the prudence of our investment, to ensure that we are a cost-effective utility services to our customers. And of course, our focus is on continuing to deliver value to our shareholders, who primarily are investment in the regulated business infrastructure, as well as our non-regulated contract operation that I mentioned before, the model that we have term Operate to Own. Rally, you want to add a few more? Thank you, Nadine. And, as Mike, as Nadine mentioned, the investment in our regulated business, that's gonna be our key growth engine, and that's gonna continue through a couple of items we mentioned earlier: the organic growth and the expansion of our franchise territory in different areas within the states that we operate in. Also, focusing on the regulatory side and reducing the lag through the mechanisms such as DSIC or other mechanisms that will be put in place to address new compliance and new CapEx spend. From a rate cases, staying on rhythm for a two- to three-year rate case cycle, and at the same time, adding to the base of the regulated business, additional tuck-in acquisitions that are adjacent and within our areas of service territory. In addition to that, we are focused also on supplementing our regulated business growth with regulated like-sized contract operations. As Nadine mentioned, our model of operate to own, and when the opportunities arise from our existing contract ops or future contract ops that we will execute, we have the front seat in acquiring those contracts and converting them from an O&M to a regulated own utility and increasing our rate base. So really super excited about what to come. There is a great foundation that we have taken over here that started a hundred and twenty-seven years ago, and we couldn't be more happy to be here. Great. I guess my next question would be, well, actually a two-part, and that would be, what should I have asked you that I didn't, if anything? And, what question are investors asking you the most? When I think about our discussions with our external stakeholders and investors, the questions are primarily around the regulatory construct and the constructive regulatory relationships that we have in the jurisdictions that we operate in, and the continuous growth. Those are some of the key items that are the focus of generally the investors that we speak with. And I cannot really stress enough, Mike, the importance of the regulatory constructive environment that we operate in, and the investment that was made by our management team in those relationships, and how it continues to produce out outcome that is constructive to both sides, the company and the shareholders, as well as the customers and the regulator. And just another example that I saw those type of relationships significantly provide positive outcome. Just yesterday, we have received the approval from our regulator in Delaware, the Delaware Public Service Commission, for the recovery of the lead service line inventory costs that are part of the new regulation related to that. So those relationships, when we have that upfront engagement with them, when we providing the education and sharing what we are doing and the transparency, it builds trust and it creates that constructive environment, and we do receive a lot of questions on those type of things. All right, well, those are all the questions that I had for you this afternoon. So I want to thank you both for participating in the conference today. I think it was probably enlightening for a lot of the investors that joined us, and I hope we can do this again next year.