Good day, everyone, and welcome to the Essential Utilities, Inc. full year 2020 earnings call. Today's call is being recorded. At this time, I would like to turn the conference over to Brian Dingerdissen. Please go ahead, sir. Thank you, Christy. Good morning, everyone, thank you for joining us for Essential Utilities 2020 full year earnings call. I'm Brian Dingerdissen, Vice President, Chief of Staff, and Head of Investor Relations. If you did not receive a copy of the press release, you can find it by visiting the investor relations section of our website. The slides that we will be referencing and the webcast of this event can also be found on our website. Here is our forward-looking statement. As a reminder, some of the matters discussed during this call may include forward-looking statements that involve risks, uncertainties, and other factors that may cause the actual results to be materially different from any future results expressed or implied by such forward-looking statements. Please refer to our most recent 10-Q, 10-K, and other SEC filings for a description of such risks and uncertainties. During the course of this call, reference may be made to certain non-GAAP financial measures. A reconciliation of these non-GAAP to GAAP financial measures is included at the end of the presentation and also in the investor relations section of our website. After the formal presentation, we will open the call up to questions. Here's our agenda for the call today. We'll start with Christopher Franklin, our chairman and CEO, who will provide a company update on our successes in 2020, including our municipal acquisition program. Dan Schuller, our CFO, will discuss our fourth quarter and full year financial results. Chris will conclude the presentation with a review of our guidance. At the conclusion, we will open the call up for questions. With that, I would like to turn the call over to Christopher Franklin. Thanks, Brian. Good morning, everyone. Thanks for joining us today. Let me start with a discussion of the impact of this bitter cold winter weather that so many of us experienced in February. In terms of the impact on our operation, it's really been a tale of two cities. Let's start in Texas. First, our hearts go out to those who were impacted and were living for days without electric and water service, some frigid temperatures, particularly last week. Water systems and wastewater systems are highly dependent on power to operate our pumps and our plants. When the power went out in Texas, many of our community well systems went down as well. In fact, at the peak of the winter weather, we had approximately two-thirds of our Texas customers impacted, which was largely due to those rolling blackouts we heard or brownouts. As the power went down and then we'd restore it, and then we'd have to go back out again once the rolling brownout went through. We quickly activated our incident command system to marshal the necessary resources to bring service back to our customers as quickly as possible. We brought in teams from our other state operations to supplement the Texas workforce, and they also brought with them supplies like bottled water, repair materials, and equipment to supplement what we had in Texas. We don't always think about it, but as our employees were working to restore service to our customers, they themselves were dealing with personal hardships resulting from the storm, too. I'd like to thank those dedicated employees and contractors that worked around the clock to restore service to customers. While we still have some systems under boiled water advisories in Texas, at this point, I'm proud to say that we have nearly all service restored, only one system left impacted, and we're working as quickly as we can to restore there as well. Just to remind you that we don't have natural gas customers in Texas, and so there were no financial or operational impacts to our natural gas customers, which are in Pennsylvania, Kentucky, and West Virginia. I mentioned the impact of the weather was a tale of two cities, and despite the extreme cold temperatures here in the Mid-Atlantic, where the majority of our operations are, we had very good news this winter, particularly in Pennsylvania, where we have been replacing water mains for nearly 30 years now. We really saw the benefit of that investment over the last few weeks and last few months even. It's impressive to see that even during a difficult winter, we're seeing fairly low numbers of main breaks. As a result, we have fewer service disruptions and less overtime than we had in previous years. As you can see by the chart on the right here, there is real benefit to investing in infrastructure. All right. Let's talk about some of the 2020 highlights. We invested about $900 million in infrastructure in the communities we serve during 2020, of which about $53.5 million was invested by Peoples in the first quarter before we owned the company. This is, once again, a record amount of capital spending for our company. On a non-GAAP basis, adjusted income per share was $1.58 for the year, up 7.5%, and Dan will take you through more details around that when he presents the financial results. Our municipal acquisition strategy remains strong with six signed municipal agreements pending closing, totaling $438 million in purchase price. Coupled with organic growth, the company increased its water and wastewater customer base by 2% and increased its rate base by 9.6%, ending the year with nearly 1.8 million customers and $8 billion in rate base across our regulated segments. Very good year. On the next slide here, you can see a more comprehensive summary of the execution of our 2020 objectives. These were the three primary themes we set for 2020. We've talked with you before about this. You saw it in our investor event. Despite the challenges of 2020, we still delivered on all three of these objectives in one of the most historic years of our company. Throughout the year, we adapted our new combined water and gas business to overcome the effects of the pandemic. Through the dedication and resiliency of our people, we remain focused on the mission of providing essential natural resources to our customers. As I mentioned, our commitment to infrastructure improvement drove us to executing a record investment, ensuring that our customers had safe and reliable service. Now, as we approach our one-year anniversary of the closing of the Peoples transaction, I'm pleased to report that we have successfully integrated our employees and customers, and we will continue to work to adopt the best practices from both utilities across the platform. I feel confident that our team's integration experience and expertise will prove invaluable as we continue to acquire water utilities across our footprint and beyond. Now here's a reminder of the municipal acquisitions we closed in 2020 for our regulated water segment. The six acquisitions include Campbell Water System, you've seen that one before in Ohio, East Norriton Wastewater System in Pennsylvania, Rockwell Utilities, that's water and wastewater in Illinois, New Garden, that's wastewater in Pennsylvania, and a small one in North Carolina called Dogwood Knolls. Together, these acquisitions added over 12,000 customers and nearly $63 million in rate base. Combined with organic growth, the company increased its customer base by over 20,500 customers in 2020. Here on this slide, we updated it since our presentation at the guidance event. You can see that we now have six municipal acquisitions that have been signed and are pending closing. The addition of Willistown Township in Pennsylvania, which we announced just last month, along with the other transactions, will add close to 227,000 customers or customer equivalents when closed. It's important to think about this. Based on the approximate rate base of $438 million, these signed agreements are expected to generate about $22 million of incremental annual income when they're fully earning. These are great examples of our acquisition strategy at work, and we look forward to serving these communities and having them join the Essential family. DELCORA is never far from our minds, and I'm sure not from yours when you think about Aqua and Essential. Let's bring you up to date. You'll recall that we received a very favorable ruling in late December from the Pennsylvania Common Pleas Court judge in a lawsuit with Delaware County. Subsequently, the county appealed that decision, and in January, the PUC administrative law judge recommended that the transaction be denied for three reasons, right? The first reason was we had some outstanding municipal intervenors. The second reason was they felt that we didn't include a rate stabilization plan in our application. The third one was the ongoing litigation with the county. Since the ALJ issued the recommendation, we have made significant progress in trying to remedy these situations, these issues. Several municipal intervenors have already withdrawn from the process. We've been in constructive conversations with the remaining municipal intervenors, and we're hopeful and optimistic that they will also withdraw before the Pennsylvania Public Utility Commission rules on the case. We've also taken measures to address the argument that we don't have a rate stabilization plan. We feel good about the progress on that issue as well. The Pennsylvania PUC is expected to render their decision at one of the two regularly scheduled public meetings in March. We'll stay tuned. With that, Dan, I'll turn it over to you. Thanks, Chris, and good morning, everyone. Before we go to the full year, let's start by taking a few minutes to review the fourth quarter highlights. We had revenues of $474 million, up $248 million from $226 million last year. The natural gas business contributed $240.6 million of that revenue increase. This figure includes the impact of $18.9 million in rate credits provided to natural gas utility customers as a condition of the Pennsylvania PUC approval of the Peoples acquisition. It also includes $92.8 million in purchased gas costs incurred in the quarter. O&M increased to $157.2 million, up from $85.3 million in the fourth quarter of last year. Again, this was primarily a result of the addition of natural gas operations and maintenance expenses of $72.6 million. Net income increased from $64.2 million = $102.7 million, and GAAP EPS was up from $0.28 - $0.40 as compared to the fourth quarter last year. Adjusted income was up from $61.4 million - $116.2 million, and adjusted income per share increased from $0.34 - $0.46. Let's discuss the full year financial highlights. As Chris noted earlier, 2020 was a very strong year, one where we achieved or overachieved our financial objectives in light of the pandemic. We ended the year with over $1.46 billion in revenue, up 64.4% from $889.7 million last year. The natural gas business contributed approximately $521 million of this revenue growth. Adjusted revenue for the year was $1.49 billion, which excludes approximately $23 million of rate credits issued to water and natural gas utility customers as a condition of the Pennsylvania PUC approval of the Peoples acquisition. O&M increased by 58.7%, from $333.1 million to $528.6 million. This was primarily a result of the addition of the natural gas operations and maintenance expenses. We'll discuss that further when we show the O&M waterfall. Net income was up 26.9% year-over-year from $224.5 million to $284.8 million. GAAP EPS increased by 7.7% to $1.12. After adjusting for transaction-related expenses, rate credits issued to utility customers, and adding the pro forma adjustment for the normalized first quarter of gas results, adjusted income was up $139.6 million, or 53%, and adjusted income per share was up 7.5% from $1.47 to $1.58, the top end of our $1.53-$1.58 guidance range. As we noted in our guidance call, strong water usage contributed incremental earnings in 2020. Thus, think about a normalized $1.56 or so as a baseline for future earnings growth. Next, let's walk through the details in the following waterfall slides, starting with revenue. In 2020, revenues increased $573 million, or 64.4%, on a GAAP basis, of which $520.9 million was related to our natural gas segment. This figure includes $165.7 million of gas costs and the impact of $18.9 million of rate credits to those natural gas customers. Rates and surcharges, increased volume, and growth from our regulated water segment provided an additional $59.8 million towards the revenue increase, which was then offset by $4.1 million of rate credits issued to the water utility customers. The $15.7 million increase due to volume reflects both water consumption and wastewater volumes. Let's review water consumption on the next slide. We've been talking about consumption since COVID started because frankly, we didn't know exactly what to expect when we went into this situation last March. In the fourth quarter, overall usage was down 0.9%. However, we continue to see strong residential usage, which was up 2.7%, offsetting the declines in the other customer classes. As we review 2020 versus 2019 and consider the impact of COVID-19 on our business, for the full year, we saw that residential water consumption increased close to 6% with more people working from home and with favorable weather. This increase more than offset the declines in the commercial and industrial customer classes, both declining about 6% versus prior year. Overall for the year, usage was up 0.8%. Next, let's talk a little about weather and gas usage for Peoples business. As a reminder, a heating degree day is a measurement designed to quantify the demand for energy needed to heat a building. It's the number of degrees that a day's average temperature is below 65 degrees Fahrenheit. As you can see on the chart on the left, 2020 started out relatively warm with below normal heating degree days in January and February. The chart on the right shows how Peoples' residential gas consumption in Pennsylvania was distributed throughout the year, and in 2020, about 78% of the gas was sold in the first and fourth quarters of the year, those cold seasons. This winter, for Peoples Natural Gas, year-to-date weather through February is projected to be 3.9% colder than normal based on actual weather through February 21st. This compares favorably to last year's mild winter, when year-to-date weather through February was 12% warmer than normal. Do recall that our 2020 adjusted income includes a normalized first quarter. Really normalized for the first 75 days where we didn't own the business. Next, let's move on to O&M expenses. Looking at the waterfall, you will see that the addition of Peoples O&M of $199.9 million is the primary reason for the increase in O&M expenses for the year. Other contributing drivers include COVID-related expenses for our water segment, including COVID-related employee costs, growth, and normal employee-related costs, which were then offset primarily by savings in other costs, which reflect a number of one-time items. We'll spend some time on the earnings per share waterfall. Bridging between GAAP and adjusted figures for both 2019 and 2020, you will notice that GAAP EPS in 2019 was $1.04, but adding back the almost $0.44 from the Peoples-related transaction costs and the dilutive effect of the equity offering brought us to $1.47 per share on an adjusted income basis for 2019. Continuing to the right, the Peoples, including the full-year pro forma adjustment, added $0.21, followed by Regulated Water segment rates and surcharges, expenses, volume and growth, which together contributed over $0.20. These were then offset by $0.31 from other items, such as increased depreciation, amortization, and interest, as well as decreased Aqua Pennsylvania tax repair benefits relative to last year. This then results in $1.58 for the adjusted income per share for 2020. Continuing to the right, the $1.58 is then impacted negatively by $0.32 related to Peoples' full-year pro forma adjustment, $0.08 from Peoples' transaction cost, and $0.06 for the rate credits we discussed previously, resulting in the $1.12 of earnings per share on a GAAP basis that we mentioned right at the beginning. Before handing the call back to Chris, I want to take a moment to provide an update on the Peoples tax repair filing. Recently, we reached a verbal settlement on the key issues with the parties in the case, and we'll file a settlement agreement on March the 11th. Consistent with the parties' positions, we'll give the tax repair benefits, the tax benefits related to the catch-up adjustment, back to our natural gas customers in the form of a credit over a five-year timeframe. This outcome should not have an impact on earnings. Rather than using a portion of the catch-up deduction to stay out longer as originally proposed, we'll be filing our next rate case on a more normal cadence. After review by the ALJ and the PUC, we expect a PUC order in the second quarter. However, there's no statutory timeline for this proceeding. Being respectful of the process, this is really about as much detail as we can go into at this point. With that, I'd like to turn the call back over to Chris to speak about our 2021 priorities and guidance. The unflappable Daniel Schuller. I tossed to you a slide early, and I skipped over an important slide. Well done. Thanks. I won't go back to that slide, but it's in the deck. You've all seen it. Other than to point out that we have a nice, strong pipeline, and we're in current discussions with systems that total over 375,000 customers. We feel very good about the pipeline of municipal acquisitions. We still remain confident that the fact that we have fair market value in each state where we do business will continue to be a main driver of that healthy pipeline. Let me come back now to the proper slide, our 2021 priorities. Let's take a look at these priorities. They're very similar to what we saw in 2020. We intend to remain focused on integration, growth, and operational excellence this year of 2021. I'd tell you that the emphasis on operational excellence and ensuring quality service is ingrained in our culture, and it's part of our history at Essential Utilities. We'll work to instill those same values in our new colleagues that join us from each of the acquisitions that we do once they're integrated. We'll remain focused on our capital program that continuously improves our customer experience, and we'll continue to build on the strong ESG initiatives that we announced earlier in the year. Let's talk about guidance now. This slide is just a reminder of what we've shown you already. Adjusted income is expected to be $1.64 - $1.69 per share. Our capital plans include spending of about $1 billion on regulated infrastructure this year and nearly $3 billion between now and 2023. Rate base growth is expected to be 6%-7% for water, 8%-10% for gas. Customer growth is expected to be between 2% and 3% on average for our regulated water segment. Lastly, we set achievable, I think you would agree, yet aggressive ESG targets, including a 60% reduction in our greenhouse gas emissions by 2035, using 2019 as our baseline. We'll continue to work to ensure that our water throughout our entire footprint never exceeds 13 parts per trillion of PFOS. Finally, as we approach our one-year anniversary as Essential Utilities, we're reminded that our 135-year-old company has now been on the New York Stock Exchange for 50 years. Our company remains strong and dedicated to our mission of providing essential natural resources to our water, wastewater, and natural gas customers. We believe we're well-positioned to play a critical role in solving our country's infrastructure challenges while recognizing our responsibility to keep rates affordable and to be an industry leader in protecting the environment. That concludes our formal remarks, and we are happy to take questions from here. Thank you. At this time, if you would like to ask a question, please press star followed by the number 1 on your telephone keypad. If you're calling from a speakerphone, please make sure your mute function is off to ensure your signal can reach our equipment. The first question we have today is from Insoo Kim from Goldman Sachs. Your line is open. Hey, thank you. Hey, Insoo. Hey, good morning. Doesn't seem like ages ago when we met in New York for the last analyst day last year. Good. It's been a while. Yeah, definitely feels like a while. My first question is regarding Texas, I know Texas for your water business is about 6% of rate base or so of the total water rate base. Could you just give a little bit more detail on the type of costs that were incurred through the past couple of weeks, and the regulatory process of recovery and all of that? Sure. Yeah, I think from the ability to recover, our operations team really did an exemplary job. It was across the platform. We had people from our purchasing group looking at where you can purchase fuel and with generators moving. We had pallets of bottled water coming to communities and equipment all brought in and teams brought in as well. I thought the response was exemplary given the circumstances of the closure of roads and the ice conditions and everything else. Feel very confident that we did a nice job there. Now, in terms of cost, I would not call the cost material cost. These things we did to recover, we'll capture. We're used to capturing these costs as a result of summer storms, typically hurricanes and others. This is not unusual for us. We shut down our delinquency on our customers in Texas for a while so that they weren't getting phone calls about late bills. We'll turn that back on soon. We wouldn't expect a major impact there either. I don't expect there to be a material impact, but let me toss to Dan here to get his opinion as well. Yeah, I think, Chris, you're right on. Then just to give you a sense of it, think of Texas as about $4.5 million a month in revenue. If we lose a few days there because customers are using less water, it's just not a material impact on the overall Essential business. As you started out and Chris added, we are aggregating these costs, be they non-capitalized repair costs or overtime expenses or bottled water, and we'll look to recover them just like we have for hurricanes and so forth in the past. Just one last thing to add to that. The impact really wasn't about our system not being winterized at all. It was really about lack of power. When the lines went down in the cold snap, we did have some main breaks, but we didn't have major pump houses or wells go down. Yeah. Maybe one thing to add to that, Chris, too, as we think about powering those well houses and such, we've got contracted power in place with one of the major players for wholesale power. That covers the majority of our systems in Texas, and other systems just get power from local co-ops or authorities, but all under regulated rates. When you're seeing things on the news with very high electric bills, we've been insulated from those peak-type electric prices. Got it. If you're saying these costs weren't that material, I guess when we think about the 2021 guidance and the midpoint of that, you'll still be able to under this and meet that guidance? That's correct. Yes. Got it. Just one more broader question then skipping to Texas. I acknowledge, I think a lot of the issues that happened were because of the electrical outages. Do you think that out of all of this, does it present to you from your standpoint an increased CapEx opportunity in this state or potentially just an increased focus on expanding your footprint there? Well, I think there's a key consideration. Always the question when you have a series of community well systems throughout a state like we do in Texas, North Carolina, even Virginia, the question is how many standby generators do you purchase and keep at the ready? We typically regionalize those, and then we move them to storm zones and position them well before storms and that sort of thing. We don't have one per system. I'm not sure that that's the prescription here either. I think it's safe to say that we'll want to go and get more generators. There was that natural rub between a regulator saying, "How much are you really going to spend for a generator that sits there a huge percentage of its time and is never used?" The regional approach seemed like a good approach. You have an event like this, you can certainly make an argument that we should own more generators. I think there are capital opportunities there, and we'll pursue those. The ongoing capital that we were spending even prior to this storm is, I would put in the SCADA category, which is our ability to operate or sense when a well house is down, out of power, or in some cases, even remotely control it. That was already work in progress, and so that will be capital that we'll be spending in addition. Got it. Thank you so much. You bet. Oh, sorry, just one moment. Next we'll go to Ryan Connors from Boenning & Scattergood. Your line is open. Hey, Ryan. Hey, Ryan. Good morning. Thanks for taking my question. How are you? Very well. Good. I hadn't intended to ask about Texas, but since you're on the topic, just bigger picture, there's a lot of talk about how the situation there is sort of indicative of a broader problem with the grid in terms of reliability, more renewables being less reliable and so forth. If you look at your states that are material to the earnings stream, do you have any other vulnerabilities, any other states where something like that could happen that there might be an impact? Yeah, that's a good question. I'm going to say, not that I'm aware of today. We're largely in PJM up here, not in ERCOT. I think if you think about this storm as a never before, then you say what else could happen? It's a good time to revisit these things and say, okay, what are the once in 100 years or 500-year issues that we should be thinking about and be prepared for? That's my initial thoughts. Dan, do you have something to add to that? Yeah. I think, Ryan, ERCOT's a different market, right? It's an energy market. The belief by ERCOT is that when power was needed, someone would show up to deliver that power, but they didn't really regulate those power producers, and they had power producers who didn't have to weatherize or winterize their equipment. That led to problems. It also had power producers in ERCOT who don't have to hold firm capacity on pipelines in order to ensure their ability to generate power. PJM is very different in that regard, that you've got to have that pipeline capacity in order to bid into the market. We do think it is different. As you know, ERCOT really doesn't have the interconnects to allow power in to any degree from outside of ERCOT. When they have a problem there, unfortunately, it gets entrenched, if you will. Got it. Okay. On DELCORA, I wondered if you could drill down for us a little bit, Chris, on your comments. You mentioned that one of the issues was the rate stabilization plan, was one of the issues that was sort of raised in that adverse proposed rule. Can you just let us know, just conceptually, what exactly they took issue with, and how you're getting them on board and more comfortable there on that particular issue? Yeah. I'm going to oversimplify this just for the call, but I'm happy to go into it in more detail. A lot of it has to do with putting the credit on the bill, on the customer's bill, right? The easiest way to do these things is to say, the customer used so much in volume, and the base facility charge, that comes to a total, then subtract out the dollars that would come in and offset it from the trust, and then you have a net total. That to us was the simplest way to do it. I think because the rate stabilization is not in the tariff, technically, there are some of the advocates who believe that it should not be on the bill. I think we're willing to concede that at this point. Listen, there's a lot of ways to skin the cat. We happen to think that was the most efficient way to do it. Certainly, there's other ways to give those trust dollars back to the customers. We've now proposed to remove it from the bill, and I think we've addressed the issue. We'll see. Okay. Well, I'm glad you oversimplified it because that's about as complex as I can take down. One last thing. On the PUC, with that decision looming now, what's going on with that fifth seat there? I know you don't have any inside baseball on that necessarily than anyone else, it seems like it's coming up on a year since that seat was vacated. That seems like a longer time than usual. Is that the case? I guess what's driving that? I assume maybe COVID and so forth, any color there on that open seat? Yeah. Listen, I'm an observer like everybody else, the governor did send a name over. He sent the same name over twice. The Republican Senate, the governor is Democrat in Pennsylvania. The Republican Senate that has to approve the PUC commissioners is Republican. The Senate has decided not to approve that individual twice now. It's a bit of a stalemate. As you know, Ryan, I know how close you watch the commission here in Pennsylvania. There have been plenty of votes that have been a two-two vote. It is a difficult situation. I think, and I know it's on the mind of the governor, and I also know that Commissioner Sweet, his seat is coming up in the next month here as well. Now we'll have potentially two seats. I haven't heard formally whether Commissioner Sweet is staying or whether he'll retire. We'll have to see how that develops. Then you have two names that need to come over to the Senate. I assume in all of that, Ryan, there will be a deal between the Republican Senate and the Democratic governor. Okay. Yeah, we'll watch that one. Lastly, if I could sneak one more in. Dan, this is I guess for you more, but if you could help us gas novices out a little bit. Obviously, you had purchased gas costs really ramped in the fourth quarter. I assume based on the weather, that's going to be another pretty big sequential ramp there. You've given the annual guidance, but can you kind of help us out on the seasonality on that line, how to think about that as we move into the first quarter? It just seems like it really jumps all over the place. Yeah. I think for now, what we'll probably need to do is kind of point you back to what we had shown before in terms of the usage percentage. We showed those again at the Analyst Day. What's potentially used in each quarter, and then the net income for the quarters. If you go to the Analyst Day presentation, page 41, you'll see what we showed is really an approximate breakdown by quarters. Of course, these are ranges because there is that seasonality in gas usage and also to some degree in water usage. At least it gives you a guide to help quarterize. I think, as I said on the analyst day too, we have the ability over time, as we start to see the way this manifests itself in the financials, we'll all be able to refine what that quarterly mix of net income should look like. That slide that I mentioned, it's actually in the appendix for today's presentation as well. Okay. Okay, good. We'll have a look. Thanks again, guys. Yeah. Thanks, Ryan. Take care. Next, we'll go to Durgesh Chopra from Evercore ISI. Your line is open. Hey, Durgesh. Hey, Durgesh. How are you? Hey, good morning, guys. Thanks for taking my question. Just one quick one. On the repair tax catch-up filing, can you just remind us. Yep What was the original plan for Pennsylvania rate case filing? Was it later this year? Yeah. wait, I guess you're asking about the repair tax, the Peoples repair tax or the Aqua Pennsylvania rate case? I'm sorry. You mentioned, yeah, I am mixing, I guess the two. That's all right. Yeah. Let me take you there. That's really the catch-up deduction on the repair for Peoples, for the PNG subsidiary. What we had originally proposed there was a splitting of that catch-up deduction, with some of that going to the customer, with some of that coming to the shareholder. What the piece to the shareholder would've done is it effectively would've just kept us out of rates longer. It was about adding to a stay-out period. It wasn't ever about incremental earnings. The outcome here, the conversations that we've had with the statutory advocates, is really leading to a situation where 100% of that catch-up deduction would go to the customers and over a five-year time period. What that means is we would be back into rates on a more normal cadence. Rather than stay out because we had some of that catch up, we would just come in sooner than that. Think about it as no impact on the guidance earnings because the guidance earnings are the 2021, 2022, 2023, and really shouldn't be any impact beyond there because we'll have new rates at some point. Understood, thanks for clarifying that. Yes, I did have a brain freeze because I was mixing the water rate case with that. Thank you for clarifying that. Absolutely you have the customer credit, and on the gas side, you'll be going in for more regular rating fees. That's the end result, if it's approved. Yeah, we'll just go in sooner than we would've otherwise. Perfect. One last one real quick. Any color on timing of the equity in the plan, the incremental equity? Is this sort of more predicated on as you announce deals, or do you have a particular time frame within the next few years when you plan to do this? Yeah. What we said on the last call is really, we'd give more specificity there as we get closer to those issuances. We're not really at a point where we can do that today. As you think about that forward sale that we did last August, we would look to use that equity at the time that we do the DELCORA transaction. We draw that down with a little bit of cushion before the transaction itself. Then on further issuances, we'll give you more details as things get closer. All right. Thanks, guys. Much appreciate the update today. Thanks, Durgesh. Take care. Next, we'll go to Travis Miller from Morningstar. Your line is open. Good morning, Travis. Travis, Hugh. Hi. Hey, Travis. If I could, I wanted to go back to the Texas thing and think a little higher level, get your thoughts here. It seems like whenever the utility industry has some kind of big headline issues and that happens, it leads to industry-wide policy changes and developments. I was wondering, kind of put a crystal ball here on and look into it, what type of water-related policy changes do you think might take place, either in Texas or even more broadly across the water industry? Yeah. I would think that one of the outcomes is sort of what I alluded to a little bit ago, which is additional redundancy on power. What form that takes probably varies by company. As I mentioned, we have a system of small community wells across Texas. That's how we serve our customers in large part. We have one surface treatment plant. When you think about that versus the City of Houston versus Austin and the challenges that larger systems have in place, redundancy, and then as you think about pump stations throughout, and for wastewater as well, I would think that power redundancy is going to be a big component. That can be a cost item, a pretty good-sized cost item, depending on what people have in place today. As you know, the challenges around winter weather just didn't appear to be as large of a risk in areas like Texas as they did in the north, where we've hardened ourselves to that kind of weather before. Dan, you have any add to that? No, I think you're right on there, Chris. Yeah. Okay. On the gas side of it, kind of similar thing, it appeared that the gas distribution utilities down there did quite a good job in terms of reliability and despite the pricing spikes, but pretty good on the reliability. Do you think this perhaps changes some of the conversation that's been going on in terms of electrification of heating and maybe moves gas up a little bit in public perception? Well, certainly what we saw there in Texas, where about 17, 18% of the power comes from wind power. When that wind power goes down, you need generation to come in to fill that gap, and natural gas stepped in to fill that gap. Given that natural gas production facilities are reliant on power as well, when rolling blackouts started, they were impacted. Servicers couldn't get out to service wells, especially to deal with handling the produced water, so things started to freeze up, and that's what kind of created the issue for the natural gas companies. If we're going to continue to have fairly dramatic weather, winterization matters for them, too. Of course, if you think about gas supplies like in the Marcellus or the Utica, the whole natural gas supply chain is pretty well winterized to make sure that it's protected from those events. When you think about conversions, we just don't see them in the areas where we serve, conversions from natural gas to electric for heating. We just don't see it. I would assume that we wouldn't see it further here. Fortunately, most of the customers we serve sit on top of the Marcellus Shale region, so we're unique in that the local gas is right there, and obviously we're hardened for wintertime. Winters have always been cold in Pittsburgh and even in some areas of Kentucky and West Virginia, where we serve as well. I think that we're well-positioned not only to hold our customers, but developers continue to put natural gas into new developments in the regions where we serve. I don't see any movement in the areas we serve away from natural gas to electric. No, you're absolutely, Chris. In colder regions, there's no more efficient heating source than direct fire natural gas. Sure. No, I appreciate that. Thank you very much. Next we'll go to Ryan Greenwald from Bank of America. Your line is open. Morning, guys. Hey, Ryan. To clarify on the commentary around Peoples Gas and the catch-up component, under the terms of the settlement, you'd expect to file in 2023 for new rates in 2024? Think about it in that time. In that timeframe. Look for the settlement agreement when that comes out on March 11th, and it'll give clarity around these things. Got it. Can you guys just kind of help frame how you're thinking about the COVID impacts in 2021 here, and then maybe looking out a bit further, any thoughts around more structural shifts in load demands among classes and sustainability of cost cuts? Yeah, let me start off, kick it over to Dan. First of all, like most utilities and probably most companies, we remain with the majority of our employees coming to work every day servicing natural gas and water and wastewater customers. The majority of our people have never stopped working in the field. Our two primary offices in Pittsburgh and in the Philadelphia area both remain largely skeleton crews. We see a return to a rotation of work hopefully coming in the next month or so, where we could get a third of our employees in a given time and rotate them through. I think from an employment standpoint, we're in a pretty good place. Our bad debt expense continues to be one that we're working through here, and we obviously have receivables aging at a level we've not seen before. Having said that, in most areas where we do business, we do have the ability to take a regulatory asset and see if we can get some recovery of those. I do believe that once we're able in every case to get back to full collections mode, we will get payment from those who can afford to pay, and we'll help provide help to those who can't. Given the fact that we reserve on our accounts receivable, I wouldn't expect to see a major issue there because that expense has already been taken as we go. We also continue to collect any additional costs. For example, we have some retrofitting going on in our offices, so we continue to collect those costs and aggregate those. I would not consider those to be material at this point, but nevertheless, as we prepare to bring people back into the office, we want to capture those costs. Dan, why don't you kick in from here? Yeah. Thanks, Chris. Ryan, I guess as you think about where the consumption occurs and will we continue to see more people working from home and higher consumption there, I think marginally, but I think lots of people are ready to return to work and sort of get back to normal, and with that, you'll see that residential consumption will come down a little bit more toward normal, and commercial consumption will naturally pick up as people are in the business, in the workplace, and using local businesses and such who are our customers in that commercial category. I think we kind of come back to a more normal picture of where the consumption occurs. When that is, it's first half of the year, I think second half of the year, we start to see some return to normalcy once vaccinations are more widespread. Yeah. One anecdote, I'm involved with the large employers here in the Philadelphia region, and again, anecdotally, as we get together, we expect that probably 80% of employees will be back to their normal schedule, 20% will not. That could be a rotational aspect of that 20%, but they do expect to see 80% back in the office. Thanks, Chris. Great. I'll leave it there. Thanks, guys. Yep. Thanks, Ryan. Again, if you'd like to ask a question, please Press Star followed by the number one on your telephone keypad at this time. Next, we'll go to Jonathan Reeder from Wells Fargo. Your line is open. Hey, Jonathan. Hey, Jonathan. Good morning, Chris and Dan. How are you guys doing? Pretty well, thanks. A couple clean-up questions, perhaps. How should we view the benefits to WTRG of the repairs tax settlement or, what was your motivation for reaching it if it doesn't help push out the timing of the next rate case as you guys proposed? Well, think about it in this term, Jonathan. Listen, we are still in the midst of COVID. Regulators are doing their job in trying to hold utility costs down. It's in that atmosphere that we're in right now. I think, as a Pennsylvania regulator, they're thinking about what can come to the customer and not the shareholder at this point. I think that's happening across the country. I just put that as a backdrop. There are a whole lot of discussions that occurred in the context of that. As Dan said, we can't talk a lot about a settlement that is not fully public or inked yet, I should say, approved yet by the ALJ and the PUC. Think about it in that context. Yeah, no, that makes sense. Maybe a bit of a goodwill gesture or so. Yep. Are you still actively trying to reach a settlement with Delaware County on the DELCORA deal, or has that ship sailed at this point? That's a great question. I would love a settlement with Delaware County. I would love a settlement with Delaware County. I think they are spending millions of dollars of taxpayer money to fight a battle that ultimately I don't believe that they can win. If there was a way to settle this, then I would like that. I think now probably everybody's focused on the next couple of weeks to see what the Pennsylvania Public Utility Commission does. Let's see how that decision comes out, and maybe there's an opportunity to get back to the table. I'll speak for the Essential team. We'd love to see a settlement. Okay. I appreciate it. Kind of segue into that, with the PAPUC, do they have the option to extend the March 26th statutory deadline in order to, say, open the record and consider new evidence? What exactly are the rules around their ability to consider these more recent developments in the breadth of the ALJ concerns? There's several, and Kim Joyce has outlined these with our board meetings the last two days, and so this is widely discussed inside. The commission has several options. One, obviously, is an approval, and remember, there's four commissioners. Two would be, I'll call it a stalemate, a two-two vote, which then it would sit. Three would be a denial. Four would be something like a remand, where the commission could say Aqua Essential has done more work on the issues raised by the ALJ. "ALJ, you should reconsider the work and the evidence," and send it back to the ALJ, and then the ALJ would send it back up to the commission again, which I think is a possibility as well. Those are probably the more likely options that the PUC has in front of them. Okay. If it is 2-2, what's the platform then? It's not approved, but it's not denied, or Yep. It could just sit for a while until the Commission adds another member or one of the members changes their mind. I am hopeful that that's not the case, Jonathan, but we'll see in the next couple of weeks. Okay. I'll be eagerly watching and good luck with that. Appreciate the additional insight. You got it. Take care, Jonathan. At this time, I'd like to turn it back to Christopher Franklin for closing remarks. Thanks, everybody, for joining, as always. Ryan, Dan, myself, the whole team here are open for follow-up questions should you have open issues that you want to chat about after this. Thanks for joining us today. That does conclude our call for today. Thank you for your participation. You may now disconnect.