Good day, welcome to the Essential Utilities Q1 2021 earnings call. Today's conference is being recorded. At this time, I would like to turn the conference over to Brian Dingerdissen. Sir, please go ahead. Thank you, Katie. Good morning, everyone, and thank you for joining us for our first quarter 2021 earnings call. I am Brian Dingerdissen, Vice President, Head of Investor Relations, and 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 in the webcast of this event can also be found on our website. As a reminder, some of the matters discussed during this call may include forward-looking statements that involve risk, 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 posted on the company's website. After the presentation, we will open the call up for questions. Here is our agenda for today. We'll start with Chris Franklin, our Chairman and CEO, who will provide a company update. Next, Dan Schuller, our CFO, will discuss our financial results. Chris will then conclude the presentation portion with an update on our municipal acquisition program and a review of our 2021 guidance. At the conclusion of the call, we will open it up for questions. With that, I will now turn it over to Chris Franklin. Hey, thanks, Brian, and good morning, everyone. Thanks for joining us. Let's start out with a look at some of our first quarter highlights. The one-year anniversary already as Essential Utilities and the one-year closing of Peoples marked the first quarter. We had a strong first quarter. On a GAAP basis, earnings per share was $0.72 for the quarter, up 19.6%. Dan will get into the details of that in just a few moments. We invested approximately $178 million in infrastructure improvements through our systems in the first quarter, first three months of the year, as compared to $172.2 million at the same time last year. Our seven pending acquisitions totaling $450.5 million in purchase price really shows the strength of our municipal acquisition strategy. Yesterday was our annual meeting of shareholders, and I'm pleased to report that all items on the ballot were voted in accordance with management's recommendations. The meeting was also one of transition. Our longtime Board Member and friend, former CEO Nick DeBenedictis, stepped down from the Board to comply with the board's age policy. Wendy Franks, who represented CPPIB since the acquisition of Peoples, was replaced by Edwina Kelly. Wendy Franks left CPPIB to take another position with a different firm. We also then expect to add a well-qualified Director in the coming months to bring the Board back to nine members again. As a reminder, our current eight-member Board has a strong diversity, which includes three women, two people of color, and a Board all of which have diverse cognitive and experiential backgrounds. I should also note that if you haven't had a chance to review our proxy, I'd encourage you to do so. We spend a lot of time and energy around that proxy. It's informative and very easy to read. All right. I'm excited to announce that in March, we opened a brand-new state-of-the-art environmental laboratory on our Bryn Mawr campus here. The new lab is just one example of our commitment to operational excellence and our mission to protect the public health and ensure high-quality water. The new two-story building will more than double the size of the previous lab, which did us great service over 70 years. This new lab, though, will allow us to adapt to the dynamic regulatory environment that requires additional sampling and equipment necessary for drinking water and wastewater operations. It also has the capacity to accommodate the increasing needs as we add customers and systems through acquisition. The lab employs a professional staff of 20, including microbiologists and chemists, who perform about 300,000 tests on 30,000 water samples each year. These scientists use 50 different analytical methods for 240 different water quality parameters. It's a busy group. The lab is certified by the Pennsylvania Department of Environmental Protection and four other state environmental and health regulatory agencies. As we've gone from measuring in parts per million when I was new in the business to now parts per trillion, a millionfold increase in detection levels, we feel confident that we will be able to deliver water that is safe and that wastewater we treat and return to our rivers, lakes and streams is pristine. As announced a year ago, we set a company-wide standard of 13 parts per trillion to uniformly address the presence of the contaminants PFOA, PFOS, and PFNA, which are all part of that PFAS family of chemicals. As I think you're aware, the EPA's non-enforceable health advisory level for PFOS and PFOA is still at 70 parts per trillion. Although an enforceable federal standard is still probably years away, our laboratory is one of two labs accredited and the only utility certified to test PFAS in Pennsylvania. Our commitment to making the necessary capital investment where source water exceeds 13 parts per trillion is for the safety and health of our customers we serve. Our new lab is integral to this important work. In light of the ESG guidance that we announced earlier this year, I'd like to highlight two solar field projects in Illinois that are in the final stages of completion. You can see the pictures here. The Manteno solar field project was completed and became operational at the end of February. This nearly 1 MW solar field will supply approximately 85% of the power needed to operate the wastewater plant. We estimate that the project will save between $20,000 and $25,000 annually in operating costs. Very good for the customers. The Danville solar plant project spans eight acres and is anticipated to become operational in the second quarter of the year. This is a 2.1 MW solar field and will supply approximately 70% of the power needed to operate that water plant. We estimate this project will save between $110,000 and $140,000 annually in operating costs. In total now, we have six solar fields across our footprint. It's projects like these that allow increased reliability and lower emissions while also achieving cost savings. As we switch to renewable energy options throughout our footprint, we'll continue to improve the company's already aggressive target to reduce Scope 1 and Scope 2 emissions by 60% over the next 15 years. With that, let me hand it over to Dan to talk about our financial results. Thanks, Chris, and good morning, everyone. We ended the first quarter with revenues of $583.6 million, up about 128% from last year. You'll recall that the Peoples transaction closed on March 16th last year. The primary driver of the increase was the addition of the natural gas business for the full quarter, which contributed $315.8 million of revenue growth. O&M increased to $125.1 million in the first quarter, up from $106.6 million in the first quarter of last year. This was primarily a result of the addition of the natural gas business, and we'll spell that out a little bit more when we talk about the O&M waterfall. Net income was up year-over-year from $51.8 million to $183.7 million, and GAAP EPS increased from $0.20 to $0.72. Adjusted income was up from $153.7 million to $183.7 million, adjusted income per share increased 19.6% from $0.60 to $0.72. As a reminder, adjusted income for the first quarter of last year excluded Peoples-related transaction expenses and included a pro forma adjustment for the Peoples operating results for the period from January 1st to March 15th, 2020, thereby providing a basis for a full-year run rate of operating results for 2020. As a reminder to clarify, there were no adjustments for 2021 for this first quarter. Next, we'll walk through the details in the following waterfall slides, starting with revenue. In the first quarter of 2021, revenues increased $328 million or 128.3% on a GAAP basis. The primary driver being the $315.8 million related to the full period for our Natural Gas segment. This figure includes $132.2 million of purchased gas costs. Rates and surcharges, primarily driven by the Pennsylvania DSIC, organic and acquisition growth, and increased volumes from our Regulated Water Segment, provided an additional $12.2 million towards the revenue increase, which is slightly offset by other. The $2.3 million increase due to volume reflects both water consumption and wastewater volumes. Let's look at our water consumption by customer class. Since COVID started, we've experienced increased usage, and this trend continued in the first quarter. Overall, usage was up 1.7%, and again, residential usage was strong for the quarter, up almost 5%, offsetting the declines in the commercial and public customer classes. As you'll recall, commercial water consumption has consistently been down since COVID began. Let's talk a little about weather and gas usage in our Gas business or Gas segment. You'll recall that weather has a very direct impact on gas consumption and associated revenue, so we closely monitor the heating degree days as an indicator. As the left side of the slide shows, we had a somewhat warmer than normal first quarter in Western Pennsylvania with 2,726 heating degree days compared to a 20-year average of 2,845 heating degree days. This was, however, an improvement over the 2,421 heating degree days in the first quarter of 2020, and just short of last year's pro forma of 2,766. The chart on the right serves as a reminder of how residential natural gas consumption in Pennsylvania was distributed throughout 2020, noting that more than three-quarters of the gas was sold in the first and fourth quarters of the year, with the largest portion being in the first quarter. Let's move on to operations and maintenance expenses. Looking at the O&M waterfall, expenses increased by 17.3% from $106.6 million in Q1 last year to $125.1 million this year. The primary reason for the increase in O&M expenses for the first quarter was the $42.9 million of additional O&M associated with Peoples for the full quarter, offset by the impact of the Peoples transaction-related expenses of $25.4 million incurred last year. Other contributing drivers include employee-related costs, COVID-related expenses for our Water segment and growth, which were offset by savings in other costs and production costs. Adjusting for growth, COVID-related bad debt, and increased pension expenses, regulated Water segment operations and maintenance increased in line with historical experience. We're going to spend a few minutes on the earnings per share waterfall. This presentation bridges from the first quarter 2020 GAAP EPS to the first quarter 2020 adjusted income per share, then to the first quarter 2021 GAAP EPS. You will note that GAAP EPS for Q1 2020 was $0.20, adding back $0.08 of Peoples-related transaction costs and almost $0.32 related to the pro forma adjustment for the Peoples operating results for the period between January 1st and March 15, 2020, brought it to $0.60 per share on an adjusted income basis for Q1 2020. Continuing on to the right, the Peoples contribution added $0.10, followed by regulated Water segment rates and surcharges, expenses, volume, and growth, which together contributed $0.045. These were offset by $0.03 from other items, which include increased depreciation, amortization, and interest, resulting in GAAP EPS of $0.72 for the first quarter of 2021. The incremental $0.10 from Peoples is primarily due to increased tax repair in this full three-month quarter versus the 16-day first quarter that we had included last year. The full year of 2021, tax repair at Peoples will contribute $0.18-$0.20, but it's attributed to the quarters based on profitability. The high gas usage quarters will receive the most benefit. Given the strong results of the first quarter, we wanted to take a moment to remind everyone of how we think about net income by quarter as a water, wastewater, and natural gas company. Due to the lack of historical comparisons, the intent of this slide was to assist our investors in creating quarterly projections. We reported income per share on a GAAP basis for Q1 at $0.72, which falls above the midpoint of the range noted on the slide. As we look forward to the second and third quarters, we'd like to reiterate that the natural falloff of gas consumption could push us lower in those ranges, and that our previously stated full-year guidance range of $1.64-$1.69 remains intact. As we previously noted, our collective ability to quarterize our earnings will improve as we establish a track record of actual results as a combined company. Moving on to rate activity and other regulatory matters. In 2021 so far, we've completed rate cases or surcharge filings for our Regulated Water segment in New Jersey, North Carolina, Ohio, Pennsylvania, Illinois, and Indiana, with total annualized revenues of $13.5 million. In our Regulated Natural Gas segment, we have completed rate cases or surcharge filings in Pennsylvania and Kentucky, with total annualized revenue over $1.1 million. In the coming months, we expect to receive new base rates in Virginia for our Regulated Water Segment. At this point in the year, we do not have any pending base rates or surcharges for our Regulated Natural Gas segment. As we previously noted, we expect to file a rate case for Aqua Pennsylvania this year. That's now expected to occur sometime in the second half. I wanted to close the loop on the discussion we had on the last call related to the Peoples catch-up deduction. The settlement that we reached with the statutory advocates was filed with the Pennsylvania PUC and was recommended to the commission by the administrative law judge. This matter was on the docket at the PUC today with a recommendation to approve, it was approved four, zero without comment. The settlement proposes, among other points, that the catch-up adjustment be provided to utility customers over a five-year period, and that Peoples will file its next base rate case before the end of 2023. As you'd expect, we've been watching proposed tax legislation and gauging its potential impact on Essential. For regulated utilities, a tax increase would look like reverse TCJA, and we'd expect a surcharge on customer bills or a regulatory asset to recover the increase. Interestingly, an increase in the tax rate would actually increase the repair benefit. Fortunately, it appears that the minimum tax on book income, as currently discussed, wouldn't apply to Essential at this time. This is obviously something that's still developing, but I'd expect we'll have more to discuss on tax reform during our next earnings call. Finally, let's spend a few minutes discussing our financing activities. As you know, last August, the company announced an offering of 6.7 million shares of common stock via a forward equity sale agreement for $308 million. Post-settlement, the proceeds are expected to be used for general corporate purposes, including the DELCORA acquisition and other water and wastewater acquisitions in our pipeline. The forward sale agreement allows the company to settle the transaction between now and August 10th of 2021. Regardless of the timing of the DELCORA closing, we intend to fully settle the forward by delivering the 6.7 million shares and receiving the cash from our counterparties. We'd likely do that close to that end date of August 10th. On March 4th, the company priced $100 million of first mortgage bonds for Aqua Ohio with a weighted average tenor of 20 years and a weighted average coupon of 2.86%. Upon closing on April 15th, the proceeds of these bonds were used for general corporate purposes. On April 19th, the company completed a $400 million public debt offering of 10-year notes issued at 2.4%. The company used these proceeds to pay down short-term borrowings and credit lines. In both of these cases, we moved expeditiously to take advantage of attractive capital markets conditions. After years of falling rates and purposeful refinancings of higher rate debt, our weighted average interest rate for our long-term debt now stands at 3.62%. As of April 30th, after considering the effects of these financings, the company had $1.1 billion of capacity to borrow on various credit facilities. With that, I'll hand it back over to Chris. Great. Thanks, Dan. Let's switch our topics now to municipal acquisitions. Many of you, I think, are familiar with this slide. As we previously announced, six of these municipal acquisitions that have been signed and are pending closing. In April, we signed an asset purchase agreement for $12.5 million for a municipal system in Illinois with approximately 4,000 equivalent dwelling units. These seven transactions in total will add close to 231,000 customers or customer equivalents and approximately $450.5 million of rate base when closed. We also have one additional deal in which we have been selected as the winning bidder. We are working to sign an APA and hope to announce that as well in the near future here. Let's take a moment to discuss DELCORA. You'll recall the county court has twice ruled that our asset purchase agreement with DELCORA is a valid and enforceable contract and has also ruled on the validity of the trust concept. Delaware County has appealed those decisions to state court, we know that, the state court called Commonwealth Court in Pennsylvania, and we're awaiting a judge's decision. Given the clarity of the rulings from the county court, we expect a positive decision in state court. Absent a settlement, this process typically takes about six months or more. Let's talk about the regulatory process for DELCORA. Since our last quarterly call, the Pennsylvania Public Utility Commission on March 30th vacated the Administrative Law Judge's recommended decision and remanded the case back to the ALJ to reopen the record and conduct further proceedings based upon recent developments, including settlement agreements reached with all the municipal interveners in the case. In its remand order, the Commission indicated awareness of the county's appeal of the trial court's decision in favor of DELCORA. On April 16th, the ALJ issued a stay order for the case, pending a final and unappealable decision by the state Commonwealth Court. We have since petitioned the Commission to review the ALJ's order, as the ALJ order is very clearly inconsistent with the Commission's remand directive. We've asked the Commission to clarify its direction to the Administrative Law Judge for the remanded proceeding. All right, as these municipal transactions, folks, get larger, like DELCORA, there is always going to be the possibility of litigation and politics that play a role. We remain focused and patient as we move through the process. We also remain convinced that our solution is best for the DELCORA and Aqua customers and Essential shareholders. We will see this to conclusion. All right. As we continue to 2021, we have a healthy pipeline of potential municipal opportunities. This table here includes acquisition opportunities where we are actively engaged in discussions with municipalities. As illustrated on this slide, we are actively pursuing approximately 395,000 customers through acquisition. We continue to believe that fair market value legislation in the eight states where we have water utilities is the main driver of our strong pipeline of opportunities. I'll also note that fair market value legislation or similar legislation for water and wastewater acquisitions has been passed in the states in which we serve natural gas. West Virginia approved fair market value legislation in 2020, and last month, the Kentucky Governor signed House Bill 465 into law, which is similar legislation to fair market value. These favorable regulatory environments are providing their municipalities the opportunity to pursue private capital solutions in infrastructure needs and access to industry experience. In closing, I want to reaffirm our guidance for 2021. We expect earnings to be between $1.64 and $1.69 per share. Hopefully, the discussion Dan led about how to best think about the quarters was helpful to you. Our capital plans remain on track as we anticipate spending approximately $1 billion on regulated infrastructure this year. Nearly $3 billion across our Essential Platform by 2023. Rate base growth is expected to be 6%-7% for water and 8%-10% for gas. This obviously does not include acquisitions in the Water side. Customer growth is expected to be between 2% and 3% on average for our Regulated Water Segment. Finally, our ESG targets include a 60% reduction in greenhouse gas emissions by 2035. With that, I'll conclude our formal remarks. Katie, if you want to open the line for questions, that'd be great. Thank you, sir. If you would like to ask a question, please signal by pressing star one on your telephone keypad. If you're using a speakerphone, please make sure your mute function is turned off to allow your signal to reach our equipment. Once again, please press star one to ask a question. We'll pause for just a moment to allow everyone the opportunity to signal for questions. Thank you. Our first question comes from Ryan Connors with Boenning & Scattergood. Hey, Ryan. Good morning. Morning. Thanks for taking the time. I've got one kind of P&L question for Dan, and then a big picture question for you, Chris. Obviously, we're in an inflationary environment here that impacts materials and chemicals and labor and all the above. Peers have called that out as a headwind, but you don't seem to be experiencing much of that. Dan mentioned actually production costs down on the Water side, and that's you're late in the rate cycle in PA anyway, but can you just frame that for us a little bit, Dan? Why you're not seeing that and whether you anticipate any cost escalation going forward? Ryan, thanks. Obviously, we're on the lookout for it, but we have not seen it yet. We do have long-term agreements with providers of lots of our materials as well as chemicals. We expect that we'll have a little bit of warning before we see increases on some of those types of things. Obviously, we're aware of the commodity price increases in the market more broadly, and so we're on the lookout for it here. As you're involved in rate matters, I assume you'll have to make some more aggressive assumptions maybe in future test years and things like that. How do you think about that? Yeah, we do that. As we go into a future test year, we are looking forward at what we expect to see in terms of expenses for specifically the operational expenses, right? Chemicals and power and things like that. Power, we've got long-term agreements in place. Chemicals, that's done on a one-year basis, and usually as we go through our budgeting process, as we look forward to that subsequent year, which is something we would then use ultimately in a rate case filing as a future test year. We are getting a read from our chemical providers in terms of what they expect to see as inflationary increases in that subsequent year. We will be looking at that as we go through this budgeting process now for 2022. Got it. Okay. My big picture question, Chris, was talk about the municipal acquisition side. Just this past Sunday, there was a very prominent front page above the fold story in "The Philadelphia Inquirer," biggest newspaper in the state, basically suggesting that there's growing and more organized opposition element to sort of municipal asset sales in Pennsylvania. I think you were quoted in that piece. Can you just kind of give us your sum up, how you think about the issues raised there and how you strategize against that, if in fact there's any reality to that? It was interesting. Andy Maykuth, who wrote the article, did spend some time with us. I'm not sure he captured my sentiments as I think about them. One of the things I said to Andy that I thought his premise was somewhat flawed in the sense that we had 10 deals signed or closed last year. Of those 10, if you look at them one by one, there was only one that had opposition, and that was in DELCORA. You could add to that, we did step back from Norristown, but we did that before it came to any kind of a referendum or a fight of some kind. The way we see it is the volume of transactions are increasing, and so proportionately, we see people voicing their opinions in the same way. Yes, there's more in the market, more deals in the market, and there's some more opposition, but I wouldn't say that it's disproportionate. I would say it's growing proportionately. Mm-hmm. Okay. That's fair. Lastly, it's good to see Illinois picking up a bit on the M&A front. Another deal there. I thought it was kind of unusual that you don't disclose there the name of the town or the system. What's the story behind that? Has that been disclosed locally, or is there some other reason why you're not disclosing that one? Yeah, it is unusual, Ryan. The reason that we're not is, and we hope to announce it very soon here, but we're finalizing some other associated agreements there. There are some sensitive things there that we just wanted to wind up before we make a formal announcement and make it public. Obviously, it's very good news, and we do have an asset purchase agreement in place, so we want to let the investors know that we've made progress there. It'll be a little bit of time before we can get some of the associated agreements signed, that's all. Sure. Great. Well, hey, thanks for your time today. Thank you. Yep, thanks Ryan. Take care. Thank you. Our next question comes from Durgesh Chopra with Evercore ISI. Hey, Durgesh. Hey, Durgesh. Hey, guys. Thanks for taking my question. Chris, I must say the picture needs to be updated with facial hair on the slides. It's already gone. That you are. It's already gone, Durgesh. Oh. I am saddened to hear that. Anyways, that was my inappropriate earnings call comment. I wanted to see, so there's back and forth seems like between the Commission and ALJ on DELCORA. If I remember this correctly, targeting a mid-year 2021 close. Is there a target there of closing a year, maybe perhaps in the second half or early next year? Yeah. The guidance I just kind of provided was that if it winds through the courts, it could be at least another six months. There's always a possibility of a settlement. We've said that all through this process. If it winds through the state court, it could be a while again. We haven't provided an exact date. We have to see the county have to file a formal brief. That would be probably in the coming days here, and then that clock begins. Yeah, best estimate is, unless a settlement, would probably be sometime next year. Understood. Then just on the timing of the equity forward August 10th. Did I hear that correctly? Are you timing that in accordance with perhaps DELCORA, or what should we think of that? Yeah. Durgesh, the forward agreement, way those work is they have a one-year life. You've got one year from when you've priced that forward to actually settle that, issue the shares, and take the cash. That expires on August the 10th of 2021 here. We would expect that we would settle that in the days before that, days or weeks before that. We don't need to settle it now, but we expect we'd settle it close to that end date, if you will. Importantly, the dilution associated is already in the numbers for the rest of the year. Correct. You'd see those shares would be in place from just simply put, kind of the middle of August through year-end. That's already in the denominator when we think about our guidance range and the EPS in that guidance range. Understood. Okay. Appreciate that. Settlement before or around August 10th, but it's already incorporated in your 2021 guidance. Perfect. Correct. Maybe just one big-picture question for you, Chris. Clearly the private market view, I'm sure you're following very closely the gas LDC multiples and gas asset transactions, right? Clearly there's a disconnect between the public equity valuation marker for these assets versus private. Would you consider, or how should we think about, like a lot of your electric peers have done some part ownership type deals in utilities amongst other things. Is there an opportunity here for you to kind of put a valuation marker of these premier assets in the private market? How are you guys thinking about that? We are really happy with the acquisition of Peoples. The integration has gone extremely well. It's earning in accordance with our expectations, and it's operating even better. We are very happy with this combination. We see a long life together and we're going to stay the course. I think, through continued understanding among investors and the public in general, that natural gas is here for a very long time, estimated at least 36% of the energy mix over the next 30 years. We're going to tighten up our system. We're going to operate it as environmentally consciously as we can with dropping our footprint by 60%, our greenhouse gas footprint by 60%, and we believe this is going to be a strong combination into the future. We're going to stay the course. I think, Durgesh, to add to that, we would expect that if we see private market transactions at that level, we'd start to see that disconnect. You start to see those converge with public market valuations increasing to that level or towards that level as well. Understood. That makes sense, guys. Thanks for the time this morning. Appreciate it. You bet. Yep, take care. Thank you. Our next question comes from Insoo Kim with Goldman Sachs. Hi, Insoo. Thank you. Hey, good morning. First question, just on the timing of the equity forward and the update you guys gave on DELCORA on what that could mean from a closing standpoint. Appreciate the comments on 2021 and what's embedded. When you just look out to 2022 at this point with the recent updates, how much of a potential impact could this have, this disconnect in timing and potential delays and just what are some of the offsets that you could do to maintain the five to seven? I guess I'd say, Insoo, it's a relatively small number of shares relative to our total number of shares today. As Chris said, we've got six acquisitions coming down the pike here already signed in addition to DELCORA. Plus a very strong pipeline of additional opportunities beyond that. In our decision-making, we just believe it makes good sense to go ahead and do that settlement in August to take those shares, to issue those shares, to take the cash. As we go through, as I kind of alluded to, there's an annual planning process. We'll be incorporating these shares. Obviously, they're in our five-year plan numbers already for 2022. They'll be in our budget for 2022 as we get to that. As you know, you manage a business that's got a number of parts and pieces, and you manage it to drive earnings as much as you can. You work to offset any sorts of dilution you might have in the business. We have these other acquisitions to close where we'll put capital to work. I think, also that when you think about the increased equity, we are spending $1 billion a year. That's a pretty good clip of capital, and we're very mindful about our credit metrics, as Dan said earlier. These things, as Dan said, it's a balance. All things in mind, I think it's very prudent to take down the equity here in August or just before. I think talking about the future, listen, we remain confident that we're going to close DELCORA. As Dan said, we've got a couple other things in the hopper, but I think we'll stand behind our guidance here. Yep, completely agree. Got it. Second, just wondering if there's any updated assessment or cost from the February event. I know we had discussed that in the fourth quarter call, but any color there. Not that it would impact 2021 times, but just giving an overall magnitude. Yeah. Not a big dollar spend there. About a half a million dollars of cost that we've looked to establish a regulatory asset on. That kind of takes care of the revenue loss and the operating expenses to resolve the situation there. Looking forward from that event, when we did our root cause analysis and looked at reason for systems being down, as we said in the last call, it's very much driven by electrical outages. Electrical outages as opposed to freezing. Without the outage, we would have continued to be successful in providing our customers with uninterrupted service. There certainly is an opportunity there on some of the systems to do some hardening and make some investments. These aren't huge dollars. In Texas, we're basically in compliance in terms of the number of generators we have for the systems that we have. To invest in more generators, we'd really need the buy-in from the PUC kind of in advance, saying we want to ensure that we can generate power if the power is out. When you look at a fairly large number of systems across Texas, it's a big number to start putting in lots of generators. I don't think the PUC would let us do a tremendous amount beyond what the TCEQ allows at this point. Yeah. We have less than 100,000 customers in Texas. It would cost us in the range of $41 million to put generators in all these facilities. I just don't see customers willing to pay that number. I don't see the Commission willing to sign up for that many. Probably someplace in between what we have, meeting today's regulation, maybe where the hardening that the Commission requires for the future. There might be some opportunity to spend capital and harden the system, as Dan said. We don't see spending at the level where everything would get its own generator. I would call it cost prohibitive. Yeah. maybe a few million dollars, but not tens of millions of dollars. Yeah. Understood. Thank you so much, folks. Yeah. Thank you Insoo. Thank you. Our next question comes from Travis Miller with Morningstar. Hey, Travis. Thanks, Travis. Hi, everyone. Wondering if you could give some more thoughts on Kentucky and the legislation there? Is that a place you've historically looked at acquisitions and just not been able to get it to work? Or now with that legislation, is that a strategic area that you might look at more? Yeah, that's a good question. We have not traditionally looked there because we didn't have a base there. Now that we have a base, a utility base, be it it's a natural gas base. We do have a management team and a regulatory expertise there and an operational team, as I said, albeit natural gas. It does give us a base of operations to look for utilities in Kentucky. Yeah, I think the short answer is we are interested in Kentucky, particularly with that legislation. It's a great regulatory state otherwise. We enjoy operating the gas utility there from an economic standpoint. I would look for us to be very active in Kentucky moving forward. Okay, great. At the national level, as you think about the infrastructure move and some of the proposals there, do you think that's an opportunity more in terms of direct CapEx for you guys in your system, or does it possibly open the opportunity for more acquisitions as kind of these municipals face or look at potential for large investment needs or wants? Yeah. Listen, my hope is that they would focus more of the federal funding on infrastructure on things like separating sanitary and storm sewers, bridges, roads, that sort of thing, because I think that's really where you can't bring private capital as easily to bear. In water and wastewater, we like to think about the solution as bringing low-cost capital to the game here, as well as local rate making. That combination, think about almost like a user fee rather than a federal bailout. To the extent that those federal dollars would flow for our use, I think that would be useful to the extent that it would flow to municipals and give them temporary band-aids on some of their massive capital needs. Obviously, that is not as productive. I really don't see it having a major impact given the vast bucket of need and the relatively small dollars that are designated here for water and wastewater. Sure. Okay, great. I really appreciate the thoughts. You bet. Thank you. Again, as a reminder, please press star one if you would like to join the queue. Our next question comes from Jonathan Reeder with Wells Fargo. Hey, Jonathan. Hey, Jonathan. Hey, good morning, Chris and Dan. Dan, first for you, did you say the repairs benefit is expected to be $0.18-$0.20 of Peoples for the full year? Is that consistent with the benefit realized in full year 2020 on a pro forma basis? For some reason, I thought you had previously indicated it was going to be $0.08-$0.12. Yeah. Jonathan, I did say $0.18-$0.20 for 2021, so you're correct there. If we think about last year, we didn't have a full year of capital. I do think you're right, $0.08-$0.12 is what we said when we had the Investor Day in New York right before COVID started. I'd have checked, it's probably at the high end of that. No, again, we didn't have the full year. We only had 16 days the first quarter and then the subsequent three quarters. Less capital was invested that was repair eligible. Okay. $0.08-$0.12 was for 2020, and then having the full year of capital gets you up to that $0.18-$0. 20 this year. Full year capital with this year's capital program, yes. Got you. Okay, great. Appreciate that. Just to also clarify the comments around usage trends in Q1 and kind of the full year guidance. If we're to assume, call it normal weather, for the remainder of the year in terms of both water and gas consumption, would that put you within the current guidance range or does the strong Q1 have you trending at or above the upper end? I would still say in the guidance range. I think at some point here, we'll see more people return to the workplace. We'll start to see less residential usage, more commercial usage. We may not be the beneficiaries of that commercial usage if we're serving the suburbs and people go back to work in the city. I think we kind of come back to what we call normal usage on COVID basis on the water side. On the gas side, it's so weather dependent. I think the best you can do is sort of assume kind of normal weather through the remainder of the year, and of course, there's always variability around that. I would say, as I said earlier, and then I think Chris reiterated it, I think that $1.64- $1.69 guidance range we gave, that remains intact. I continue to focus on that. Okay, awesome. Maybe this one's for you, Chris. When do you expect Pennsylvania PUC to respond to your appeal of the ALJ's stay in the DELCORA docket? Is there time? Yeah, 30 days. May 20th is the public meeting that they need to respond by. Okay. If they kind of reiterate that they didn't want this thing stayed and move forward, would you think then the Commission's prepared to act before the appeal process plays out? That's a question. I don't want to front run the commissioners. It is a good question, and I think there's a diversity of views among the commissioners. Let's see, we're trying to take these things one step at a time. Let's see what they do on May 20th and then maybe give a better judgment from there. Okay. Last, I know you're limited as to what you can say in regards to the potential settlement, do you feel any additional headway has been made in reaching a compromise since, say, your year-end update in February? Yeah. All I can say is there's been discussions. I'll just say this, and I've said this publicly, so I'm so disappointed in the politics being played here. DELCORA had to raise rates 10% at the end of last year, they 'll probably have to raise them again 10% this year if this continues on. We committed in the transaction that we would only raise rates 3% a year. Already these customers are paying a lot more than they really need to. We continue to ask through a Right- to- Know process how much the county is spending on legal fees, and they're spending literally millions of dollars on this. It's a sad commentary on politics over good economics. Jonathan, we're committed to seeing this thing through. At the end of the day, we think that our contract, as I said, is valid and enforceable, and we plan to take it to the end here. Okay, great. I appreciate those responses. Good luck with DELCORA. Hopefully, we get some movement there, and you can get the deal done soon. Yep. Thank you. Thanks, Jonathan. Thank you. Our next question comes from Verity Mitchell with HSBC. Hi, Verity. Hey, Verity. Hi. Morning. I've got a more general question about your Gas business. There's been a lot of focus on Water. In one of your previous slide decks, you've got a rate of miles for gas rehabilitation. You've obviously got a step-up in this year, and then kind of flat in 2022, and then another step-up in 2023. Are you being conservative, or could you do your gas rehabilitation faster, and therefore spend more? Some comment on that would be interesting. Thank you. Yeah. I think I'll give a couple of opening thoughts and then let Dan jump in too, Verity. When you do a gas rehabilitation program, the number one thing is safety. Depending on where that work is being completed, what it looks like, is it densely populated city of Pittsburgh? Is it out further in more rural areas? Clearly, the complication in the city is difficult, right? We're looking at a construction site just this week out there in Pittsburgh, and they were moving nine feet a day. That's how complicated a city street is. However, out in the more rural areas, you can move much more quickly. The mix of projects is part of the element of what comes to bear here. As you can imagine, what we've tried to do in our capital program is handle those more densely populated areas first and then move into the more rural areas. There's a lot of things to consider in that mix. We've estimated about 15 years in total, and that will probably vary a little bit in terms of pace throughout that period. Dan, do you think about it in any different way than that? No, I think you're right, Chris. I'm looking at the same slide now, Verity, that you're looking at, and there is that step-up in terms of mileage. I believe that what underlies that is a move to doing more mileage outside the city where it is faster to move those miles. Also, Verity, a couple other things to talk about here. One is, we do file with the Pennsylvania PUC a long-term infrastructure improvement plan that really outlines the number of miles we intend to replace year after year. You'll remember, as part of the transaction, we agreed to increase both the mileage and the dollars invested each year. We've built that into our filed LTIIP program. Note that there is that sort of plan in place for how we would do it. The other constraint is obviously qualified labor to implement a capital program. Ramping up a capital program means we need both more crews from outside contractors who are well-qualified to do this, but also a fairly large number of internal resources as well, because in the Gas business, we need internal resources to do the tie-ins to any live gas type of work where we're connecting to customer service lines. There's the question of ramping up on the resource side as well if you try to do this faster. I would say at this point, we think that what we filed in the LTIIP and what we're planning to do is very much as stated on the slide that you're looking at. We'll adhere to that for the time being. Thanks. Really helpful. Thank you. Yep. Thanks, Verity. Thank you. This concludes today's Q and A. I would now like to turn the call back over to Chris for closing remarks. Thank you all for joining us today. As always, Brian, Dan, and I are always available for follow-ups if you need it. Have a great day. Thanks again for joining us. Thank you, ladies and gentlemen. This concludes today's teleconference. You may now disconnect.