American States Water Company (NYSE:AWR) Q2 2023 Results Conference Call August 8, 2023 2:00 PM ET

Company Participants

Bob Sprowls - President and Chief Executive Officer

Eva Tang - Senior Vice President of Finance and Chief Financial Officer

Conference Call Participants

Angie Storozynski - Seaport Global

Jonathan Reeder - Wells Fargo

Operator

Ladies and gentlemen, thank you for standing by. Welcome to the American States Water Company Conference Call discussing the company's Second Quarter 2023 Results. The call is being recorded. If you would like to listen to the replay of this call, it will begin this afternoon at 5:00 p.m. Eastern Time and run through Tuesday, August 15, 2023, on the company's Web site, www.aswater.com. The slides that the company will be referring to are also available on the Web site [Operator Instructions]. After today's presentation, there will be an opportunity to ask questions [Operator Instructions]. Presenting today from American States Water Company are Bob Sprowls, President and Chief Executive Officer; and Eva Tang, Senior Vice President of Finance and Chief Financial Officer.

As a reminder, certain matters discussed during this conference call may be forward-looking statements intended to qualify for the Safe Harbor from liability established by the Private Securities Litigation Reform Act of 1995. Please review description of the company's risks and uncertainties in our most recent Form 10-K and Form 10-Q on file with the Securities and Exchange Commission. In addition, this conference call will include a discussion of certain measures that are not prepared in accordance with Generally Accepted Accounting Principles or GAAP in the United States and constitute non-GAAP financial measures under SEC rules. These non-GAAP financial measures are derived from consolidated financial information but are not presented in our financial statements that are prepared in accordance with GAAP. For more details, please refer to the press release.

At this time, I will turn the call over to Bob Sprowls, President and Chief Executive Officer of American States Water Company.

Bob Sprowls

Thank you, Alan. Welcome everyone, and thank you for joining us today. I'll begin with some brief comments on the quarter. Eva will then discuss some financial details. And then I'll wrap it up with updates on regulatory activity, ASUS, dividends, and then we'll take your questions. It was a productive and positive quarter for the company. I'm very pleased that in late June, the California Public Utilities Commission or CPUC adopted the decisions for Golden State Water Company's water general rate case or GRC to set rates for 2022 through 2024 and the cost of capital proceeding. Both decisions can be viewed as constructive and they enable us to continue investing in the utility infrastructure to provide safe and reliable water services for the communities we serve. The cost of capital decision adopted the authorized return on equity, capital structure and embedded cost of debt prospectively and allows for continuation of the water cost of capital mechanism for adjusting the return on equity. As a result, Golden State Water’s cost of capital reflects a 9.36% return on equity with a 57% equity ratio and a debt cost of 5.1% effective July 31st. Advice letters have been filed with and approved by the CPUC to implement 2023 rates based on the newly adopted general rate case and cost of capital decisions. We started billing customers the new 2023 rates on July 31st and will seek recovery of the retroactive rates from January 1, 2022 to July 30, 2023 within 90 days of implementing the new rates.