《Essential Utilities Inc. (WTRG) 2024年10-K年度報告「NYSE」.pdf》由會員分享，可在線閱讀，更多相關《Essential Utilities Inc. (WTRG) 2024年10-K年度報告「NYSE」.pdf（134頁珍藏版）》請在三個皮匠報告上搜索。
1、 UNITED STATES SECURITIES AND EXCHANGE COMMISSIONWASHINGTON,D.C.20549FORM 10-K(Mark One)ANNUAL REPORT PURSUANT TO SECTION 13 or 15(D)OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31,2024 Or TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF
2、 1934For the transition period from _ to _ Commission File number 1-6659 ESSENTIAL UTILITIES,INC.(Exact name of registrant as specified in its charter)Pennsylvania23-1702594(State or other jurisdiction of incorporation or organization)(I.R.S.Employer Identification No.)762 W Lancaster Avenue,Bryn Ma
3、wr,Pennsylvania19010-3489(Address of principal executive offices)(Zip Code)(610)527-8000(Registrants telephone number,including area code)Securities registered pursuant to Section 12(b)of the Act:Title of each class Trading Symbol(s)Name of each exchange on which registeredCommon stock,par value$0.5
4、0 per share WTRG New York Stock Exchange Securities registered pursuant to Section 12(g)of the Act:None.Indicate by check mark if the registrant is a well-known seasoned issuer,as defined in Rule 405 of the Securities Act.Yes No Indicate by check mark if the registrant is not required to file report
5、s pursuant to Section 13 or Section 15(d)of the Act.Yes No Indicate by check mark whether the registrant(1)has filed all reports required to be filed by Section 13 or 15(d)of the Securities Exchange Act of 1934 during the preceding 12 months(or for such shorter period that the registrant was require
6、d to file such reports),and(2)has been subject to such filing requirements for the past 90 days.Yes No Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months
7、(or for such shorter period that the registrant was required to submit such files).Yes No Indicate by check mark whether the registrant is a large accelerated filer,an accelerated filer,a non-accelerated filer,a smaller reporting company or emerging growth company.See the definitions of“large accele
8、rated filer,”“accelerated filer,”“small reporting company,”and“emerging growth company”in Rule 12(b)-2 of the Exchange Act.:Large accelerated filer Accelerated filer Non-accelerated filer Small reporting company Emerging growth company If an emerging growth company,indicate by check mark if the regi
9、strant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a)of the Exchange Act.Indicate by check mark whether the registrant has filed a report on and attestation to its managements assessment of
10、 the effectiveness of its internal control over financial reporting under Section 404(b)of the Sarbanes-Oxley Act(15 U.S.C.7262(b)by the registered public accounting firm that prepared or issued its audit report.If securities are registered pursuant to Section 12(b)of the Act,indicate by check mark
11、whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements.Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation rece
12、ived by any of the registrants executive officers during the relevant recovery period pursuant to 240.10D.1(b).Indicate by check mark whether the registrant is a shell company(as defined in Rule 12b-2 of the Act).Yes No The aggregate market value of the voting and non-voting common equity held by no
13、n-affiliates of the registrant as of June 30,2024:$10,196,364,496 The number of shares outstanding of the registrants common stock as of February 24,2025:274,922,770 DOCUMENTS INCORPORATED BY REFERENCE(1)Portions of the definitive Proxy Statement,relating to the 2025 annual meeting of shareholders o
14、f registrant,to be filed within 120 days after the end of the fiscal year covered by this Form 10-K,have been incorporated by reference into Part III of this Form 10-K 2025/5/19 14:42wtrg-20241231x10khttps:/www.sec.gov/Archives/edgar/data/78128/000156276225000036/wtrg-20241231x10k.htm1/1342025/5/19
15、14:42wtrg-20241231x10khttps:/www.sec.gov/Archives/edgar/data/78128/000156276225000036/wtrg-20241231x10k.htm2/134 TABLE OF CONTENTS Part I PageItem 1.Business1Item 1A.Risk Factors17Item 1B.Unresolved Staff Comments34Item 1C.Cybersecurity34Item 2.Properties35Item 3.Legal Proceedings35Item 4.Mine Safet
16、y Disclosures35Part II Item 5.Market for the Registrants Common Stock,Related Stockholder Matters and Issuer Purchases of Equity Securities36Item 6.Reserved36Item 7.Managements Discussion and Analysis of Financial Condition and Results of Operations37Item 7AQuantitative and Qualitative Disclosures A
17、bout Market Risk59Item 8.Financial Statements and Supplementary Data60Item 9.Changes in and Disagreements with Accountants on Accounting and Financial Disclosure112Item 9A.Controls and Procedures112Item 9B.Other Information113Item 9C.Disclosure Regarding Foreign Jurisdictions that Prevent Inspection
18、s113Part III Item 10.Directors,Executive Officers and Corporate Governance113Item 11.Executive Compensation114Item 12.Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters114Item 13Certain Relationships and Related Transactions,and Director Independence115Ite
19、m 14.Principal Accountant Fees and Services115Part IV Item 15.Exhibits and Financial Statement Schedules116Item 16.Form 10-KSummary116 Exhibit Index117 Signatures124 Schedule 1 Condensed Parent Company Financial Statements126 02025/5/19 14:42wtrg-20241231x10khttps:/www.sec.gov/Archives/edgar/data/78
20、128/000156276225000036/wtrg-20241231x10k.htm3/134Table of Contents SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS Certain statements in this Annual Report on Form 10-K,or this Annual Report,are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section
21、21E of the Securities Exchange Act of 1934 that are made based upon,among other things,our current assumptions,expectations,plans,and beliefs concerning future events and their potential effect on us.These forward-looking statements involve risks,uncertainties and other factors,many of which are out
22、side our control that may cause our actual results,performance or achievements to be materially different from any future results,performance or achievements expressed or implied by these forward-looking statements.In some cases you can identify forward-looking statements where statements are preced
23、ed by,followed by or include the words“believes,”“expects,”“estimates”,“anticipates,”“plans,”“future,”“potential,”“probably,”“predictions,”“intends,”“will,”“continue,”“in the event”or the negative of such terms or similar expressions.Please refer to the Summary in Item 1A Risk Factors in this Annual
24、 Report for a description of the types of forward-looking statements in this Annual Report.These factors are not necessarily all of the important factors that could cause actual results to differ materially from those expressed in any of our forward-looking statements.Other unknown or unpredictable
25、factors could also have material adverse effects on future results.Given these risks and uncertainties,you should not place undue reliance on any forward-looking statements.You should read this Annual Report completely and with the understanding that our actual future results,performance and achieve
26、ments may be materially different from what we expect.These forward-looking statements represent assumptions,expectations,plans,and beliefs only as of the date of this Annual Report.Except for our ongoing obligations to disclose certain information under the federal securities laws,we are not obliga
27、ted,and assume no obligation,to update these forward-looking statements,even though our situation may change in the future.For further information or other factors which could affect our financial results and such forward-looking statements,see Item 1A Risk Factors.We qualify all of our forward-look
28、ing statements by these cautionary statements.PART I Item 1.Business The Company Essential Utilities,Inc.,referred to as“Essential Utilities”,“Essential”,the“Company”,“we”,“us”,or“our”,a Pennsylvania corporation,is the holding company for regulated utilities providing water,wastewater,or natural gas
29、 services to an estimated 5.5 million people in Pennsylvania,Ohio,Texas,Illinois,North Carolina,New Jersey,Indiana,Virginia,and Kentucky under the Aqua and Peoples brands.One of our largest operating subsidiaries,Aqua Pennsylvania,Inc.,or Aqua Pennsylvania,accounted for approximately 55%of operating
30、 revenues and approximately 67%of income for our Regulated Water segment in 2024.As of December 31,2024,Aqua Pennsylvania provided water or wastewater services to approximately one-half of the total number of water and wastewater customers we serve.Aqua Pennsylvanias service territory is located in
31、the suburban areas in counties north and west of the City of Philadelphia and in 27 other counties in Pennsylvania.Our other regulated water or wastewater utility subsidiaries provide similar services in seven additional states.Our Peoples subsidiaries provide natural gas service to approximately 74
32、5,000 customers in western Pennsylvania and Kentucky.Approximately 95%of the total number of natural gas utility customers we serve are in western Pennsylvania.The Company also operates market-based activities,conducted through its non-regulated subsidiaries,that provide utility service line protect
33、ion solutions and repair services to households and gas marketing and production activities.Currently,the Company seeks to acquire businesses in the U.S.regulated sector,focusing on water and wastewater utilities and to opportunistically pursue growth ventures in select market-based activities,such
34、as infrastructure opportunities that are supplementary and complementary to our regulated water utility businesses.12025/5/19 14:42wtrg-20241231x10khttps:/www.sec.gov/Archives/edgar/data/78128/000156276225000036/wtrg-20241231x10k.htm4/134Table of Contents In October 2023,the Company completed the sa
35、le of its regulated natural gas utility assets in West Virginia,which represented approximately two percent of the Companys regulated natural gas customers.The Company initially received net cash proceeds of$39,965,000,subject to working capital and other adjustments.In March 2024,the Company receiv
36、ed an additional$1,213,000 from the buyer.In January 2024,the Company completed the sale of its interest in three non-utility local microgrid and distributed energy projects for$165,000,000.These transactions are consistent with the Companys long-term strategy of focusing on its core business and wi
37、ll allow the Company to prioritize the growth of its utilities in states where it has scale.The Company used the proceeds from these transactions to finance its capital expenditures and water and wastewater acquisitions,in place of external funding from equity and debt issuances.See Note 3 Dispositi
38、ons in the Notes to Consolidated Financial Statements,which is contained in Item 8 of this Annual Report for additional information.The following table reports our operating revenues,by principal state,for our Regulated Water segment,which includes both water and wastewater utility services,Regulate
39、d Natural Gas segment,and Other and eliminations for the year ended December 31,2024:Operating Revenues(000s)Operating Revenues(%)Pennsylvania$674,051 32.3%Ohio 136,600 6.5%Texas 107,519 5.2%Illinois 101,194 4.9%North Carolina 88,604 4.2%Other states(1)113,912 5.5%Regulated Water segment total 1,221
40、,880 58.6%Pennsylvania 786,722 37.7%Kentucky 56,269 2.7%Regulated Natural Gas segment total 842,991 40.4%Other and eliminations 21,242 1.0%Consolidated$2,086,113 100.0%(1)Includes our water operating subsidiaries in the following states:New Jersey,Indiana,and Virginia.The Company has identified elev
41、en operating segments and has two reportable segments,the Regulated Water segment and the Regulated Natural Gas segment.The Regulated Water segment is comprised of eight operating segments for the Companys water and wastewater regulated utility companies,aligned with the states where we provide thes
42、e services.These operating segments are aggregated into one reportable segment since each of the Companys operating segments has the following similarities:economic characteristics,nature of services,production processes,customers,water distribution or wastewater collection methods,and the nature of
43、 the regulatory environment.The Regulated Natural Gas segment is comprised of one operating segment representing natural gas utility companies,for which the Company provides natural gas distribution services.In addition to the Companys two reportable segments,the Company includes two of its operatin
44、g segments in“Other”.These businesses represent its non-regulated water,wastewater,and natural gas operations,which are not quantitatively significant to be reportable and therefore are included as a component of“Other”.In addition,“Other”and eliminations include corporate costs that have not been a
45、llocated to the Regulated Water and Regulated Natural Gas segments,because they would not be recoverable as a cost of utility service,and intersegment eliminations.Information concerning revenues,net income,significant segment expenses and related financial information for the Regulated Water and Re
46、gulated Natural Gas segments and Other and eliminations for 2024,2023,and 2022,is set forth in Managements Discussion and Analysis of Financial Condition and Results of Operations and in Note 18 Segment Information in the Notes to Consolidated Financial Statements which is contained in Item 8 of thi
47、s Annual Report.22025/5/19 14:42wtrg-20241231x10khttps:/www.sec.gov/Archives/edgar/data/78128/000156276225000036/wtrg-20241231x10k.htm5/134Table of Contents The following table summarizes our operating revenues,by utility customer class,for the Regulated Water and Regulated Natural Gas segments and
48、Other and eliminations for the year ended December 31,2024:Operating Revenues(000s)Operating Revenues(%)Residential water$662,909 31.8%Commercial water 186,534 8.9%Fire protection 42,409 2.0%Industrial water 34,831 1.7%Other water 80,964 3.9%Total water 1,007,647 48.3%Wastewater 199,422 9.6%Other ut
49、ility 14,811 0.7%Regulated Water segment total 1,221,880 58.6%Residential gas 504,426 24.2%Commercial gas 100,662 4.8%Industrial gas 2,279 0.1%Gas transportation 194,413 9.3%Other utility 41,211 2.0%Regulated Natural Gas segment total 842,991 40.4%Other and eliminations 21,242 1.0%Consolidated$2,086
50、,113 100.0%Customers and Seasonality of Business Our water utility customer base is diversified among residential water,commercial water,fire protection,industrial water,other water,wastewater customers,and other utility customers(consisting of contracted services that are associated with the utilit
51、y operations).Residential water and wastewater customers make up the largest component of our water utility customer base,with these customers representing approximately 67%,69%,and 68%,of our water and wastewater revenues for 2024,2023,and 2022,respectively.Substantially all of our water utility cu
52、stomers are metered,which allows us to measure and bill for our customers water consumption.Water consumption per customer is affected by local weather conditions during the year,especially during late spring,summer,and early fall when discretionary and recreational use of water is at its highest.Co
53、nsequently a higher proportion of annual Regulated Water segment operating revenues are realized in the second and third quarters.In general,during these seasons,an extended period of dry weather increases consumption,while above-average rainfall decreases consumption.Also,an increase in the average
54、 temperature generally causes an increase in water consumption.On occasion,abnormally dry weather in our service areas can result in governmental authorities declaring drought warnings and imposing water use restrictions in the affected areas,which could reduce water consumption.See“Business Water U
55、tility Supplies,and Facilities and Wastewater Utility Facilities”for a discussion of water use restrictions that may impact water consumption during abnormally dry weather.The geographic diversity of our water utility customer base reduces the effect of our exposure to extreme or unusual weather con
56、ditions in any one area of our service territories.During the year ended December 31,2024,our operating revenues for our Regulated Water segment were derived principally from the following states:approximately 55%in Pennsylvania,11%in Ohio,9%in Texas,8%in Illinois,and 7%in North Carolina.Water usage
57、 is also affected by changing consumption patterns by our customers,resulting from such causes as increased water conservation and the installation of water saving devices and appliances that can result in decreased water usage.It is estimated that,in the event we experience a 0.50%decrease in resid
58、ential water consumption,it would result in a decrease in annual residential water revenue of approximately$3,000,000,which would likely be partially offset by a reduction in incremental water production expenses such as chemicals and power.32025/5/19 14:42wtrg-20241231x10khttps:/www.sec.gov/Archive
59、s/edgar/data/78128/000156276225000036/wtrg-20241231x10k.htm6/134Table of Contents Our natural gas utility customer base is diversified among residential gas,commercial gas,industrial gas,gas transportation,and other utility.Substantially all of our natural gas utility customers are metered,which all
60、ows us to measure and bill for our customers natural gas usage.Natural gas usage per customer is affected by local weather conditions during the year,especially during the fall,winter,and early spring.These patterns reflect the higher demand for natural gas for heating purposes during the colder mon
61、ths.The impact on our natural gas sales resulting from weather temperatures that are above or below normal is offset partially through our weather normalization adjustment mechanisms in place in Kentucky and in Pennsylvania(effective beginning October 2024).During the year ended December 31,2024,we
62、experienced 4,288 actual heating degree days(HDDs),which was warmer by 18.2%than the average or normal HDDs for Pittsburgh,Pennsylvania,which we use as a proxy for our western Pennsylvania service territory.HDDs are used in the natural gas industry to measure the relative coldness of weather and to
63、estimate the demand for natural gas.Our regulated natural gas revenues and expenses are also affected by the cost of gas.We are generally able to pass the cost of gas through to our customers using a purchased gas adjustment clause;therefore,fluctuations in the cost of purchased gas impact revenues
64、on a dollar-for-dollar basis.Since regulated natural gas revenues are affected by the cost of gas,higher gas costs,as well as general economic conditions,may cause customers to conserve usage,or seek alternative energy sources.In addition,higher gas costs result in an increase to our purchased gas i
65、nventory,which requires additional borrowings under credit facilities,resulting in higher interest expense.The Companys growth in revenues over the past five years is primarily a result of increases in water and wastewater rates,increase in the cost of natural gas in 2021 and 2022,customer growth,an
66、d its acquisition in 2020 of Peoples Natural Gas Company LLC and its affiliated companies,or the Peoples Gas Acquisition.See Economic Regulation for a discussion of water,wastewater,and natural gas rates.The increase in our utility customer base has been due to customers added through acquisitions,p
67、artnerships with developers,and organic growth(excluding dispositions)as shown below:Year Utility Customer Growth Rate2024 0.6%2023 1.0%2022 1.7%2021 1.2%2020 42.9%In 2024,2023,2022,2021,and 2020,our customer count increased by 11,845,5,875,31,537,21,246,and 772,099 customers,respectively,primarily
68、due to the water and wastewater utility systems that we acquired,organic growth,and in 2020,due to the Peoples Gas Acquisition that resulted to the addition of approximately 750,000 natural gas utility customers.Overall,for the five year period of 2020 through 2024,our utility customer base,adjusted
69、 to exclude customers associated with utility system dispositions,increased at an annual compound rate of 12.9%.During the five year period ended December 31,2024,our utility customer base including customers associated with utility system acquisitions and dispositions increased from 1,026,704 at Ja
70、nuary 1,2020 to 1,869,306 at December 31,2024.Acquisitions and Other Growth Ventures We believe that acquisitions will continue to be an important source of customer growth for us.We intend to continue to pursue acquisitions of government-owned and regulated water and wastewater systems that provide
71、 services in areas near our existing service territories or in new service areas.We engage in continuing activities with respect to potential acquisitions,including calling on prospective sellers,performing analyses of and due diligence on acquisition candidates,making preliminary acquisition propos
72、als,and negotiating the terms of potential acquisitions.Further,we are also seeking other potential business opportunities,including but not limited to,partnering with public and regulated utilities to invest in infrastructure projects,growing our market-based activities by acquiring businesses that
73、 provide water and wastewater or other utility-related services,and investing in infrastructure projects.Based on the 2023 U.S.Census American Housing Survey,approximately 89%of the U.S.population obtain their water from public or private water utility systems,and 11%of the U.S.population obtain the
74、ir water from individual wells.With approximately 50,000 community water systems in the U.S.(approximately 81%of which serve less than 3,300 customers),the water industry is the most fragmented of the major utility industries(telephone,natural gas,electric,water and wastewater).The majority of these
75、 community water systems are government-owned.The nations water systems 42025/5/19 14:42wtrg-20241231x10khttps:/www.sec.gov/Archives/edgar/data/78128/000156276225000036/wtrg-20241231x10k.htm7/134Table of Contents range in size from large government-owned systems,such as the New York City water syste
76、m,which serves approximately 8.5 million people,to small systems,where a few customers share a common well.In the states where we operate regulated water utilities,we believe there are over 14,000 community water systems of widely-varying size,with the majority of the population being served by gove
77、rnment-owned water systems.Although not as fragmented as the water industry,the wastewater industry in the U.S.also presents opportunities for consolidation.Based on the 2023 U.S.Census American Housing Survey,approximately 81%of the U.S.population relies on public or private sewer systems,and 19%of
78、 the U.S.population relies on septic tank,cesspool,or other sewer options.A majority of wastewater facilities are government-owned rather than regulated utilities.In the states where we operate regulated water utilities,we believe there are approximately 5,000 wastewater facilities in operation,with
79、 the majority of the population being served by government-owned wastewater systems.Because of the fragmented nature of the water and wastewater utility industries,we believe there are many potential water and wastewater system acquisition candidates throughout the U.S.We believe the factors driving
80、 consolidation of these systems are:the benefits of economies of scale;the increasing cost and complexity of environmental regulations;the need for substantial capital investment;the need for technical and managerial expertise;the desire to improve water quality and service;limited access to cost-ef
81、fective financing;the monetizing of public assets to support,in some cases,the declining financial condition of municipalities;andthe use of system sale proceeds by a municipality to accomplish other public purposes.We are actively exploring opportunities to expand our water and wastewater utility o
82、perations through acquisitions or other growth ventures.During the three-year period ended December 31,2024,we expanded our utility operations by completing 12 acquisitions of water or wastewater utilities or other similar assets.Capital Investment One of the greatest challenges facing the United St
83、ates is the rehabilitation of our nations aging infrastructure.The Company expects to invest approximately$7.8 billion from 2025 through 2029 to meet compliance requirements,improve water and natural gas systems,and better serve customers through improved information technology.These investments inc
84、lude replacing and expanding its water and wastewater utility infrastructure,construction of additional treatment facilities to comply with the latest water quality standards,and replacing and upgrading its natural gas utility infrastructure,with the latter leading to significant reductions in metha
85、ne emissions that occur in aged gas pipes.These figures could change as plans for construction execution are refined.The capital investments made to rehabilitate and expand the infrastructure of the communities we serve is critical to our mission of safely and reliably delivering Earths most essenti
86、al resources.Supply and Facilities Water Utility Supplies and Facilities and Wastewater Utility Facilities-Our water utility operations obtain their water supplies from surface water sources,underground aquifers,and water purchased from other water suppliers.Our water supplies are primarily self-sup
87、plied and processed at twenty-four surface water treatment plants located in five states,and numerous well stations located in the states in which we conduct business.Approximately 6.6%of our water supplies are provided through water purchased from other water suppliers.It is our policy to obtain an
88、d maintain the permits necessary to obtain and treat the water we distribute.We believe that the capacities of our sources of supply,and our water treatment,pumping and distribution facilities,are generally sufficient to meet the present requirements of our customers under normal conditions.We plan
89、system improvements and additions to capacity in response to normal replacement and renewal needs,changing regulatory standards,changing patterns of consumption,and increased demand from customer growth.We also have long-term 52025/5/19 14:42wtrg-20241231x10khttps:/www.sec.gov/Archives/edgar/data/78
90、128/000156276225000036/wtrg-20241231x10k.htm8/134Table of Contents planning processes and maintain contingency plans to minimize the potential impact on service caused by climate variability.The various state utility commissions have generally recognized the operating and capital costs associated wi
91、th these improvements in setting water rates.On occasion,drought warnings and water use restrictions are issued by governmental authorities for portions of our service territories in response to extended periods of dry weather conditions.The timing and duration of the warnings and restrictions can h
92、ave an impact on our water revenues and net income.In general,water consumption in the summer months is more affected by drought warnings and restrictions because discretionary and recreational use of water is at its highest during the summer months.At other times of the year,warnings and restrictio
93、ns generally have less of an effect on water consumption.Drought warnings and watches result in the public being asked to voluntarily reduce water consumption.We believe that our wastewater treatment facilities are generally adequate to meet the present requirements of our customers under normal con
94、ditions.Additionally,we own several wastewater collection systems that convey the wastewater to municipally-owned facilities for treatment.Changes in regulatory requirements can be reflected in revised permit limits and conditions when permits are renewed,typically on a five year cycle,or when treat
95、ment capacity is expanded.Capital improvements are planned and budgeted to meet normal replacement and renewal needs,anticipated changes in regulations,needs for increased capacity related to projected growth,and to reduce inflow and infiltration to collection systems.The various state utility commi
96、ssions have generally recognized the operating and capital costs associated with these improvements in setting wastewater rates for current and new customers.It is our policy to obtain and maintain the permits necessary for the treatment of the wastewater that we return to the environment.Natural Ga
97、s Supply and Transportation Facilities-Our natural gas supply strategy is to ensure a dependable gas supply that is economically priced and which is available for delivery when needed.We purchase natural gas from intrastate,interstate,and local sources,and transport natural gas supplies through vari
98、ous intrastate and interstate pipelines under contracts with remaining terms,including extensions,varying from one month to 10 years.We anticipate that these gas supply and transportation contracts will be renewed or replaced prior to their expiration.The regulations of the states in which we operat
99、e natural gas utilities allow us to pass through changes in the cost of natural gas to our customers under purchased gas adjustment provisions in our tariffs.Depending upon the jurisdiction,the purchased gas adjustment factors are updated periodically,ranging from quarterly to annually.The changes i
100、n the cost of gas billed to customers are subject to review by the applicable regulatory bodies.We use various third-party storage services or owned natural gas storage facilities to meet peak-day requirements and to manage the daily changes in demand due to changes in weather.We own and operate und
101、erground natural gas storage facilities with capacity of 10.5 billion cubic feet(Bcf).Total working capacity is 5.3 Bcf for use during the heating season with a maximum daily withdrawal rate of 115.5 million cubic feet(MMcf).Additionally,we have contracted for off-system storage from interstate pipe
102、lines.The total amount of off-system storage under contract is 34.9 Bcf with a maximum daily withdrawal rate of 588.9 MMcf.We perform studies of our underground natural gas storage facilities to identify capital improvements.It is possible that disruptions to the storage facilities could occur,inclu
103、ding failure of the facilities.On an ongoing basis,we enter into contracts to provide sufficient supplies and pipeline capacity to meet our customers natural gas requirements.However,it is possible for limited service disruptions to occur from time to time due to weather conditions,transportation co
104、nstraints,and other events.As a result of these factors,supplies of natural gas may become unavailable from time to time,or prices may increase rapidly in response to temporary supply constraints or other factors.We enter into firm agreements with suppliers,including major producers and marketers,in
105、tended to provide flexibility to meet the temperature-sensitive needs of its customers.In Pennsylvania,our distribution system is connected to six interstate pipelines,where we maintain capacity we believe is sufficient to meet our customers gas requirements.In Kentucky,our distribution system is co
106、nnected to four interstate pipelines,where we maintain capacity we believe is sufficient to meet our customers gas requirements.62025/5/19 14:42wtrg-20241231x10khttps:/www.sec.gov/Archives/edgar/data/78128/000156276225000036/wtrg-20241231x10k.htm9/134Table of Contents Natural Gas Gathering-Our Penns
107、ylvania Regulated Natural Gas service territory is situated in the Marcellus Shale production region.Approximately 27%of the natural gas supply on the system is from locally produced gas,which we gather and transport into our distribution system.Our gathering system is regulated by the Pennsylvania
108、Public Utility Commission which includes various safety,environmental and,in some circumstances,anti-discrimination requirements,and in some instances complaint-based rate regulation.Our gathering operations may be subject to ratable take and common purchaser statutes in the states in which we opera
109、te.Our Regulated Natural Gas gathering operations could be adversely affected should they be subject in the future to the application of state or federal regulation of rates and services.Our gathering operations could also be subject to additional safety and operational regulations relating to the d
110、esign,construction,testing,operation,replacement,and maintenance of gathering facilities.We cannot predict what effect,if any,such changes might have on our operations,but our Regulated Natural Gas segment could be required to incur additional capital expenditures and increased costs depending on fu
111、ture legislative and regulatory changes.Refer to further discussion below in the Environmental,Health and Safety Regulation and Compliance section.Economic Regulation Most of our utility operations are subject to regulation by their respective state utility commissions,which have broad administrativ
112、e power and authority to regulate billing rates,determine franchise areas and conditions of service,approve acquisitions,and authorize the issuance of securities.The utility commissions also establish uniform systems of accounts and approve the terms of contracts with affiliates and customers,busine
113、ss combinations with other utility systems,and loans and other financings.The policies of the utility commissions often differ from state to state and may change over time.A small number of our water and wastewater utility operations are subject to rate regulation by county or city governments.The p
114、rofitability of our utility operations is influenced to a great extent by the timeliness and adequacy of rate allowances we are granted by the respective utility commissions or authorities in the various states in which we operate.Rate Case Management Capability We maintain a rate case management ca
115、pability,the objective of which is to provide that the tariffs of our utility operations reflect,to the extent practicable,the timely recovery of increases in costs of operations,capital expenditures,interest expense,taxes,energy,materials,and compliance with environmental regulations as well as a r
116、eturn on equity.We file rate increase requests to recover and earn a fair return on the infrastructure investments that we make in improving or replacing our facilities and to recover expense increases.In the states in which we operate,we are primarily subject to economic regulation by the following
117、 state utility commissions:StateUtility CommissionPennsylvaniaPennsylvania Public Utility CommissionOhioPublic Utilities Commission of OhioNorth CarolinaNorth Carolina Utilities CommissionTexasPublic Utility Commission of TexasIllinoisIllinois Commerce CommissionNew JerseyNew Jersey Board of Public
118、UtilitiesKentuckyPublic Service Commission of KentuckyVirginiaVirginia State Corporation CommissionIndianaIndiana Utility Regulatory Commission Our water and wastewater operations are comprised of 38 rate divisions,and our natural gas operations are comprised of two rate divisions.Each of our utilit
119、y rate divisions requires a separate rate filing for the evaluation of the cost of service,including the recovery of investments,in connection with the establishment of rates for that rate division.When feasible and beneficial to our utility customers,we will seek approval from the applicable state
120、regulatory commission to consolidate rate divisions to achieve a more even distribution of costs over a larger customer base.All eight states in which we operate permit us to file a revenue requirement for some form of consolidated rates for all,or some,of the rate divisions in that state.72025/5/19
121、 14:42wtrg-20241231x10khttps:/www.sec.gov/Archives/edgar/data/78128/000156276225000036/wtrg-20241231x10k.htm10/134Table of Contents In Ohio,Virginia,North Carolina,Texas,and Kentucky,we may bill our utility customers,in certain circumstances,in accordance with a base rate filing that is pending befo
122、re the respective regulatory commission,which would allow for interim rates.As of December 31,2024,we have no billings under interim rate arrangements for base rate case filings in progress.Furthermore,some utility commissions authorize the use of expense deferrals and amortization to provide for an
123、 impact on our operating income by an amount that approximates the requested amount in a rate request.In these states,the additional revenue billed and collected prior to the final regulatory commission ruling is subject to refund to customers based on the outcome of the ruling.The revenue recognize
124、d and the expenses deferred by us reflect an estimate as to the final outcome of the ruling.If the request is denied completely or in part,we could be required to refund to customers some or all of the revenue billed to date and write-off some or all of the deferred expenses.Revenue Surcharges Eight
125、 states in which we operate water and wastewater utilities,and two states in which we operate natural gas utilities,permit us to add an infrastructure rehabilitation surcharge to their respective bills to offset the additional depreciation and capital costs associated with capital expenditures relat
126、ed to replacing and rehabilitating infrastructure systems.Without this surcharge,a utility absorbs all of the depreciation and capital costs of these projects between base rate increases.The gap between the time that a capital project is completed and the recovery of its costs in rates is known as r
127、egulatory lag.This surcharge is intended to substantially reduce regulatory lag,which could act as a disincentive for utilities to rehabilitate their infrastructure.In addition,our subsidiaries in some states use a surcharge or credit on their bills to reflect changes in costs,such as changes in sta
128、te tax rates,other taxes and purchased water costs,until such time as the new cost levels are incorporated into base rates.The infrastructure rehabilitation surcharge typically adjusts periodically based on additional qualified capital expenditures completed or anticipated in a future period,and is
129、capped at a percentage of base rates,generally at 5%to 12.75%,and is reset to zero when new base rates that reflect the costs of those additions become effective or when a utilitys earnings exceed a regulatory benchmark.These surcharges provided revenues of$45,749,987 in 2024,$20,260,881 in 2023,and
130、$26,902,294 in 2022.In the majority of our natural gas service territories,the public utility commissions have authorized bare steel and cast-iron replacement programs.In Pennsylvania,we filed a Long-Term Infrastructure Replacement program with the Pennsylvania Public Utility Commission where we hav
131、e committed to the replacement of bare steel and cast-iron pipe.In Kentucky,we have a pipe replacement program tariff,which allows adjustment of regulated rates annually to earn a return on capital expenditures incurred subsequent to our last rate case which were associated with the replacement of b
132、are steel and vintage plastic pipe.Gas costs incurred to serve our natural gas customers represent a significant operating expense.Our regulated natural gas rates,in all jurisdictions,contain a Purchased Gas Adjustment(PGA),which is reflected in our tariffs.The PGA allows us to timely charge for cha
133、nges in the cost of purchased gas,inclusive of unaccounted for gas expense based on actual experience.PGA procedures involve periodic filings and hearings before the state regulatory commissions to establish price adjustments for a designated future period.The procedures also provide for inclusion i
134、n later periods of any variances between actual recoveries representing the estimated costs and actual costs incurred.The PGA is subject to periodic review and audit by the state regulatory commissions who also have the authority to disallow previously incurred costs.In Pennsylvania,the gas cost com
135、ponent of uncollectible accounts expense,gas procurement costs,and certain costs to maintain a supplier choice program,where customers can elect their natural gas supplier,are recovered by mechanisms outside of typical base rate recovery.Additionally,in Pennsylvania,we recover the costs related to u
136、niversal service programs,whereby customers who meet certain income guidelines receive assistance toward paying their monthly bill,weatherization services,and other programs.In Kentucky,the gas cost component of uncollectible accounts expense is recovered by a recovery mechanism outside of base rate
137、 recovery.Income Tax Accounting Method Change The Company uses the flow-through method to account for the repairs tax deduction for qualifying utility infrastructure at its regulated Pennsylvania and New Jersey subsidiaries.The flow-through method of recording income tax benefits results in a reduct
138、ion to current income tax expense and is included in utility customers rates,which generally is subject to a collar mechanism.82025/5/19 14:42wtrg-20241231x10khttps:/www.sec.gov/Archives/edgar/data/78128/000156276225000036/wtrg-20241231x10k.htm11/134Table of Contents In April 2023,the Internal Reven
139、ue Service issued Revenue Procedure 2023-15 which provides a safe harbor method of accounting that taxpayers may use to determine whether expenses to repair,maintain,replace,or improve natural gas transmission and distribution property must be capitalized for tax purposes.The Company adopted the met
140、hodology on its 2023 tax return.In the second quarter of 2023,based on the tax legislative guidance that was issued,the Company reevaluated the uncertain tax positions related to the Regulated Water Segment and ultimately released a portion of its historical income tax reserves.Concurrently,the Comp
141、any deferred this tax benefit from the reserve release as a regulatory liability.The accounting treatment has been determined in the rate order issued on February 7,2025,by the Pennsylvania Public Utility Commission.Please refer to Note 7 Income Taxes for more detail.Fair Market Value Legislation In
142、 April 2016,Pennsylvania enacted legislation allowing the public utility commission to utilize fair market value to set ratemaking rate base instead of the depreciated original cost of water or wastewater assets for certain qualifying municipal acquisitions.The legislation includes a process for eng
143、aging two independent utility valuation experts to perform appraisals that are filed with the public utility commission and then averaged and compared to the purchase price.The ratemaking rate base is the lower of the average of the appraisals or the purchase price and is subject to regulatory appro
144、val.Illinois,Indiana,New Jersey,North Carolina,Ohio,Virginia,and Texas also have legislation that allows the use of fair market value under varying rules and circumstances.We believe that this legislation encourages consolidation in the water and wastewater industry,providing municipalities with an
145、option for exiting the business if they are dealing with challenges associated with their aging,deteriorating water and wastewater assets,do not have the expertise or technical capabilities to continue to comply with ever-increasing environmental regulations,or simply want to focus on other communit
146、y priorities.In June 2024,the Pennsylvania public utility commission updated existing procedures and guidelines designed to increase public involvement and ensure greater consistency in the process for reviewing and evaluating the acquisition and valuation of municipal-owned or authority-owned water
147、 and wastewater systems in Pennsylvania.This includes requirements for public notice and meetings,requires a rate impact notice,and provides other measures to improve the fair market value process when investor-owned utilities acquire water and wastewater utilities in Pennsylvania.Revenue Stability
148、Mechanisms Revenue stability mechanisms separate the volume of water sold from our ability to meet our cost of service and infrastructure costs.These mechanisms allow us to recognize revenue based on a target amount established in the last rate case,and then record either a regulatory asset or liabi
149、lity based on the cumulative difference over time,which results in either a refund due to customers or a payment from customers.In Illinois,our operating subsidiary utilizes a revenue stability mechanism.Additionally,a weather-normalization adjustment(WNA)mechanism is in place for our natural gas cu
150、stomers served in Kentucky,and effective October 2024,to our natural gas customers in Pennsylvania.The WNA serves to minimize the effects of weather on the Companys results for its residential and small commercial natural gas customers.This regulatory mechanism adjusts revenues earned for the varian
151、ce between actual and normal weather and can have either positive(warmer than normal)or negative(colder than normal)effects on revenues.Customer bills are adjusted during the December through April heating season for our natural gas customers in Kentucky,and the October to May heating season for our
152、 natural gas customers in Pennsylvania,with rates adjusted for the difference between actual revenues and revenues calculated under this mechanism billed to the customers.Competition In general,we believe that Essential Utilities and its water,wastewater,and natural gas subsidiaries have valid autho
153、rity,free from unduly burdensome restrictions,to enable us to carry on our business as presently conducted in the franchised or contracted areas we now serve.The rights to provide water,wastewater,or natural gas service to customers in a particular franchised service territory are generally non-excl
154、usive,although the applicable utility commissions usually allow only one regulated utility to provide service to customers in a given area.In some instances,another water utility provides service to a separate area within the same political subdivision served by one of our subsidiaries.Additionally,
155、our larger natural gas customers may bypass gas distribution services by gaining distribution directly from interstate pipelines,other gas distributors,or other energy sources.As a regulated utility,we believe there is little competition for the daily water,wastewater,and natural gas service we prov
156、ide to our customers.92025/5/19 14:42wtrg-20241231x10khttps:/www.sec.gov/Archives/edgar/data/78128/000156276225000036/wtrg-20241231x10k.htm12/134Table of Contents Although our natural gas subsidiaries are not currently in significant direct competition with any other distributors of natural gas in i
157、ts service areas,we do compete with suppliers of other forms of energy such as fuel oil,electricity,propane,coal,wind,and solar.Competition can be intense among the energy sources with price being the primary consideration.This is particularly true for industrial customers who have the ability to sw
158、itch to alternative fuels.Natural gas generally benefits from a competitive price advantage over oil,electricity,and propane.Competition from renewable energy sources such as solar and wind is likely to increase as the political environment currently favors these energy sources through incentives or
159、 by placing restrictions on emissions from the burning of fossil fuels.Water and wastewater utilities may compete for the acquisition of other water and wastewater utilities or for acquiring new customers in new service territories.Competition for these acquisitions generally comes from nearby utili
160、ties,either other regulated utilities or municipal-owned utilities,and sometimes from strategic or financial purchasers seeking to enter or expand in the water and wastewater industry.We compete for new service territories and the acquisition of other utilities on the following bases:economic value;
161、economies of scale;our ability to provide quality water,wastewater,and natural gas service;our existing infrastructure network;our ability to perform infrastructure improvements;our ability to comply with environmental,health,and safety regulations;our technical,regulatory,and operational expertise;
162、our ability to access capital markets;and our cost of capital.The addition of new service territories and the acquisition of other utilities by regulated utilities such as the Company are generally subject to review and approval by the applicable state utility commissions.In a very small number of i
163、nstances in one of our southern states,where there are municipally-owned water or wastewater systems near our operating divisions,the municipally-owned system may either have water distribution or wastewater collection mains that are located adjacent to our divisions mains or may construct new mains
164、 that parallel our mains.In these rare circumstances,the municipally-owned system may attempt to voluntarily offer service to customers who are connected to our mains,resulting in our mains becoming surplus or underutilized without compensation.In the states where our water subsidiaries operate,it i
165、s possible that portions of our subsidiaries operations could be acquired by municipal governments by one or more of the following methods:eminent domain;the right of purchase given to or reserved by a municipality or political subdivision when the original franchise was granted;and,the right of pur
166、chase given or reserved under the law of the state in which the subsidiary was incorporated or from which it received its permit.The price to be paid upon such an acquisition by the municipal government is usually determined in accordance with applicable law under eminent domain.In other instances,t
167、he price may be negotiated,fixed by appraisers selected by the parties,or computed in accordance with a formula prescribed in the law of the state or in the particular franchise or charter.We believe that our operating subsidiaries would be entitled to fair market value for any assets that are conde
168、mned,and we believe the fair market value would be in excess of the book value for such assets.Despite maintaining a program to monitor condemnation interests and activities that may affect us over time,one of our primary strategies continues to be to acquire additional water and wastewater systems,
169、to maintain our existing systems where there is a business or a strategic benefit,and to actively oppose unilateral efforts by municipal governments to acquire any of our operations,particularly for less than the fair market value of our operations or where the municipal government seeks to acquire
170、more than it is entitled to under the applicable law or agreement.On occasion,we may 102025/5/19 14:42wtrg-20241231x10khttps:/www.sec.gov/Archives/edgar/data/78128/000156276225000036/wtrg-20241231x10k.htm13/134Table of Contents voluntarily agree to sell systems or portions of systems in order to hel
171、p focus our efforts in areas where we have more critical mass and economies of scale or for other strategic reasons.Environmental,Health and Safety Regulation and Compliance The Companys mission is“to sustain life and improve economic prosperity by safely and reliably delivering Earths most essentia
172、l resources to customers and communities”.We are committed to protecting the environment and the health and safety of our employees,customers,and the public and continue to adhere to applicable regulatory standards.We integrate environmental,health,and safety requirements into planning,decision-maki
173、ng,construction,operations,and maintenance activities that we perform.Provision of water and wastewater services is subject to regulation under the federal Safe Drinking Water Act,the Clean Water Act,and related state laws,and under federal and state regulations issued under these laws.These laws an
174、d regulations establish criteria and standards for drinking water and for wastewater discharges.In addition,we are subject to federal and state laws and other regulations relating to solid waste disposal,dam safety,and other aspects of our operations.From time to time,Essential Utilities has acquire
175、d,and may acquire,systems that have environmental compliance issues.Environmental compliance issues also arise in the course of normal operations or as a result of regulatory changes.Essential Utilities attempts to align capital budgeting and expenditures to address these issues in due course.We est
176、imate the capital expenditures required to address outstanding environmental compliance issues in our water and wastewater systems and budgeted in our capital program to be approximately$104,000,000,or less than 3%of our expected total water and wastewater capital expenditures over the next five yea
177、rs(2025-2029).These capital expenditures do not include the amounts related to compliance with the final National Primary Drinking Water Regulation(NPDWR)and Lead and Copper Rule Improvements(LCRI),discussed below,which are budgeted separately.We are also parties to agreements with regulatory agenci
178、es in Pennsylvania,Texas,and Illinois under which we have committed to make improvements for environmental compliance.These agreements are intended to provide the regulators with assurance that problems covered by these agreements will be addressed,and the agreements generally provide protection fro
179、m fines,penalties,and other actions while corrective measures are being implemented.We are working with state environmental officials in Pennsylvania,Texas,and Illinois to implement or amend regulatory agreements as necessary.Our Regulated Natural Gas utility operations are subject to stringent and
180、complex laws and regulations pertaining to the environment.Legislative and regulatory actions to address climate change are in various phases of review or implementation in the United States.These measures could include emissions limits,reporting requirements,carbon taxes,and incentives or mandates
181、to conserve energy or use renewable energy sources.As an owner or operator of natural gas pipelines,distribution systems and storage,and the facilities that support these systems,we must comply with these laws and regulations at the federal,state,and local levels.Failure to comply with these laws an
182、d regulations may trigger a variety of administrative,civil,and criminal enforcement measures,including the assessment of monetary penalties,the imposition of remedial actions,and the issuance of orders enjoining future operations.Certain environmental statutes impose strict,joint and several liabil
183、ity for costs required to assess,clean up,and restore sites where hazardous substances have been stored,disposed or released.Safe Drinking Water Act-The Safe Drinking Water Act establishes criteria and procedures for the U.S.Environmental Protection Agency(EPA)to develop national quality standards f
184、or drinking water.Regulations issued pursuant to the Safe Drinking Water Act set standards regarding the amount of microbial and chemical contaminants and radionuclides in drinking water.On April 10,2024,the EPA announced the final NPDWR for the treatment of six per-and polyfluoroalkyl substances or
185、 compounds(PFAS).The NPDWR established the maximum contaminant levels(MCLs)in drinking water and allows for a five-year window to comply.The Company performed its analysis of the NPDWR and estimated an investment of at least$450,000,000 of capital expenditures to install additional treatment facilit
186、ies over the Compliance Period in order to comply(i.e.,2029 pending no delays due to lawsuits).This figure could increase as plans for construction execution are refined or if additional sites require treatment in the future.Additionally,the Company estimates annual operating expenses of approximate
187、ly five percent of the installed capital expenditures,in todays dollars,related to testing,112025/5/19 14:42wtrg-20241231x10khttps:/www.sec.gov/Archives/edgar/data/78128/000156276225000036/wtrg-20241231x10k.htm14/134Table of Contents treatment,and disposal.These are preliminary estimates and actual
188、capital expenditures and expenses may differ based upon a variety of factors,including supply chain issues and site-by-site requirements.On April 19,2024,the EPA announced a final rule that designated two PFAS chemicals,perfluorooctanoic acid(PFOA)and perfluorooctanesulfonic acid(PFOS),as hazardous
189、substances under the Comprehensive Environmental Response,Compensation,and Liability Act(CERCLA),also known as Superfund.This final action will address PFOA and PFOS contamination by enabling investigation and cleanup of these harmful chemicals and ensuring that leaks,spills,and other releases are r
190、eported.In addition to the final rule,the EPA issued a separate CERCLA enforcement discretion policy that makes it clear that EPA will focus enforcement on parties who significantly contributed to the release of PFAS chemicals into the environment,including parties that have manufactured PFAS or use
191、d PFAS in the manufacturing process,federal facilities,and other industrial parties.The policy identifies examples for operators of public water systems and wastewater systems or entities performing a public service role in providing safe drinking water,handling municipal solid waste,treating or man
192、aging stormwater and wastewater,disposing of pollution control residuals,or ensuring beneficial application of wastewater products as a fertilizer substitute.The potential liabilities to the Company,if any,resulting from this rule are currently being evaluated.Multiple lawsuits were filed by various
193、 companies and industry groups against the EPAs PFAS rule and are awaiting court action.The Company continues to advocate for actions to hold polluters accountable and is part of the Multi-District Litigation and other legal actions against multiple PFAS manufacturers and polluters to attempt to ens
194、ure that the ultimate responsibility for the cleanup of these contaminants is attributed to the polluters and is seeking damages and other costs to address the contamination of its public water supply systems by PFAS.Capital expenditures and operating costs required as a result of water quality stan
195、dards have been traditionally recognized by state utility commissions as appropriate for inclusion in establishing rates;however,we are also actively applying for grants and low interest loans,whenever possible,to reduce the overall cost to customers.The Company is also monitoring ongoing litigation
196、 and settlement activity with manufacturers of PFAS in these proceedings.For more information,see Item 8-Note 9 to the Companys Notes to Consolidated Financial Statements.Clean Water Act-The Clean Water Act regulates discharges from drinking water and wastewater treatment facilities into lakes,river
197、s,streams,and groundwater.It is our policy to obtain and maintain all required permits and approvals for the discharges from our water and wastewater facilities,and to comply with all conditions of those permits and other regulatory requirements.A program is in place to monitor facilities for compli
198、ance with permitting,monitoring and reporting for wastewater discharges.We are continuously modernizing wastewater treatment methods,ensuring our systems protect the surrounding environment and adhere to current standards.From time to time,discharge violations may occur which may result in fines.The
199、se fines and penalties,if any,are not expected to have a material impact on our business,financial condition,or results of operations.We are also parties to agreements with regulatory agencies in several states where we operate while improvements are being made to address wastewater discharge issues
200、.The EPA has identified leveraging wastewater discharge permitting and application of biosolids,or sewage sludge,containing PFAS as areas of focus in its PFAS Strategic Roadmap.Solid Waste Disposal-The handling and disposal of waste generated from water and wastewater treatment facilities is governe
201、d by federal and state laws and regulations.A program is in place to monitor our facilities for compliance with regulatory requirements,and we are not aware of any significant environmental remediation costs necessary from our handling and disposal of waste material from our water and wastewater ope
202、rations.Dam Safety-Our subsidiaries own 32 dams,of which 18 are classified as high hazard dams that are subject to the requirements of the federal and state regulations related to dam safety,which undergo regular inspections and an annual engineering inspection.After a thorough review and inspection
203、 of our dams by professional outside engineering firms,we believe that all 18 dams are structurally sound and well-maintained,except as described below.These inspections provide recommendations for ongoing rehabilitation which we include in our capital improvement program.The Company has approximate
204、ly$39,000,000 in capital improvements budgeted between 2025 and 2029 for dam improvements.We performed studies of our dams that identified five high hazard dams in Pennsylvania and one high hazard dam in Ohio requiring capital improvements.These capital improvements result from the adoption by state
205、 regulatory agencies of revised formulas for calculating the magnitude of a possible maximum flood event.The most significant capital improvement remaining to be performed in our dam improvement program is on one dam in Pennsylvania at a total 122025/5/19 14:42wtrg-20241231x10khttps:/www.sec.gov/Arc
206、hives/edgar/data/78128/000156276225000036/wtrg-20241231x10k.htm15/134Table of Contents estimated cost of$15,400,000.Design for this dam commenced in 2013 and construction is expected to be completed in 2030.An additional four high hazard dams in Pennsylvania were recently added due to an acquisition
207、 in 2023.These dams are undergoing additional evaluations but have capital improvements budgeted for currently identified needs in the 2025 to 2029 period.Lead and Copper Rule On October 30,2024,the EPA issued the final LCRI which require water systems to identify and replace lead pipes by 2037,lowe
208、rs the lead action level threshold,and requires more proactive communications about lead pipes and plans for replacements,among other items.The LCRI builds upon the Lead and Copper Rule Revisions(LCRR)issued in 2021 and the Lead and Copper Rule(LCR)issued in 1992.The Company has been replacing lead
209、service lines as part of its ongoing water main replacement and service line renewal programs,and in accordance with applicable state regulations.Pursuant to the LCRR,the Company completed the submission of its initial lead service line inventories on October 14,2024.The Company estimates that appro
210、ximately 6%of its regulated water service systems contain some lead or galvanized service lines requiring replacement.The Company currently has budgeted approximately$210,000,000 of capital expenditures over the next five years for lead and galvanized service line replacement.Management is still rev
211、iewing the final LCRI and its impact to the Company.Partnership for Safe Water Program Essential Utilities is a proud participant in the American Water Works Associations(AWWA)Partnership for Safe Water Program.This voluntary program is a commitment to excellence within the drinking water community
212、above and beyond the EPAs stringent treatment goals.All of our active surface water treatment plants within Pennsylvania,Ohio,Virginia,and Illinois maintain good standing in the program which includes many awards of achievement.The honors include the“Directors Award”(achieved at eight systems)which
213、recognizes plants that have:1)completed a comprehensive self-assessment report,2)created an action plan for continuous improvement,and 3)provided several evaluations of performance demonstrating operational excellence.Several of our systems have met these criteria annually and have received 5-,10-,1
214、5-,and 20-year subscriber awards.Furthermore,our Roaring Creek Pennsylvania treatment plant has received the Phase IV Excellence Award,the highest honor achieved in the Partnership Program.Safety Standards-Our facilities and operations may be subject to inspections by representatives of the Occupati
215、onal Safety and Health Administration from time to time.We maintain safety policies and procedures to comply with the Occupational Safety and Health Administrations rules and regulations,but violations may occur from time to time,which may result in fines and penalties,which are not expected to have
216、 a material impact on our business,financial condition,or results of operations.We endeavor to correct such violations promptly when they come to our attention.Pipeline and Hazardous Materials Safety Administration(PHMSA)Regulations Under the Protecting Our Infrastructure of Pipelines and Enhancing
217、Safety(PIPES)Act of 2020,PHMSA,an agency of the U.S.Department of Transportation(DOT),has revised,and continues to revise,the pipeline safety regulations to require operators to update,as needed,their existing distribution integrity management plans,emergency response plans,and operations and mainte
218、nance plans.In May 2023,PHMSA proposed numerous regulatory revisions to minimize methane emissions and improve public safety.Under these proposed revisions,we would be required to increase the frequency of leak detection surveys,accelerate the repair of leaks found,and expand our existing advanced l
219、eak detection program.The final rule is expected to be published in the first or second quarter of 2025,with an implementation period of 24 months.In September 2023,PHMSA proposed additional regulatory revisions to enhance distribution system safety through equipment and procedural expectations.Oper
220、ators will be required to incorporate additional protections for low pressure distribution systems that prevent over-pressurization,amend construction procedures designed to minimize the risk of incidents caused by system over-pressurization,and update distribution integrity management programs to c
221、over and prepare for over-pressurization incidents.On November 30,2023,the House Transportation&Infrastructure Committee introduced new pipeline safety reauthorization legislation known as the PIPES Act of 2023 to reauthorize and finalize PHMSAs safety programs for the next four years.Peoples has in
222、 place integrity programs designed to maintain the safe storage and delivery of natural gas through transmission and distribution systems in order to ensure the safety of its employees,customers,and the community.These include a Transmission Integrity Management Program which outlines methods for ha
223、ndling threats and maintaining the integrity of the pipeline;a Distribution Integrity Management Program which is dedicated to the safe operation of the distribution system that delivers natural gas to customers;and,a Storage Integrity Management Plan that 132025/5/19 14:42wtrg-20241231x10khttps:/ww
224、w.sec.gov/Archives/edgar/data/78128/000156276225000036/wtrg-20241231x10k.htm16/134Table of Contents governs the safe operation,maintenance,and integrity testing of company-owned storage facilities.To the extent new laws or regulations adopted by PHMSA,like those summarized above,impose more stringen
225、t requirements on our facilities and operations,we may be required to incur capital and operating costs that may be material.In addition,we may be subject to the DOTs enforcement actions and penalties if the Company fails to comply with pipeline regulations.Physical Security We maintain security mea
226、sures at our facilities,and collaborate with federal,state and local authorities and industry trade associations regarding information on possible threats and physical security measures for water,wastewater,and natural gas utility operations.The costs incurred are expected to be recoverable in custo
227、mer rates and are not expected to have a material impact on our business,financial condition,or results of operations.Environmental Stewardship The way we do business at Essential reflects our commitment to a sustainable,safe,and healthy environment for all our stakeholders.Sustainability is deeply
228、engrained in our business strategy.We ensure environmental stewardship remains a priority for management by factoring several benchmarks into executive compensation.In 2024,for the third consecutive year,the Company has been named to Newsweeks list of Americas Most Responsible Companies,which celebr
229、ates public companies that have demonstrated meaningful and impactful environmental,social and corporate governance business practices.Early in 2021,we announced an enterprise-wide commitment that by 2035,we will reduce our Scope 1 and 2 greenhouse gas(GHG)emissions by 60%from our 2019 baseline.This
230、 will be achieved by extensive gas pipeline replacement,renewable energy purchasing,accelerated methane leak detection and repair,and various other currently planned initiatives that are highly feasible with proven technology.Of our Scope 1 and 2 GHG emissions,89%are driven by our gas distribution b
231、usiness.We have replaced 268 miles of gas pipeline in 2024 and over 930 since 2021.We also began procuring nearly 100%renewable electricity to power our water and wastewater operations in Illinois,New Jersey,Ohio,and Pennsylvania in 2022.We estimated that as of December 31,2023,we have achieved 25%e
232、missions reduction from our 2019 baseline.The Company manages climate-change matters through significant board-level oversight.At the management level,there is an oversight committee,which is a group of about a dozen of the Companys senior leaders across the organization and the Chief Executive Offi
233、cer,that meet at least once each quarter to discuss these topics.The Companys environmental sustainability initiatives and strategy are discussed further in our sustainability reporting,which can be found on our website at https:/esg.essential.co.Such reports are not incorporated by reference and sh
234、ould not be considered part of this Annual Report.Human Capital Management The Company values its workforce as one of its most important assets.The Company is dedicated to creating a sustainable working atmosphere for its employees to attract and retain the best employees.Human capital measures and
235、objectives that the Company focuses on in managing its business include the health and safety of its employees,succession planning,voluntary attrition rate,and diversity,equity and inclusion initiatives.As of December 31,2024,we employed a total of 3,291 full-time employees.Our subsidiaries are part
236、ies to 23 labor agreements with labor unions covering 1,664 employees.The labor agreements expire at various times up until 2028.Health and Safety-Safety is the foundation of our business and guides all our employees actions.The Company continues to invest in safety improvements,implement policies a
237、nd procedures,develop technical training and guidelines for our employees,and leverage new tools and technology to improve our maps,records and infrastructure performance.The Companys Senior Leadership Safety Council leads our safety efforts and is supported by the Safety Steering Committee,state an
238、d facility committees and leaders that operate at the local site level.Hazards in the workplace are actively identified,and management tracks incidents so remedial actions can be taken to improve workplace safety.To encourage managers to promote a safe environment,related metrics are incorporated in
239、 managements incentive compensation plans.142025/5/19 14:42wtrg-20241231x10khttps:/www.sec.gov/Archives/edgar/data/78128/000156276225000036/wtrg-20241231x10k.htm17/134Table of Contents The Company provides free access to an employee assistance program,which offers a variety of innovative,flexible,an
240、d convenient employee health and wellness programs.Through our partnership with our benefit services provider,personalized mental health assistance is available to all employees and their family members;support is available 24/7 via in-person,phone or virtual visits with a licensed counselor.Employe
241、e Development and Training-The Company continues to invest in training and development programs for employees so that they may evolve and enhance their skills in their areas of expertise.The Company offers several learning opportunities through partnerships with one of the leading online learning pr
242、oviders,business school certificate programs,tuition reimbursement for post-secondary degree granting programs,and individual career coaching.At Essential,we believe in an integrated talent development approach.We utilize the“70/20/10 model”for development,which holds that 70%of learning happens on
243、the job through stretch goals and critical assignments,20%of learning occurs through mentoring and coaching and involvement in professional and industry related activities,and 10%of learning occurs within a virtual or live learning environment.We align our development model to support our vision,mis
244、sion,and competencies,with a balanced approach to developing our workforce that leads us to the development of a confident,committed,and high-performance culture.Succession Planning Essential has organizational workforce analysis and planning programs to ensure the Company has the talent it needs fo
245、r the future.By conducting stay interviews with key performers,the Company learns where talent risks may arise.Under the Companys Corporate Governance Guidelines,the Board of Directors is responsible for the development and periodic review of a management succession plan for the Chief Executive Offi
246、cer and other executives.Annually,the Board of Directors reviews the Companys succession planning process for the Chief Executive Officer and the named executive officers.During this review,the directors review succession candidates on an immediate basis and more developmental candidates to ensure t
247、hat the Company is well-prepared for the future.Voluntary Attrition and Turnover-The Company measures turnover rates of its employees in assessing the Companys overall human capital.The Companys voluntary attrition rate(not including retirements)for 2024 was 5.3%at the executive and senior managemen
248、t level,4.5%at the mid-level manager level,8.0%at the professional level,and 7.0%across all other employees.Our overall voluntary attrition rate of 6.7%in 2024 was lower than last years voluntary attrition rate of 7.6%.We believe our low voluntary attrition rate is in part a result of the Companys c
249、ontinued commitment to employee development,competitive pay and benefits,and our culture.Diversity,Equity and Inclusion-Diversity of backgrounds,ideas,thoughts,and experiences is essential to our culture and the way we do business.Creating an environment where our differences are valued and where ev
250、ery person feels a sense of belonging and engagement supports a thriving organization that cares about our customers and ensures our continued long-term success.In order to promote a culture of diversity and inclusion,we have conducted educational workshops to foster better understanding of differen
251、t points of view and how pre-conceived notions impact relationships at work.We also support diverse segments of our workforce through employee resource groups,such as the Black Resource Group,LGBTQ+Pride Resource Group,and Womens Resource Group.These groups welcome participation from all employees i
252、n order to learn from a cultural perspective and support each other through allyship.We also believe diversity in our Board of Directors is critical for effective governance.Candidates for nomination to the Board are considered by the Corporate Governance Committee based on their personal abilities,
253、qualifications,independence,knowledge,judgment,character,leadership skills,education,background,and their expertise and experience in fields and disciplines relevant to the Company.In October 2024,we were recognized as a Champion of Board Diversity by The Forum of Executive Women for having one-thir
254、d of our board comprised of women for the sixth year since 2016.Total Rewards-We invest in our workforce by offering a total rewards package that is targeted to be competitive with the market in which we compete for talent,while allowing individual pay to vary equitably based on performance,skills a
255、nd experience.Our total rewards package includes a combination of salaries,short and long-term incentives,health and wellness benefits,retirement 2025/5/19 14:42wtrg-20241231x10khttps:/www.sec.gov/Archives/edgar/data/78128/000156276225000036/wtrg-20241231x10k.htm18/134benefits,and other benefits whi
256、ch we regularly assess against the current business environment and labor market to ensure they are competitive.152025/5/19 14:42wtrg-20241231x10khttps:/www.sec.gov/Archives/edgar/data/78128/000156276225000036/wtrg-20241231x10k.htm19/134Table of Contents Communication and Engagement We believe that
257、our employees are critical to our business,and it is essential to have an environment of high engagement and inclusivity in which employees thrive.We use a variety of communication channels to help employees stay informed and to facilitate direct dialogue,including open forums with our executives,to
258、wn halls,regular engagement surveys,employee resource groups,and regular performance feedback sessions between employees and their supervisors.We value feedback from our employees,as it helps us gain a deeper understanding of areas where we are doing well and where we need improvement.Periodically,e
259、mployees are requested to participate in a culture assessment by completing an anonymous survey.We have worked with various functional areas to create and implement action plans to address areas of employee concern.Executive management also regularly conducts town hall-style meetings with employees,
260、where they have the opportunity to ask questions,voice opinions,and share feedback.Citizenship As a mission-based organization,we are driven to improve the quality of life and livelihood of our customers and the communities we serve.Through our charitable giving program,employees are encouraged to e
261、ngage in philanthropy through the United Way campaign and matching gift program.Essential matches 100%,up to a maximum of$500 per calendar year per employee,for personal contributions made by an employee or their spouse or domestic partner to qualifying nonprofit organizations.At various times throu
262、ghout the year,the Company supports its employees in volunteering their time and talents to give back to their communities.Management and Board Oversight Our Board of Directors has various committees including an audit committee,an executive compensation committee,a corporate governance committee,an
263、d a risk mitigation and investment policy committee.Each of these committees has a formal charter.We also have Corporate Governance Guidelines and a Code of Ethical Business Conduct.Copies of these charters,guidelines,and codes can be obtained free of charge from our Investor Relations page on our w
264、eb site,www.essential.co.In the event we amend or waive any portion of the Code of Ethical Business Conduct that applies to any of our directors,executive officers,or senior financial officers,we will post that information on our web site.Available Information We file annual,quarterly,current report
265、s,proxy statements,and other information with the Securities and Exchange Commission(SEC).You may obtain our SEC filings from the SECs web site at www.sec.gov.Our internet web site address is www.essential.co.We make available free of charge through our web sites Investor Relations page all of our f
266、ilings with the SEC,including our annual report on Form 10-K,quarterly reports on Form 10-Q,current reports on Form 8-K,and other information.These reports and information are available as soon as reasonably practicable after such material is electronically filed with the SEC.In addition,you may req
267、uest a copy of the foregoing filings,at no cost by writing or telephoning us at the following address or telephone number:Investor Relations DepartmentEssential Utilities,Inc.762 W.Lancaster AvenueBryn Mawr,PA 19010-3489Telephone:610-527-8000 The references to our web site and the SECs web site are
268、intended to be inactive textual references only,and the contents of those web sites are not incorporated by reference herein and should not be considered part of this or any other report that we file with or furnish to the SEC.162025/5/19 14:42wtrg-20241231x10khttps:/www.sec.gov/Archives/edgar/data/
269、78128/000156276225000036/wtrg-20241231x10k.htm20/134Table of Contents Item 1A.Risk Factors In addition to the other information included in this Annual Report,the following factors should be considered in evaluating our business and future prospects.Any of the following risks,either alone or taken t
270、ogether,could materially harm our business,financial condition,and results of operations.If one or more of these or other risks or uncertainties materialize,or if our underlying assumptions prove to be incorrect,our business,financial condition,and results of operations could be materially harmed.Ri
271、sk Factor Summary Our business is subject to many risks and uncertainties.The following are the types of forward-looking statements we make throughout this Annual Report,including in these Risk Factors,and a summary of the types of risks that could impact us and cause actual results to differ from t
272、hose described in such forward-looking statements:opportunities for future acquisitions,both within and outside the water and wastewater industries,the success of pending acquisitions and the impact of future acquisitions;acquisition-related costs and synergies;the impact of decisions of governmenta
273、l and regulatory bodies,including decisions to raise or lower rates and decisions regarding potential acquisitions;the sale of water,wastewater,and gas subsidiaries;the impact of conservation awareness of customers and more efficient fixtures and appliances on water and natural gas usage per custome
274、r;the impact of our business on the environment,and our ability to meet our environmental,social,and governance goals;our authority to carry on our business and successfully achieve our operational growth projections without unduly burdensome restrictions;our capability to pursue timely rate increas
275、e requests;the capacity of our water supplies,water facilities,wastewater facilities,and natural gas supplies and storage facilities;the impact of public health threats,or the measures implemented by the Company as a result of these threats;the impact of cybersecurity attacks or other cyber-related
276、events;developments,trends and consolidation in the water,wastewater,and natural gas utility and infrastructure industries;the impact of changes in and compliance with governmental laws,regulations and policies,including those dealing with the environment,health and water quality,taxation,and public
277、 utility regulation;the development of new services and technologies by us or our competitors;the availability of qualified personnel;the condition of our assets,including the risk of explosion from our natural gas operations and the failure of our natural gas storage facilities;recovery of capital
278、expenditures and expenses in rates;projected capital expenditures and related funding requirements;the availability and cost of capital financing,including impacts of increasing financing costs and interest rates;dividend payment projections;the impact of geographic diversity on our exposure to unus
279、ual weather;the continuation of investments in strategic ventures;our ability to obtain fair market value for condemned assets;the impact of fines and penalties;the impact of legal proceedings;general economic conditions,including inflation;the impairment of goodwill resulting in a non-cash charge t
280、o earnings;the impact of federal and/or state tax policies and the regulatory treatment of the effects of those policies;and 172025/5/19 14:42wtrg-20241231x10khttps:/www.sec.gov/Archives/edgar/data/78128/000156276225000036/wtrg-20241231x10k.htm21/134Table of Contents the amount of income tax deducti
281、ons for qualifying utility asset improvements and the Internal Revenue Services ultimate acceptance of the deduction methodology.Because forward-looking statements involve risks and uncertainties,there are important factors that could cause actual results to differ materially from those expressed or
282、 implied by these forward-looking statements,including but not limited to:the success in the closing of,and the profitability of future acquisitions;changes in general economic,political,business,credit,and financial market conditions and interest rates;our ability to manage the expansion of our bus
283、iness;changes in environmental conditions,including the effects of climate change;our ability to integrate and otherwise realize all of the anticipated benefits of businesses,technologies or services which we may acquire;the decisions of governmental and regulatory bodies,including decisions on regu
284、latory filings,such as rate increase requests and decisions regarding potential acquisitions;our ability to file rate cases on a timely basis to minimize regulatory lag;the impact of inflation on our business and on our customers and potential opposition to rate increases;abnormal weather conditions
285、 and natural disasters,including those that result in water use restrictions or reduced or elevated natural gas consumption;the seasonality of our business;our ability to source,treat,and supply water,including in times of drought,or collect and treat wastewater;our ability to source sufficient natu
286、ral gas to meet customer demand in a timely manner;the continuous and reliable operation of our information technology systems,including the impact of cybersecurity attacks or other cyber-related events,and risks associated with new systems implementation or integration;impacts from public health th
287、reats,including on consumption,usage,supply chain,and collections.changes in governmental laws,regulations and policies,including those dealing with taxation,the environment,health and water quality,data and consumer privacy,and public utility regulation;the extent to which we are able to develop an
288、d market new and improved services;the effect of the loss of major customers;our ability to retain the services of key personnel and to hire qualified personnel as we expand;labor disputes;increasing difficulties in obtaining insurance and increased cost of insurance;cost overruns relating to improv
289、ements to,or the expansion of,our operations;inflation and potential impact of proposed tariffs on the availability and costs of goods and services;the effect of natural gas price volatility,including the potential impact of high commodity prices on usage or rate case outcomes;civil disturbance or t
290、erroristic threats or acts;changes to the rules or our assumptions underlying our determination of what qualifies for an income tax deduction for qualifying utility asset improvements;changes in,or unanticipated,capital requirements;changes in our credit rating or outlook of credit rating agencies w
291、ith respect to our Company and subsidiaries,or the market price of our common stock;changes in valuation of strategic ventures;changes in accounting pronouncements;litigation and claims;andrestrictions on our subsidiaries ability to make dividend payments and other distributions.182025/5/19 14:42wtr
292、g-20241231x10khttps:/www.sec.gov/Archives/edgar/data/78128/000156276225000036/wtrg-20241231x10k.htm22/134Table of Contents Risks Related to the Operation and Regulation of our Business General economic conditions may affect our financial condition and results of operations.A general economic downtur
293、n may lead to a number of impacts on our business and may affect our financial condition and results of operations.Such impacts may include:a reduction in discretionary and recreational water use by our residential water customers,particularly during the summer months when such discretionary usage i
294、s normally at its highest;a reduction in natural gas use by our residential customers,particularly during the winter months when such usage is normally at its highest;a decline in usage by industrial and commercial customers as a result of decreased business activity or a shift to alternative energy
295、 sources;an increased incidence of customers inability to pay or delays in paying their utility bills,or an increase in customer bankruptcies,which may lead to higher bad debt expense,increased financing costs,and reduced cash flow;opposition by customers and statutory advocates to rate increases;a
296、lower natural customer growth rate due to a decline in new housing starts;and a decline in the number of active customers due to housing vacancies.General economic turmoil may also lead to an investment market downturn,which may result in our pension and other post-retirement plans asset market valu
297、es suffering a decline and significant volatility.A decline in our plans asset market values could increase our required cash contributions to the plans and increased expense in subsequent years.Inflation levels in excess of historical levels could also lead to regulatory lag and thus impact our ear
298、ned returns and financial results.Moreover,in recent years,inflation and higher interest rates have become areas of increasing economic concern.Changes in the cost of providing our products and services,including price increases in operating and capital costs,as well as increases in labor costs or b
299、orrowing costs,have negatively impacted our financial condition and results of operations.We review the adequacy of our rates as approved by public utility commissions in relation to the increasing cost of providing services and the inherent regulatory lag in adjusting those rates.Rate increases are
300、 not retroactive and often lag increases in costs caused by inflation.On occasion,our regulated utility companies may enter into rate settlement agreements,which require us to wait for a period of time to file the next base rate increase request.These agreements may result in regulatory lag whereby
301、inflationary increases in expenses or higher borrowing costs may not be reflected in rates,and may not yet be requested,or a gap may exist between when a capital project is completed and the start of its recovery in rates.Even during periods of moderate inflation,the effects of inflation can have a
302、negative impact on our operating results.The ability to control operating expenses is an important factor that will influence future results.Inflation,and the potential impact of proposed tariffs,could adversely impact our ability to control costs,including operating expenses and capital costs.The o
303、peration of our business and the execution of our capital projects require significant expenditures for labor,production costs,property and equipment,and services.Recent inflationary pressures have increased our expenses and capital costs,and those costs may continue to increase.To the extent inflat
304、ion remains elevated and higher tariffs are imposed,we may experience further cost increases for our operations.We cannot predict any future trends in the rate of inflation and interest rates,and a significant increase in inflation,to the extent we are unable to recover higher costs through rate cas
305、es,could negatively impact our business,financial condition,and results of operation.192025/5/19 14:42wtrg-20241231x10khttps:/www.sec.gov/Archives/edgar/data/78128/000156276225000036/wtrg-20241231x10k.htm23/134Table of Contents The rates we charge our customers are subject to regulation.If we are un
306、able to obtain government approval of our requests for rate increases,or if approved rate increases are untimely or inadequate to recover and earn a return on our capital investments,to recover expenses or taxes,or to take into account changes in water,wastewater,or natural gas usage,our profitabili
307、ty may suffer.The rates we charge our customers are subject to approval by utility commissions in the states in which we operate.We file rate increase requests,from time to time,to recover our investments in utility plant and expenses.Our ability to maintain and meet our financial objectives is depe
308、ndent upon the recovery of,and return on,our capital investments and expenses through the rates we charge our customers.Once a rate increase petition is filed with a utility commission,the ensuing administrative and hearing process may be lengthy and costly,and our costs may not always be fully reco
309、verable.The timing of our rate increase requests are therefore partially dependent upon the estimated cost of the administrative process in relation to the investments and expenses that we expect to recover through the rate increase.In addition,the amount or frequency of rate increases may be decrea
310、sed or lengthened as a result of many factors including changes in regulatory oversight in the states in which we operate utilities and income tax laws,including regulations regarding tax-basis depreciation as it applies to our capital expenditures or qualifying utility asset improvements.We can pro
311、vide no assurances that any future rate increase request will be approved by the appropriate utility commission;and,if approved,we cannot guarantee that these rate increases will be granted in a timely or sufficient manner.In Virginia,North Carolina and Kentucky,we may bill our water utility custome
312、rs,in certain circumstances,in accordance with a rate filing that is pending before the respective regulatory commission,which would allow for interim rates.Furthermore,some utility commissions authorize the use of expense deferrals and amortization in order to provide for an impact on our operating
313、 income by an amount that approximates the requested amount in a rate request.The additional revenue billed and collected prior to the final ruling is subject to refund to customers based on the outcome of the ruling.The revenue recognized and the expenses deferred by us reflect an estimate as to th
314、e final outcome of the ruling.If the request is denied completely or in part,we could be required to refund to customers some or all of the revenue billed to date,and write-off some or all of the deferred expenses.Changes in our earnings per share may differ from changes in our rate base.Our busines
315、s is capital intensive and requires significant capital investments for additions to or replacement of property,plant and equipment.These capital investments create assets that are used and useful in providing regulated utility service,and as a result,increase our rate base,on which we generate earn
316、ings through the regulatory process.Changes in our reported earnings per share,however,may differ from changes in our rate base in a given period due to several factors,including rate case timing and the terms of such rate cases;over-or under-earnings in a given period due to changes in operating co
317、sts;the effects of tax rates or tax treatment of capital investments,including the effect of repair tax;capital expenditures that are not eligible for a DSIC between rate cases;acquisitions which have not yet been included in rate base;unrecovered short-term interest costs;and issuances of equity.We
318、 anticipate that we may experience periods in which growth in earnings is less than growth in rate base;such differences may be material and may persist over multiple reporting periods.Our ability to meet customers natural gas requirements may be impaired if contracted natural gas supplies and inter
319、state pipelines services are not available,are not delivered in a timely manner or if federal regulations decrease its available capacity,which may result in a loss of customers and an adverse effect on our financial conditions and results of operations.We are responsible for acquiring sufficient na
320、tural gas supplies,interstate pipeline capacity and storage capacity to meet current and future customers peak,annual and seasonal natural gas requirements.We rely on third-party service providers,as we purchase a portion of our natural gas supply from interstate sources and rely on interstate pipel
321、ines to transport natural gas to our distribution system,in addition to local production that is delivered directly into our pipeline system.The Federal Energy Regulatory Commission(FERC)regulates the transportation of the natural gas received from interstate sources,and any change in regulatory pol
322、icies could increase our transportation costs or decrease our available pipeline capacity.A decrease in interstate pipeline capacity available,an increase in competition for interstate pipeline transportation service or other interruptions to pipeline gas supplies could reduce our normal interstate
323、supply of natural gas.Additionally,federal or state legislation could restrict or limit natural gas drilling,which could decrease the supply of available natural gas.If we are unable to maintain access to a reliable and adequate natural gas supply or sufficient 202025/5/19 14:42wtrg-20241231x10khttp
324、s:/www.sec.gov/Archives/edgar/data/78128/000156276225000036/wtrg-20241231x10k.htm24/134Table of Contents pipeline capacity to deliver that supply,we may be unable to meet our customers requirements,resulting in a loss of customers and an adverse effect on our financial conditions and results of oper
325、ations.Peoples has traditionally used local production as a source of supply to fulfill a portion of its supply requirements.In order to absorb local gas into its system,Peoples has in place a network of pipelines and related facilities that move the gas either to customers located where gas is prod
326、uced or to the more populated areas of the service territory where the greatest level of consumption occurs,and,in summer months,to Peoples on-system and off-system storage facilities.This network of facilities includes gathering lines,compressor stations,and transmission lines.Peoples has entered i
327、nto gas purchase agreements with various producers to supply this local production.A decrease in this supply could occur,for example,if the local gas producers no longer drill wells to offset natural well production decline or if such producers decide to cease production or produce into another pipe
328、line.State and federal legislation or regulations could also limit drilling activities and in turn limit gas supply.If supply is limited,we would be faced with purchasing gas supplies likely at a higher cost,may be unable to find alternative gas supply,and accordingly,may be unable to meet customer
329、requirements,resulting in a loss of customers and an adverse effect on our financial condition and results of operations.Any failure of our water and wastewater treatment plants,network of water and wastewater pipes,or water reservoirs could result in damages that may harm our business,financial con
330、dition,and results of operations.Our operating subsidiaries treat water and wastewater,distribute water,and collect wastewater through an extensive network of pipes,and store water in reservoirs.A failure of a major treatment plant,pipe,or reservoir could result in claims for injuries or property da
331、mage.The failure of a major treatment plant,pipe,or reservoir may also result in the need to shut down some facilities or parts of our network in order to conduct repairs.Such failures and shutdowns may limit our ability to supply water in sufficient quality and quantities to our customers or collec
332、t and treat wastewater in accordance with standards prescribed by governmental regulators,including state utility commissions,and may harm our business,financial condition,and results of operations.Any business interruption or other losses might not be covered by insurance policies or be recoverable
333、 in rates,and such losses may make it difficult for us to secure insurance in the future at acceptable rates.Our facilities could be the target of a possible terrorist or other deliberate attack which could harm our business,financial condition and results of operations.In addition to the potential contamination of our water supply or deliberate gas explosions as described in separate risk factors
0731-84720580
sgpjbg002
工作日 9:30 - 18:00
研報
新質生產力
DeepSeek?
低空經濟
大模型
AI Agent
AI Infra
具身智能
自動駕駛
寵物
銀發經濟
人形機器人
企業出海
算力
微短劇
薪酬
白皮書
創新藥
人工智能
AI產業
信息科技
互聯網
消費經濟
汽車交通
電商零售
傳媒娛樂
醫藥健康
投資金融
能源環境
地產建筑
傳統產業
英文報告
其它
最新報告
中英對照
全文搜索
報告精選
PDF上傳翻譯
多格式文檔互轉
入駐&報告售賣
會員權益
機構報告
券商研報
財報庫
專題合集
英文報告
數據圖表
會議報告
其他資源
行業聚焦
芯片產業
熱點概念
全球咨詢智庫
人工智能
500強
新質生產力
會議峰會
新能源汽車
企業年報
互聯網
公司研究
行業綜觀
消費教育
科技通信
醫藥健康
人力資源
投資金融
汽車產業
物流地產
電子商務
傳統產業
傳媒營銷
其它
2025低空經濟/低空產業報告合集（共49套打包）
2025年智算中心/AIDC/AI數據中心研究報告合集（共37套打包）
AI、科技與通信
廣告、傳媒與營銷
消費、零售與支付
HR、文化與旅游
金融、保險與投資
能源、環境與工業
醫療制藥與大健康
物流、地產與建筑
其他行業
AI ? 科技 ? 通信
數字化
金融財經
智能制造
電商傳媒
地產建筑
醫療醫學
能源化工
其他行業
收藏
下載
2025-05-20
AI查數
行業數據
政策法規
商業模式
產業鏈
競爭格局
市場規模
產業概述
其它
2025年
AI讀財報
年報
一季報
半年報
三季報
IPO招股書
社會責任報告
A股
IPO申報
港股
美股&全球
新三板
掃碼登錄
手機快捷登錄
賬號登錄
