American Water Works Company, Inc. (NYSE:AWK) Q1 2024 Earnings Call Transcript

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Cheryl Norton: Gregg, we haven’t seen a big uptake in the amount of water that our customers are asking for related to the data center moves at all. So we’re thinking just some minimal impact for us unlike our electric utility peers.

Operator: [Operator Instructions] The next question comes from Aditya Gandhi with Wolfe Research.

Aditya Gandhi: Just on the PFAS legislation that you’re allocating for. Could you give us some color on whether it’s attached to other related bills and if there’s any sort of milestones we should be watching for there? And then could you also just explain what steps you’re taking to sort of secure support on both sides of the aisle as it relates to legislation?

Susan Hardwick: Cheryl, do you want to take that?

Cheryl Norton: So there has been legislation filed both on the Senate and the House side that it’s the Water Systems PFAS Liability Act. On the House side, it’s 79.44% and I’m trying to see — I don’t have the Senate number, but this act would help protect us along with some other industries as a passive receiver. And so we work really hard on both sides of the aisle all the time to connect with our legislators and also educate them on the real issues at hand. We’ve had some really great conversations on the Hill and are hopeful that this still will continue to move forward, both in the House and the Senate, so that we can push this forward. And I think you would just watch for the key things like getting out of committee, getting a floor vote. And so we’ll continue to push that forward and update you on these calls as things unfold there.

Susan Hardwick: And Cheryl, it is stand-alone, right, there’s nothing else defined.

Cheryl Norton: Yes, it’s not tied to anything else except to try to protect passive users or passive receivers from this liability.

Aditya Gandhi: And maybe just one follow-up there. Is there a particular time line by which you’re expecting this legislation to either pass or by when should we know whether this thing is going to pass or not?

Cheryl Norton: I think it’s impossible to anticipate the time line. We would love to say it will be all completed by the next couple of months, but it could take much longer. The political process is really challenging at times. So we think we’ve got good support and we’ll continue to push on it as fast as we can, but there’s just no time line for it.

Susan Hardwick: We do think it probably helps a bit that we now have the final rules out. We’ve been working on this particular angle for quite some time even before the final rule was published. So now that the final rule is here that sort of eliminates one reason why legislators didn’t want to take this issue up. If they were waiting to see what the final rule was and that was sort of an excuse to not address this issue, I think that’s been removed from their list of reasons not to move. So hopefully, that helps and we’ll see continued movement here.

Cheryl Norton: And in addition, the EPA said that they want to be able to use discretion. So part of this is some discretionary flexibility for them because they did not intend by designating these compounds as hazardous substances that it would apply to water and wastewater utilities. So they’re planning to use discretion, but we think it’s a much tighter protection to have this legislation. So we’ll continue to pursue that in addition to working with EPA.

Operator: This concludes our question-and-answer session and concludes our conference call today. Thank you for attending today’s presentation. You may now disconnect.

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