Daniel Schuller: Yes. It’s consistent with the past. So it includes — it doesn’t include acquisition prices — purchase prices paid. It does include CapEx subsequent to acquisitions closing for those acquisitions, where we have a signed purchase and sale agreement.
Jonathan Reeder: Okay. And then in terms of like [indiscernible], should we just assume like gradual annual increases off of the to or — is it going to be a little more heavy in ’25 and ’26 because of the PFAS stuff? I mean, I guess that’s what you — still a little bit to be determined, but…
Daniel Schuller: Yes, a little bit to be determined whether PFAS is a 5-year or 3-year program and by state. Otherwise, I guess I would say that if you take $7.2 billion and you divide it by 5, you’re kind of in this $1.3 billion, $1.4 billion range, and it kind of bounces around in that range over those years. It’s not necessarily a directionality to it.
Jonathan Reeder: Okay, can you kind of just talk about the drivers of the CapEx increase? What caused you to kind of step it up? Because I think you’d kind of been relatively consistent the past few years in your budget. This is a lot bigger increase. And then along with that, what sort of impact the higher CapEx will have on the average annual customer bill increases that you foresee?
Daniel Schuller: Yes. I’m happy to start and then Chris can chime in. But as we look forward, and I think all utilities and really all companies that do construction work have experienced this, we do see higher construction costs in the future than we’ve had in the past. So that gets incorporated when we develop our 5-year plan. And then, of course, we’ve got a bit more clarity here in this 5-year plan regarding PFAS and lead than we had previously as well. And then…go ahead, Chris.
Christopher Franklin: Yes, it’s really step up. I mean we were in ’22, in ’23 and now we’re coming up to, call it, an average of . So it’s not a massive increase. But given the cost we’re seeing — labor costs as well, we’re seeing increase. And then more clarity on PFAS and lead, it just is migrating north.
Jonathan Reeder: Okay. And then last for me, on the PFAS front. Can you provide any update on federal or state efforts to protect the water utilities from any potential liabilities related to distributing water, that might have a PFAS in it prior to the EPA actually establishing a rule? I think there’s some class action lawsuits perhaps in Connecticut around this issue that have been filed?
Christopher Franklin: Yes. I mean listen, I think a number of people are trying to figure out ways in — at the state level even to protect water utilities through legislation from that kind of liability. As you said, there’s 2 in Connecticut, with the public company there. One is about product liability lawsuits, class action. And — which we’re watching clearly very closely as the rest of the industry as well. I’m not aware of any that have successfully passed in terms of protections. As we think about looking for protection, we’re also looking for on the waste side, right? [indiscernible] we want to understand really how we’re going to be treated going forward with the waste. So work to be done. Listening to guys like [indiscernible] and the industry lobbyists are working hard in Washington to try and get protection.
And I’ll just give a quick shout out to Senator Shelley Capito, who’s really done nice work in this area and leading some of the work and really understands what we’re facing. The team, Jonathan, that we’re talking to — elected officials about is, again, we didn’t put the water there. As a matter of fact, we’ve taken steps even before now to put mitigation in place. And so we believe that our customers and our companies need to be protected. So I would put that in the category of work that needs to be done.
Jonathan Reeder: Okay. Yes, I know it’s definitely kind of interest, given the size of the liabilities that the actual polluters face is, hopefully, that doesn’t come back on the water utilities, which ultimately gets passed on to the customers and bills and everything like that. So good luck with that.
Christopher Franklin: Yes, thank you.
Operator: Next question comes from the line of Gregg Orrill from UBS.
Gregg Orrill: Just thoughts on Aquarion and how your criteria would align with that as an opportunity, how you think about that? And I guess a separate question, I guess, ’23 is the base year for the rate base growth guidance?
Daniel Schuller: Yes, that’s correct.
Christopher Franklin: Yes. On Aquarion, Greg, it’s a good question. Obviously, the asset is in the market as announced by Eversource. Let’s start with — it’s a strong asset in terms of the quality of the asset itself. Don Morrissey, who runs the company, along with Joe Nolan, who runs Eversource, they’ve done a nice job in maintaining the asset, growing it a little bit. So from that perspective, I think it’s a nice asset. But I also think it’s a challenged regulatory environment. An 8.7% ROE in the latest case is a little bit concerning, I think to any potential buyer. And I think the ability to grow in Connecticut is also challenging with the requirement of a referendum to grow. So I think there are some challenging things. Listen, there’s a lot of people are going to look at that asset. We don’t talk about what our plans are. But I think it’s an interesting asset, and it has some pluses and minuses to it.
Operator: There are no further questions. So I’ll hand you back to Christopher Franklin to conclude today’s call.
Christopher Franklin: Thanks for sticking with us, folks. I know we went a little long today, but good questions and a lot of material to cover on the year, so many things happening in the industry. Obviously, Dan, myself, Brian and the team are always available for your follow-ups. Thanks for joining us today.
Operator: Thank you for joining today’s call. You may now disconnect your lines.
