|
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
For the fiscal year ended
|
||
OR
|
||
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
For the transition period from __________ to __________
|
||
Commission file number
|
||
THE
|
||
(Exact name of registrant as specified in its charter)
|
||
|
||
|
|
|
(State or other jurisdiction of incorporation or organization)
|
(I.R.S. Employer Identification No.)
|
|
|
|
|
(Address of principal executive offices)
|
(Zip Code)
|
|
Registrant’s telephone number, including area code (
|
||
|
|
|
(Title of Class)
|
(Trading Symbol)
|
(Name of Each Exchange on Which Registered)
|
Securities registered pursuant to Section 12(g) of the Act:
|
None
|
|
(Title of Each Class)
|
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
|
||||
|
☐ Yes ⌧
|
|||
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.
|
||||
|
☐ Yes ⌧
|
|||
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 required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
|
||||
|
⌧
|
|||
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 (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
|
||||
|
⌧
|
|||
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting
company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging
growth company” in Rule 12b-2 of the Exchange Act
|
||||
Large accelerated filer ☐
|
Accelerated filer ☐
|
|
||
Smaller reporting company
|
Emerging growth company
|
If an emerging growth company, indicate by check mark if the registrant 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 if the registrant has filed a report on and attestation to its management’s assessment of 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 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 received by any of the registrant’s 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 Exchange Act).
|
|
|
|
PART I
|
||
Item 1C |
Cybersecurity |
|
PART II
|
||
PART III
|
||
PART IV
|
||
•
|
the amount and timing of rate changes and other regulatory matters including the recovery of costs recorded as regulatory assets;
|
•
|
expected profitability and results of operations;
|
•
|
trends;
|
•
|
goals, priorities and plans for, and cost of, growth and expansion;
|
•
|
strategic initiatives;
|
•
|
availability of water supply;
|
•
|
water usage by customers; and
|
•
|
the ability to pay dividends on common stock and the rate of those dividends.
|
•
|
changes in weather or climate, including drought conditions or extended periods of heavy precipitation;
|
•
|
natural disasters, including pandemics such as the recent outbreak of the novel strain of coronavirus known as “COVID-19” and its variants and the
effectiveness of the Company’s pandemic plans;
|
•
|
levels of rate relief granted;
|
•
|
the level of commercial and industrial business activity within the Company’s service territory;
|
•
|
construction of new housing within the Company’s service territory and increases in population;
|
•
|
changes in government policies or regulations, including the tax code;
|
•
|
the ability to obtain permits for expansion projects;
|
•
|
material changes in demand from customers, including the impact of conservation efforts which may impact the demand
of customers for water;
|
•
|
changes in economic and business conditions, including interest rates;
|
•
|
loss of customers;
|
•
|
changes in, or unanticipated, capital requirements;
|
•
|
the impact of acquisitions;
|
•
|
changes in accounting pronouncements;
|
•
|
changes in the Company’s credit rating or the market price of its common stock; and
|
•
|
the ability to obtain financing.
|
Item 1.
|
Business.
|
Molly E. Houck
|
The York Water Company
|
(717) 718-2942
|
Investor Relations &
|
130 East Market Street
|
(800) 750-5561
|
Communications Administrator
|
York, PA 17401
|
mollyh@yorkwater.com
|
Item 1A.
|
Risk Factors.
|
Item 1B.
|
Unresolved Staff Comments.
|
Item 1C.
|
Cybersecurity.
|
•
|
Current cybersecurity risks, including qualitative rating based upon underlying objective measures;
|
•
|
Status of ongoing cybersecurity initiatives and strategies;
|
•
|
Incident and response reports and lessons learned from any cybersecurity event; and
|
•
|
Compliance report with regulatory requirements and industry standards.
|
Item 2.
|
Properties.
|
Item 3.
|
Legal Proceedings.
|
Item 4.
|
Mine Safety Disclosures.
|
Item 5.
|
Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.
|
Item 6.
|
Reserved.
|
Item 7.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations.
|
Item 7A.
|
Quantitative and Qualitative Disclosures About Market Risk.
|
Item 8.
|
Financial Statements.
|
|
||
|
Page
|
|||
Report of Independent Registered Public Accounting Firm (PCAOB ID
) |
22 |
|||
Balance Sheets
|
23 | |||
Statements of Income
|
25 | |||
Statements of Common Stockholders’ Equity
|
26 | |||
Statements of Cash Flows
|
27 | |||
Notes to Financial Statements
|
28 |
Dec. 31, 2023
|
Dec. 31, 2022
|
|||||||
ASSETS
|
||||||||
UTILITY PLANT, at original cost
|
$
|
|
$
|
|
||||
Plant acquisition adjustments
|
(
|
)
|
(
|
)
|
||||
Accumulated depreciation
|
(
|
)
|
(
|
)
|
||||
Net utility plant
|
|
|
||||||
OTHER PHYSICAL PROPERTY, net of accumulated depreciation
of $
|
|
|
||||||
CURRENT ASSETS:
|
||||||||
Cash and cash equivalents
|
|
|
||||||
Accounts receivable, net of reserves of $
and $ |
|
|
||||||
Unbilled revenues
|
|
|
||||||
Recoverable income taxes
|
|
|
||||||
Materials and supplies inventories, at cost
|
|
|
||||||
Prepaid expenses
|
|
|
||||||
Total current assets
|
|
|
||||||
OTHER LONG-TERM ASSETS:
|
||||||||
Prepaid pension cost
|
|
|
||||||
Note receivable
|
|
|
||||||
Deferred regulatory assets
|
|
|
||||||
Other assets
|
|
|
||||||
Total other long-term assets
|
|
|
||||||
Total Assets
|
$
|
|
$
|
|
Dec. 31, 2023
|
Dec. 31, 2022
|
|||||||
STOCKHOLDERS’ EQUITY AND LIABILITIES
|
||||||||
COMMON STOCKHOLDERS’ EQUITY:
|
||||||||
Common stock,
issued and outstanding
and
|
$
|
|
$
|
|
||||
Retained earnings
|
|
|
||||||
Total common stockholders’ equity
|
|
|
||||||
PREFERRED STOCK, authorized
|
|
|
||||||
LONG-TERM DEBT
|
|
|
||||||
COMMITMENTS
|
|
|
||||||
CURRENT LIABILITIES:
|
||||||||
Accounts payable
|
|
|
||||||
Dividends payable
|
|
|
||||||
Accrued compensation and benefits
|
|
|
||||||
Accrued interest
|
|
|
||||||
Deferred regulatory liabilities
|
|
|
||||||
Other accrued expenses
|
|
|
||||||
Total current liabilities
|
|
|
||||||
DEFERRED CREDITS:
|
||||||||
Customers’ advances for construction
|
|
|
||||||
Deferred income taxes
|
|
|
||||||
Deferred employee benefits
|
|
|
||||||
Deferred regulatory liabilities
|
|
|
||||||
Other deferred credits
|
|
|
||||||
Total deferred credits
|
|
|
||||||
Contributions in aid of construction
|
|
|
||||||
Total Stockholders’ Equity and Liabilities
|
$
|
|
$
|
|
Year Ended December 31
|
||||||||
2023
|
2022
|
|||||||
OPERATING REVENUES:
|
$
|
|
$
|
|
||||
OPERATING EXPENSES:
|
||||||||
Operation and maintenance
|
|
|
||||||
Administrative and general
|
|
|
||||||
Depreciation and amortization
|
|
|
||||||
Taxes other than income taxes
|
|
|
||||||
|
|
|||||||
Operating income
|
|
|
||||||
OTHER INCOME (EXPENSES):
|
||||||||
Interest on debt
|
(
|
)
|
(
|
)
|
||||
Allowance for funds used during construction
|
|
|
||||||
Other pension costs
|
(
|
)
|
(
|
)
|
||||
Other income (expenses), net
|
(
|
)
|
|
|
||||
(
|
)
|
(
|
)
|
|||||
Income before income taxes
|
|
|
||||||
Income tax expense
|
|
|
||||||
Net Income
|
$
|
|
$
|
|
||||
Basic Earnings Per Share
|
$
|
|
$
|
|
||||
Diluted Earnings Per Share
|
$
|
|
$
|
|
Common
Stock
Shares
|
Common
Stock
Amount
|
Retained
Earnings
|
Total
|
|||||||||||||
Balance, December 31, 2021
|
|
$
|
|
$
|
|
$
|
|
|||||||||
Net income
|
–
|
|
|
|
||||||||||||
Cash dividends declared, $
|
– | ( |
) | ( |
) | |||||||||||
Issuance of common stock
|
||||||||||||||||
Issuance of common stock under
dividend reinvestment, direct stock and
employee stock purchase plans
|
|
|
|
|
||||||||||||
Stock-based compensation
|
|
|
|
|
||||||||||||
Balance, December 31, 2022
|
|
|
|
|
||||||||||||
Net income
|
–
|
|
|
|
||||||||||||
Cash dividends declared, $
|
–
|
|
(
|
)
|
(
|
)
|
||||||||||
Issuance of common stock under
dividend reinvestment, direct stock and
employee stock purchase plans
|
|
|
|
|
||||||||||||
Stock-based compensation
|
|
|
|
|
||||||||||||
Balance, December 31, 2023
|
|
$
|
|
$
|
|
$
|
|
Year Ended December 31
|
||||||||
2023
|
2022
|
|||||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
||||||||
Net income
|
$
|
|
$
|
|
||||
Adjustments to reconcile net income to net cash provided by operating activities:
|
||||||||
Depreciation and amortization
|
|
|
||||||
Stock-based compensation
|
|
|
||||||
Increase in deferred income taxes
|
|
|
||||||
Other
|
(
|
)
|
(
|
)
|
||||
Changes in assets and liabilities:
|
||||||||
Increase in accounts receivable and unbilled revenues
|
(
|
)
|
(
|
)
|
||||
Decrease in recoverable income taxes
|
|
|
||||||
Increase in materials and supplies, prepaid expenses, prepaid pension cost,
regulatory and other assets
|
(
|
)
|
(
|
)
|
||||
Increase (decrease) in accounts payable, accrued compensation and benefits, accrued
expenses, deferred employee benefits, regulatory liabilities, and other deferred credits
|
|
(
|
)
|
|||||
Increase in accrued interest
|
|
|
||||||
Net cash provided by operating activities
|
|
|
||||||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
||||||||
Utility plant additions, including debt portion of allowance for funds used during
construction of $
|
(
|
)
|
(
|
)
|
||||
Acquisitions of water and wastewater systems
|
(
|
)
|
(
|
)
|
||||
Net cash used in investing activities
|
(
|
)
|
(
|
)
|
||||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
||||||||
Customers’ advances for construction and contributions in aid of construction
|
|
|
||||||
Repayments of customer advances
|
(
|
)
|
(
|
)
|
||||
Proceeds of long-term debt issues
|
|
|
||||||
Debt issuance costs |
( |
) | ||||||
Repayments of long-term debt
|
(
|
)
|
(
|
)
|
||||
Changes in cash overdraft position
|
(
|
)
|
|
|||||
Issuance of common stock
|
|
|
||||||
Dividends paid
|
(
|
)
|
(
|
)
|
||||
Net cash provided by financing activities
|
|
|
||||||
Net change in cash and cash equivalents
|
|
|
||||||
Cash and cash equivalents at beginning of period
|
|
|
||||||
Cash and cash equivalents at end of period
|
$
|
|
$
|
|
||||
Supplemental disclosures of cash flow information:
|
||||||||
Cash paid during the period for:
|
||||||||
Interest, net of amounts capitalized
|
$
|
|
$
|
|
||||
Supplemental disclosure of non-cash investing and financing activities:
|
||||||||
Accounts payable includes $
|
||||||||
Contributions in aid of construction includes $
|
December 31
|
Approximate range
|
|||||||||||
Utility Plant Asset Category
|
2023
|
2022
|
of remaining lives
|
|||||||||
Mains and accessories
|
$
|
|
$
|
|
|
|||||||
Services, meters, and hydrants
|
|
|
|
|||||||||
Operations structures, reservoirs, and water tanks
|
|
|
|
|||||||||
Pumping and treatment equipment
|
|
|
|
|||||||||
Office, transportation, and operating equipment
|
|
|
|
|||||||||
Land and other non-depreciable assets
|
|
|
–
|
|||||||||
Utility plant in service
|
|
|
||||||||||
Construction work in progress
|
|
|
–
|
|||||||||
Total Utility Plant
|
$
|
|
$
|
|
December 31
|
Remaining Recovery
|
|||||||||||
2023
|
2022
|
Periods
|
||||||||||
Assets
|
||||||||||||
Income taxes
|
$
|
|
$
|
|
Various
|
|||||||
Unrealized swap losses
|
|
|
|
|||||||||
Utility plant retirement costs
|
|
|
|
|||||||||
Customer-owned lead service line replacements
|
|
|
Various
|
|||||||||
Income taxes on customers’ advances for
construction and contributions in aid of
construction
|
|
|
Various
|
|||||||||
Service life study expenses
|
|
|
|
|||||||||
Rate case filing expenses
|
|
|
|
|||||||||
$
|
|
$
|
|
|||||||||
Liabilities
|
||||||||||||
Excess accumulated deferred income
taxes on accelerated depreciation
|
$
|
|
$
|
|
Various
|
|||||||
Postretirement benefits
|
|
|
Not yet known
|
|||||||||
Income taxes
|
|
|
Various
|
|||||||||
IRS TPR catch-up deduction
|
|
|
|
|||||||||
$
|
|
$
|
|
As of
|
As of
|
|||||||||||
Dec. 31, 2023
|
Dec. 31, 2022
|
Change
|
||||||||||
Accounts receivable – customers
|
$
|
|
$
|
|
$
|
|
||||||
Other receivables
|
|
|
|
|||||||||
|
|
|
||||||||||
Less: allowance for doubtful accounts
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
Accounts receivable, net
|
$
|
|
$
|
|
$
|
|
||||||
Unbilled revenue
|
$
|
|
$
|
|
$
|
|
2023
|
2022
|
|||||||
Note receivable, including interest
|
$
|
|
$
|
|
||||
Customers’ advances for construction
|
|
|
2023
|
2022
|
|||||||
Weighted average common shares, basic
|
|
|
||||||
Effect of dilutive securities:
|
||||||||
Employee stock-based compensation
|
|
|
||||||
Weighted average common shares, diluted
|
|
|
2023
|
2022
|
|||||||
Variable Rate Pennsylvania Economic Development Financing Authority
Exempt Facilities Revenue Refunding Bonds, Series 2008A, due 2029
|
$ |
|
$ |
|
||||
Facilities Revenue Refunding Bonds, Series A of 2019, due 2036
|
|
|
||||||
Facilities Revenue Refunding Bonds, Series B of 2019, due 2038
|
|
|
||||||
|
|
|
||||||
Facilities Revenue Bonds, Series 2015, due 2029 - 2045
|
|
|
||||||
|
|
|
||||||
|
|
|
||||||
Committed Line of Credit, due 2025
|
|
|
||||||
Total long-term debt
|
|
|
||||||
Less discount on issuance of long-term debt
|
(
|
)
|
(
|
)
|
||||
Less unamortized debt issuance costs
|
(
|
)
|
(
|
)
|
||||
Long-term portion
|
$
|
|
$
|
|
2024
|
2025
|
2026
|
2027
|
2028
|
||||
$
|
$
|
$
|
$
|
$
|
Description
|
December 31, 2023
|
Fair Value Measurements
at Reporting Date Using
Significant Other Observable Inputs (Level 2)
|
||
Interest Rate Swap
|
$
|
$
|
Description
|
December 31, 2022
|
Fair Value Measurements
at Reporting Date Using
Significant Other Observable Inputs (Level 2)
|
||
Interest Rate Swap
|
$
|
$
|
2023
|
2022
|
|||||||
Water utility service:
|
||||||||
Residential
|
$
|
|
$
|
|
||||
Commercial and industrial
|
|
|
||||||
Fire protection
|
|
|
||||||
Wastewater utility service:
|
||||||||
Residential
|
|
|
||||||
Commercial and industrial
|
|
|
||||||
Billing and revenue collection services
|
|
|
||||||
Collection services
|
|
|
||||||
Other revenue
|
|
|
||||||
Total Revenue from Contracts with Customers
|
|
|
||||||
Rents from regulated property
|
|
|
||||||
Total Operating Revenue
|
$
|
|
$
|
|
Obligations and Funded Status
At December 31
|
2023
|
2022
|
||||||
Change in Benefit Obligation
|
||||||||
Pension benefit obligation at beginning of year
|
$
|
|
$
|
|
||||
Service cost
|
|
|
||||||
Interest cost
|
|
|
||||||
Actuarial loss (gain)
|
|
(
|
)
|
|||||
Benefit payments
|
(
|
)
|
(
|
)
|
||||
Pension benefit obligation at end of year
|
|
|
||||||
Change in Plan Assets
|
||||||||
Fair value of plan assets at beginning of year
|
|
|
||||||
Actual return on plan assets
|
|
(
|
)
|
|||||
Employer contributions
|
|
|
||||||
Benefits paid
|
(
|
)
|
(
|
)
|
||||
Fair value of plan assets at end of year
|
|
|
||||||
Funded Status of Plans at End of Year
|
$
|
|
$
|
|
2023
|
2022
|
|||||||
Net loss (gain) arising during the year
|
$
|
(
|
)
|
$
|
|
|||
Recognized prior service credit
|
|
|
||||||
Total changes in regulatory asset (liability) during the year
|
$
|
(
|
)
|
$
|
|
2023
|
2022
|
|||||||
Net loss
|
$
|
(
|
)
|
$
|
|
|||
Prior service credit
|
(
|
)
|
(
|
)
|
||||
Regulatory asset (liability)
|
$
|
(
|
)
|
$
|
|
2023
|
2022
|
|||||||
Service cost
|
$
|
|
$
|
|
||||
Interest cost
|
|
|
||||||
Expected return on plan assets
|
(
|
)
|
(
|
)
|
||||
Amortization of prior service credit
|
(
|
)
|
(
|
)
|
||||
Rate-regulated adjustment
|
|
|
||||||
Net periodic benefit cost
|
$
|
|
$
|
|
Net loss
|
$
|
|
||
Net prior service credit
|
(
|
)
|
||
$ |
(
|
)
|
2024
|
2025
|
2026
|
2027
|
2028
|
2029–2033
|
|||||
$
|
$
|
$
|
$
|
$
|
$
|
2023
|
2022
|
|||||||
Projected benefit obligation
|
$
|
|
$
|
|
||||
Fair value of plan assets
|
|
|
2023
|
2022
|
|||||||
Accumulated benefit obligation
|
$
|
|
$
|
|
||||
Fair value of plan assets
|
|
|
2023
|
2022
|
|||
Discount rate
|
|
|
||
Rate of compensation increase
|
|
|
2023
|
2022
|
|||
Discount rate
|
|
|
||
Expected long-term return on plan assets
|
|
|
||
Rate of compensation increase
|
|
|
Total
Fair
Value
|
Quoted Prices in
Active Markets for
Identical Assets
(Level 1)
|
|||||||||||||||
Asset Category
|
2023
|
2022
|
2023
|
2022
|
||||||||||||
Cash and Money Market Funds (a)
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Equity Securities:
|
||||||||||||||||
Common Equity Securities (b)
|
||||||||||||||||
Equity Mutual Funds (c)
|
|
|
|
|
||||||||||||
Fixed Income Securities:
|
||||||||||||||||
Fixed Income Mutual Funds (d)
|
|
|
|
|
||||||||||||
Total Plan Assets
|
$
|
|
$
|
|
$
|
|
$
|
|
(a) |
|
(b)
|
|
(c) |
|
(d) |
|
Number of Shares
|
Grant Date Weighted
Average Fair Value
|
||||||
Nonvested at beginning of the year 2022
|
|
$
|
|||||
Granted
|
|
$
|
|||||
Vested
|
(
|
)
|
$
|
||||
Forfeited
|
(
|
)
|
$
|
||||
Nonvested at end of the year 2022
|
|
$
|
|||||
Granted
|
|
$
|
|||||
Vested
|
(
|
)
|
$
|
||||
Forfeited
|
(
|
)
|
$
|
||||
Nonvested at the end of the year 2023
|
|
$
|
2023
|
2022
|
|||||||
Regulatory Assessment
|
$
|
|
$
|
|
||||
Property
|
|
|
||||||
Payroll, net of amounts capitalized
|
|
|
||||||
Other
|
|
|
||||||
Total taxes other than income taxes
|
$
|
|
$
|
|
2023
|
2022
|
|||||||
Federal current
|
$
|
|
$
|
|
||||
State current
|
|
|
||||||
Federal deferred
|
|
|
||||||
State deferred
|
|
|
(
|
)
|
||||
Federal investment tax credit, net of current utilization
|
(
|
)
|
(
|
)
|
||||
Total income taxes
|
$
|
|
$
|
|
2023
|
2022
|
|||||||
Statutory Federal tax provision
|
$
|
|
$
|
|
||||
State income taxes, net of Federal benefit
|
|
(
|
)
|
|||||
IRS TPR deduction
|
(
|
)
|
(
|
)
|
||||
Tax-exempt interest
|
(
|
)
|
(
|
)
|
||||
Amortization of investment tax credit
|
(
|
)
|
(
|
)
|
||||
Cash value of life insurance
|
|
|
||||||
Amortization of excess accumulated deferred income taxes
on accelerated depreciation
|
(
|
)
|
(
|
)
|
||||
Change in enacted state tax rate |
( |
) | ||||||
Other, net
|
|
(
|
)
|
|||||
Total income taxes
|
$
|
|
$
|
|
2023
|
2022
|
|||||||
Deferred tax assets:
|
||||||||
Reserve for doubtful accounts
|
$
|
|
$
|
|
||||
Compensated absences
|
|
|
||||||
Deferred compensation
|
|
|
||||||
Excess accumulated deferred income taxes on accelerated depreciation
|
|
|
||||||
Deferred taxes associated with the gross-up of revenues necessary to
return, in rates, the effect of temporary differences
|
|
|
||||||
Customers’ advances for construction and contributions in aid of
construction
|
|
|
||||||
Tax effect of pension regulatory liability
|
|
|
||||||
Tax loss carryover
|
||||||||
Contribution carryover
|
||||||||
Other costs deducted for book, not for tax
|
|
|
||||||
Total deferred tax assets
|
|
|
||||||
Deferred tax liabilities:
|
||||||||
Accelerated depreciation
|
|
|
||||||
Basis differences from IRS TPR
|
|
|
||||||
Investment tax credit
|
|
|
||||||
Deferred taxes associated with the gross-up of revenues necessary to
recover, in rates, the effect of temporary differences
|
|
|
||||||
Pensions
|
|
|
||||||
Unamortized debt issuance costs
|
|
|
||||||
Other costs deducted for tax, not for book
|
|
|
||||||
Total deferred tax liabilities
|
|
|
||||||
Net deferred tax liability
|
$
|
|
$
|
|
Item 9.
|
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.
|
Item 9A.
|
Controls and Procedures.
|
Item 9B.
|
Other Information.
|
Item 9C.
|
Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.
|
Item 10.
|
Directors, Executive Officers and Corporate Governance.
|
Item 11.
|
Executive Compensation.
|
Item 12.
|
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.
|
Plan Category
|
Number of
securities to be
issued upon exercise
of outstanding
options, warrants
and rights
|
Weighted-average
exercise price of
outstanding
options, warrants
and rights
|
Number of securities
remaining available for
future issuance under
equity compensation
plans (excluding
securities reflected in
column (a))
|
|||
(a)
|
(b)
|
(c)
|
||||
Equity compensation plans
approved by security holders*
|
-
|
-
|
108,057
|
|||
Equity compensation plans not
approved by security holders
|
-
|
-
|
0
|
Item 13.
|
Certain Relationships and Related Transactions, and Director Independence.
|
Item 14.
|
Principal Accounting Fees and Services.
|
Item 15.
|
Exhibits and Financial Statement Schedules.
|
(a)
|
Certain documents filed as part of the Form 10-K.
|
1.
|
The financial statements set forth under Item 8 of this Form 10-K.
|
Report of Independent Registered Public Accounting Firm
|
Balance Sheets as of December 31, 2023 and 2022
|
Statements of Income for Years Ended December 31, 2023 and 2022
|
Statements of Common Stockholders’ Equity for Years Ended December 31, 2023 and 2022
|
Statements of Cash Flows for Years Ended December 31, 2023 and 2022
|
Notes to Financial Statements
|
2.
|
Financial Statement schedules.
|
Schedule
|
Schedule
|
Page
|
Number
|
Description
|
Number
|
II
|
Valuation and Qualifying Accounts
|
60 |
for the years ended December 31, 2023 and 2022
|
3.
|
Exhibits required by Item 601 of Regulation S-K.
|
Exhibit
Number
|
Exhibit
Description
|
Page Number of
Incorporation
By Reference
|
||
|
||||
|
Exhibit
Number
|
Exhibit
Description
|
Page Number of
Incorporation
By Reference
|
||
|
||||
10.1
|
Articles of Agreement Between The York Water Company and Springettsbury Township relative to Extension of Water Mains dated April 17, 1985
|
Incorporated herein by reference. Filed previously with the Securities and Exchange Commission as Exhibit 10.1 to the Company’s 1989 Form 10-K.
|
||
10.2
|
Note Agreement relative to the $7,500,000 8.43% Senior Notes, Series D dated December 15, 1992
|
Incorporated herein by reference. Filed previously with the Securities and Exchange Commission as Exhibit 4.7 to the Company’s 1992 Form 10-K.
|
||
|
||||
|
||||
|
||||
|
||||
|
Exhibit
Number
|
Exhibit
Description
|
Page Number of
Incorporation
By Reference
|
||
10.8*
|
||||
Form of Amended
and Restated Change in Control Agreement originally effective as of August 1, 2022 between The York Water Company and each of the individuals listed on a schedule attached thereto, which plans are identical in all material respects except
as indicated in Schedule 10.1
|
Filed herewith.
|
|||
|
||||
|
|
|||
|
|
|||
|
||||
|
|
Exhibit
Number
|
Exhibit
Description
|
Page Number of
Incorporation
By Reference
|
||
|
||||
|
||||
10.21 | ||||
Consent of Baker Tilly US, LLP, Independent Registered Public Accounting Firm
|
Filed herewith.
|
Exhibit
Number
|
Exhibit
Description
|
Page Number of
Incorporation
By Reference
|
||
31.1 |
Certification pursuant to
Rule 13a-14(a) and 15d-14(a)
|
Filed herewith. |
||
Certification pursuant to
Rule 13a-14(a) and 15d-14(a)
|
Filed herewith. |
|||
32.1 |
Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
Filed herewith. |
||
Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
Filed herewith. |
|||
The York Water Company Clawback Policy
|
Filed herewith. |
|||
101.INS
|
Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL
document)
|
Filed herewith.
|
||
101.SCH
|
Inline XBRL Taxonomy Extension Schema
|
Filed herewith.
|
||
101.CAL
|
Inline XBRL Taxonomy Extension Calculation Linkbase
|
Filed herewith.
|
||
101.DEF
|
Inline XBRL Taxonomy Extension Definition Linkbase
|
Filed herewith.
|
||
101.LAB
|
Inline XBRL Taxonomy Extension Label Linkbase
|
Filed herewith.
|
||
101.PRE
|
Inline XBRL Taxonomy Extension Presentation Linkbase
|
Filed herewith.
|
||
104
|
Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)
|
Filed herewith.
|
||
* Management contracts and compensatory plans or arrangements required to be filed as exhibits pursuant
|
||||
to Item 15(a)(3) of this Annual Report.
|
Item 16.
|
Form 10-K Summary.
|
Additions
|
||||||||||||||||
Description
|
Balance at
Beginning
of Year
|
Charged to
Cost and
Expenses
|
Recoveries
|
Deductions
|
Balance at
End of Year
|
|||||||||||
FOR THE YEAR ENDED
DECEMBER 31, 2023
Reserve for
uncollectible accounts
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||
FOR THE YEAR ENDED
DECEMBER 31, 2022
Reserve for
uncollectible accounts
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
THE YORK WATER COMPANY
|
|
(Registrant)
|
|
Dated: March 4, 2024
|
By: /s/ Joseph T. Hand
|
Joseph T. Hand
|
|
President and CEO
|
By: /s/ Joseph T. Hand
|
By: /s/ Matthew E. Poff
|
Joseph T. Hand
|
Matthew E. Poff
|
(Principal Executive Officer and Director)
|
(Principal Accounting Officer and Chief Financial Officer)
|
Dated: March 4, 2024
|
Dated: March 4, 2024
|
Directors:
|
Date:
|
By: /s/ Paul R. Bonney
|
March 4, 2024
|
Paul R. Bonney
|
|
By: /s/ Douglas S. Brossman
|
March 4, 2024
|
Douglas S. Brossman
|
|
By: /s/ Michael W. Gang
|
March 4, 2024
|
Michael W. Gang
|
|
By: /s/ Joseph T. Hand
|
March 4, 2024
|
Joseph T. Hand
|
|
By: /s/ Jeffrey R. Hines
|
March 4, 2024
|
Jeffrey R. Hines
|
|
By: /s/ George W. Hodges
|
March 4, 2024
|
George W. Hodges
|
|
By: /s/ Jody L. Keller
|
March 4, 2024
|
Jody L. Keller
|
|
By: /s/ Erin C. McGlaughlin
|
March 4, 2024
|
Erin C. McGlaughlin
|
|
By: /s/ Steven R. Rasmussen
|
March 4, 2024
|
Steven R. Rasmussen
|
|
By: /s/ Laura T. Wand
|
March 4, 2024
|
Laura T. Wand
|
|
By: /s/ Ernest J. Waters
|
March 4, 2024
|
Ernest J. Waters
|
I, Joseph T. Hand, certify that:
|
||
1.
|
I have reviewed this report on Form 10-K of The York Water Company;
|
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects
the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
|
a)
|
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure
that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
b)
|
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our
supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
c)
|
evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
d)
|
disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most
recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting,
to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function):
|
|
a)
|
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably
likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
|
b)
|
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control
over financial reporting.
|
Date: March 5, 2024
|
/s/ Joseph T. Hand
|
Joseph T. Hand
|
|
President and CEO
|
I, Matthew E. Poff, certify that:
|
||
1.
|
I have reviewed this report on Form 10-K of The York Water Company;
|
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects
the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
|
a)
|
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure
that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
b)
|
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our
supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
c)
|
evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
d)
|
disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most
recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting,
to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function):
|
|
a)
|
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably
likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
|
b)
|
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control
over financial reporting.
|
Date: March 5, 2024
|
/s/ Matthew E. Poff
|
Matthew E. Poff
|
|
Chief Financial Officer
|
(1)
|
The Report fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934;
and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial
condition and results of operations of the Company.
|
THE YORK WATER COMPANY
|
|
/s/ Joseph T. Hand
|
|
Joseph T. Hand
|
|
Chief Executive Officer
|
|
Date: March 5, 2024
|
(1)
|
The Report fully complies with the requirements of Section 13(a) of the Securities Exchange Act
of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the
financial condition and results of operations of the Company.
|
THE YORK WATER COMPANY
|
|
/s/ Matthew E. Poff
|
|
Matthew E. Poff
|
|
Chief Financial Officer
|
|
Date: March 5, 2024
|
Approved by: Board of Directors
|
File: Clawback Policy
|
|
Date: November 2023
|
||
Page 1 of 6
|
||
CLAWBACK POLICY
|
Approved by: Board of Directors
|
File: Clawback Policy
|
|
Date: November 2023
|
||
Page 2 of 6
|
||
CLAWBACK POLICY
|
Approved by: Board of Directors
|
File: Clawback Policy
|
|
Date: November 2023
|
||
Page 3 of 6
|
||
CLAWBACK POLICY
|
Approved by: Board of Directors
|
File: Clawback Policy
|
|
Date: November 2023
|
||
Page 4 of 6
|
||
CLAWBACK POLICY
|
•
|
The direct expense paid to a third party to assist in enforcing the Policy would exceed the amount to be recovered; provided that prior to
concluding that it would be impracticable to recover any amount of Excess Incentive Compensation based on expense of enforcement, the Board must make a reasonable attempt to recover such erroneously awarded compensation, document such
reasonable attempt(s) to recover and provide that documentation to Nasdaq; or
|
•
|
Recovery would likely cause an otherwise tax-qualified retirement plan, under which benefits are broadly available to employees of the Company,
to fail to meet the requirements of 26 U.S.C. 401(a)(13) or 26 U.S.C. 411(a) and regulations thereunder.
|
Approved by: Board of Directors
|
File: Clawback Policy
|
|
Date: November 2023
|
||
Page 5 of 6
|
||
CLAWBACK POLICY
|
Approved by: Board of Directors
|
File: Clawback Policy
|
|
Date: November 2023
|
||
Page 6 of 6
|
||
CLAWBACK POLICY
|
THE YORK WATER COMPANY
|
EXECUTIVE
|
|
By: ___________________________________
Name: ________________________________
Title: __________________________________
|
_________________________________
Title: _____________________________
|
A.
|
rights of the Executive arising under, or preserved by, this Release;
|
B.
|
the right of the Executive to receive COBRA continuation coverage in accordance with applicable law;
|
C.
|
claims for benefits under any health, disability, retirement, life insurance or other, similar employee benefit plan (within
the meaning of Section 3(3) of ERISA) of the Company Affiliated Group;
|
D.
|
rights to indemnification the Executive has or may have under the organizing documents of any member of the Company
Affiliated Group or as an insured under any director’s and officer’s liability insurance policy now or previously in force; and
|
E.
|
rights granted to the Executive as an equity holder of the Company, if any.
|
The York Water Company
|
||
By:
|
||
Name:
|
||
Title:
|
||
Executive
|
||
Name
|
Agreement Date
|
Vernon L. Bracey
|
August 1, 2022
|
Alexandra C. Chiaruttini
|
August 1, 2022
|
Joseph T. Hand
|
August 1, 2022
|
Matthew E. Poff
|
August 1, 2022
|
Matthew J. Scarpato
|
July 31, 2023
|
Mark S. Snyder
|
August 1, 2022
|
Balance Sheets (Parenthetical) - USD ($) $ in Thousands |
Dec. 31, 2023 |
Dec. 31, 2022 |
---|---|---|
ASSETS | ||
Other physical property, accumulated depreciation | $ 501 | $ 463 |
CURRENT ASSETS: | ||
Accounts receivables, reserves | $ 1,005 | $ 855 |
COMMON STOCKHOLDERS' EQUITY: | ||
Common stock, par value (in dollars per share) | $ 0 | $ 0 |
Common stock, authorized (in shares) | 46,500,000 | 46,500,000 |
Common stock, issued (in shares) | 14,332,245 | 14,285,584 |
Common stock, outstanding (in shares) | 14,332,245 | 14,285,584 |
Preferred stock, authorized (in shares) | 500,000 | 500,000 |
Preferred stock, issued (in shares) | 0 | 0 |
Statements of Income - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2023 |
Dec. 31, 2022 |
|
Statements of Income [Abstract] | ||
OPERATING REVENUES: | $ 71,031 | $ 60,061 |
OPERATING EXPENSES: | ||
Operation and maintenance | 17,362 | 14,133 |
Administrative and general | 10,893 | 9,926 |
Depreciation and amortization | 11,746 | 10,139 |
Taxes other than income taxes | 1,499 | 1,380 |
Operating expenses | 41,500 | 35,578 |
Operating income | 29,531 | 24,483 |
OTHER INCOME (EXPENSES): | ||
Interest on debt | (7,047) | (5,114) |
Allowance for funds used during construction | 4,153 | 1,501 |
Other pension costs | (1,082) | (1,275) |
Other income (expenses), net | (521) | 0 |
Other income (expenses) | (4,497) | (4,888) |
Income before income taxes | 25,034 | 19,595 |
Income tax expense | 1,277 | 15 |
Net Income | $ 23,757 | $ 19,580 |
Basic Earnings Per Share (in dollars per share) | $ 1.66 | $ 1.4 |
Diluted Earnings Per Share (in dollars per share) | $ 1.66 | $ 1.4 |
Statements of Common Stockholders' Equity (Parenthetical) - $ / shares |
12 Months Ended | |
---|---|---|
Dec. 31, 2023 |
Dec. 31, 2022 |
|
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||
Cash dividends declared (in dollars per share) | $ 0.8189 | $ 0.7874 |
Statements of Cash Flows (Parenthetical) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2023 |
Dec. 31, 2022 |
|
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Utility plant additions, debt portion of allowance for funds used during construction | $ 2,321 | $ 839 |
Supplemental disclosure of non-cash investing and financing activities: | ||
Accounts payable for construction of utility plant | 6,433 | $ 5,118 |
Contributions in aid of construction as part of acquisition | $ 4,403 |
Significant Accounting Policies |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Significant Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Significant Accounting Policies |
1. Significant Accounting Policies
The primary business of The York Water Company, or the Company, is to impound,
purify and distribute water. The Company also owns and operates three wastewater collection systems and ten wastewater collection and treatment systems. The Company operates within its franchised territory located in four counties within south-central Pennsylvania and is subject to regulation by the Pennsylvania Public Utility Commission, or PPUC.
The following summarizes the significant accounting policies employed by The York Water Company.
Utility Plant and Depreciation
The cost of additions includes contracted cost, direct labor and fringe benefits, materials, overhead and, for certain utility plant, allowance for funds
used during construction. In accordance with regulatory accounting requirements, water and wastewater systems acquired are recorded at estimated original cost of utility plant when first devoted to utility service and the applicable depreciation is
recorded to accumulated depreciation. The difference between the estimated original cost less applicable accumulated depreciation, and the purchase price and acquisition costs, is recorded as an acquisition adjustment within utility plant as
permitted by the PPUC. At December 31, 2023 and 2022, utility plant includes a net credit acquisition adjustment of $9,384 and $9,178, respectively. For those amounts approved by the PPUC, the net acquisition adjustment is being amortized over the remaining life of the respective
assets. Certain amounts are still awaiting approval from the PPUC before amortization will commence. Amortization amounted to $69 and $67 for the years ended December 31, 2023
and 2022, respectively.
Upon normal retirement of depreciable property, the estimated or actual cost of the asset is credited to the utility plant account, and such amounts,
together with the cost of removal less salvage value, are charged to the reserve for depreciation. To the extent the Company recovers cost of removal or other retirement costs through rates after the retirement costs are incurred, a regulatory asset
is reported. Gains or losses from abnormal retirements are reflected in income currently.
The straight-line remaining life method is used to compute depreciation on utility plant cost, exclusive of land and land rights. Annual provisions for
depreciation of transportation and mechanical equipment included in utility plant are computed on a straight-line basis over the estimated service lives. Such provisions are charged to clearing accounts and apportioned therefrom to operating
expenses and other accounts in accordance with the Uniform System of Accounts as prescribed by the PPUC.
The Company charges to maintenance expense the cost of repairs and replacements and renewals of minor items of property. Maintenance of transportation
equipment is charged to clearing accounts and apportioned from there in a manner similar to depreciation. The cost of replacements, renewals, and betterments of units of property is capitalized to the utility plant accounts.
The following remaining lives are used for financial reporting purposes:
The effective rate of depreciation was 2.55%
in 2023 and 2.38% in 2022, on average utility plant, net of customers’ advances and contributions. Larger depreciation provisions resulting from allowable accelerated
methods are deducted for tax purposes.
Cash and Cash Equivalents
For the purposes of the statements of cash flows, the Company considers all highly liquid debt instruments purchased with an original maturity of three
months or less to be cash equivalents except for those instruments earmarked to fund construction expenditures or repay long-term debt.
The Company periodically maintains cash balances in major financial institutions in excess of the federally insured limit by the Federal Deposit Insurance
Corporation (FDIC). The Company has not experienced any losses and believes it is not exposed to any significant credit risk on cash and cash equivalents.
Accounts Receivable
Accounts receivable are stated at outstanding balances, less a reserve for doubtful accounts. The reserve for doubtful accounts is established through provisions charged
against income. Accounts deemed to be uncollectible are charged against the reserve and subsequent recoveries, if any, are credited to the reserve. The reserve for doubtful accounts is the best estimate of the amount of probable credit
losses in the existing accounts receivable and is determined based on lifetime expected credit losses and the aging of account balances. Management’s periodic evaluation of the adequacy of the reserve is based on historical write-offs combined with
an evaluation of current conditions and reasonable and supportable forecasts including inactive accounts with outstanding balances, the aging of balances in payment agreements, adverse situations that may affect a customer’s ability to pay, economic
conditions, and other relevant factors applied to the current aging of receivables. This evaluation is inherently subjective. Unpaid balances remaining after the stated payment terms are considered past due.
Materials and Supplies Inventories
Materials and supplies inventories are stated at cost. Costs are determined using the average cost method.
Note Receivable
Note receivable is recorded at cost and represents amounts due from a municipality for construction of water mains in their municipality. Management,
considering current information and events regarding the borrowers’ ability to repay their obligations, considers a note to be impaired when it is probable that the Company will be unable to collect all amounts due according to the contractual terms
of the note agreement. When a note is considered to be impaired, the carrying value of the note is written down. The amount of the impairment is measured based on the present value of expected future cash flows discounted at the note’s effective
interest rate.
Regulatory Assets and Liabilities
The Company is subject to the provisions of generally accepted accounting principles regarding rate-regulated entities. The accounting standards provide
for the recognition of regulatory assets and liabilities as allowed by regulators for costs or credits that are reflected in current customer rates or are considered probable of being included in future rates. The regulatory assets or liabilities
are then relieved as the cost or credit is reflected in rates. Regulatory assets represent costs that are expected to be fully recovered from customers in future rates while regulatory liabilities represent amounts that are expected to be refunded
to customers in future rates. These deferred costs have been excluded from the Company’s rate base and, therefore, no return is being earned on the unamortized balances.
Regulatory assets and liabilities are comprised of the following:
The regulatory asset for income taxes includes (a) deferred state income taxes related primarily to differences between book and tax depreciation expense,
(b) deferred income taxes related to the differences that arise between specific asset improvement costs capitalized for book purposes and deducted as a repair expense for tax purposes, and (c) deferred income taxes associated with the gross-up of
revenues related to the differences. These assets are recognized for ratemaking purposes on a cash or flow-through basis and will be recovered in rates as they reverse.
The Company uses regulatory accounting treatment to defer the mark-to-market unrealized gains and losses on its interest rate swap to reflect that the gain
or loss is included in the ratemaking formula when the transaction actually settles. The value of the swap as of the balance sheet date is recorded as part of other deferred credits. Realized gains or losses on the swap will be recorded as interest
expense in the statement of income over its remaining term of six years.
Utility plant retirement costs represent costs already incurred for the removal of assets, which are expected to be recovered over a five-year period in rates, through depreciation expense.
The Company was granted approval by the PPUC to modify its tariff to replace lead customer-owned service lines that were discovered when the Company
replaced its lead service lines, and to include the cost of the annual replacement of up to 400 lead customer-owned service lines whenever
they are discovered, regardless of the material used for the company-owned service line, over nine years. The tariff modification allows
the Company to replace customer-owned service lines at its own initial cost and record the costs as a regulatory asset to be recovered in future base rates to customers. The recovery period was established in the most recent rate order at four years beginning March 1, 2023. The recovery period for the customer-owned lead service line replacements completed subsequent to the most recent
rate order will begin after the next rate order.
Service life study expenses are deferred and amortized over their remaining life of four years. Rate
case filing expenses are deferred and amortized over their remaining life of three years.
Pursuant to the Tax Cuts and Jobs Act of 2017, or 2017 Tax Act, customers’ advances for construction and contributions in aid of construction are
considered taxable income. The Company’s tariff allows the Company to record these income taxes for inclusion in rate base. This asset is recognized for ratemaking purposes on a cash or flow-through basis and will be recovered in rates as it
reverses. In November 2021, the Infrastructure Investment and Jobs Act of 2021, or 2021 Infrastructure Act, repealed the tax treatment of customers’ advances for construction and contributions in aid of construction made after December 31, 2020.
Under normalization rules applicable to public utility property included in the 2017 Tax Act, the excess accumulated deferred income taxes on accelerated
depreciation from lowering of the enacted federal statutory corporate tax rate is recorded as a regulatory liability. The benefit will be given back to customers in rates over the remaining regulatory life of the property.
The regulatory liability for income taxes includes deferred taxes related to excess accumulated deferred income taxes on accelerated depreciation, other
postretirement benefits, customers’ advances for construction and contributions in aid of construction, and bad debts, as well as deferred investment tax credits. These liabilities will be given back to customers in rates, as tax deductions occur
over the next 1 to 50
years.
The regulatory liability for the Internal Revenue Service, or IRS, tangible property regulations, or TPR, catch-up deduction represents the tax benefits
realized on the Company’s 2014 income tax return for qualifying capital expenditures made prior to 2014. The period over which it will be given back to customers in rates was established in a rate order at 15 years beginning March 1, 2019.
Postretirement benefits include the difference between contributions and deferred pension expense and the overfunded status of the pension plans. The
overfunded status represents the difference between the projected benefit obligation and the fair market value of the assets. This liability will change in future years based on the amount of contributions made and market returns. The liability
will be given back to customers in rates over some period determined by the PPUC in a future rate filing.
Other Assets
Other assets consist mainly of the cash value of life insurance policies held as an investment by the Company for reimbursement of costs and benefits
associated with its supplemental retirement and deferred compensation programs.
Deferred Debt Expense
Deferred debt expense is amortized on a straight-line basis over the term of the related debt and is presented on the balance sheet as a direct reduction
from long-term debt.
Customers’ Advances for Construction
Customer advances are cash payments from developers, municipalities, customers, or builders for construction of utility plant, and are refundable upon
completion of construction, as operating revenues are earned. If the Company loans funds for construction to the customer, the refund amount is credited to the note receivable rather than paid out in cash. After all refunds to which the customer is
entitled are made, any remaining balance is transferred to contributions in aid of construction.
Contributions in Aid of Construction
Contributions in Aid of Construction is composed of (i) direct, non-refundable contributions from developers, customers, or builders for construction of
water infrastructure and (ii) customer advances that have become non-refundable. Contributions in aid of construction are deducted from the Company’s rate base, and therefore, no return is earned on property financed with contributions. The PPUC
requires that contributions received remain on the Company’s balance sheets indefinitely as a long-term liability.
Interest Rate Swap Agreement
The Company is exposed to certain risks relating to its ongoing business operations. The primary risk managed by using derivative instruments is interest
rate risk. The Company utilizes an interest rate swap agreement to effectively convert its variable-rate debt to a fixed rate. Interest rate swaps are contracts in which a series of interest rate cash flows are exchanged over a prescribed period.
The notional amount on which the interest payments are based is not exchanged. The Company has designated the interest rate swap agreement as a cash flow hedge, classified as a financial derivative used for non-trading activities.
The accounting standards regarding accounting for derivatives and hedging activities require companies to recognize all derivative instruments as either
assets or liabilities at fair value on the balance sheets. In accordance with the standards, the interest rate swap is recorded on the balance sheets in other deferred credits at fair value.
The Company uses regulatory accounting treatment rather than hedge accounting to defer the unrealized gains and losses on its interest rate swap. These
unrealized gains and losses are recorded as a regulatory asset. Based on current ratemaking treatment, the Company expects the gains and losses to be recognized in rates and in interest expense as the swap settlements occur. Swap settlements are
recorded in the income statement with the hedged item as interest expense. Swap settlements resulted in the reclassification from regulatory assets to interest expense of $18 in 2023 and $247 in 2022. The overall swap result was a gain of $24 in 2023 and $1,133 in 2022. During the year ending
December 31, 2024, the Company expects to reclassify $40 before tax from regulatory assets to interest expense.
The interest rate swap will expire on October 1, 2029.
Stock-Based Compensation
The Company records compensation expense in the financial statements for stock-based awards based on the grant date fair value of those awards.
Stock-based compensation expense is recognized over the requisite service periods of the awards on a straight-line basis, which is generally commensurate with the vesting term. Forfeitures are recognized as they occur.
Income Taxes
Certain income and expense items are accounted for in different time periods for financial reporting than for income tax reporting purposes.
Deferred income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax
consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted
tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period
that includes the enactment date. To the extent such income taxes increase or decrease future rates, an offsetting regulatory asset or liability has been recorded.
Investment tax credits have been deferred and are being amortized to income over the average estimated service lives of the related assets. As of December
31, 2023 and 2022,
deferred investment tax credits amounted to $392 and $428, respectively.
The Company filed for a change in accounting method under the IRS TPR effective in 2014. Under the change in accounting method, the Company is permitted
to deduct the costs of certain asset improvements that were previously being capitalized and depreciated for tax purposes as an expense on its income tax return. The Company was permitted to make this deduction for prior years (the “catch-up
deduction”) and each year going forward, beginning with 2014 (the “ongoing deduction”). After receiving approval from the PPUC in a rate order, the Company began to recognize the catch-up deduction, recorded as a regulatory liability, over 15 years beginning March 1, 2019. The ongoing deduction results in a reduction in the effective income tax rate, a net reduction in income tax expense,
and a reduction in the amount of income taxes currently payable. The catch-up deduction resulted in a decrease in current income taxes payable and an increase to regulatory liabilities. Both the ongoing and catch-up deductions resulted in increases
to deferred tax liabilities and regulatory assets representing the appropriate book and tax basis difference on capital additions.
The 2017 Tax Act, among other things, reduces the federal statutory corporate tax rate for tax years beginning in 2018 from 34% to 21%, treats customers’ advances for
construction and contributions in aid of construction as taxable income, eliminates certain deductions, and eliminates bonus depreciation on qualified water and wastewater property. This resulted in the remeasurement of the federal portion of the
Company’s deferred taxes as of December 31, 2017 to the 21% rate. The effect was recognized in income for the year ended December 31,
2017 for all deferred tax assets and liabilities except accelerated depreciation. Under normalization rules applicable to public utility property included in the 2017 Tax Act, the excess accumulated deferred income taxes on accelerated depreciation
is recorded as a regulatory liability. The regulatory liability is a temporary difference, so a deferred tax asset is recorded including the gross-up of revenue necessary to return, in rates, the effect of the temporary difference. In November
2021, the 2021 Infrastructure Act repealed the tax treatment of customers’ advances for construction and contributions in aid of construction made after December 31, 2020.
Allowance for Funds Used During Construction
Allowance for funds used during construction (AFUDC) represents the estimated cost of funds used for construction purposes during the period of
construction. These costs are reflected as non-cash income during the construction period and as an addition to the cost of plant constructed. AFUDC includes the net cost of borrowed funds and a rate of return on other funds. The PPUC approved
rate of 10.04% was applied for 2023
and 2022. AFUDC is recovered through water and wastewater rates as utility plant is depreciated.
Use of Estimates in the Preparation of Financial Statements
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to
make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
|
Acquisitions |
12 Months Ended |
---|---|
Dec. 31, 2023 | |
Acquisitions [Abstract] | |
Acquisitions |
2. Acquisitions
On August 11, 2022, the Company completed the acquisition of the water assets and wastewater collection and treatment assets of Country View Manor
Community, LLC in York County, Pennsylvania. The Company began operating the existing water assets and wastewater collection and treatment assets on August 15, 2022. The acquisition resulted in the addition of approximately 50 water and wastewater customers with purchase price and acquisition costs of approximately $47, which is less than the depreciated original cost of the assets. The Company recorded a negative acquisition adjustment of $13 and will seek approval from the PPUC to amortize the acquisition adjustment over the remaining life of the acquired assets. This acquisition is immaterial to Company
results.
On August 25, 2022, the Company completed the acquisition of the water assets and wastewater collection and treatment assets jointly owned by Letterkenny
Industrial Development Authority and Franklin County General Authority in Franklin County, Pennsylvania. The Company began operating the existing water assets and wastewater collection and treatment assets on August 29, 2022. The acquisition
resulted in the addition of approximately 90 water and wastewater customers with purchase price and acquisition costs of approximately $2,818, which is less than the depreciated original cost of the assets. The Company recorded a negative acquisition adjustment of $5,613 and will seek approval from the PPUC to amortize the acquisition adjustment over the remaining life of the acquired assets. This acquisition is
immaterial to Company results.
On October 28, 2022, the Company completed the acquisition of the water assets of the Albright Trailer Park of R.T. Barclay, Inc. in Springfield
Township, York County, Pennsylvania. The Company began operating the existing water system through an interconnection with its current distribution system on October 31, 2022. The acquisition resulted in the addition of approximately 60 water customers with purchase price and acquisition costs of approximately $10, which is less than the depreciated original cost of the assets. The Company recorded a negative acquisition adjustment of $5 and will seek approval from the PPUC to amortize the acquisition adjustment over the remaining life of the acquired assets. These customers were previously served by the
Company through a single customer connection to the park. This acquisition is immaterial to Company results.
On November 17, 2022, the Company completed the acquisition of the water assets of Scott Water Company in Greene Township, Franklin County,
Pennsylvania. The Company began operating the existing water system through an interconnection with its current distribution system on November 18, 2022. The acquisition resulted in the addition of approximately 25 water customers with purchase price and acquisition costs of approximately $32, which is more than the depreciated original cost of the assets. The Company recorded an acquisition adjustment of $23 and will seek approval from the PPUC to amortize the acquisition adjustment over the remaining life of the acquired assets. This acquisition is immaterial to Company
results.
On December 1, 2022, the Company completed the acquisition of the wastewater collection and treatment assets of SYC WWTP, L.P. and the Albright Trailer
Park of R.T. Barclay, Inc. in Shrewsbury and Springfield Townships, York County, Pennsylvania. The Company began operating the existing collection and treatment facilities on December 5, 2022. The acquisition resulted in the addition of
approximately 90 wastewater customers with purchase price and acquisition costs of approximately $516, of which $35 was paid in 2023, which
is less than the depreciated original cost of the assets. The Company recorded a negative acquisition adjustment of $202 and will seek
approval from the PPUC to amortize the acquisition adjustment over the remaining life of the acquired assets. The wastewater customers of the Albright Trailer Park were previously served by SYC WWTP, L.P. through a single customer connection to
the park. This acquisition is immaterial to Company results.
On October 12, 2023, the Company completed the acquisition of the water assets and wastewater collection and treatment assets of Conewago Industrial Park Water and Sewer
Company in Lancaster County, Pennsylvania. The Company began operating the existing water assets and wastewater collection and treatment assets on October 16, 2023. The acquisition resulted in the addition of approximately 30 commercial and industrial water and wastewater customers with purchase
price and acquisition costs of approximately $590, which is less than the depreciated original cost of the assets. The Company
recorded a negative acquisition adjustment of $73 and will seek approval from the PPUC to amortize the acquisition adjustment over
the remaining life of the acquired assets. This acquisition is immaterial to Company results.
|
Accounts Receivable and Contract Assets |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounts Receivable and Contract Assets [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounts Receivable and Contract Assets |
3. Accounts Receivable and Contract Assets
Accounts receivable are summarized in the following table:
Differences in timing of revenue recognition, billings, and cash collections result in receivables, which are contract assets. Generally, billing
occurs subsequent to revenue recognition, resulting in unbilled revenue on the balance sheet, which is also a contract asset. The Company does not receive advances or deposits from customers before revenue is recognized so no contract
liabilities are reported. Accounts receivable are recorded when the right to consideration becomes unconditional and are presented separately on the balance sheet. The changes in accounts receivable – customers and in unbilled revenue were
primarily due to normal timing difference between performance and the customer’s payments.
|
Note Receivable and Customers' Advances for Construction |
12 Months Ended | |||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2023 | ||||||||||||||||||||||||||||
Note Receivable and Customers' Advances for Construction [Abstract] | ||||||||||||||||||||||||||||
Note Receivable and Customers' Advances for Construction |
4. Note Receivable and Customers’ Advances for Construction
The Company entered into an agreement with
municipality to extend water service into a previously formed water district. The Company loaned funds to the municipality to cover the costs related to the project. The municipality concurrently advanced these funds back to the Company in the form
of customers’ advances for construction. The municipality is required by enacted ordinance to charge application fees and water revenue surcharges (fees) to customers connected to the system, which are remitted to the Company. The note principal
and the related customer advance that could be used to settle the note receivable are reduced periodically as operating revenues are earned by the Company from customers connected to the system and refunds of the advance are made. There is no due
date for the notes or expiration date for the advance.The Company recorded interest income of $192
in 2023 and $194 in 2022. The interest rate on the note outstanding is 7.5%.
Included in the accompanying balance sheets at December 31, 2023
and 2022 were the following amounts related to this project.
The Company has other customers’ advances for construction totaling $18,648 and $14,668 at December 31, 2023 and 2022, respectively.
|
Common Stock and Earnings Per Share |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||
Common Stock and Earnings Per Share [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||
Common Stock and Earnings Per Share |
5. Common Stock and Earnings Per Share
Net income of $23,757 and $19,580 for the years ended December 31, 2023
and 2022, respectively, is used to calculate both basic and diluted earnings per share. Basic net income per share is based on the
weighted average number of common shares outstanding. Diluted net income per share is based on the weighted average number of common shares outstanding plus potentially dilutive shares. The dilutive effect of employee stock-based compensation is
included in the computation of diluted net income per share. The dilutive effect of stock-based compensation is calculated using the treasury stock method and expected proceeds upon exercise or issuance of the stock-based compensation.
The following table summarizes the shares used in computing basic and diluted net income per share:
Under the employee stock purchase plan, all full-time employees who have been employed at least
consecutive days may purchase shares of the Company’s common stock limited to 10%
of gross compensation. The purchase price is 95% of the fair market value (as defined). Shares issued during 2023 and 2022 were 4,227 and 4,378, respectively. As of
December 31, 2023, 45,416
authorized shares remain unissued under the plan.The Company has a Dividend Reinvestment and Direct Stock Purchase and Sale Plan (“the Plan”), which is available to both current shareholders and the
general public. On November 7, 2022, the Company filed a Registration Statement on Form S-3 with the Securities and Exchange Commission (SEC) to rollover the unissued 365,975 shares authorized under the 2019 Form S-3, for issuance under the new Prospectus for the Plan. Under the optional dividend reinvestment portion of the Plan, holders of the Company’s common stock may purchase
additional shares instead of receiving cash dividends. The purchase price is 95% of the fair market value (as defined). Under the direct
stock purchase portion of the Plan, purchases are made monthly at 100% of the stock’s fair market value, as defined in the new
Prospectus. The Registration Statement was declared effective by the SEC on November 17, 2022. Shares issued during 2023 and 2022 were 37,475 and 38,361, respectively. As of December 31, 2023,
320,708 authorized shares remain unissued under the Plan.
On April 5, 2022, the Company closed an underwritten public offering of 975,600 shares of its common stock, with an offering price of $41 per share. On April 7, 2022, the
Company closed on the full exercise of the underwriter’s option to purchase an additional 146,340 shares of its common stock at the same
price. Janney Montgomery Scott LLC was the underwriter in the offering. The Company received net proceeds in the offering, after deducting offering expenses and underwriters’ discounts and commissions, of $43,970. The net proceeds were used to repay the Company’s borrowings under its line of credit agreement incurred to fund capital expenditures and acquisitions, and for general
corporate purposes.
On March 11, 2013, the Board of Directors, or the Board, authorized a share repurchase program granting the Company authority to repurchase up to 1,200,000 shares of the Company’s common stock from time to time. The stock repurchase program has no specific end date and the Company may repurchase
shares in the open market or through privately negotiated transactions. The Company may suspend or discontinue the repurchase program at any time. During both 2023 and 2022, the Company did not repurchase or retire any shares. As of December 31, 2023,
618,004 shares remain available for repurchase.
|
Long-Term Debt and Short-Term Borrowings |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Long-Term Debt and Short-Term Borrowings [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Long-Term Debt and Short-Term Borrowings |
6. Long-Term Debt and Short-Term Borrowings
Long-term debt as of December 31, 2023 and 2022 is summarized in the following table:
Payments due by year as of December 31, 2023:
Payments due in 2025 include payback of the committed line of credit. The committed line of credit is reviewed annually, and upon favorable outcome, would
likely be extended for another year. Payments due in 2025 also include potential payments of $12,000 on the variable rate bonds (due
2029) which would only be payable if all bonds were tendered and could not be remarketed, or in the event the Company was unable to, or chose not to, renew the letter of credit backing the bonds. There is currently no such indication of this
happening.
Fixed Rate Long-Term Debt
On February 24, 2023, the Company entered into a note purchase agreement with certain institutional investors relating to the private
placement of $40,000 aggregate principal amount of the Company’s senior notes. The senior notes bear interest at 5.50% per annum payable semiannually and mature on February 24, 2053. The senior notes are unsecured and unsubordinated obligations of the Company. The Company received net proceeds, after deducting issuance costs, of approximately $39,829. The net proceeds were used to refinance line of credit borrowings incurred by the Company as interim financing for various capital projects of the Company.
The 8.43% Senior Notes, Series D had a
maturity date of December 18, 2022. The Company retired the $7,500 notes using funds available under its line of credit.
Variable Rate Long-Term Debt
On May 7, 2008, the Pennsylvania Economic Development Financing Authority, or PEDFA, issued $12,000 aggregate principal amount of PEDFA Exempt Facilities Revenue Refunding Bonds, Series A of 2008 (the “Series A Bonds”) for the Company’s benefit pursuant to the terms of a trust
indenture, dated as of May 1, 2008, between the PEDFA and Manufacturers and Traders Trust Company, as trustee. The PEDFA then loaned the proceeds of the offering of the Series A Bonds to the Company pursuant to a loan agreement, dated as of May 1,
2008, between the Company and the PEDFA. The loan agreement provides for a $12,000 loan with a maturity date of October 1, 2029. Amounts outstanding under the loan agreement are the Company’s direct general obligations. The proceeds of the loan were used to
redeem the PEDFA Exempt Facilities Revenue Bonds, Series B of 2004 (the “2004 Series B Bonds”). The 2004 Series B Bonds were redeemed because the bonds were tendered and could not be remarketed due to the downgrade of the bond insurer’s credit
rating.
Borrowings under the loan agreement bear interest at a variable rate as determined by PNC Capital Markets, as remarketing agent, on a periodic basis
elected by the Company, which has currently elected that the interest rate be determined on a weekly basis. The remarketing agent determines the interest rate based on the current market conditions in order to determine the lowest interest rate
which would cause the Series A Bonds to have a market value equal to the principal amount thereof plus accrued interest thereon. The variable interest rate under the loan agreement averaged 3.38% in 2023 and 1.25% in 2022. As of December 31, 2023 and 2022, the interest rate was 3.89% and 3.75%, respectively.
The holders of the $12,000 Series A Bonds
may tender their bonds at any time. When the bonds are tendered, they are subject to an annual remarketing agreement, pursuant to which a remarketing agent attempts to remarket the tendered bonds according to the terms of the indenture. In order to
keep variable interest rates down and to enhance the marketability of the Series A Bonds, the Company entered into a Reimbursement, Credit and Security Agreement with PNC Bank, National Association (“the Bank”) dated as of May 1, 2008. This
agreement provides for a direct pay letter of credit issued by the Bank to the trustee for the Series A Bonds. The Bank is responsible for providing the trustee with funds for the timely payment of the principal and interest on the Series A Bonds
and for the purchase price of the Series A Bonds that have been tendered or deemed tendered for purchase and have not been remarketed. The Company’s responsibility is to reimburse the Bank the same day as regular interest payments are made, and
within fourteen months for the purchase price of tendered bonds that have not been remarketed. The reimbursement period for the principal
is immediate at maturity, upon default by the Company, or if the Bank does not renew the Letter of Credit. The current expiration date of the Letter of Credit is June 30, 2025. It is reviewed annually for a potential extension of the expiration
date.
The Company may elect to have the Series A Bonds redeemed, in whole or in part, on any date that interest is payable for a redemption price equal to the
principal amount thereof plus accrued interest to the date of redemption. The Series A Bonds are also subject to mandatory redemption for the same redemption price in the event that the IRS determines that the interest payable on the Series A Bonds
is includable in gross income of the holders of the bonds for federal tax purposes.
Interest Rate Swap Agreement
In connection with the issuance of the PEDFA 2004 Series B Bonds, the Company entered into an interest rate swap agreement with a counterparty, in the
notional principal amount of $12,000. The Company elected to retain the swap agreement for the 2008 Series A Bonds. Interest rate swap
agreements derive their value from underlying interest rates. These transactions involve both credit and market risk. The notional amounts are amounts on which calculations, payments, and the value of the derivative are based. Notional amounts do
not represent direct credit exposure. Direct credit exposure is limited to the net difference between the calculated amounts to be received and paid, if any. Such difference, which represents the fair value of the swap, is reflected on the
Company’s balance sheets. See Note 7 for additional information regarding the fair value of the swap.
The interest rate swap will terminate on the maturity date of the 2008 Series A Bonds (which is the same date as the maturity date of the loan under the
loan agreement), unless sooner terminated pursuant to its terms. In the event the interest rate swap terminates prior to the maturity date of the 2008 Series A Bonds, either the Company or the swap counterparty may be required to make a termination
payment to the other based on market conditions at such time. The Company is exposed to credit-related losses in the event of nonperformance by the counterparty. The Company controls the credit risk of its financial contracts through credit
approvals, limits and monitoring procedures, and does not expect the counterparty to default on its obligations. Notwithstanding the terms of the swap agreement, the Company is ultimately obligated for all amounts due and payable under the loan
agreement.
The interest rate swap agreement contains provisions that require the Company to maintain a credit rating of at least BBB- with Standard & Poor’s. On
July 26, 2023, Standard & Poor’s affirmed the Company’s credit rating at A-, with a stable outlook and adequate liquidity. If the Company’s rating were to fall below this rating, it would be in violation of these provisions, and the counterparty
to the derivative could request immediate payment if the derivative was in a liability position. The Company’s interest rate swap was in a liability position as of December 31, 2023. If a violation was triggered on December 31, 2023, the Company would
have been required to pay the counterparty approximately $649.
The Company’s interest rate swap agreement provides that it pays the counterparty a fixed interest rate of 3.16% on the notional amount of $12,000. In exchange, the
counterparty paid the Company a floating interest rate (based on 59% of the U.S. Dollar one-month LIBOR rate) on the notional amount. The variable interest rate changed to 59%
of the daily simple Secured Overnight Financing Rate, or SOFR, plus a spread adjustment of 11.448 basis points upon the discontinuance of
LIBOR in 2023. The floating interest rate paid to the Company is intended, over the term of the swap, to approximate the variable interest rate on the loan agreement and the interest rate paid to bondholders, thereby managing its exposure to
fluctuations in prevailing interest rates. The Company’s net payment rate on the swap averaged 0.14% in 2023 and 2.04% in 2022.
As of December 31, 2023, there was a
spread of 68 basis points between the variable rate paid to bondholders and the variable rate received from the swap counterparty, which
equated to an overall effective rate of 3.84% (including variable interest and swap payments). As of December 31, 2022, there was a spread of 122 basis
points which equated to an overall effective rate of 4.38% (including variable interest and swap payments).
Line of Credit Borrowings
As of December 31, 2023, the Company
maintained a $50,000 unsecured,
committed line of credit at an interest rate of SOFR plus 1.17% with an unused commitment fee and an interest rate floor. In the third quarter of 2023, the Company renewed its committed line
of credit and extended the maturity date to September 2025. No other terms or conditions of the line of credit agreement were modified. On
January 1, 2023, the interest rate changed from LIBOR plus 1.05% to a successor rate of SOFR plus 1.17% in advance of the discontinuation of LIBOR in 2023. Average borrowings outstanding under the lines of credit were $16,316 in 2023 and $13,428 in 2022. The average cost of borrowings under the lines of credit was 5.36%
during 2023 and 2.11%
during 2022. The weighted average interest rate on the line of credit borrowings was 6.51% as of December 31, 2023 and 5.17% as of December 31, 2022.
The Company utilizes a cash management account that is directly connected to its line of credit. Excess cash generated automatically pays down
outstanding borrowings under the line of credit. If there are no outstanding borrowings, the cash is used as an earnings credit to reduce banking fees. Likewise, if additional funds are needed beyond what is generated internally, funds are
automatically borrowed under the line of credit. The Company borrowed $30,273 and $29,740 under its line of credit and incurred a cash overdraft of $1,547
and $3,175, which was recorded in accounts payable, as of December 31, 2023 and 2022, respectively.
Debt Covenants and Restrictions
The terms of the debt agreements carry certain covenants and limit in some cases the Company’s ability to borrow additional funds, to prepay its borrowings
and include certain restrictions with respect to declaration and payment of cash dividends and the Company’s acquisition of its stock. Under the terms of the most restrictive agreements, the Company cannot borrow in excess of 60% of its utility plant, and cumulative payments for dividends and acquisition of stock since December 31, 1982 may not exceed $1,500 plus net income since that date. As of December 31, 2023,
none of the earnings retained in the business are restricted under these provisions. The Company’s debt is unsecured.
The Company’s line of credit requires it to maintain a minimum equity to total capitalization ratio (defined as the sum of equity plus funded debt) and a
minimum interest coverage ratio (defined as net income plus interest expense plus income tax expense divided by interest expense). As of December 31, 2023,
the Company was in compliance with these covenants.
|
Fair Value of Financial Instruments |
12 Months Ended | ||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2023 | |||||||||||||||||||||
Fair Value of Financial Instruments [Abstract] | |||||||||||||||||||||
Fair Value of Financial Instruments |
7. Fair Value of Financial Instruments
The accounting standards regarding fair value measurements establish a fair value hierarchy which indicates the extent to which inputs used in measuring
fair value are observable in the market. Level 1 inputs include quoted prices for identical instruments and are the most observable. Level 2 inputs include quoted prices for similar assets and observable inputs such as interest rates, commodity
rates and yield curves. Level 3 inputs are not observable in the market and include management’s own judgments about the assumptions market participants would use in pricing the asset or liability.
The Company has recorded its interest rate swap liability at fair value in accordance with the standards. The liability is recorded under the caption
“Other deferred credits” on the balance sheets. The table below illustrates the fair value of the interest rate swap as of the end of the reporting period.
Fair values are measured as the present value of all expected future cash flows based on the swap yield curve as of the date of the valuation. These
inputs to this calculation are deemed to be Level 2 inputs. The balance sheet carrying value reflects the Company’s credit quality as of December 31, 2023.
The rate used in discounting all prospective cash flows anticipated to be made under this swap reflects a representation of the yield to maturity for 30-year
debt on utilities rated A- as of December 31, 2023. The use of the Company’s credit quality resulted in a reduction in the swap
liability of $17 as of December 31, 2023.
The fair value of the swap reflecting the Company’s credit quality as of December 31, 2022 is shown in the table below.
The carrying amount of current assets and liabilities that are considered financial instruments approximates fair value as of the dates presented. The
Company’s total long-term debt, with a carrying value of $182,643 at December 31, 2023, and $142,110 at December 31, 2022, had an estimated fair value of approximately $175,000
and $126,000, respectively. The estimated fair value of debt was calculated using a discounted cash flow technique that incorporates a
market interest yield curve with adjustments for duration and risk profile. These inputs to this calculation are deemed to be Level 2 inputs. The Company recognized its credit rating in determining the yield curve and did not factor in third party
credit enhancements including the letter of credit on the 2008 PEDFA Series A issue.
Customers’ advances for construction and note receivable have carrying values at December 31, 2023 of $18,853 and $255, respectively. At December 31, 2022, customers’ advances
for construction and note receivable had carrying values of $14,911 and $255, respectively. The relative fair values of these amounts cannot be accurately estimated since the timing of future payment streams is dependent upon several factors,
including new customer connections, customer consumption levels and future rate increases.
|
Commitments |
12 Months Ended |
---|---|
Dec. 31, 2023 | |
Commitments [Abstract] | |
Commitments |
8. Commitments
Based on its
capital budget, the Company anticipates construction and acquisition expenditures for 2024 and 2025 of approximately $42,200 and $46,100, respectively, exclusive of any acquisitions not yet approved. The Company plans to finance ongoing capital expenditures with internally-generated
funds, borrowings against the Company’s line of credit, proceeds from the issuance of common stock under its dividend reinvestment and direct stock purchase and sale plan and ESPP, potential common stock or debt issues and customer advances and
contributions.
The
Company committed to capital expenditures of approximately $39,548 to armor and replace the spillway of the Lake Williams dam, of
which $2,945 remains to be incurred as of December 31, 2023. The Company may make additional commitments for this project in the future.
The Company was granted approval by the PPUC to modify its tariff to include the cost of the annual replacement of up to 400 lead customer-owned service lines over nine years from the date of the
agreement. The tariff modification allows the Company to replace customer-owned service lines at its own initial cost. The Company will record the costs as a regulatory asset to be recovered in future base rates to customers, over a four-year period. The cost for the customer-owned lead service line replacements was approximately $1,762 and $1,518 through December 31, 2023 and 2022, respectively, and
is included as a regulatory asset. Based on its experience, the Company estimates that lead customer-owned service lines replacements will cost $1,900.
This estimate is subject to adjustment as more facts become available.
As of
December 31, 2023, approximately 32%
of the Company’s full-time employees are under union contract. The current contract was ratified in June 2023 and expires on April 30, 2026.
The Company
is involved in certain legal and administrative proceedings before various courts and governmental agencies concerning utility service and other matters. The Company expects that the ultimate disposition of these proceedings will not have a material
effect on the Company’s financial position, results of operations and cash flows.
|
Revenue |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue |
9. Revenue
The following table shows the Company’s revenues disaggregated by service and customer type.
Utility Service
The Company provides utility service as a distinct and single performance obligation to each of its water and wastewater customers. The transaction price
is detailed in the tariff pursuant to an order by the PPUC and made publicly available. There is no variable consideration and no free service, special rates, or subnormal charges to any customer. Due to the fact that the contract includes a single
performance obligation, no judgment is required to allocate the transaction price. The performance obligation is satisfied over time through the continuous provision of utility service through a stand-ready obligation to perform and the transfer of
water or the collection of wastewater through a series of distinct transactions that are identical in nature and have the same pattern of transfer to the customer. The Company uses an output method to recognize the utility service revenue over
time. The stand-ready obligation is recognized through the passage of time in the form of a fixed charge and the transfer of water or the collection of wastewater is recognized at a per unit rate based on the actual or estimated flow through the
meter. Each customer is invoiced every month and the invoice is due within twenty days. The utility service has no returns or warranties
associated with it. No revenue is recognized from performance obligations satisfied in prior periods and no performance obligations remain unsatisfied as of the end of the reporting period. A contract asset for unbilled revenue is recognized for
the passage of time and the actual or estimated usage from the latest meter reading to the end of the accounting period. The methodology is standardized and consistently applied to reduce bias and the need for judgment.
Billing and Revenue Collection Service
The Company provides billing and revenue collection service as distinct performance obligations to three municipalities within the service territory of the Company. The municipalities provide service to their residents and the Company acts as the billing and revenue
collection agent for the municipalities. The transaction price is a fixed amount per bill prepared as established in the contract. There is no variable consideration. Due to the fact that both the billing performance obligation and the revenue
collection performance obligation are materially complete by the end of the reporting period, the Company does not allocate the transaction price between the two performance obligations. The performance obligations are satisfied at a point in time
when the bills are sent as the municipalities receive all the benefits and bears all of the risk of non-collection at that time. Each municipality is invoiced when the bills are complete and the invoice is due within thirty days. The billing and revenue collection service has no returns or warranties associated with it. No revenue is recognized from performance
obligations satisfied in prior periods and no performance obligations remain unsatisfied as of the end of the reporting period.
Collection Service
The Company provides collection service as a distinct and single performance obligation to several municipalities within the service territory of the
Company. The municipalities provide wastewater service to their residents. If those residents are delinquent in paying for their wastewater service, the municipalities request that the Company post for and shut off the supply of water to the
premises of those residents. When the resident is no longer delinquent, the Company will restore water service to the premises. The transaction price for each posting, each shut off, and each restoration is a fixed amount as established in the
contract. There is no variable consideration. Due to the fact that the contract includes a single performance obligation, no judgment is required to allocate the transaction price. The performance obligation is satisfied at a point in time when
the posting, shut off, or restoration is completed as the municipalities receive all the benefits in the form of payment or no longer providing wastewater service. Each municipality is invoiced periodically for the posting, shut offs, and
restorations that have been completed since the last billing and the invoice is due within thirty days. The collection service has no
returns or warranties associated with it. No revenue is recognized from performance obligations satisfied in prior periods and no performance obligations remain unsatisfied as of the end of the reporting period. A contract asset for unbilled
revenue is recognized for postings, shut offs, and restorations that have been completed from the last billing to the end of the accounting period.
Service Line Protection Plan
The Company provides service line protection as a distinct and single performance obligation to current water customers that choose to participate. The
transaction price is detailed in the plan’s terms and conditions and made publicly available. There is no variable consideration. Due to the fact that the contract includes a single performance obligation, no judgment is required to allocate the
transaction price. The performance obligation is satisfied over time through the continuous provision of service line protection through a stand-ready obligation to perform. The Company uses an output method to recognize the service line protection
revenue over time. The stand-ready obligation is recognized through the passage of time. A customer has a choice to prepay for an entire year or to pay in advance each month. The service line protection plan has no returns or extended warranties
associated with it. No revenue is recognized from performance obligations satisfied in prior periods and no material performance obligations remain unsatisfied as of the end of the reporting period.
|
Rate Matters |
12 Months Ended |
---|---|
Dec. 31, 2023 | |
Rate Matters [Abstract] | |
Rate Matters |
10. Rate Matters
From time to time, the Company files applications for rate increases with the PPUC and is granted rate relief as a result of such requests. The most
recent rate request was filed by the Company on May 27, 2022 and sought an annual increase in water rates of $18,854 and an annual
increase in wastewater rates of $1,457. Effective March 1, 2023, the PPUC authorized an increase in water rates designed to produce
approximately $11,600 in additional annual revenues and an increase in wastewater rates designed to produce approximately $1,900 in additional annual revenues.
The PPUC permits water utilities to collect a distribution system improvement charge, or DSIC. The DSIC allows the Company to add a charge to customers’ bills for
qualified replacement costs of certain infrastructure without submitting a rate filing. This surcharge mechanism typically adjusts periodically based on additional qualified capital expenditures completed or anticipated in a future period. The DSIC
is capped at 5% of base rates, and is reset to zero when new base rates that reflect the costs of those additions become effective or when a utility’s earnings exceed a regulatory benchmark. The DSIC reset to zero when the new base rates took effect March 1, 2023. The DSIC provided revenues of $249 in 2023 and $2,243 in 2022. The DSIC is subject to audit by the PPUC.
|
Employee Benefit Plans |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Employee Benefit Plans [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Employee Benefit Plans |
11. Employee Benefit Plans
Pensions
The Company maintains a general and administrative and a union-represented defined benefit pension plan covering all of its employees hired prior to May 1,
2010. Employees hired after May 1, 2010 are eligible for an enhanced 401(k) plan rather than a defined benefit plan. The benefits under the defined benefit plans are based upon years of service and compensation near retirement. The Company amended
its defined benefit pension plans in 2014, generally limiting the years of eligible service under the plans to 30 years. The Company’s
funding policy is to contribute annually the amount permitted by the PPUC to be collected from customers in rates, but in no case less than the minimum Employee Retirement Income Security Act (ERISA) required contribution.
The following table sets forth the plans’ funded status as of December 31, 2023 and 2022. The measurement of assets and obligations of the plans is as of December 31, 2023 and 2022.
The accounting standards require that the funded status of defined benefit pension plans be fully recognized on the balance sheets. They also call for the
unrecognized actuarial gain or loss, the unrecognized prior service cost, and the unrecognized transition costs to be adjustments to shareholders’ equity (accumulated other comprehensive income). Due to a rate order granted by the PPUC, the Company
is permitted under the accounting standards to defer the charges otherwise recorded in accumulated other comprehensive income as a regulatory asset. Management believes these costs will be recovered in future rates charged to customers. The asset
for the funded status of the Company’s pension plans as of December 31, 2023 and 2022 is recorded in “Prepaid pension cost” on its balance sheets.
In 2023, the plans recognized a significant actuarial loss. In 2023, the Company recognized a 25 basis point decrease in the discount rate. In 2022, the plans recognized a significant actuarial gain. In 2022, the Company recognized a 235 basis point increase in the discount rate. The Company uses the corridor method to amortize actuarial gains and losses. Gains and losses over 10% of the greater of pension benefit obligation or the market value of assets are amortized over the average future service of plan participants
expected to receive benefits.
Changes in plan assets and benefit obligations recognized in regulatory liabilities are as follows:
Amounts recognized in regulatory liabilities that have not yet been recognized as components of net periodic benefit cost consist of the following at
December 31:
Components of net periodic benefit cost are as follows:
Pension service cost is recorded in operating expenses. All other components of net periodic pension cost are recorded as other pension costs in other
income (expenses).
The rate-regulated adjustment set forth above is required in order to reflect pension expense for the Company in accordance with the method used in
establishing water rates. The Company is permitted by rate order of the PPUC to expense pension costs to the extent of contributions and defer any remaining expense to regulatory assets or recognize the excess as a regulatory liability to be
collected in rates at a later date as additional contributions are made. During 2023, the deferral decreased by $2,831.
The estimated costs for the defined benefit pension plans relating to the December 31, 2023 balance sheet that will be amortized from regulatory liabilities into net periodic benefit cost over the next fiscal year are as follows:
The Company plans to contribute $1,556 to
the plans in 2024.
The following benefit payments, which reflect expected future service, as appropriate, are expected to be paid in each of the next five years and the
subsequent five years in the aggregate:
The following tables show the projected benefit obligation, the accumulated benefit obligation, and the fair value of plan assets as of December 31:
Weighted-average assumptions used to determine benefit obligations at December 31:
Weighted-average assumptions used to determine net periodic benefit cost for years ended December 31:
The selected long-term rate of return on plan assets was primarily based on the asset allocation of each of the plan’s assets. Analysis of the historic
returns of these asset classes and projections of expected future returns were considered in setting the long-term rate of return.
The Company adopted new investment policy statements in December 2023. The investment objective of the Company’s defined benefit pension plans is to
grow the assets in such a manner that, when coupled with contributions to the plans, the assets are sufficient to pay the benefits promised to the participants and beneficiaries as they come due. At December 31, 2023, compliance with the new
investment policy had only recently commenced implementation, resulting in a significant portion of the assets in cash and money market funds awaiting deployment to the asset classes defined in the investment policy statements.
The weighted-average target asset allocations are 70%
to 90% fixed income securities, 10%
to 30% equity securities, and 0%
to 10% reserves (cash and cash equivalents). The Company’s investment performance is reviewed on a quarterly basis, with long-term
emphasis placed on results achieved over a
to five year period.Eligible investments for fixed income securities include: (i) U.S. Treasury securities and agency securities; (ii) agency and non-agency mortgage-backed
securities backed by loans secured by residential, multi-family and commercial properties including, but not limited to passthroughs, collateralized mortgage obligations, REMICs, project loans, construction loans, and adjustable rate mortgages;
(iii) U.S.-dollar denominated obligations of foreign governments and supranational organizations; (iv) U.S.-dollar denominated obligations of domestic and foreign corporations; (v) asset-backed securities; (vi) municipal bonds, both taxable and
tax-exempt issues; (vii) cash equivalent investments such as commercial paper, asset-backed commercial paper, certificates of deposit (domestic and U.S.-dollar denominated foreign,) bankers’ acceptances and floating rate notes; and (viii) fixed
income mutual funds and exchange traded funds consistent with the investment guidelines. At the time of purchase, securities must be rated investment grade pursuant to the inclusion rules for a reference benchmark provider. Securities that are not
index eligible must be rated investment grade by a nationally recognized statistical rating organization at the time of purchase. The portfolio is allowed to hold up to 5% in aggregate market value of the portfolio in bonds downgraded below investment grade, provided that an overall investment grade rating is maintained for the total
portfolio.
Direct exposure to the following strategies and types of securities is prohibited: oil and gas wells; interest only securities; warrants; principal only
securities; margin trading; and inverse floating rate securities.
The fair values of the Company’s pension plan assets at December 31, 2023 and 2022 by asset category and fair value hierarchy level are as follows. All of the
valuations are based on quoted prices on active markets (Level 1).
Defined Contribution Plan
The Company has a savings plan pursuant to the provisions of section 401(k) of the Internal Revenue Code. For employees hired before May 1, 2010, this
plan provides for elective employee contributions of up to 15% of compensation and Company matching contributions of 100% of the participant’s contribution, up to a maximum annual Company contribution of $2.8 for each employee.
Employees hired after May 1, 2010 are entitled to an enhanced feature of the plan. This feature provides for elective employee contributions of up to 15% of compensation and Company matching contributions of 100%
of the participant’s contribution, up to a maximum of 4% of the employee’s compensation. In addition, the Company will make an annual
contribution of $1.2 to each employee’s account whether or not they defer their own compensation. Employees eligible for this enhanced
401(k) plan feature are not eligible for the defined benefit plans. As of December 31, 2023, 76 employees were participating in the enhanced feature of the plan. The Company’s contributions to both portions of the plan amounted to $380 in 2023 and $345 in 2022.
Deferred Compensation
The Company has non-qualified deferred compensation and supplemental retirement agreements with certain members of management. The future commitments under
these arrangements are offset by corporate-owned life insurance policies. At December 31, 2023 and 2022, the present value of the future obligations included in “Accrued compensation and benefits” and “Deferred employee benefits” was approximately $4,188 and $4,067, respectively. The
insurance policies included in “Other assets” had a total cash value of approximately $4,566 and $4,306 at December 31, 2023 and 2022, respectively. The Company’s net (income) expenses under the plans amounted to $419 in 2023 and $(385) in 2022.
Other
The Company has a retiree life insurance program which pays the beneficiary of a retiree $2 upon the retiree’s death. At December 31, 2023 and 2022, the present value of the future obligations was approximately $100 and $91, respectively. There is no trust or insurance covering this future liability, instead the
Company will pay these benefits out of its general assets. The Company’s net (income) expenses under the plan amounted to $9 in 2023 and $(58) in 2022.
|
Stock-Based Compensation |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-Based Compensation [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-Based Compensation |
12. Stock-Based Compensation
On May 2, 2016, the Company’s stockholders approved The York Water Company Long-Term Incentive Plan, or LTIP. The LTIP was adopted to provide the
incentive of long-term stock-based awards to officers, directors, and key employees. The LTIP provides for the granting of nonqualified stock options, incentive stock options, stock appreciation rights, performance restricted stock grants and units,
restricted stock grants and units, and unrestricted stock grants. A maximum of 100,000 shares of common stock may be issued under the
LTIP over the ten-year life of the plan. The maximum number of shares of common stock subject to awards that may be granted to any
participant in any one calendar year is 2,000. Shares of common stock issued under the LTIP may be treasury shares or authorized but
unissued shares. The LTIP is administered by the Compensation Committee of the Board, or the full Board, provided that the full Board administers the LTIP as it relates to awards to non-employee directors of the Company. The Company filed a
registration statement with the SEC on May 11, 2016 covering the offering of stock under the LTIP. The LTIP was effective on July 1, 2016.
On May 6, 2019, the Board awarded stock to non-employee directors effective May 6, 2019. This stock award vested immediately. On May 6, 2019, the
Compensation Committee awarded restricted stock to officers and key employees effective May 6, 2019. This restricted stock award vests ratably over three years beginning May 6, 2019 and has been fully recognized as of December 31, 2022.
On September 18, 2020, the Board awarded stock to non-employee directors
effective September 18, 2020. This stock award vested immediately. On September 18, 2020, the Compensation Committee awarded restricted stock to officers and key employees effective September 18, 2020. This restricted stock award vests ratably
over three years beginning September 18, 2020 and
has been fully recognized as of December 31, 2023.
On May 3, 2021, the Board awarded stock to non-employee directors effective May 3, 2021. This stock award vested immediately. On May 3, 2021, the
Compensation Committee awarded restricted stock to officers and key employees effective May 3, 2021. This restricted stock award vests ratably over three years beginning May 3, 2021.
On May 2, 2022, the Board awarded stock to non-employee directors effective May 2, 2022. This stock award vested immediately. On May
2, 2022, the Compensation Committee awarded restricted stock to officers and key employees effective May 2, 2022. This stock award vests ratably over three years beginning May 2, 2022.
On October 24, 2022, the Board awarded stock to an officer effective October 24, 2022. This stock award vested immediately.
On May 1,
2023, the Board awarded stock to non-employee directors effective May 1, 2023. This stock award vested immediately. On May 1, 2023, the Compensation Committee awarded restricted stock to officers and key employees effective May 1, 2023. This stock
award vests ratably over three years beginning May 1, 2023.
On May 1,
2023, the Board accelerated the vesting period for restricted stock granted in 2021, 2022, and 2023 to one retiring key employee from three years to that key employee’s 2024 retirement date.
On November
20, 2023, the Board awarded stock to an officer effective November 20, 2023. This stock award vested immediately.
The restricted stock awards provide the grantee with the rights of a shareholder, including the right to receive dividends and to vote such shares, but not
the right to sell or otherwise transfer the shares during the restriction period. As a result, the awards are included in common shares outstanding on the balance sheet. Restricted stock awards result in compensation expense valued at the fair
market value of the stock on the date of the grant and are amortized ratably over the requisite service period.
The following table summarizes the stock grant amounts and activity for the years ended December 31, 2022 and 2023.
For the years ended December 31, 2023 and
2022, the statement of income includes $300
and $279 of stock-based compensation and related
recognized tax benefits of $84 and $81,
respectively. The total fair value of the shares vested in the years ended December 31, 2023 and 2022 was $292 and $255, respectively. Total stock-based compensation related to
nonvested awards not yet recognized is $379 at December 31, 2023, which will be recognized over the remaining three-year vesting period.
|
Taxes Other than Income Taxes |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Taxes Other than Income Taxes [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Taxes Other than Income Taxes |
13. Taxes Other than Income Taxes
The following table provides the components of taxes other than income taxes:
|
Income Taxes |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Taxes [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Taxes |
14. Income Taxes
The provisions for income taxes consist of:
A reconciliation of the statutory Federal tax provision to the total provision follows:
The Company filed for a change in accounting method under the IRS TPR effective in 2014. Under the change in accounting method, the Company is permitted
to deduct the costs of certain asset improvements that were previously being capitalized and depreciated for tax purposes as an expense on its income tax return. The Company was permitted to make this deduction for prior years (the “catch-up
deduction”) and for each year going forward (the “ongoing deduction”). As a result of the catch-up deduction, income tax benefits of $3,887
were deferred as a regulatory liability. After receiving approval from the PPUC in a rate order, the Company began to recognize the catch-up deduction, recorded as a regulatory liability, over 15 years beginning March 1, 2019. As a result, the Company recognized $259
in income taxes during each of the years ended December 31, 2023 and 2022. As a result of the ongoing deduction, the net income tax benefits of $3,770
and $3,416 for the years ended December 31, 2023 and 2022, respectively, reduced income tax expense and flowed through to net income. The
ongoing deduction results in a reduction in the effective income tax rate, a net reduction in income tax expense, and a reduction in the amount of income taxes currently payable. Both the ongoing and catch-up deductions result in increases to
deferred tax liabilities and regulatory assets representing the appropriate book and tax basis difference on capital additions.
The 2017 Tax Act, among other things, reduces the federal statutory corporate tax rate for tax years beginning in 2018 from 34% to 21%, treats customers’ advances
for construction and contributions in aid of construction as taxable income, eliminates certain deductions, and eliminates bonus depreciation on qualified water and wastewater property. This resulted in the remeasurement of the federal portion of
the Company’s deferred taxes as of December 31, 2017 to the 21% rate. The effect was recognized in income for the year ended December 31, 2017 for all deferred tax assets and liabilities except accelerated depreciation. Under normalization rules
applicable to public utility property included in the 2017 Tax Act, the excess accumulated deferred income taxes on accelerated depreciation is recorded as a regulatory liability. The regulatory liability is a temporary difference, so a deferred tax
asset is recorded including the gross-up of revenue necessary to return, in rates, the effect of the temporary difference. The Company is recognizing the excess accumulated deferred income taxes on accelerated depreciation, recorded as a regulatory
liability, over the remaining useful life of the underlying assets. As a result, the Company recognized $197 and $160 in income taxes for the years ended December 31, 2023
and 2022, respectively. In November 2021, the 2021 Infrastructure Act repealed the tax treatment of customers’ advances for
construction and contributions in aid of construction made after December 31, 2020.
On July 8, 2022, the Pennsylvania budget for the fiscal year ending June 30, 2023 was signed into law. A
provision within the tax code bill included with the budget provides for an annual phase-down of the Pennsylvania corporate net income tax rate of one percentage point in the first year beginning January 1, 2023 from 9.99% to 8.99%, and a one-half
percentage point each year thereafter until it reaches 4.99% beginning January 1, 2031. The Company has remeasured the state portion of the Company’s deferred income taxes. The effect, net of the federal benefit, of $(9) and $3 was recognized in income for
the years ended December 31, 2023 and 2022, respectively. Deferred income taxes for differences that are recognized for ratemaking purposes on a cash or flow-through basis were remeasured with offsetting changes to regulatory assets and
liabilities on the balance sheet as of December 31, 2023 and 2022. The Company expects any savings in its Pennsylvania current income taxes to be returned to its customers through the rate making process or as a future negative surcharge on their
bills.
The tax effects of temporary differences between book and tax balances that give rise to significant portions of the deferred tax assets and deferred tax
liabilities as of December 31, 2023 and 2022
are summarized in the following table:
In accordance with accounting standards, the net deferred tax liability is classified as a noncurrent deferred income tax liability on the balance sheets.
The Company has a Pennsylvania tax loss carryover of $2,499. If not used, this carryover will expire in
. The Company has
contribution carryovers of $408. If not used, these carryovers will expire in .No valuation allowance was required
for deferred tax assets as of December 31, 2023 and 2022. In assessing the value of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of
deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future
taxable income, and tax planning strategies in making this assessment. Based upon expected future taxable income and the current regulatory environment, management believes it is more likely than not that the Company will realize the benefits of
these deductible differences.
The Company determined that there were no
uncertain tax positions meeting the recognition and measurement test of the accounting standards recorded in the years that remain open for review by taxing authorities, which are
through for both federal and state income tax returns.
The Company has not yet filed tax returns for 2023. The Company believes that it has fully complied with any changes pursuant to the
2017 Tax Act and the 2021 Infrastructure Act and has not taken any new positions in its 2023 income tax provision.The Company’s policy is to recognize interest and penalties related to income tax matters in other expenses. The Company paid no interest or penalties for the years ended December 31, 2023 and 2022.
|
Subsequent Events |
12 Months Ended |
---|---|
Dec. 31, 2023 | |
Subsequent Events [Abstract] | |
Subsequent Events |
15. Subsequent Events
On January 31, 2024, the Company completed the acquisition of the wastewater collection and treatment assets of MESCO, Inc. in Monaghan Township, York
County, Pennsylvania. The Company began operating the existing wastewater collection and treatment assets on February 1, 2024. The acquisition resulted in the addition of approximately 180 wastewater customers with purchase price and acquisition costs of approximately $25. This acquisition is immaterial to Company results.
On February 27, 2024, the Company entered into a note purchase agreement with certain institutional investors relating to the private placement of $40,000 aggregate principal amount of the Company’s senior notes. The senior notes bear interest at 5.67% per annum payable semiannually and mature on February 27, 2054.
The senior notes are unsecured and unsubordinated obligations of the Company. The Company received net proceeds, after deducting issuance costs, of approximately $39,837. The net proceeds were used to refinance line of credit borrowings incurred by the Company as interim financing for various capital projects of the Company.
|
Insider Trading Arrangements |
3 Months Ended |
---|---|
Dec. 31, 2023 | |
Insider Trading Arrangements [Line Items] | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
Schedule II - Valuation and Qualifying Accounts |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule II - Valuation and Qualifying Accounts [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule II - Valuation and Qualifying Accounts |
THE YORK WATER COMPANY
Schedule II Valuation and Qualifying Accounts
For the Two Years Ended December 31, 2023
The Deductions column above represents write-offs of accounts receivable during the applicable year.
|
Significant Accounting Policies (Policies) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Significant Accounting Policies [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Utility Plant and Depreciation |
Utility Plant and Depreciation
The cost of additions includes contracted cost, direct labor and fringe benefits, materials, overhead and, for certain utility plant, allowance for funds
used during construction. In accordance with regulatory accounting requirements, water and wastewater systems acquired are recorded at estimated original cost of utility plant when first devoted to utility service and the applicable depreciation is
recorded to accumulated depreciation. The difference between the estimated original cost less applicable accumulated depreciation, and the purchase price and acquisition costs, is recorded as an acquisition adjustment within utility plant as
permitted by the PPUC. At December 31, 2023 and 2022, utility plant includes a net credit acquisition adjustment of $9,384 and $9,178, respectively. For those amounts approved by the PPUC, the net acquisition adjustment is being amortized over the remaining life of the respective
assets. Certain amounts are still awaiting approval from the PPUC before amortization will commence. Amortization amounted to $69 and $67 for the years ended December 31, 2023
and 2022, respectively.
Upon normal retirement of depreciable property, the estimated or actual cost of the asset is credited to the utility plant account, and such amounts,
together with the cost of removal less salvage value, are charged to the reserve for depreciation. To the extent the Company recovers cost of removal or other retirement costs through rates after the retirement costs are incurred, a regulatory asset
is reported. Gains or losses from abnormal retirements are reflected in income currently.
The straight-line remaining life method is used to compute depreciation on utility plant cost, exclusive of land and land rights. Annual provisions for
depreciation of transportation and mechanical equipment included in utility plant are computed on a straight-line basis over the estimated service lives. Such provisions are charged to clearing accounts and apportioned therefrom to operating
expenses and other accounts in accordance with the Uniform System of Accounts as prescribed by the PPUC.
The Company charges to maintenance expense the cost of repairs and replacements and renewals of minor items of property. Maintenance of transportation
equipment is charged to clearing accounts and apportioned from there in a manner similar to depreciation. The cost of replacements, renewals, and betterments of units of property is capitalized to the utility plant accounts.
The following remaining lives are used for financial reporting purposes:
The effective rate of depreciation was 2.55%
in 2023 and 2.38% in 2022, on average utility plant, net of customers’ advances and contributions. Larger depreciation provisions resulting from allowable accelerated
methods are deducted for tax purposes.
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cash and Cash Equivalents |
Cash and Cash Equivalents
For the purposes of the statements of cash flows, the Company considers all highly liquid debt instruments purchased with an original maturity of three
months or less to be cash equivalents except for those instruments earmarked to fund construction expenditures or repay long-term debt.
The Company periodically maintains cash balances in major financial institutions in excess of the federally insured limit by the Federal Deposit Insurance
Corporation (FDIC). The Company has not experienced any losses and believes it is not exposed to any significant credit risk on cash and cash equivalents.
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounts Receivable |
Accounts Receivable
Accounts receivable are stated at outstanding balances, less a reserve for doubtful accounts. The reserve for doubtful accounts is established through provisions charged
against income. Accounts deemed to be uncollectible are charged against the reserve and subsequent recoveries, if any, are credited to the reserve. The reserve for doubtful accounts is the best estimate of the amount of probable credit
losses in the existing accounts receivable and is determined based on lifetime expected credit losses and the aging of account balances. Management’s periodic evaluation of the adequacy of the reserve is based on historical write-offs combined with
an evaluation of current conditions and reasonable and supportable forecasts including inactive accounts with outstanding balances, the aging of balances in payment agreements, adverse situations that may affect a customer’s ability to pay, economic
conditions, and other relevant factors applied to the current aging of receivables. This evaluation is inherently subjective. Unpaid balances remaining after the stated payment terms are considered past due.
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Materials and Supplies Inventories |
Materials and Supplies Inventories
Materials and supplies inventories are stated at cost. Costs are determined using the average cost method.
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Note Receivable |
Note Receivable
Note receivable is recorded at cost and represents amounts due from a municipality for construction of water mains in their municipality. Management,
considering current information and events regarding the borrowers’ ability to repay their obligations, considers a note to be impaired when it is probable that the Company will be unable to collect all amounts due according to the contractual terms
of the note agreement. When a note is considered to be impaired, the carrying value of the note is written down. The amount of the impairment is measured based on the present value of expected future cash flows discounted at the note’s effective
interest rate.
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Regulatory Assets and Liabilities |
Regulatory Assets and Liabilities
The Company is subject to the provisions of generally accepted accounting principles regarding rate-regulated entities. The accounting standards provide
for the recognition of regulatory assets and liabilities as allowed by regulators for costs or credits that are reflected in current customer rates or are considered probable of being included in future rates. The regulatory assets or liabilities
are then relieved as the cost or credit is reflected in rates. Regulatory assets represent costs that are expected to be fully recovered from customers in future rates while regulatory liabilities represent amounts that are expected to be refunded
to customers in future rates. These deferred costs have been excluded from the Company’s rate base and, therefore, no return is being earned on the unamortized balances.
Regulatory assets and liabilities are comprised of the following:
The regulatory asset for income taxes includes (a) deferred state income taxes related primarily to differences between book and tax depreciation expense,
(b) deferred income taxes related to the differences that arise between specific asset improvement costs capitalized for book purposes and deducted as a repair expense for tax purposes, and (c) deferred income taxes associated with the gross-up of
revenues related to the differences. These assets are recognized for ratemaking purposes on a cash or flow-through basis and will be recovered in rates as they reverse.
The Company uses regulatory accounting treatment to defer the mark-to-market unrealized gains and losses on its interest rate swap to reflect that the gain
or loss is included in the ratemaking formula when the transaction actually settles. The value of the swap as of the balance sheet date is recorded as part of other deferred credits. Realized gains or losses on the swap will be recorded as interest
expense in the statement of income over its remaining term of six years.
Utility plant retirement costs represent costs already incurred for the removal of assets, which are expected to be recovered over a five-year period in rates, through depreciation expense.
The Company was granted approval by the PPUC to modify its tariff to replace lead customer-owned service lines that were discovered when the Company
replaced its lead service lines, and to include the cost of the annual replacement of up to 400 lead customer-owned service lines whenever
they are discovered, regardless of the material used for the company-owned service line, over nine years. The tariff modification allows
the Company to replace customer-owned service lines at its own initial cost and record the costs as a regulatory asset to be recovered in future base rates to customers. The recovery period was established in the most recent rate order at four years beginning March 1, 2023. The recovery period for the customer-owned lead service line replacements completed subsequent to the most recent
rate order will begin after the next rate order.
Service life study expenses are deferred and amortized over their remaining life of four years. Rate
case filing expenses are deferred and amortized over their remaining life of three years.
Pursuant to the Tax Cuts and Jobs Act of 2017, or 2017 Tax Act, customers’ advances for construction and contributions in aid of construction are
considered taxable income. The Company’s tariff allows the Company to record these income taxes for inclusion in rate base. This asset is recognized for ratemaking purposes on a cash or flow-through basis and will be recovered in rates as it
reverses. In November 2021, the Infrastructure Investment and Jobs Act of 2021, or 2021 Infrastructure Act, repealed the tax treatment of customers’ advances for construction and contributions in aid of construction made after December 31, 2020.
Under normalization rules applicable to public utility property included in the 2017 Tax Act, the excess accumulated deferred income taxes on accelerated
depreciation from lowering of the enacted federal statutory corporate tax rate is recorded as a regulatory liability. The benefit will be given back to customers in rates over the remaining regulatory life of the property.
The regulatory liability for income taxes includes deferred taxes related to excess accumulated deferred income taxes on accelerated depreciation, other
postretirement benefits, customers’ advances for construction and contributions in aid of construction, and bad debts, as well as deferred investment tax credits. These liabilities will be given back to customers in rates, as tax deductions occur
over the next 1 to 50
years.
The regulatory liability for the Internal Revenue Service, or IRS, tangible property regulations, or TPR, catch-up deduction represents the tax benefits
realized on the Company’s 2014 income tax return for qualifying capital expenditures made prior to 2014. The period over which it will be given back to customers in rates was established in a rate order at 15 years beginning March 1, 2019.
Postretirement benefits include the difference between contributions and deferred pension expense and the overfunded status of the pension plans. The
overfunded status represents the difference between the projected benefit obligation and the fair market value of the assets. This liability will change in future years based on the amount of contributions made and market returns. The liability
will be given back to customers in rates over some period determined by the PPUC in a future rate filing.
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Assets |
Other Assets
Other assets consist mainly of the cash value of life insurance policies held as an investment by the Company for reimbursement of costs and benefits
associated with its supplemental retirement and deferred compensation programs.
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Deferred Debt Expense |
Deferred Debt Expense
Deferred debt expense is amortized on a straight-line basis over the term of the related debt and is presented on the balance sheet as a direct reduction
from long-term debt.
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Customers' Advances for Construction |
Customers’ Advances for Construction
Customer advances are cash payments from developers, municipalities, customers, or builders for construction of utility plant, and are refundable upon
completion of construction, as operating revenues are earned. If the Company loans funds for construction to the customer, the refund amount is credited to the note receivable rather than paid out in cash. After all refunds to which the customer is
entitled are made, any remaining balance is transferred to contributions in aid of construction.
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Contributions in Aid of Construction |
Contributions in Aid of Construction
Contributions in Aid of Construction is composed of (i) direct, non-refundable contributions from developers, customers, or builders for construction of
water infrastructure and (ii) customer advances that have become non-refundable. Contributions in aid of construction are deducted from the Company’s rate base, and therefore, no return is earned on property financed with contributions. The PPUC
requires that contributions received remain on the Company’s balance sheets indefinitely as a long-term liability.
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Interest Rate Swap Agreement |
Interest Rate Swap Agreement
The Company is exposed to certain risks relating to its ongoing business operations. The primary risk managed by using derivative instruments is interest
rate risk. The Company utilizes an interest rate swap agreement to effectively convert its variable-rate debt to a fixed rate. Interest rate swaps are contracts in which a series of interest rate cash flows are exchanged over a prescribed period.
The notional amount on which the interest payments are based is not exchanged. The Company has designated the interest rate swap agreement as a cash flow hedge, classified as a financial derivative used for non-trading activities.
The accounting standards regarding accounting for derivatives and hedging activities require companies to recognize all derivative instruments as either
assets or liabilities at fair value on the balance sheets. In accordance with the standards, the interest rate swap is recorded on the balance sheets in other deferred credits at fair value.
The Company uses regulatory accounting treatment rather than hedge accounting to defer the unrealized gains and losses on its interest rate swap. These
unrealized gains and losses are recorded as a regulatory asset. Based on current ratemaking treatment, the Company expects the gains and losses to be recognized in rates and in interest expense as the swap settlements occur. Swap settlements are
recorded in the income statement with the hedged item as interest expense. Swap settlements resulted in the reclassification from regulatory assets to interest expense of $18 in 2023 and $247 in 2022. The overall swap result was a gain of $24 in 2023 and $1,133 in 2022. During the year ending
December 31, 2024, the Company expects to reclassify $40 before tax from regulatory assets to interest expense.
The interest rate swap will expire on October 1, 2029.
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-Based Compensation |
Stock-Based Compensation
The Company records compensation expense in the financial statements for stock-based awards based on the grant date fair value of those awards.
Stock-based compensation expense is recognized over the requisite service periods of the awards on a straight-line basis, which is generally commensurate with the vesting term. Forfeitures are recognized as they occur.
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Taxes |
Income Taxes
Certain income and expense items are accounted for in different time periods for financial reporting than for income tax reporting purposes.
Deferred income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax
consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted
tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period
that includes the enactment date. To the extent such income taxes increase or decrease future rates, an offsetting regulatory asset or liability has been recorded.
Investment tax credits have been deferred and are being amortized to income over the average estimated service lives of the related assets. As of December
31, 2023 and 2022,
deferred investment tax credits amounted to $392 and $428, respectively.
The Company filed for a change in accounting method under the IRS TPR effective in 2014. Under the change in accounting method, the Company is permitted
to deduct the costs of certain asset improvements that were previously being capitalized and depreciated for tax purposes as an expense on its income tax return. The Company was permitted to make this deduction for prior years (the “catch-up
deduction”) and each year going forward, beginning with 2014 (the “ongoing deduction”). After receiving approval from the PPUC in a rate order, the Company began to recognize the catch-up deduction, recorded as a regulatory liability, over 15 years beginning March 1, 2019. The ongoing deduction results in a reduction in the effective income tax rate, a net reduction in income tax expense,
and a reduction in the amount of income taxes currently payable. The catch-up deduction resulted in a decrease in current income taxes payable and an increase to regulatory liabilities. Both the ongoing and catch-up deductions resulted in increases
to deferred tax liabilities and regulatory assets representing the appropriate book and tax basis difference on capital additions.
The 2017 Tax Act, among other things, reduces the federal statutory corporate tax rate for tax years beginning in 2018 from 34% to 21%, treats customers’ advances for
construction and contributions in aid of construction as taxable income, eliminates certain deductions, and eliminates bonus depreciation on qualified water and wastewater property. This resulted in the remeasurement of the federal portion of the
Company’s deferred taxes as of December 31, 2017 to the 21% rate. The effect was recognized in income for the year ended December 31,
2017 for all deferred tax assets and liabilities except accelerated depreciation. Under normalization rules applicable to public utility property included in the 2017 Tax Act, the excess accumulated deferred income taxes on accelerated depreciation
is recorded as a regulatory liability. The regulatory liability is a temporary difference, so a deferred tax asset is recorded including the gross-up of revenue necessary to return, in rates, the effect of the temporary difference. In November
2021, the 2021 Infrastructure Act repealed the tax treatment of customers’ advances for construction and contributions in aid of construction made after December 31, 2020.
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Allowance for Funds Used During Construction |
Allowance for Funds Used During Construction
Allowance for funds used during construction (AFUDC) represents the estimated cost of funds used for construction purposes during the period of
construction. These costs are reflected as non-cash income during the construction period and as an addition to the cost of plant constructed. AFUDC includes the net cost of borrowed funds and a rate of return on other funds. The PPUC approved
rate of 10.04% was applied for 2023
and 2022. AFUDC is recovered through water and wastewater rates as utility plant is depreciated.
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Use of Estimates in the Preparation of Financial Statements |
Use of Estimates in the Preparation of Financial Statements
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to
make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
|
Revenue (Policies) |
12 Months Ended |
---|---|
Dec. 31, 2023 | |
Revenue [Abstract] | |
Revenue |
Utility Service
The Company provides utility service as a distinct and single performance obligation to each of its water and wastewater customers. The transaction price
is detailed in the tariff pursuant to an order by the PPUC and made publicly available. There is no variable consideration and no free service, special rates, or subnormal charges to any customer. Due to the fact that the contract includes a single
performance obligation, no judgment is required to allocate the transaction price. The performance obligation is satisfied over time through the continuous provision of utility service through a stand-ready obligation to perform and the transfer of
water or the collection of wastewater through a series of distinct transactions that are identical in nature and have the same pattern of transfer to the customer. The Company uses an output method to recognize the utility service revenue over
time. The stand-ready obligation is recognized through the passage of time in the form of a fixed charge and the transfer of water or the collection of wastewater is recognized at a per unit rate based on the actual or estimated flow through the
meter. Each customer is invoiced every month and the invoice is due within twenty days. The utility service has no returns or warranties
associated with it. No revenue is recognized from performance obligations satisfied in prior periods and no performance obligations remain unsatisfied as of the end of the reporting period. A contract asset for unbilled revenue is recognized for
the passage of time and the actual or estimated usage from the latest meter reading to the end of the accounting period. The methodology is standardized and consistently applied to reduce bias and the need for judgment.
Billing and Revenue Collection Service
The Company provides billing and revenue collection service as distinct performance obligations to three municipalities within the service territory of the Company. The municipalities provide service to their residents and the Company acts as the billing and revenue
collection agent for the municipalities. The transaction price is a fixed amount per bill prepared as established in the contract. There is no variable consideration. Due to the fact that both the billing performance obligation and the revenue
collection performance obligation are materially complete by the end of the reporting period, the Company does not allocate the transaction price between the two performance obligations. The performance obligations are satisfied at a point in time
when the bills are sent as the municipalities receive all the benefits and bears all of the risk of non-collection at that time. Each municipality is invoiced when the bills are complete and the invoice is due within thirty days. The billing and revenue collection service has no returns or warranties associated with it. No revenue is recognized from performance
obligations satisfied in prior periods and no performance obligations remain unsatisfied as of the end of the reporting period.
Collection Service
The Company provides collection service as a distinct and single performance obligation to several municipalities within the service territory of the
Company. The municipalities provide wastewater service to their residents. If those residents are delinquent in paying for their wastewater service, the municipalities request that the Company post for and shut off the supply of water to the
premises of those residents. When the resident is no longer delinquent, the Company will restore water service to the premises. The transaction price for each posting, each shut off, and each restoration is a fixed amount as established in the
contract. There is no variable consideration. Due to the fact that the contract includes a single performance obligation, no judgment is required to allocate the transaction price. The performance obligation is satisfied at a point in time when
the posting, shut off, or restoration is completed as the municipalities receive all the benefits in the form of payment or no longer providing wastewater service. Each municipality is invoiced periodically for the posting, shut offs, and
restorations that have been completed since the last billing and the invoice is due within thirty days. The collection service has no
returns or warranties associated with it. No revenue is recognized from performance obligations satisfied in prior periods and no performance obligations remain unsatisfied as of the end of the reporting period. A contract asset for unbilled
revenue is recognized for postings, shut offs, and restorations that have been completed from the last billing to the end of the accounting period.
Service Line Protection Plan
The Company provides service line protection as a distinct and single performance obligation to current water customers that choose to participate. The
transaction price is detailed in the plan’s terms and conditions and made publicly available. There is no variable consideration. Due to the fact that the contract includes a single performance obligation, no judgment is required to allocate the
transaction price. The performance obligation is satisfied over time through the continuous provision of service line protection through a stand-ready obligation to perform. The Company uses an output method to recognize the service line protection
revenue over time. The stand-ready obligation is recognized through the passage of time. A customer has a choice to prepay for an entire year or to pay in advance each month. The service line protection plan has no returns or extended warranties
associated with it. No revenue is recognized from performance obligations satisfied in prior periods and no material performance obligations remain unsatisfied as of the end of the reporting period.
|
Significant Accounting Policies (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Significant Accounting Policies [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Utility Plant |
The following remaining lives are used for financial reporting purposes:
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Regulatory Assets and Liabilities |
Regulatory assets and liabilities are comprised of the following:
|
Accounts Receivable and Contract Assets (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounts Receivable and Contract Assets [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounts Receivable and Contract Assets |
Accounts receivable are summarized in the following table:
|
Note Receivable and Customers' Advances for Construction (Tables) |
12 Months Ended | |||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2023 | ||||||||||||||||||||||||||||
Note Receivable and Customers' Advances for Construction [Abstract] | ||||||||||||||||||||||||||||
Amounts Related to Water District Projects |
Included in the accompanying balance sheets at December 31, 2023
and 2022 were the following amounts related to this project.
|
Common Stock and Earnings Per Share (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||
Common Stock and Earnings Per Share [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||
Shares Used in Computing Basic and Diluted Earnings per Share |
The following table summarizes the shares used in computing basic and diluted net income per share:
|
Long-Term Debt and Short-Term Borrowings (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Long-Term Debt and Short-Term Borrowings [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Long-Term Debt |
Long-term debt as of December 31, 2023 and 2022 is summarized in the following table:
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Payments Due by Year |
Payments due by year as of December 31, 2023:
|
Fair Value of Financial Instruments (Tables) |
12 Months Ended | ||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2023 | |||||||||||||||||||||
Fair Value of Financial Instruments [Abstract] | |||||||||||||||||||||
Fair Value of Interest Rate Swap |
The Company has recorded its interest rate swap liability at fair value in accordance with the standards. The liability is recorded under the caption
“Other deferred credits” on the balance sheets. The table below illustrates the fair value of the interest rate swap as of the end of the reporting period.
Fair values are measured as the present value of all expected future cash flows based on the swap yield curve as of the date of the valuation. These
inputs to this calculation are deemed to be Level 2 inputs. The balance sheet carrying value reflects the Company’s credit quality as of December 31, 2023.
The rate used in discounting all prospective cash flows anticipated to be made under this swap reflects a representation of the yield to maturity for 30-year
debt on utilities rated A- as of December 31, 2023. The use of the Company’s credit quality resulted in a reduction in the swap
liability of $17 as of December 31, 2023.
The fair value of the swap reflecting the Company’s credit quality as of December 31, 2022 is shown in the table below.
|
Revenue (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenues Disaggregated by Service and Customer Type |
The following table shows the Company’s revenues disaggregated by service and customer type.
|
Employee Benefit Plans (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Employee Benefit Plans [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Obligations and Funded Status |
The following table sets forth the plans’ funded status as of December 31, 2023 and 2022. The measurement of assets and obligations of the plans is as of December 31, 2023 and 2022.
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Changes in Plan Assets and Benefit Obligations Recognized in Regulatory Assets |
Changes in plan assets and benefit obligations recognized in regulatory liabilities are as follows:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Amounts Recognized in Regulatory Assets That Have Not Yet Been Recognized as Components of Net Periodic Benefit Cost |
Amounts recognized in regulatory liabilities that have not yet been recognized as components of net periodic benefit cost consist of the following at
December 31:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of Net Periodic Benefit Cost |
Components of net periodic benefit cost are as follows:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Regulatory Assets to be Reclassified into Net Periodic Benefit Cost Over Next Fiscal Year |
The estimated costs for the defined benefit pension plans relating to the December 31, 2023 balance sheet that will be amortized from regulatory liabilities into net periodic benefit cost over the next fiscal year are as follows:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Benefit Payments Expected to be Paid |
The following benefit payments, which reflect expected future service, as appropriate, are expected to be paid in each of the next five years and the
subsequent five years in the aggregate:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Projected Benefit Obligation and Fair Value of Plan Assets |
The following tables show the projected benefit obligation, the accumulated benefit obligation, and the fair value of plan assets as of December 31:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accumulated Benefit Obligation and Fair Value of Plan Assets |
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Weighted-Average Assumptions Used |
Weighted-average assumptions used to determine benefit obligations at December 31:
Weighted-average assumptions used to determine net periodic benefit cost for years ended December 31:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Values of Pension Plan Assets |
The fair values of the Company’s pension plan assets at December 31, 2023 and 2022 by asset category and fair value hierarchy level are as follows. All of the
valuations are based on quoted prices on active markets (Level 1).
|
Stock-Based Compensation (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-Based Compensation [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restricted Stock |
The following table summarizes the stock grant amounts and activity for the years ended December 31, 2022 and 2023.
|
Taxes Other than Income Taxes (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Taxes Other than Income Taxes [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of Taxes Other than Income Taxes |
The following table provides the components of taxes other than income taxes:
|
Income Taxes (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Taxes [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Provisions for Income Taxes |
The provisions for income taxes consist of:
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reconciliation of Statutory Federal Tax Provision to Total Provision |
A reconciliation of the statutory Federal tax provision to the total provision follows:
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Deferred Tax Assets and Liabilities |
The tax effects of temporary differences between book and tax balances that give rise to significant portions of the deferred tax assets and deferred tax
liabilities as of December 31, 2023 and 2022
are summarized in the following table:
|
Significant Accounting Policies, Interest Rate Swap Agreement (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2023 |
Dec. 31, 2022 |
|
Interest Rate Swap Agreement [Abstract] | ||
Interest rate swap settlements reclassified from regulatory assets to interest expense | $ 18 | $ 247 |
Overall interest rate swap (gain) loss | (24) | $ (1,133) |
Interest rate swap settlements to be reclassified during the next 12 months | $ 40 |
Significant Accounting Policies, Income Taxes (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2023 |
Dec. 31, 2022 |
Dec. 31, 2017 |
|
Income Taxes [Abstract] | |||
Deferred investment tax credits | $ 392 | $ 428 | |
Federal corporate tax rate | 21.00% | 21.00% | 34.00% |
IRS TPR Catch-Up Deduction [Member] | |||
Income Taxes [Abstract] | |||
Approved amortization period | 15 years |
Significant Accounting Policies, Allowance for Funds Used During Construction (Details) |
12 Months Ended | |
---|---|---|
Dec. 31, 2023 |
Dec. 31, 2022 |
|
Allowance for Funds Used During Construction [Abstract] | ||
PPUC approved rate for AFUDC | 10.04% | 10.04% |
Accounts Receivable and Contract Assets (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2023 |
Dec. 31, 2022 |
|
Accounts Receivable and Contract Assets [Abstract] | ||
Accounts receivable - customers | $ 8,250 | $ 7,069 |
Other receivables | 592 | 487 |
Accounts receivable | 8,842 | 7,556 |
Less: allowance for doubtful accounts | (1,005) | (855) |
Accounts receivable, net | 7,837 | 6,701 |
Unbilled revenue | 3,484 | $ 3,290 |
Change in accounts receivable - customers | 1,181 | |
Change in other receivables | 105 | |
Change in accounts receivable | 1,286 | |
Change in allowance for doubtful accounts | (150) | |
Change in accounts receivable, net | 1,136 | |
Change in unbilled revenue | $ 194 |
Note Receivable and Customers' Advances for Construction (Details) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2023
USD ($)
Municipality
|
Dec. 31, 2022
USD ($)
|
|
Note Receivable and Customers' Advances for Construction [Abstract] | ||
Number of municipalities with agreements to extend water service | Municipality | 1 | |
Interest income on note receivable | $ 192 | $ 194 |
Interest rate on note outstanding | 7.50% | |
Amounts Related to Water District Projects Included in Balance Sheet [Abstract] | ||
Note receivable, including interest | $ 255 | 255 |
Customers' advances for construction | 205 | 243 |
Other customers' advances for construction | $ 18,648 | $ 14,668 |
Long-Term Debt and Short-Term Borrowings, Payments Due by Year (Details) $ in Thousands |
Dec. 31, 2023
USD ($)
|
---|---|
Payments Due by Year [Abstract] | |
2024 | $ 0 |
2025 | 42,273 |
2026 | 330 |
2027 | 340 |
2028 | 355 |
Variable Rate Pennsylvania Economic Development Financing Authority Exempt Facilities Revenue Refunding Bonds, Series 2008A, due 2029 [Member] | |
Payments Due by Year [Abstract] | |
2025 | $ 12,000 |
Long-Term Debt and Short-Term Borrowings, Fixed Rate Long-Term Debt (Details) - USD ($) $ in Thousands |
12 Months Ended | |||
---|---|---|---|---|
Feb. 24, 2023 |
Dec. 18, 2022 |
Dec. 31, 2023 |
Dec. 31, 2022 |
|
Long-Term Debt [Abstract] | ||||
Long term debt retired | $ 64,148 | $ 61,458 | ||
5.50% Senior Notes, due 2053 [Member] | ||||
Long-Term Debt [Abstract] | ||||
Face value | $ 40,000 | |||
Interest rate | 5.50% | |||
Maturity date | Feb. 24, 2053 | |||
Proceeds from debt, net of issuance costs | $ 39,829 | |||
Senior Notes, Series D, due 2022 [Member] | ||||
Long-Term Debt [Abstract] | ||||
Interest rate | 8.43% | |||
Maturity date | Dec. 18, 2022 | |||
Long term debt retired | $ 7,500 |
Long-Term Debt and Short-Term Borrowings, Variable Rate Long-Term Debt (Details) - Variable Rate Pennsylvania Economic Development Financing Authority Exempt Facilities Revenue Refunding Bonds, Series 2008A, due 2029 [Member] - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2023 |
Dec. 31, 2022 |
|
Variable Rate Long-Term Debt [Abstract] | ||
Face value | $ 12,000 | |
Maturity date | Oct. 01, 2029 | |
Annual average variable interest rate | 3.38% | 1.25% |
Variable interest rate at year end | 3.89% | 3.75% |
Period in which to reimburse bank for purchase price of tendered bonds that have not been remarketed | 14 months |
Long-Term Debt and Short-Term Borrowings, Interest Rate Swap Agreement (Details) - Interest Rate Swap [Member] - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2023 |
Dec. 31, 2022 |
|
Interest Rate Swap Agreement [Abstract] | ||
Notional amount of swap | $ 12,000 | |
Potential payment to counterparty | $ 649 | |
Fixed interest rate | 3.16% | |
Net payment rate on swap | 0.14% | 2.04% |
LIBOR [Member] | ||
Interest Rate Swap Agreement [Abstract] | ||
Percentage of variable interest rate | 59.00% | |
Term of variable rate | 1 month | |
SOFR [Member] | ||
Interest Rate Swap Agreement [Abstract] | ||
Percentage of variable interest rate | 59.00% | |
Basis spread adjustment | 0.11448% | |
Variable Rate Pennsylvania Economic Development Financing Authority Exempt Facilities Revenue Refunding Bonds, Series 2008A, due 2029 [Member] | ||
Interest Rate Swap Agreement [Abstract] | ||
Interest rate spread | 0.68% | 1.22% |
Overall effective rate, including variable interest and swap payments | 3.84% | 4.38% |
Long-Term Debt and Short-Term Borrowings, Line of Credit Borrowings (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2023 |
Dec. 31, 2022 |
|
Line of Credit Facility [Abstract] | ||
Average borrowings outstanding | $ 16,316 | $ 13,428 |
Weighted average cost of borrowings | 5.36% | 2.11% |
Weighted average interest rate at year end | 6.51% | 5.17% |
Outstanding borrowings | $ 182,643 | $ 142,110 |
Committed Line of Credit, due 2025 [Member] | ||
Line of Credit Facility [Abstract] | ||
Borrowing capacity | 50,000 | |
Outstanding borrowings | 30,273 | 29,740 |
Committed Line of Credit, due 2025 [Member] | Accounts Payable [Member] | ||
Line of Credit Facility [Abstract] | ||
Cash overdraft | $ 1,547 | $ 3,175 |
Committed Line of Credit, due 2025 [Member] | SOFR [Member] | ||
Line of Credit Facility [Abstract] | ||
Basis adjustment | 1.17% | |
Committed Line of Credit, due September 2024 [Member] | LIBOR [Member] | ||
Line of Credit Facility [Abstract] | ||
Basis adjustment | 1.05% |
Long-Term Debt and Short-Term Borrowings, Debt Covenants and Restrictions (Details) $ in Thousands |
12 Months Ended |
---|---|
Dec. 31, 2023
USD ($)
| |
Long-Term Debt and Short-Term Borrowings [Abstract] | |
Maximum borrowing percentage of utility plant | 60.00% |
Base amount added to annual net income to determine restriction on dividends and stock acquisition | $ 1,500 |
Fair Value of Financial Instruments (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2023 |
Dec. 31, 2022 |
|
Interest Rate Swap [Abstract] | ||
Term of debt on utilities rated A- used to discount prospective cash flows | 30 years | |
Reduction in the fair value of swap liability | $ 17 | |
Fair Value Measurements [Abstract] | ||
Customers' advances for construction | 18,853 | $ 14,911 |
Note receivable | 255 | 255 |
Fair Value on a Recurring Basis [Member] | ||
Interest Rate Swap [Abstract] | ||
Interest rate swap | 632 | 680 |
Fair Value on a Recurring Basis [Member] | Significant Other Observable Inputs (Level 2) [Member] | ||
Interest Rate Swap [Abstract] | ||
Interest rate swap | 632 | 680 |
Carrying Amount [Member] | ||
Fair Value, Financial Liabilities [Abstract] | ||
Total long-term debt | 182,643 | 142,110 |
Estimated Fair Value [Member] | ||
Fair Value, Financial Liabilities [Abstract] | ||
Total long-term debt | $ 175,000 | $ 126,000 |
Commitments (Details) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2023
USD ($)
ServiceLine
|
Dec. 31, 2022
USD ($)
|
|
Commitments [Abstract] | ||
Capital expenditures committed | $ 39,548 | |
Commitments [Abstract] | ||
Percentage of employees under union contract | 32.00% | |
Armor and Replace Spillway of Lake Williams Dam [Member] | ||
Commitments [Abstract] | ||
Remaining committed capital expenditures to be incurred | $ 2,945 | |
Customer-Owned Lead Service Lines [Member] | ||
Commitments [Abstract] | ||
Number of lead customer-owned service lines to be replaced annually | ServiceLine | 400 | |
Term of tariff modification to replace customer-owned lead service lines | 9 years | |
Recovery period of regulatory asset | 4 years | |
Costs incurred to replace customer-owned lead service lines | $ 1,762 | $ 1,518 |
Costs to be incurred to replace customer-owned lead service lines | 1,900 | |
Construction and Acquisition Expenditures [Member] | ||
Capital Commitments [Abstract] | ||
Commitments for 2024 | 42,200 | |
Commitments for 2025 | $ 46,100 |
Rate Matters (Details) - PPUC [Member] - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2023 |
Dec. 31, 2022 |
|
Rate Request Filed on May 27, 2022 [Member] | Water [Member] | ||
Rate Matters [Abstract] | ||
Requested increase in annual rates | $ 18,854 | |
Authorized dollar increase in annual revenues | 11,600 | |
Rate Request Filed on May 27, 2022 [Member] | Wastewater [Member] | ||
Rate Matters [Abstract] | ||
Requested increase in annual rates | 1,457 | |
Authorized dollar increase in annual revenues | 1,900 | |
DSIC [Member] | ||
Rate Matters [Abstract] | ||
Distribution system improvement charge revenue | $ 249 | $ 2,243 |
DSIC [Member] | Maximum [Member] | ||
Rate Matters [Abstract] | ||
Distribution system improvement charge percentage over base rate | 5.00% | |
DSIC [Member] | Minimum [Member] | ||
Rate Matters [Abstract] | ||
Distribution system improvement charge percentage over base rate | 0.00% |
Employee Benefit Plans, Components of Net Periodic Benefit Cost (Details) - Defined Benefit Pension Plans Combined [Member] - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2023 |
Dec. 31, 2022 |
|
Components of Net Periodic Pension Cost [Abstract] | ||
Service cost | $ 598 | $ 1,025 |
Interest cost | 1,876 | 1,336 |
Expected return on plan assets | (3,612) | (4,218) |
Amortization of prior service credit | (13) | (13) |
Rate-regulated adjustment | 2,831 | 4,170 |
Net periodic benefit cost | 1,680 | $ 2,300 |
Change in defined benefit plan regulatory asset from pension contribution greater (less) than net periodic benefit cost | 2,831 | |
Amortization of Regulatory Assets to be Reclassified into Net Periodic Benefit Cost [Abstract] | ||
Net loss | 0 | |
Net prior service credit | (13) | |
Total amortization of regulatory assets to be reclassified into net periodic benefit cost during the next fiscal year | $ (13) |
Employee Benefit Plans, Benefit Payments Expected to be Paid (Details) $ in Thousands |
Dec. 31, 2023
USD ($)
|
---|---|
Estimated Future Employer Contributions [Abstract] | |
Estimated employer contributions in 2024 | $ 1,556 |
Defined Benefit Pension Plans Combined [Member] | |
Benefit Payments Expected to be Paid [Abstract] | |
2024 | 2,238 |
2025 | 2,231 |
2026 | 2,318 |
2027 | 2,358 |
2028 | 2,588 |
2029 - 2033 | $ 13,698 |
Employee Benefit Plans, Projected Benefit Obligation, Accumulated Benefit Obligation and Fair Value of Plan Assets (Details) - Defined Benefit Pension Plans Combined [Member] - USD ($) $ in Thousands |
Dec. 31, 2023 |
Dec. 31, 2022 |
Dec. 31, 2021 |
---|---|---|---|
Projected Benefit Obligation and Fair Value of Plan Assets [Abstract] | |||
Projected benefit obligation | $ 40,198 | $ 38,717 | $ 51,530 |
Fair value of plan assets | 63,578 | 55,807 | 65,584 |
Accumulated Benefit Obligation and Fair Value of Plan Assets [Abstract] | |||
Accumulated benefit obligation | 38,510 | 37,040 | |
Fair value of plan assets | $ 63,578 | $ 55,807 | $ 65,584 |
Employee Benefit Plans, Defined Contribution Plan, Deferred Compensation and Other (Details) |
12 Months Ended | |
---|---|---|
Dec. 31, 2023
USD ($)
Employee
|
Dec. 31, 2022
USD ($)
|
|
Defined Contribution Plan [Abstract] | ||
Maximum elective employee contribution percentage | 15.00% | |
Company matching contribution percentage | 100.00% | |
Maximum annual Company contribution for each employee | $ 2,800 | |
Maximum annual Company contribution as a percentage of employee's compensation | 4.00% | |
Annual Company discretionary contribution | $ 1,200 | |
Number of employees participating in enhanced feature of plan | Employee | 76 | |
Contributions to defined contribution plan | $ 380,000 | $ 345,000 |
Deferred Compensation [Abstract] | ||
Present value of future obligations | 4,188,000 | 4,067,000 |
Total cash value of insurance policies | 4,566,000 | 4,306,000 |
Net (income) expenses under deferred compensation plans | 419,000 | (385,000) |
Other [Abstract] | ||
Amount payable upon retiree's death | 2,000 | |
Present value of future obligations | 100,000 | 91,000 |
Net (income) expenses under retiree life insurance program | $ 9,000 | $ (58,000) |
Stock-Based Compensation (Details) $ / shares in Units, $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2023
USD ($)
Employee
$ / shares
shares
|
Dec. 31, 2022
USD ($)
$ / shares
shares
|
May 02, 2016
shares
|
|
Stock-Based Compensation [Abstract] | |||
Number of retiring key employees receiving accelerated vesting period | Employee | 1 | ||
LTIP [Member] | |||
Stock-Based Compensation [Abstract] | |||
Maximum number of shares of common stock that can be issued under the plan (in shares) | 100,000 | ||
Term of plan | 10 years | ||
Maximum number of shares of common stock subject to awards that may be granted to a participant per calendar year (in shares) | 2,000 | ||
LTIP [Member] | Restricted Stock [Member] | |||
Number of Shares [Roll Forward] | |||
Nonvested at beginning of the year (in shares) | 10,765 | 8,804 | |
Granted (in shares) | 6,792 | 8,457 | |
Vested (in shares) | (6,780) | (5,996) | |
Forfeited (in shares) | (1,833) | (500) | |
Nonvested at end of the year (in shares) | 8,944 | 10,765 | |
Grant Date Weighted Average Fair Value [Abstract] | |||
Nonvested at beginning of the year (in dollars per share) | $ / shares | $ 43.24 | $ 46.91 | |
Granted (in dollars per share) | $ / shares | 41.63 | 39.01 | |
Vested (in dollars per share) | $ / shares | 43.09 | 42.55 | |
Forfeited (in dollars per share) | $ / shares | 42.29 | 44.61 | |
Nonvested at the end of the year (in dollars per share) | $ / shares | $ 42.32 | $ 43.24 | |
Stock-Based Compensation Expense [Abstract] | |||
Stock-based compensation expense | $ | $ 300 | $ 279 | |
Recognized tax benefits related to stock-based compensation expense | $ | 84 | 81 | |
Fair value of vested shares | $ | 292 | $ 255 | |
Stock-based compensation expense not yet recognized | $ | $ 379 | ||
Period of recognition | 3 years | ||
LTIP [Member] | Restricted Stock [Member] | Officers and Key Employees [Member] | |||
Stock-Based Compensation [Abstract] | |||
Vesting period | 3 years | ||
LTIP [Member] | Restricted Stock [Member] | Key Employee Retiring in 2024 [Member] | |||
Stock-Based Compensation [Abstract] | |||
Vesting period | 3 years |
Taxes Other than Income Taxes (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2023 |
Dec. 31, 2022 |
|
Components of Taxes Other than Income Taxes [Abstract] | ||
Regulatory assessment | $ 356 | $ 347 |
Property | 451 | 415 |
Payroll, net of amounts capitalized | 687 | 614 |
Other | 5 | 4 |
Total taxes other than income taxes | $ 1,499 | $ 1,380 |
Income Taxes (Details) $ in Thousands |
12 Months Ended | |||
---|---|---|---|---|
Dec. 31, 2023
USD ($)
Position
|
Dec. 31, 2022
USD ($)
|
Dec. 31, 2017 |
Dec. 31, 2014
USD ($)
|
|
Provisions for Income Taxes [Abstract] | ||||
Federal current | $ 506 | $ 11 | ||
State current | 241 | 0 | ||
Federal deferred | 540 | 370 | ||
State deferred | 25 | (331) | ||
Federal investment tax credit, net of current utilization | (35) | (35) | ||
Total income taxes | 1,277 | 15 | ||
Reconciliation of Statutory Federal Tax Provision to Total Provision [Abstract] | ||||
Statutory Federal tax provision | 5,257 | 4,115 | ||
State income taxes, net of Federal benefit | 287 | (196) | ||
IRS TPR deduction | (4,029) | (3,675) | ||
Tax-exempt interest | (40) | (41) | ||
Amortization of investment tax credit | (35) | (35) | ||
Cash value of life insurance | 5 | 13 | ||
Amortization of excess accumulated deferred income taxes on accelerated depreciation | (197) | (160) | ||
Change in enacted state tax rate | (9) | 3 | ||
Other, net | 38 | (9) | ||
Total income taxes | 1,277 | 15 | ||
Regulatory Liabilities [Abstract] | ||||
Regulatory liabilities | $ 43,633 | $ 38,041 | ||
Federal corporate tax rate | 21.00% | 21.00% | 34.00% | |
Deferred Tax Assets [Abstract] | ||||
Reserve for doubtful accounts | $ 278 | $ 240 | ||
Compensated absences | 186 | 172 | ||
Deferred compensation | 1,073 | 1,052 | ||
Excess accumulated deferred income taxes on accelerated depreciation | 3,335 | 3,385 | ||
Deferred taxes associated with the gross-up of revenues necessary to return, in rates, the effect of temporary differences | 1,623 | 1,700 | ||
Customers' advances for construction and contributions in aid of construction | 1,117 | 1,260 | ||
Tax effect of pension regulatory liability | 5,286 | 3,717 | ||
Tax loss carryover | 168 | 839 | ||
Contribution carryover | 113 | 140 | ||
Other costs deducted for book, not for tax | 62 | 58 | ||
Total deferred tax assets | 13,241 | 12,563 | ||
Deferred Tax Liabilities [Abstract] | ||||
Accelerated depreciation | 29,298 | 28,772 | ||
Basis differences from IRS TPR | 23,182 | 18,713 | ||
Investment tax credit | 290 | 316 | ||
Deferred taxes associated with the gross-up of revenues necessary to recover, in rates, the effect of temporary differences | 8,965 | 7,439 | ||
Pensions | 5,831 | 4,262 | ||
Unamortized debt issuance costs | 363 | 393 | ||
Other costs deducted for tax, not for book | 547 | 569 | ||
Total deferred tax liabilities | 68,476 | 60,464 | ||
Net deferred tax liability | 55,235 | 47,901 | ||
Tax Credit Carryovers [Abstract] | ||||
Valuation allowance | 0 | 0 | ||
Uncertain tax positions | $ 0 | |||
Income Taxes [Abstract] | ||||
Number of new tax positions taken | Position | 0 | |||
Interest or penalties | $ 0 | 0 | ||
Earliest Tax Year [Member] | ||||
Income Taxes [Abstract] | ||||
Open tax year | 2020 | |||
Latest Tax Year [Member] | ||||
Income Taxes [Abstract] | ||||
Open tax year | 2022 | |||
Contribution Carryovers [Member] | ||||
Tax Credit Carryovers [Abstract] | ||||
Tax credit carryover | $ 408 | |||
Contribution Carryovers [Member] | Latest Tax Year [Member] | ||||
Tax Credit Carryovers [Abstract] | ||||
Expiration date | Dec. 31, 2027 | |||
IRS TPR Catch-Up Deduction [Member] | ||||
Regulatory Liabilities [Abstract] | ||||
Regulatory liabilities | $ 2,635 | 2,894 | $ 3,887 | |
Approved amortization period | 15 years | |||
Amortization of catch-up deduction | $ (259) | (259) | ||
IRS TPR Ongoing Deductions [Member] | ||||
Regulatory Liabilities [Abstract] | ||||
Ongoing TPR deduction | (3,770) | $ (3,416) | ||
Pennsylvania [Member] | ||||
Tax Loss Carryovers [Abstract] | ||||
Tax loss carryover | $ 2,499 | |||
Expiration date | Dec. 31, 2042 |
Subsequent Events (Details) - Subsequent Event [Member] $ in Thousands |
Feb. 27, 2024
USD ($)
|
Jan. 31, 2024
USD ($)
Customer
|
---|---|---|
5.67% Senior Notes, due 2053 [Member] | ||
Debt [Abstract] | ||
Face value | $ 40,000 | |
Interest rate | 5.67% | |
Maturity date | Feb. 27, 2054 | |
Proceeds from debt, net of issuance costs | $ 39,837 | |
Wastewater Collection and Treatment Assets of MESCO in Monaghan Township [Member] | ||
Acquisitions [Abstract] | ||
Number of customers acquired | Customer | 180 | |
Purchase price and acquisition costs | $ 25 |
Schedule II - Valuation and Qualifying Accounts (Details) - Reserve for Uncollectible Accounts [Member] - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2023 |
Dec. 31, 2022 |
|
Movement in Reserve [Roll Forward] | ||
Balance at beginning of year | $ 855,000 | $ 855,000 |
Additions - charged to cost and expenses | 538,152 | 431,851 |
Additions - recoveries | 24,646 | 39,023 |
Deductions | 412,798 | 470,874 |
Balance at end of year | $ 1,005,000 | $ 855,000 |
K.OEK=R(\M%*(M.ZF;G;LR?S>GKNX U4'H>_W&B\&(1;9%VJ*2NE'9
M;0X R=WHE,3!.)WCC^<^>E*)YZ0
M+0;[$J5&T9_K#B0'V@DFM_?=8?-& "N%KV&!H2M)Q.QAYX$=4;PH2X[H@E]'
M_3E+:5$.18""@EH8!I% !'E=P5ZCY#>*5J5 P7](YH'0"Q;@P (7CXXQA T\
MJ\@4&U>:[;JG[W3A^E4#:R,$.51#&$2;_1K@FX]X!-B7>:>-_:0*RB25&NFA
MN.TQ$C^$R"!0OL4 L4]L/J-^_T-ENI_%MGTWU(!WX?:-@2A7^Q$<[$V^R[G
M.-:-:W 7P>WD)$XKD!^5-O#:I_O$5\<%^NN^\[@*G4?45>*&!ET9KL)UR!XY
MFJ U $9V8LL;6TZQFW5I+US5B"'5>A1!#^O5*$$$([3ZQ*9BE R[FR/8DA78
MD_7HZGF)QX>F7K@UXIHB-L'Z9A_:L%)'-&9@TN_E.1)D ?=)_(L[YAEJX56>ZJ=-Z*YA9?JHY$ XL1ET4Y -^[HJ,61GP=Q%$;3#/U\F$V21W=OY3U(
M>E?#_<4!CH,7AR*+\P 4Q/,PA9S]E;= _P3L=)>53W?G14^?$%'DHUM4N7 -
MJ;P+%,+(=>V3QVL&
M3I?AJ,;OE'95*1I;!]W_T3O#01-YKGD>%6TQ%IHJ=&-"X; +'3;05?*0@X:Z
MIT2VWRT^BQXD-4SM?V,]X;#W/,-%PZ.N
_E 118W#SN&+ZJC7
MV']]4@HV2HG4I?0Q-G*,$T6'S]=2V3;@8V4W3.1:4<:Q>T2Q'G9?.Z24ZH
MBCG%E#X3N!W O+G"I1;3"0.>!->H*YVRO+'#$J(7F&R6?B6+:8I+A)-B>RR%
M*-/?91[# .)"*4M]PJR,QX7K+>WEBJMR#_.LHK*_U,-N!-!IOVSVOW#FXZ:M
M3B0HRQ_,F"PTLN-V=.YKC>;!,L0J(8C&&?C* :FE!B*V4^:8P4\H5FL*^Q/#
MR6S:= YV(K&K6!I#;ESKT@FFVP<%6$G(2D'W:TCP2E2TXN/P^3**>CN543>J
MR0@S%78F([%-/M&KJQR/V(3A<:Y2C=Z-Z7GP9 F-&8
)XMCEH:R:D'_( ZT/M#2\P_==X-"EFSV4NMEI2)!
MY+7?MT-+87J&U@660KA8 JM$I\E23]V"R;M*0%CWYV\/NSS#*+CSC0]GH8]
MJ&,]B)Z!"B[9X/N+&KXY2!T[:H1T>A9/IF^%0'1S-..5
MB!SX(?N9U[78NW/Y&A,,HW>9*6O9+[_<.<(\@]/1KLO!\$2Q?>>%D=@/ZF=;
MP.*"+.<6;6YS\DE(9\;8+H'7DU(0OH.I.IMK9^1=:K(<:7*P/FU3SQF$X@
M.'YVYT
ML.\.A76D)FU>V/C#,0BLY591O-%Z6YF#!ZC?@"BT&$T7FI'B*O")30Y)4*:I
MK9A+\>+\;
@KH1[3.'!M4U< .0BN+9,-X 0HDU*[(N5L&4PY
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M_>4=\:-L("I:PB^4#VFVJ< U YB:@"9T4H\GQ?]1%)=UP@HCF^IGS**0,_\Z4H\MKUQ;G
M4O+OM'SPGS+W0>9"
ZANIYUMQ@WCG0.=WE55
M=^57W/5\-!NX S;)NL]'XXE[,&1H,F5IQ+4:7]N')4+,'["C@'WBYQSXIZTW
MOGN9=:Y4HX@KC4M;I)=K2JJEU)JUQ\ROFQMIKMB05CA%W]1!,5^>"UQ/G2J=
MI4^%6'\+RK3GNQ;5K^ ?=$"0+BC6(-IQ7X\SJ=05ZJ<+$W2V[2]XM.QUJW
M8]/)C?QUM/LX+NMC2O)]:'\WC9ZY.8TU&H#8'[SU9YM/? *-+.-\'$:SF9AV
MC)S\EGO&&T&:;,?:# [%/\;R7WFW2=GF%Z1>M9925W+:]N+5/AN3Z=2S,1I,
MGZ_[CC!YX/%T>'7A+E\V-SX.;LOWG'T
5_A$4[DQ*"8*J,7E&^!Y=CB
M*&;K0L+HX#R4%FYU>!PVT^YQ9\B+8-R(#BY7VZVL)7)A+9L'"03@W*=(+J36
MX<*G)D\=E8>VWMR!:4P.M26>&*5)3FA68*S2 <=@A3(:E.6_@;7#,Z"CZAX^
M/"$.LMZK!LE8/]*Z-S ;@)8*-I_M4:"(=36(=$1E
M2I]PQ1-+ 7/6$H419JD;]2\\%5 +>@Q$$Y0!?RS45B)5_*TE0V1:2_#-R;51
M&T<)""D<WZ'D;%!RML ?
ME X[;C:9B]EJ(69FY#,Q7Z:K^0H_3-/%?"$"0RM^XB F+C89>69P*AP7@O Y
MBKUAYLDLG2XO^,-\Z3=T X<4G)FM0XKI))VL+L1DGJ[&%P)0%!#;)!]+.+%8
MDB[2Q>0"_KU<+/WIO+M-WM^\@^TWF[OS]F#B=Z1DFE[,%O#OMWZ%G2NJ
M+Z(U8,96)4/6FO>$F*]%-WO;Z6O)(J=F DTX45,] ?::M%\ 3]"L]N*+\"5,
M/>]@$C0S>3)*.'T>X9AK\:>Z:/Z-.ZKBZR%?T _5V_."I=5>?)DFNB+SU.5E
ME#KC75JM#^XZ[=./E)'>FD(#IC+.F^J<4AH-6'%G#G)^$VYGRK)'=FO,AJPD8
>GM73X2Y3]?KZTS8,*_QJ(,-EZ,V^#J>&5KF=#U'/2W
M9+8TO_GZJXOOSG\XX>&+WL,7IZQW'HZY=7KB>Z<*Y5KQ#@ZIA,3?!\
5*F!7?B+(!DB_E@APWC19U#BQF
M0?3")CSF8 Q.DKRIFA(C+7HF[]>0&S