YORK WATER CO

Previous wording

Water service is supplied through the Company’s own distribution system. The Company obtains the bulk of its water supply for its primary system for York and Adams Counties from both the South Branch and East Branch of the Codorus Creek, which together have an average daily flow of approximately 73.0 million gallons from a combined watershed area of approximately 117 square miles. The Company has two reservoirs on this primary system, Lake Williams and Lake Redman, which together hold up to approximately 2.5 billion gallons of water. The Company supplements these reservoirs with a 15-mile pipeline from the Susquehanna River to Lake Redman which provides access to an additional supply of 12.0 million gallons of untreated water per day. The Company obtains its water supply for its system for Franklin County from the Roxbury Dam on the Conodoguinet Creek, which has an average daily flow of approximately 26.0 million gallons from a watershed area of approximately 33 square miles. The Company has a reservoir on this system which holds up to approximately 330 million gallons of water. The Company also owns fifteen wells which are capable of providing a safe yield of approximately 923,000 gallons per day to supply water to the customers of its groundwater satellite systems in York, Adams, and Lancaster Counties. As of June 30, 2026, the Company’s average daily availability was 41.1 million gallons, and average daily consumption was approximately 23.2 million gallons. The Company’s service territory had an estimated population of 214,000 as of December 31, 2025. Industry within the Company’s service territory is diversified, manufacturing such items as fixtures and furniture, electrical machinery, food products, paper, ordnance units, textile products, air conditioning systems, laundry detergent, barbells, and motorcycles.

Current wording

Water service is supplied through the Company’s own distribution system. The Company obtains the bulk of its water supply for its primary system for York and Adams Counties from both the South Branch and East Branch of the Codorus Creek, which together have an average daily flow of approximately 73.0 million gallons from a combined watershed area of approximately 117 square miles. The Company has two reservoirs on this primary system, Lake Williams and Lake Redman, which together hold up to approximately 2.5 billion gallons of water. The Company supplements these reservoirs with a 15-mile pipeline from the Susquehanna River to Lake Redman which provides access to an additional supply of 12.0 million gallons of untreated water per day. The Company obtains its water supply for its system for Franklin County from the Roxbury Dam on the Conodoguinet Creek, which has an average daily flow of approximately 26.0 million gallons from a watershed area of approximately 33 square miles. The Company has a reservoir on this system which holds up to approximately 330 million gallons of water. The Company also owns fifteen wells which are capable of providing a safe yield of approximately 923,000 gallons per day to supply water to the customers of its groundwater satellite systems in York, Adams, and Lancaster Counties. As of September 30, 2026, the Company’s average daily availability was 41.1 million gallons, and average daily consumption was approximately 22.6 million gallons. The Company’s service territory had an estimated population of 214,000 as of December 31, 2025. Industry within the Company’s service territory is diversified, manufacturing such items as fixtures and furniture, electrical machinery, food products, paper, ordnance units, textile products, air conditioning systems, laundry detergent, barbells, and motorcycles.

Previous wording

Net income for the second quarter of 2026 was $7,615, an increase of $2,563, or 50.7%, from net income of $5,052 for the same period of 2025. The primary contributing factors to the increase were higher operating revenues, which were partially offset by higher operating expenses and income taxes.

Current wording

Net income for the third quarter of 2026 was $7,809, an increase of $1,608, or 25.9%, from net income of $6,201 for the same period of 2025. The primary contributing factors to the increase were higher operating revenues, which were partially offset by higher operating expenses and income taxes.

Previous wording

Operating revenues for the second quarter of 2026 increased $4,316, or 22.5%, from $19,199 for the second quarter of 2025 to $23,515 for the corresponding 2026 period. The primary reason for the increase was a rate increase effective March 1, 2026. Growth in the customer base also added to revenues. The average number of water customers served in 2026 increased as compared to 2025 by 876 customers, from 73,459 to 74,335 customers. The average number of wastewater customers served in 2026 increased as compared to 2025 by 643 customers, from 7,017 to 7,660 customers, primarily due to acquisitions. The increased revenues were partially offset by a $531 decrease from a lower distribution system improvement charge, or DSIC, allowed by the PPUC. The DSIC reset to zero on March 1, 2026 when the rate order took effect. Total per capita consumption for 2026 was approximately 2.7% lower than the same period of last year.

Current wording

Operating revenues for the third quarter of 2026 increased $3,972, or 19.5%, from $20,361 for the third quarter of 2025 to $24,333 for the corresponding 2026 period. The primary reason for the increase was a rate increase effective March 1, 2026. Growth in the customer base also added to revenues. The average number of water customers served in 2026 increased as compared to 2025 by 841 customers, from 73,684 to 74,525 customers. The average number of wastewater customers served in 2026 increased as compared to 2025 by 575 customers, from 7,115 to 7,690 customers, primarily due to acquisitions. The increased revenues were partially offset by a $673 decrease from a lower distribution system improvement charge, or DSIC, allowed by the PPUC. The DSIC reset to zero on March 1, 2026 when the rate order took effect. Total per capita consumption for 2026 was approximately 3.7% lower than the same period of last year.

Previous wording

Operating expenses for the second quarter of 2026 increased $1,594, or 13.2%, from $12,113 for the second quarter of 2025 to $13,707 for the corresponding 2026 period. The increase was primarily due to higher expenses of approximately $529 for distribution system maintenance, $386 for wages and benefits, $249 for wastewater treatment, $154 for purchased power, $148 for depreciation and amortization, and $137 for the provision for uncollectible accounts. Other operating expenses decreased by a net of $9.

Current wording

Operating expenses for the third quarter of 2026 increased $1,351, or 10.9%, from $12,447 for the third quarter of 2025 to $13,798 for the corresponding 2026 period. The increase was primarily due to higher expenses of approximately $352 for wages and benefits, $216 for purchased power, $211 for wastewater treatment, $202 for the provision for uncollectible accounts, $109 for depreciation and amortization, $104 for water treatment, and $61 for insurance. Other operating expenses increased by a net of $96.

Previous wording

Interest on debt for the second quarter of 2026 decreased $239, or 9.5%, from $2,521 for the second quarter of 2025 to $2,282 for the corresponding 2026 period. The decrease was primarily due to a decrease in short-term and long-term debt outstanding. Upon the completion of the underwritten common stock offering in April 2026, the Company repaid its term loan and line of credit. The average debt outstanding under the short-term borrowings and line of credit was $9,326 for the second quarter of 2026 and $25,762 for the second quarter of 2025. The weighted average interest rate on the line of credit and short-term borrowings was 3.92% for the quarter ended June 30, 2026 and 5.49% for the quarter ended June 30, 2025.

Current wording

Interest on debt for the third quarter of 2026 decreased $416, or 15.9%, from $2,615 for the third quarter of 2025 to $2,199 for the corresponding 2026 period. The decrease was primarily due to a decrease in short-term and long-term debt outstanding. Upon the completion of the underwritten common stock offering in April 2026, the Company repaid its term loan and line of credit. The average debt outstanding under the short-term borrowings and line of credit was $3,129 for the third quarter of 2026 and $33,331 for the third quarter of 2025. The weighted average interest rate on the line of credit and short-term borrowings was 4.22% for the quarter ended September 30, 2026 and 5.49% for the quarter ended September 30, 2025.

Previous wording

Allowance for funds used during construction increased $142, from $191 in the second quarter of 2025 to $333 in the corresponding 2026 period due to a higher volume of eligible construction.

Current wording

Allowance for funds used during construction increased $225, from $218 in the third quarter of 2025 to $443 in the corresponding 2026 period due to a higher volume of eligible construction.

Previous wording

Income tax expense for the second quarter of 2026 increased $533 as compared to the same period of 2025 due to higher taxable income. The Company’s effective tax rate was 2.1% for the second quarter of 2026 and (7.8)% for the second quarter of 2025.

Current wording

Income tax expense for the third quarter of 2026 increased $1,588 as compared to the same period of 2025 due to higher taxable income and lower deductions for the Internal Revenue Service, or IRS, tangible property regulations, or TPR. The Company’s effective tax rate was 11.4% for the third quarter of 2026 and (10.4)% for the third quarter of 2025.

Previous wording

Net income for the first six months of 2026 was $12,429, an increase of $3,739, or 43.0%, from net income of $8,690 for the same period of 2025. The primary contributing factors to the increase were higher operating revenues and lower income taxes, which were partially offset by higher operating expenses.

Current wording

Net income for the first nine months of 2026 was $20,238, an increase of $5,347, or 35.9%, from net income of $14,891 for the same period of 2025. The primary contributing factor to the increase were higher operating revenues, which were partially offset by higher operating expenses and income taxes.

Previous wording

Operating revenues for the first six months of 2026 increased $5,934, or 15.8%, from $37,655 for the six months ended June 30, 2025 to $43,589 for the corresponding 2026 period. The primary reason for the increase was a rate increase effective March 1, 2026. Growth in the customer base also added to revenues. The average number of water customers served in 2026 increased as compared to 2025 by 938 customers, from 73,322 to 74,260 customers. The average number of wastewater customers served in 2026 increased as compared to 2025 by 631 customers, from 6,865 to 7,496 customers, primarily due to acquisitions. The increased revenues were partially offset by a $638 decrease from a lower distribution system improvement charge, or DSIC, allowed by the PPUC. The DSIC reset to zero on March 1, 2026 when the rate order took effect. Total per capita consumption for 2026 was approximately 2.5% lower than the same period of last year. For the remainder of the year, the Company expects revenues to increase due to the increase in rates, higher summer demand and an increase in the number of water and wastewater customers from acquisitions and growth within the Company’s service territory. Other regulatory actions, drought warnings or restrictions, weather patterns, and economic conditions could impact results.

Current wording

Operating revenues for the first nine months of 2026 increased $9,906, or 17.1%, from $58,016 for the nine months ended September 30, 2025 to $67,922 for the corresponding 2026 period. The primary reason for the increase was a rate increase effective March 1, 2026. Growth in the customer base also added to revenues. The average number of water customers served in 2026 increased as compared to 2025 by 905 customers, from 73,443 to 74,348 customers. The average number of wastewater customers served in 2026 increased as compared to 2025 by 613 customers, from 6,948 to 7,561 customers, primarily due to acquisitions. The increased revenues were partially offset by a $1,311 decrease from a lower DSIC allowed by the PPUC. The DSIC reset to zero on March 1, 2026 when the rate order took effect. Total per capita consumption for 2026 was approximately 2.9% lower than the same period of last year. For the remainder of the year, the Company expects revenues to increase due to the increase in rates and an increase in the number of water and wastewater customers from acquisitions and growth within the Company’s service territory. Other regulatory actions, drought warnings or restrictions, weather patterns, and economic conditions could impact results.

Previous wording

Operating expenses for the first six months of 2026 increased $3,142, or 12.9%, from $24,286 for the first six months of 2025 to $27,428 for the corresponding 2026 period. The increase was primarily due to higher expenses of approximately $927 for distribution system maintenance, $708 for wages and benefits, $339 for purchased power, $299 for wastewater treatment, $252 for insurance, $247 for the provision for uncollectible accounts, and $243 for depreciation and amortization. Other operating expenses increased by a net of $127. For the remainder of the year, the Company expects depreciation and amortization expense to continue to rise due to additional investment in utility plant, and other expenses to increase as costs to treat water and wastewater, and to maintain and extend the distribution system, continue to rise. Weather patterns could further increase operating expenses.

Current wording

Operating expenses for the first nine months of 2026 increased $4,493, or 12.2%, from $36,733 for the first nine months of 2025 to $41,226 for the corresponding 2026 period. The increase was primarily due to higher expenses of approximately $1,060 for wages and benefits, $896 for distribution system maintenance, $555 for purchased power, $510 for wastewater treatment, $449 for the provision for uncollectible accounts, $352 for depreciation and amortization, $313 for insurance, and $128 for water treatment. Other operating expenses increased by a net of $230. For the remainder of the year, the Company expects depreciation and amortization expense to continue to rise due to additional investment in utility plant, and other expenses to increase as costs to treat water and wastewater, and to maintain and extend the distribution system, continue to rise. Weather patterns could further increase operating expenses.

Previous wording

Interest on debt for the first six months of 2026 increased $57, or 1.2%, from $4,940 for the first six months of 2025 to $4,997 for the corresponding 2026 period. The increase was primarily due to an increase in short-term and long-term debt outstanding. The average debt outstanding under the short-term borrowings and line of credit was $27,922 for the first six months of 2026 and $22,481 for the first six months of 2025. The weighted average interest rate on the line of credit was 4.40% for the six months ended June 30, 2026 and 5.49% for the six months ended June 30, 2025. Interest expense for the remainder of the year is expected to decrease due to the repayment of the term loan and line of credit upon the completion of the underwritten common stock offering in April 2026.

Current wording

Interest on debt for the first nine months of 2026 decreased $359 or 4.8%, from $7,555 for the first nine months of 2025 to $7,196 for the corresponding 2026 period. The decrease was primarily due to a decrease in short-term and long-term debt outstanding. The average debt outstanding under the short-term borrowings and line of credit was $19,553 for the first nine months of 2026 and $26,137 for the first nine months of 2025. The weighted average interest rate on the line of credit was 4.34% for the nine months ended September 30, 2026 and 5.49% for the nine months ended September 30, 2025. Interest expense for the remainder of the year is expected to increase due to continued borrowings under the line of credit.

Previous wording

Allowance for funds used during construction increased $230, from $376 in the first six months of 2025 to $606 in the corresponding 2026 period due to a higher volume of eligible construction. Allowance for funds used during construction for the remainder of the year is expected to increase based on a projected increase in the amount of eligible construction.

Current wording

Allowance for funds used during construction increased $455, from $594 in the first nine months of 2025 to $1,049 in the corresponding 2026 period due to a higher volume of eligible construction. Allowance for funds used during construction for the remainder of the year is expected to increase based on a projected increase in the amount of eligible construction.

Previous wording

Other income (expenses), net for the first six months of 2026 reflects increased expenses of $5 as compared to the same period of 2025. Higher charitable contributions of approximately $20 were offset by higher earnings on life insurance policies of approximately $15. For the remainder of the year, other income (expenses) will be largely determined by the change in market returns and discount rates for retirement programs and related assets.

Current wording

Other income (expenses), net for the first nine months of 2026 reflects increased expenses of $68 as compared to the same period of 2025. Lower interest income of approximately $62 and higher charitable contributions of approximately $48 were offset by higher earnings on life insurance policies of approximately $46. Other expenses increased by a net of $4. For the remainder of the year, other income (expenses) will be largely determined by the change in market returns and discount rates for retirement programs and related assets.

Previous wording

Income tax expense for the first six months of 2026 decreased $784 as compared to the same period of 2025 due to higher deductions for the Internal Revenue Service, or IRS, tangible property regulations, or TPR. The Company’s effective tax rate was (5.8)% for the first six months of 2026 and 1.2% for the first six months of 2025. The Company’s effective tax rate for the remainder of 2025 will be largely determined by the level of eligible asset improvements expensed for tax purposes under IRS TPR each period. The Company expects the level to be lower in the remainder of the year than the first six months, increasing the effective tax rate

Current wording

Income tax expense for the first nine months of 2026 increased $804 as compared to the same period of 2025 due to higher taxable income partially offset by higher deductions for the IRS TPR. The Company’s effective tax rate was 1.6% for the first nine months of 2026 and (3.3)% for the first nine months of 2025. The Company’s effective tax rate for the remainder of 2026 will be largely determined by taxable income and the level of eligible asset improvements expensed for tax purposes under IRS TPR each period. The Company expects taxable income and the level of eligible asset improvements to increase the effective tax rate in the remainder of the year.

Previous wording

On December 23, 2025, the Company signed an agreement to purchase the water assets of Lenwood Management, LLC in Southampton Township, Franklin County, Pennsylvania. Completion of the acquisition is contingent upon receiving approval from all required regulatory authorities. Closing is expected in the fourth quarter of 2026 at which time the Company will add approximately 90 water customers.

Current wording

On December 23, 2025, the Company signed an agreement to purchase the water assets of Lenwood Management, LLC in Southampton Township, Franklin County, Pennsylvania. Completion of the acquisition is contingent upon receiving approval from all required regulatory authorities. Closing is expected in the first half of 2027 at which time the Company will add approximately 90 water customers.

Previous wording

On December 11, 2025, the Company signed an agreement to purchase the water assets of Mt. Rock Manor Management, LLC in Southampton Township, Franklin County, Pennsylvania. Completion of the acquisition is contingent upon receiving approval from all required regulatory authorities. Closing is expected in the fourth quarter of 2026 at which time the Company will add approximately 140 water customers.

Current wording

On December 11, 2025, the Company signed an agreement to purchase the water assets of Mt. Rock Manor Management, LLC in Southampton Township, Franklin County, Pennsylvania. Completion of the acquisition is contingent upon receiving approval from all required regulatory authorities. Closing is expected in the first half of 2027 at which time the Company will add approximately 140 water customers.

Previous wording

For the six months ended June 30, 2026, the Company invested $21,102 in construction expendituresfor main extensions, wastewater treatment plant construction, and an upgrade to the enterprise software system, as well as various replacements and improvements to infrastructure and routine items. The Company was able to fund construction expenditures using internally-generated funds, line of credit borrowings, proceeds from its stock purchase plans and customer advances and contributions from developers, municipalities, customers, or builders.

Current wording

For the nine months ended September 30, 2026, the Company invested $36,233 in construction expenditures for main extensions, wastewater treatment plant construction, and an upgrade to the enterprise software system, as well as various replacements and improvements to infrastructure and routine items. The Company was able to fund construction expenditures using internally-generated funds, line of credit borrowings, proceeds from its stock purchase plans and customer advances and contributions from developers, municipalities, customers, or builders.

Previous wording

The Company anticipates construction expenditures for the remainder of 2026 of approximately $26,800 exclusive of any potential acquisitions not yet approved. In addition to routine transmission and distribution projects, a portion of the anticipated expenditures will be for additional main extensions and an upgrade to the enterprise software system, as well as various replacements and improvements to infrastructure and routine items. The Company intends to use primarily internally-generated funds for its anticipated construction and fund the remainder through line of credit borrowings, proceeds from its stock purchase plans and customer advances and contributions. Customer advances and contributions are expected to account for between 5% and 10% of funding requirements during the remainder of 2026. The Company believes it will have adequate credit facilities and access to the capital markets, if necessary, during 2026 and 2027, to fund anticipated construction and acquisition expenditures.

Current wording

The Company anticipates construction expenditures for the remainder of 2026 of approximately $11,800 exclusive of any potential acquisitions not yet approved. In addition to routine transmission and distribution projects, a portion of the anticipated expenditures will be for additional main extensions and an upgrade to the enterprise software system, as well as various replacements and improvements to infrastructure and routine items. The Company intends to use primarily internally-generated funds for its anticipated construction and fund the remainder through line of credit borrowings, proceeds from its stock purchase plans and customer advances and contributions. Customer advances and contributions are expected to account for between 5% and 10% of funding requirements during the remainder of 2026. The Company believes it will have adequate credit facilities and access to the capital markets, if necessary, during 2026 and 2027, to fund anticipated construction and acquisition expenditures.

Previous wording

The Company manages its cash through 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 arrangement. 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 for payroll, to pay suppliers, to fund capital expenditures, or to pay debt service, funds are automatically borrowed under the line of credit. As of June 30, 2026, the Company had no borrowings on its line of credit and had a cash balance of $555. Upon completion of the underwritten common stock offering in April 2026, the Company repaid its line of credit and generated a cash balance. The Company expects the cash balance to be fully utilized in 2026, after whichthe cash management facility connected to the line of credit is expected to provide the necessary liquidity and funding for the Company’s operations, capital expenditures, and acquisitions for the foreseeable future.

Current wording

The Company manages its cash through 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 arrangement. 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 for payroll, to pay suppliers, to fund capital expenditures, or to pay debt service, funds are automatically borrowed under the line of credit. As of September 30, 2026, the Company borrowed $4,850 on its line of credit and incurred a cash overdraft on its cash management account of $688. The cash management facility connected to the line of credit is expected to provide the necessary liquidity and funding for the Company’s operations, capital expenditures, and acquisitions for the foreseeable future.

Previous wording

The amount of internally-generated funds available for operations and construction depends on the Company’s ability to obtain timely and adequate rate relief, changes in regulations including taxes, customers’ water usage, weather conditions, customer growth and controlled expenses. During the first six months of 2026, the Company generated $17,241 internally from operations as compared to the $13,603 it generated during the first six months of 2025. The increase was primarily due to higher net income.

Current wording

The amount of internally-generated funds available for operations and construction depends on the Company’s ability to obtain timely and adequate rate relief, changes in regulations including taxes, customers’ water usage, weather conditions, customer growth and controlled expenses. During the first nine months of 2026, the Company generated $27,823 internally from operations as compared to the $21,432 it generated during the first nine months of 2025. The increase was primarily due to higher net income.

Previous wording

Common stockholders’ equity as a percent of the total capitalization was 60.5% as of June 30, 2026, compared with 51.7% as of December 31, 2025. Based on the equity percentage falling to near fifty percent, the Company completed the underwritten common stock offering, increasing equity as a percentage of total capitalization. The Company expects to use long-term debt for its future financing needs and allow the debt percentage to trend upward until it approaches fifty percent before considering additional equity. It is the Company’s general intent to target equity between fifty and fifty-five percent of total capitalization.

Current wording

Common stockholders’ equity as a percent of the total capitalization was 60.3% as of September 30, 2026, compared with 51.7% as of December 31, 2025. Based on the equity percentage falling to near fifty percent, the Company completed the underwritten common stock offering, increasing equity as a percentage of total capitalization. The Company expects to use long-term debt for its future financing needs and allow the debt percentage to trend upward until it approaches fifty percent before considering additional equity. It is the Company’s general intent to target equity between fifty and fifty-five percent of total capitalization.

Previous wording

Historically, the Company has borrowed under its line of credit before refinancing with long-term debt or equity capital. As of June 30, 2026, the Company maintained an unsecured line of credit in the amount of $50,000 at an interest rate of the Secured Overnight Financing Rate plus 1.17% with an unused commitment fee and an interest rate floor. The Company had no borrowings under its line of credit as of June 30, 2026. Upon completion of the underwritten common stock offering in April 2026, the Company repaid its line of credit. The Company expects to extend the maturity for this line of credit into 2028 under similar terms and conditions.

Current wording

Historically, the Company has borrowed under its line of credit before refinancing with long-term debt or equity capital. As of September 30, 2026, the Company maintained an unsecured line of credit in the amount of $50,000 at an interest rate of the Secured Overnight Financing Rate plus 1.17% with an unused commitment fee and an interest rate floor. The Company had $4,850 in borrowings under its line of credit as of September 30, 2026. The interest rate on the line of credit borrowings as of September 30, 2026 was 4.85%. In the third quarter of 2026, the Company renewed its committed line of credit and extended the maturity date to September 2028. No other terms and conditions of the line of credit agreement were modified.

Previous wording

The Company’s total long-term debt as a percentage of the total capitalization, defined as total common stockholders’ equity plus total long-term debt, was 39.5% as of June 30, 2026, compared with 48.3% as of December 31, 2025. Based on the debt percentage nearly reaching fifty percent, the Company completed an underwritten common stock offering in April 2026 and repaid its line of credit, decreasing long-term debt as a percentage of total capitalization. The Company expects to use long-term debt for its future financing needs and allow the debt percentage to trend upward. A debt to total capitalization ratio between forty-five and fifty percent has historically been acceptable to the PPUC in rate filings.

Current wording

The Company’s total long-term debt as a percentage of the total capitalization, defined as total common stockholders’ equity plus total long-term debt, was 39.7% as of September 30, 2026, compared with 48.3% as of December 31, 2025. Based on the debt percentage nearly reaching fifty percent, the Company completed an underwritten common stock offering in April 2026 and repaid its line of credit, decreasing long-term debt as a percentage of total capitalization. The Company expects to use long-term debt for its future financing needs and allow the debt percentage to trend upward. A debt to total capitalization ratio between forty-five and fifty percent has historically been acceptable to the PPUC in rate filings.

Previous wording

The Company was granted approval by the PPUCto 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 allowed the Company to replace customer-owned service lines at its own initial cost. The Company recorded 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 $2,093 and $2,087 through June 30, 2026 and December 31, 2025, respectively, and is included as a regulatory asset. The tariff modification expired on March 8, 2026. The Company has filed a Lead Service Line Replacement Plan with the PPUC and is awaiting a decision. If approved, the plan would establish the requirements for, and the associated cost recovery mechanisms related to, the future replacement of customer‑owned lead service lines.

Current wording

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 allowed the Company to replace customer-owned service lines at its own initial cost. The Company recorded 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 $2,093 and $2,087 through September 30, 2026 and December 31, 2025, respectively, and is included as a regulatory asset. The tariff modification expired on March 8, 2026. The Company has filed a Lead Service Line Replacement Plan with the PPUC and is awaiting a decision. If approved, the plan would establish the requirements for, and the associated cost recovery mechanisms related to, the future replacement of customer‑owned lead service lines.

Previous wording

As of June 29, 2026, Pennsylvania state officials maintained a drought watch for 11 counties in Pennsylvania, including York and Adams Counties within the Company’s service territory, and a drought warning for 8 counties in Pennsylvania, including Franklin and Lancaster Counties within the Company’s service territory. The watch calls for a voluntary reduction in nonessential water use of 5 to 10 percent and the warning calls for a voluntary reduction in nonessential water use of 10 to 15 percent. These measures could potentially impact future revenues, operating expenses, and net income depending on the length and severity of the dry conditions.

Current wording

As of October 2, 2026, Pennsylvania state officials maintained a drought watch for five counties in Pennsylvania, including Franklin County within the Company’s service territory. All remaining counties in Pennsylvania, including York, Adams, and Lancaster Counties within the Company’s service territory, are in normal status. The watch calls for a voluntary reduction in nonessential water use of 5 to 10 percent. This measure could potentially impact future revenues, operating expenses, and net income depending on the length and severity of the dry conditions.