Elevated LeverageLeverage above 1x equity tightens financial flexibility and increases the company's sensitivity to cash flow variability. Covenants and higher debt levels limit room for incremental investments or weathering regulatory delays, making capital structure a persistent constraint.
Thin Free Cash FlowFree cash flow remains modest relative to earnings and has been negative in prior years, reflecting significant capital spending. Limited FCF heightens reliance on external financing for infrastructure, constraining the company's ability to self-fund growth or build large liquidity buffers.
Earnings Volatility And Cost PressureRecent margin compression from rising operating and G&A costs, and episodic events (noted past large loss), show earnings vulnerability. While a rate case seeks recovery, regulatory timing and possible refunds introduce persistent earnings uncertainty over several months.