American States Water Company Announces a Settlement Agreement in its Water Utility General Rate Case
November 29 2021 - 8:30AM
Business Wire
American States Water Company (NYSE:AWR) announced that on
November 23, 2021, its regulated water utility subsidiary, Golden
State Water Company (GSWC) and the Public Advocates Office (Cal
Advocates) at the California Public Utilities Commission (CPUC)
filed a joint motion to adopt a settlement agreement between GSWC
and Cal Advocates in connection with the water utility general rate
case. GSWC had filed a general rate case application in July 2020
for all of its water regions and the general office to determine
new rates for the years 2022 - 2024. The CPUC is expected to issue
a proposed decision in the water general rate case during the first
half of 2022. When approved, the new rates are expected to become
effective and retroactive to January 1, 2022.
The proposed settlement agreement, if approved by the CPUC,
resolves all issues related to the calculation of the 2022 annual
revenue requirement in the general rate case application, leaving
only three unresolved issues. Among other things, the settlement
authorizes GSWC to invest approximately $416.6 million in capital
infrastructure over the three-year rate cycle in order to continue
to provide safe and reliable water utility service to its
customers. The $416.6 million of infrastructure investment, as
settled, includes $11.8 million of capital projects to be filed for
revenue recovery through advice letters when those projects are
completed. Excluding the advice letter project revenues, under the
terms of the settlement agreement GSWC’s adopted operating revenues
less water supply costs (RLWSC) for 2022 increases by approximately
$20.6 million as compared to the 2021 adopted RLWSC. The settlement
agreement also allows for potential additional increases in adopted
revenues of approximately $13 million for each of the years 2023
and 2024 based on inflation factors used at the time of the
application filing in July 2020. The increases in 2023 and 2024 are
subject to the results of an earnings test and changes to the
forecasted inflationary index values. Actual increases for 2023 and
2024 will be determined at the time the filings to implement the
new rate increases are approved by the CPUC, and will be calculated
using inflationary index values at that time.
The three remaining unresolved issues relate to GSWC's requests
for: (i) a medical cost balancing account, (ii) a general liability
insurance cost balancing account, and (iii) the consolidation of
two of GSWC's customer service areas. With regards to these
unresolved issues, GSWC and Cal Advocates have filed briefs with
the CPUC. When the administrative law judge in the proceeding
issues a proposed decision, it will address the three unresolved
issues along with the settlement agreement filed by GSWC and Cal
Advocates.
Forward-Looking Statements
Certain matters discussed in this press release with regard to
the company’s expectations may be forward-looking statements that
involve risks and uncertainties. The assumptions and risk factors
that could cause actual results to differ materially include those
described in the company’s most recent Form 10-Q and Form 10-K
filed with the Securities and Exchange Commission.
About American States Water Company
American States Water Company is the parent of Golden State
Water Company, Bear Valley Electric Service, Inc. and American
States Utility Services, Inc., serving over one million people in
nine states. Through its water utility subsidiary, Golden State
Water Company, the company provides water service to approximately
262,500 customer connections located within more than 80
communities in Northern, Coastal and Southern California. Through
its electric utility subsidiary, Bear Valley Electric Service,
Inc., the company distributes electricity to approximately 24,600
customer connections in the City of Big Bear Lake and surrounding
areas in San Bernardino County, California. Through its contracted
services subsidiary, American States Utility Services, Inc., the
company provides operations, maintenance and construction
management services for water distribution and wastewater
collection and treatment facilities located on 11 military bases
throughout the country under 50-year privatization contracts with
the U.S. government.
American States Water Company has paid dividends to shareholders
every year since 1931, increasing the dividends received by
shareholders each calendar year for 67 consecutive years, which
places it in an exclusive group of companies on the New York Stock
Exchange that have achieved that result.
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version on businesswire.com: https://www.businesswire.com/news/home/20211129005089/en/
Eva G. Tang Senior Vice President-Finance, Chief Financial
Officer, Corporate Secretary and Treasurer (909) 394-3600, ext.
707
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