California Water Service Group Files Proposal to Invest $1.02 Billion in its California Water Systems Between 2022 and 2024; ...
July 02 2021 - 9:10AM
As part of its commitment to provide a reliable supply of safe,
clean water and affordable service to the communities it serves,
California Water Service (Cal Water)—the largest subsidiary of
California Water Service Group (NYSE: CWT)—yesterday submitted its
2022-2024 infrastructure improvement plans for all of its
California districts in its General Rate Case (GRC) filing with the
California Public Utilities Commission (CPUC). The proposal also
contains proposed new rate designs, which seek to balance revenue
stability with reduced customer impacts, especially for low-income
and water-saving customers. The CPUC will analyze the
infrastructure improvement plans, operating budget proposals, and
rate designs to establish water rates that reflect the actual cost
of service, effective no earlier than January 2023.
Cal Water proposes to invest $1.02 billion over the period of
2022-2024. Included in the proposal are $913.1 million of newly
proposed capital investments along with continued funding for
capital projects begun in 2021 or earlier. Almost half of Cal
Water’s proposed new infrastructure improvements are to replace
aging water pipelines, which will enhance reliability and augment
water supplies to support customers’ and firefighters’ needs. The
plans also include, among others, upgrades to withstand power
outages and Public Safety Power Shutoff events, protect customers
from known and emerging water contaminants, and expand water
supplies to ensure sustainability and wildfire hardening. The cost
of these upgrades are expected to be offset by the utility’s
continuing refinements to its operating model to improve service
and reduce costs.
In another part of the filing, Cal Water proposed rate design
changes that would improve revenue stability but provide a
discounted unit rate to the first six units of water per month
(approximately 150 gallons per day) for residential customers. In
the proposal, this block of usage would be charged at 25% of the
average rate. The CPUC has recognized this six-unit block as
essential for basic needs.
“We remain steadfast in our commitment to protect our customers,
and we have prepared these multi-year, proactive infrastructure
improvement plans to ensure customers continue to have safe, clean
water and reliable service, both during normal and drought years,”
said Martin A. Kropelnicki, President and CEO. “Additionally, our
proposed rate design returns us to a reasonable amount of revenue
stability without the Water Revenue Adjustment Mechanism, while
offering customers discounted volumetric charges for lifeline
needs. We won’t cut corners on our customers’ health and safety,
and we are committed to doing everything we can to maintain
affordability and provide quality, service, and value.”
The required filing begins an approximately 18-month review
process by the CPUC, an independent state agency, during which it
determines approved projects and sets rates for the following three
years. Any changes in customer rates would become effective no
sooner than January 2023. Cal Water has proposed to the CPUC to
increase revenues by $80.5 million, or 11.1%, in 2023; $43.6
million, or 5.4%, in 2024; and $43.2 million, or 5.1%, in 2025 to
support these investments. If approved as filed, this would cost
the average residential customer less than an additional $5 per
month in all of Cal Water’s service areas.
About California Water Service GroupCalifornia
Water Service Group is the parent company of regulated utilities
California Water Service, Hawaii Water Service, New Mexico Water
Service, Washington Water Service, and Texas Water Service, a
utility holding company. Together, these companies provide
regulated and non-regulated water service to more than 2 million
people in California, Hawaii, New Mexico, Texas, and Washington.
California Water Service Group’s common stock trades on
the New York Stock Exchange under the symbol “CWT.”
Additional information is available online
at www.calwatergroup.com.
This news release contains forward-looking statements within the
meaning established by the Private Securities Litigation Reform Act
of 1995 ("Act"). The forward-looking statements are intended to
qualify under provisions of the federal securities laws for "safe
harbor" treatment established by the Act. Forward-looking
statements are based on currently available information,
expectations, estimates, assumptions and projections, and
management's judgment about the Company, the water utility industry
and general economic conditions. Such words as would, expects,
intends, plans, believes, estimates, assumes, anticipates,
projects, predicts, forecasts or variations of such words or
similar expressions are intended to identify forward-looking
statements. The forward-looking statements are not guarantees of
future performance. They are subject to uncertainty and changes in
circumstances. Actual results may vary materially from what is
contained in a forward-looking statement. Factors that may cause a
result different than expected or anticipated include, but are not
limited to: natural disasters, public health crises, pandemics,
epidemics or outbreaks of a contagious disease, such as the
outbreak of coronavirus (or COVID‐19), governmental and regulatory
commissions' decisions, including decisions on our GRC and on
proper disposition of property; consequences of eminent domain
actions relating to our water systems; changes in regulatory
commissions' policies and procedures; the timeliness of regulatory
commissions' actions concerning rate relief and other actions;
changes in water quality standards; changes in environmental
compliance and water quality requirements; electric power
interruptions; housing and customer growth trends; the impact of
opposition to rate increases; our ability to recover costs;
availability of water supplies; issues with the implementation,
maintenance or security of our information technology systems;
civil disturbances or terrorist threats or acts; the adequacy of
our efforts to mitigate physical and cyber security risks and
threats; the ability of our enterprise risk management processes to
identify or address risks adequately; labor relations matters as we
negotiate with unions; changes in customer water use patterns and
the effects of conservation; the impact of weather, climate,
natural disasters, and diseases on water quality, water
availability, water sales and operating results, and the adequacy
of our emergency preparedness; and, other risks and unforeseen
events. When considering forward-looking statements, you should
keep in mind the cautionary statements included in this paragraph,
as well as the annual 10-K, Quarterly 10-Q, and other reports filed
from time-to-time with the Securities and Exchange Commission
(SEC). The Company assumes no obligation to provide public updates
of forward-looking statements.
Media ContactYvonne
Kingmanykingman@calwater.com310-257-1434
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