CPUC Approves $1.21 Billion Investment for Cal Water

The California Public Utilities Commission (CPUC) has made a decision on California Water Service's (Cal Water) 2021 general rate case and infrastructure improvement plan. The decision, issued on March 7, 2024, revises the alternate proposed decision from January 24, 2024, resulting in an increase of adopted revenues for 2023 by approximately $39.2 million, plus an inflation factor retroactive to January 1, 2023. Additionally, it allows for an increase in revenues by up to approximately $32.2 million for 2024 and $31.7 million for 2025, subject to CPUC's escalation earnings test and inflationary adjustments.

The decision authorizes Cal Water to invest approximately $1.21 billion from 2021 through 2024 in water system infrastructure projects. This includes around $160 million of infrastructure projects that may be submitted for recovery via the CPUC's advice letter process.

Furthermore, the CPUC's decision approves a progressive rate design intended to provide budget stability while benefiting low-income and low-water-using customers by significantly decreasing the cost of the first units of water consumed and increasing the percentage of fixed costs that are recovered in the service charge.

Martin A. Kropelnicki, Chairman, President & Chief Executive Officer of California Water Service Group, expressed pride in the company's track record of prioritizing critical infrastructure projects. He highlighted that from 2021 through 2023, the company completed over 85% of the projects previously approved by the CPUC, deferring the remaining projects to focus on higher-priority initiatives such as wildfire hardening and water supply-reliability projects. In total, the company spent nearly 100% of its approved capital budget.

Kropelnicki also noted the commissioners' acknowledgment of the need to improve the timeliness of their decisions, both related to general rate cases and advice letter projects.

California Water Service Group, the parent company of regulated utilities California Water Service, Hawaii Water Service, New Mexico Water Service, Washington Water Service, and Texas Water Service, provides regulated and non-regulated water and wastewater service to more than 2.1 million people across several states.

Today the company's shares have moved 2.4% to a price of $47.42. If you want to know more, read the company's complete 8-K report here.

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