Cal Water to Invest $1.6B in California Infrastructure

California Water Service (Cal Water) has announced plans to invest over $1.6 billion in its California districts from 2025-2027. This includes approximately $1.3 billion of newly proposed capital investments, with around 46% of the proposed new infrastructure improvements aimed at replacing aging water pipelines to enhance water supply reliability.

The proposed infrastructure improvement plans also encompass various projects such as water quality upgrades, infrastructure replacements to aid in water delivery, equipment installations to withstand power outages and reduce dependency on the electric power grid, as well as security and safety enhancements.

In addition to the infrastructure investments, Cal Water has proposed a low-use water equity program designed to decouple revenue from water sales across its regulated service areas. This program aims to enhance affordability, particularly for low-use and low-income customers, while reinforcing conservation goals.

To support these investments and the proposed low-use water equity program, Cal Water has proposed to increase 2026 total revenue by $140.6 million, or 17.1%, based on 2026 authorized revenue at current rates. In 2027, the proposed revenue increase is $74.2 million, or 7.7%, and in 2028, it is $83.6 million, or 8.1%. The company also aims to focus on enhancing efficiency and reducing expenses to help offset the cost of upgrades.

Martin A. Kropelnicki, Chairman and CEO of California Water Service Group, emphasized the proactive nature of these infrastructure improvement plans, highlighting the company's commitment to providing safe, clean, and reliable drinking water to customers and communities. He also noted that these ongoing investments and proposed decoupling program are intended to help the company navigate challenges such as a changing climate, increasingly stringent regulations, and inflation. Following these announcements, the company's shares moved -1.2%, and are now trading at a price of $48.36. For more information, read the company's full 8-K submission here.

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