San Jose Water (SJW) has announced a constructive settlement agreement in its 2025 to 2027 general rate case (GRC) that was filed with the California Public Utilities Commission (CPUC) on January 2, 2024. The settlement agreement, filed on August 19, 2024, provides for $450 million in drinking water infrastructure investment over three years.
The agreement further aligns actual compared to authorized usage through a lower sales forecast and provides for greater revenue recovery through the service charge. It also approves the recovery of $15.8 million from balancing and memorandum accounts.
Water rate advocates for transparency, equity, and sustainability (WRATES) had originally agreed to the settlement agreement in principle on June 14, 2024, but has since decided to not sign on to the settlement agreement.
The settlement agreement positions SJW to invest $450 million over three years in drinking water infrastructure to support day-to-day water system functions, in addition to supporting fire protection, economic vibrancy, and environmental conservation efforts. The company is committed to serving its customers, communities, and the environment at best-in-class levels.
Every three years, water utilities regulated by the CPUC are required to submit a filing detailing proposed rate adjustments and the reasons for these adjustments. The CPUC and Public Advocates Office (PAO) analyze each aspect of the rate application as part of a transparent public process, which includes public hearings and opportunities to share feedback * all to ensure just and reasonable rates, and safe and reliable infrastructure.
The CPUC is expected to render a decision on the settlement agreement in the fourth quarter of 2024 with new rates effective on January 1, 2025.
San Jose Water, founded in 1866, is an investor-owned public utility and one of the largest and most technically sophisticated urban water systems in the United States. It serves over one million people in the greater San Jose metropolitan area and provides services to other utilities including operations and maintenance, billing, and backflow testing. San Jose Water is owned by SJW Group, a publicly traded company listed on the New York Stock Exchange under the symbol SJW. As a result of these announcements, the company's shares have moved -1.0% on the market, and are now trading at a price of $58.92. For the full picture, make sure to review SJW's 8-K report.
