CPUC Authorizes Cal Water to Invest $828 Million Through 2021

The California Public Utilities Commission (CPUC) issued its decision yesterday on the 2018 General Rate Case and Infrastructure Improvement Plan for California Water Service (Cal Water), the largest subsidiary of California Water Service Group (NYSE: CWT). The decision marks the end of an extensive review of the utility’s water system improvement plans, costs, and rates.

The decision by the CPUC, the governmental body responsible for providing independent oversight and setting water rates that reflect the actual costs of providing service, adopts the proposed decision issued October 14, 2020, by the Administrative Law Judge overseeing the case. The proposed decision had approved the settlement reached in October 2019 by Cal Water and the CPUC’s Public Advocates Office, allowed Cal Water to continue its decoupling balancing accounts through 2022, enabled Cal Water to retain its pension and medical cost balancing accounts, and resolved the remaining issues excluded from the settlement.

The CPUC’s decision authorizes Cal Water to invest $828 million in its districts through 2021 in order to continue providing safe, reliable water service to its customers throughout California. This includes $148 million of water system infrastructure upgrades that would be recovered via the CPUC’s advice letter procedure after those projects are completed. The decision authorizes Cal Water to increase total adopted revenue company-wide by approximately $4.4 million in 2020, which will be collected beginning in 2021, and up to $20.9 million in 2021 and $21.4 million in 2022, subject to the CPUC’s escalation earnings test. Additionally, Cal Water could increase revenue up to $17.3 million when the advice letter projects are completed. Rate changes will vary by service area.

“We appreciate the CPUC’s thorough analysis and decision on our 2018 General Rate Case and Infrastructure Improvement Plan, which will enable us to continue fulfilling our promise to provide quality, service, and value to our customers and firefighters,” said Martin A. Kropelnicki, President and CEO. “We take our responsibility to provide a reliable supply of safe, high-quality drinking water at affordable rates very seriously, and will continue working hard every day for the nearly 2 million people we serve.”