About American States Water

American States Water Company (AWR), through its subsidiaries, provides water, electric, and contracted services. AWR is the parent company of GSWC, Bear Valley Electric Service, Inc. (BVES) and American States Utility Services, Inc. (ASUS) (and its wholly-owned subsidiaries: Fort Bliss Water Services Company (FBWS), Old Dominion Utility Services, Inc. (ODUS), Terrapin Utility Services, Inc. (TUS), Palmetto State Utility Services, Inc. (PSUS), Old North Utility Services, Inc. (ONUS), Emerald Coast Utility Services, Inc. (ECUS), Fort Riley Utility Services, Inc. (FRUS), Bay State Utility Services LLC (BSUS), and Patuxent River Utility Services LLC (PRUS)). AWR has three segments: water, electric and contracted services. Within the segments, AWR has three principal business units, water and electric service utility operations conducted through its regulated utilities GSWC and BVES, respectively, and contracted services conducted through ASUS and its subsidiaries. GSWC is a public water utility engaged in the purchase, production, distribution and sale of water in 10 counties in the state of California. GSWC is regulated by the California Public Utilities Commission (CPUC). BVES is a public electric utility that distributes electricity in several San Bernardino County mountain communities in California and is also regulated by the CPUC. AWR’s regulated utilities served 264,093 water customers and 24,777 electric customers at December 31, 2023. Both GSWC’s and BVES’s operations exhibit seasonal trends. Although both have diversified customer bases, residential and commercial customers account for the majority of water and electric sales and revenues. Revenues derived from commercial and residential customers accounted for approximately 90% of total water and electric revenues for the year ended December 31, 2023. ASUS, through its subsidiaries, has contracted with the U.S. government to provide water and/or wastewater services at various military installations. ASUS operates, maintains and performs construction activities (including renewal and replacement capital work) on water and/or wastewater systems at various U.S. military bases pursuant to an initial 50-year, firm-fixed-price contract and additional firm-fixed-price contracts, task order agreements and contracts with third party prime contractors. ASUS has one subsidiary that has entered into a task order agreement with the U.S. government that has a term of 15 years. Each of the contracts with the U.S. government is subject to termination, in whole or in part, prior to the end of its term for convenience of the U.S. government or as a result of default or nonperformance by the ASUS subsidiary performing the contract. AWR generally guarantees performance of all of the contracts of ASUS’s subsidiaries. Properties Water Properties As of December 31, 2023, GSWC’s physical properties consisted of water transmission and distribution systems, which included 2,878 miles of pipeline together with services, meters and fire hydrants, and approximately 450 parcels of land generally less than 1 acre each, on which are located wells, pumping plants, reservoirs and other water utility facilities, including five surface water treatment plants. GSWC also has franchises, easements and other rights of way for the purpose of accessing wells and tanks and constructing and using pipes and appurtenances for transmitting and distributing water. All of GSWC’s properties are located in California. As of December 31, 2023, GSWC owned 239 wells, of which 167 are active with an aggregate production capacity of approximately 164 million gallons per day. GSWC has 59 connections to the water distribution facilities of the MWD, and other municipal water agencies. GSWC’s storage reservoirs and tanks have an aggregate capacity of approximately 119 million gallons. Electric Properties BVES’s properties are located in the Big Bear area of San Bernardino County, California. As of December 31, 2023, BVES owned and operated approximately 87.8 miles of overhead 34.5 kilovolt (kv) sub-transmission lines (17.43 circuit miles are insulated), 6.49 miles of underground 34.5 kv sub-transmission lines, 493.41 miles of overhead 4.16 kv or 2.4 kv distribution lines (36.2 circuit miles are insulated), 114.22 miles of underground cable, 13 sub-stations and a natural gas-fueled 8.4 MW peaking generation facility. BVES also has franchises, easements and other rights of way for the purpose of constructing and using poles, wires and other appurtenances for transmitting electricity. Adjudicated and Other Water Rights GSWC owns groundwater and surface water rights in California. Groundwater rights are further subject to classification as either adjudicated or unadjudicated rights. Adjudicated rights have been established through comprehensive litigation in the courts, and the annual extraction quantities and use of the adjudicated rights are often subject to the provisions of the judgment for that particular groundwater basin. Additionally, as a result of the adjudication, many of these groundwater basins are managed by a watermaster that is charged with enforcing the provisions of the judgment, which may include determining operating safe yields based on the water supply conditions of the groundwater basin. GSWC actively manages its adjudicated groundwater rights portfolio with the goal of optimizing and making this source of supply sustainable. Unadjudicated rights are subject to further regulation by the State Water Resources Control Board (SWRCB) and the California Department of Water Resources. Surface water rights are quantified and managed by the SWRCB, unless the surface water rights originated prior to 1914. As of December 31, 2023, GSWC had adjudicated groundwater rights and surface water rights of 69,409 and 11,335 acre-feet per year, respectively. GSWC also has a number of unadjudicated groundwater rights. Seasonality During unusually wet weather, the company’s customers generally use less water. The CPUC has adopted regulatory mechanisms at GSWC that help mitigate fluctuations in revenues due to changes in water consumption by its customers in California, which currently remain in effect. The demand for electricity in the company’s electric customer service area is greatly affected by winter snow levels. An increase in winter snow levels reduces the use of snow-making machines at ski resorts in the Big Bear area and, as a result, reduces the company’s electric revenues. The CPUC has adopted regulatory mechanisms for the company’s electric business, which helps mitigate fluctuations in the revenues of its electric business due to changes in the amount of electricity used by BVES’s customers. Environmental Regulation As mandated by legislation enacted in California, BVESI is required to submit wildfire mitigation plans to the CPUC and the Office of Energy Infrastructure Safety (OEIS) for approvals. BVES is also required to comply with the CPUC’s greenhouse gas emission performance standards. History American States Water Company was founded in 1929. The company was incorporated as a California corporation in 1929.