About California Water Service Group

California Water Service Group, through its subsidiaries, provides water utility and other related services in California, Washington, New Mexico, Hawaii, and Texas. The company’s seven operating subsidiaries are California Water Service Company (Cal Water), New Mexico Water Service Company (New Mexico Water), Washington Water Service Company (Washington Water), Hawaii Water Service Company, Inc. (Hawaii Water), TWSC, Inc. (Texas Water), and CWS Utility Services and HWS Utility Services LLC (CWS Utility Services and HWS Utility Services LLC being referred to collectively as Utility Services). Cal Water, New Mexico Water, Washington Water, and Hawaii Water are regulated public utilities. Texas Water holds regulated and contracted wastewater utilities. The regulated utility entities also provide some non-regulated services. Utility Services holds non-utility property and provides non-regulated services to private companies and municipalities outside of California. The company engages in the supply and distribution of water and providing water-related utility services. Its principal markets are users of water within the company’s service areas. The company’s business is conducted through its operating subsidiaries and the company provides utility services to approximately two million people. The bulk of the business consists of the production, purchase, storage, treatment, testing, distribution and sale of water for domestic, industrial, public and irrigation uses, and the provision of domestic and municipal fire protection services. In some areas, the company provides wastewater collection and treatment services, including treatment, which allows water recycling. The company also provides non-regulated water-related services under agreements with municipalities and other private companies. The non-regulated services include full water system operation, billing and meter reading services. Non-regulated operations also include the lease of communication antenna sites, lab services and promotion of other non-regulated services. Regulated Business California water operations are conducted by Cal Water, which provides service to approximately 496,400 customer connections in approximately 100 California communities through 21 separate districts, which are subject to regulation by the California Public Utilities Commission (CPUC). The company operates the City of Hawthorne and the City of Commerce water systems under lease agreements. In accordance with the lease agreements, the company receives all revenues from operating the systems. The City of Hawthorne and the City of Commerce lease revenues are governed through their respective city councils and are considered non-regulated because they are outside of the CPUC's jurisdiction. The City of Hawthorne capital lease is a 15-year lease and expires in 2026. In April of 2018, a renewal agreement was negotiated with the City of Commerce for the company to continue to lease and to operate its water system for 15 years. The company is responsible for all operations, maintenance, water quality assurance, customer service programs, and financing capital improvements to provide a reliable supply of water that meets federal and state standards to customers served by the City of Commerce system. The City of Commerce retains title to the system and system improvements and remains responsible for setting its customers’ water rates. Hawaii Water provides service to approximately 6,200 water and wastewater customer connections on the islands of Maui, Oahu, and Hawaii, including several large resorts and condominium complexes. Hawaii Water's regulated customer connections are subject to the jurisdiction of the Hawaii Public Utilities Commission (HPUC). Washington Water provides domestic water service to approximately 37,500 customer connections in the Tacoma, Olympia, Graham, Spanaway, Puyallup, Rainier, Yelm, and Gig Harbor areas. Washington Water's utility operations are regulated by the Washington Utilities and Transportation Commission. New Mexico Water provides service to approximately 10,700 water and wastewater customer connections in the Belen, Farmington, Los Lunas, Indian Hills, and Elephant Butte areas in New Mexico. New Mexico's regulated operations are subject to the jurisdiction of the New Mexico Public Regulation Commission (NMPRC). In May of 2021, Texas Water became the majority owner of BVRT Utility Holding Company (BVRT), a Texas-based utility development company owning and operating four wastewater utilities serving growing communities outside of Austin and San Antonio. Texas Water initially invested funds to enable BVRT to continue to build wastewater infrastructure and converted its investment to equity. BVRT’s five wastewater utilities serve or are under contract to serve over 2,200 customer connections. On August 16, 2022, BVRT entered into a long-term water supply agreement with the Guadalupe Blanco River Authority (GBRA) that enables BVRT to receive up to 2,419 acre-feet of potable water annually. The company distributes and treats water and treat wastewater in accordance with accepted water utility methods. Where applicable, the company holds franchises and permits in the cities and communities where the company operates. The franchises and permits allow the company to operate and maintain facilities in public streets and rights-of-way as necessary. Non-Regulated Activities Non-regulated revenue and expenses consist primarily of the operation of water systems that are owned by other entities under lease agreements, leasing of communication antenna sites on the company’s properties, billing of optional third-party insurance programs to the company’s residential customers, and unrealized gains or losses on benefit plan investments. Under the company’s non-regulated contract arrangements, the company operates municipally owned water systems and privately owned water and recycled water distribution systems, but are not responsible for all operating costs. Non-regulated revenue received from non-leased water system operations is generally determined on a fee-per-customer basis. Seasonal Fluctuations In California, the company’s customers' consumption pattern of water varies with the weather, in terms of rainfall and temperature. Security at Company Facilities The company has complied with regulations issued by the U.S. Environmental Protection Agency (EPA) pursuant to federal legislation concerning vulnerability assessments and have made filings to the EPA as required. In accordance with the 2018 America’s Water Infrastructure Act (AWIA), the company is required to conduct additional risk and resilience assessments and develop emergency response plans for each of the company’s water systems. Properties The company’s physical properties consist of offices and water facilities to accomplish the production, storage, treatment, and distribution of water. Cal Water has 416 owned storage tanks with a capacity of 293 million gallons, two leased storage tanks with a capacity of 0.4 million gallons, 16 managed storage tanks with a capacity of 29 million gallons, and three surface water reservoirs with a capacity of 241 million gallons. Cal Water owns and operates six surface water treatment plants with a combined capacity of 46 million gallons per day. There are 6,709 miles of supply and distribution mains in the various owned and managed systems. In the leased City of Hawthorne and City of Commerce systems or in systems that are operated under contract for municipalities or private companies, title to the various properties is held exclusively by the municipality or private company. Hawaii Water has 38 storage tanks with a storage capacity of 35.8 million gallons. There are 246 miles of supply and distribution lines. Hawaii Water operates six wastewater treatment facilities with a combined capacity to process approximately 3.8 million gallons per day. There are 70.1 miles of sewer collection mains, including force mains. Washington Water has 196 owned storage tanks with a storage capacity of 21.7 million gallons. There are 706 miles of supply and distribution lines. Washington Water operates one wastewater treatment plant with 1.3 miles of sewer collection mains. New Mexico Water has 25 storage tanks with a storage capacity of 10.9 million gallons. There are 204 miles of supply and distribution lines. New Mexico operates two wastewater treatment facilities with a combined capacity to process 0.62 million gallons per day. There are eight lift stations and 35 miles of sewer collection mains. Washington Water has long-term bank loans that are secured primarily by utility plant owned by Washington Water. Texas Water, through its majority ownership of BVRT, owns and operates four wastewater treatment plants. The plants have a capacity of 638,000 gallons-per-day. History California Water Service Group was founded in 1926. The company was incorporated in Delaware in 1999.