California American Water Applies for New Revenue to Fund Infrastructure and Service Improvements

Rhea-AI Summary

California American Water has submitted a proposed application for a rate adjustment to the California Public Utilities Commission, seeking to raise revenues by approximately $95 million from 2024 through 2026. The application, set to take effect on January 1, 2024, includes a $54 million increase in the first year. The funds will support $585 million for infrastructure improvements and compliance with regulations. The request is subject to public hearings and CPUC review, with a final decision expected in late 2023.

Positive

• Proposed revenue increase of $95 million over three years to support infrastructure improvements.
• Investment of $585 million aimed at enhancing water quality and service reliability.
• Continued commitment to customer assistance programs for those facing financial hardships.

Negative

• Increased rates may burden customers financially, pending CPUC approval.

Request reinforces company’s commitment to providing safe, reliable and affordable water and wastewater service

SAN DIEGO--(BUSINESS WIRE)-- California American Water today submitted a proposed application for a rate adjustment in each of its service areas for 2024 through 2026 to continue providing safe and reliable service. The company continues to make needed investments to replace aging infrastructure, comply with water quality and environmental regulations and meet customers’ water and wastewater service needs. The new rates would take effect January 1, 2024, pending approval by the California Public Utilities Commission (CPUC).

This application, which the company is required to submit every three years, is seeking to raise revenue by approximately $95 million over three years, beginning with a $54-million increase proposed for January 1, 2024. This increase is based on 2024 authorized revenues calculated at current rates. Specific increases for each service area will be addressed in the final application filing in July 2022.

The request includes approximately $585 million for approved and forecasted infrastructure improvements for 2022-2025 that will help maintain high-quality water service, as well as renew and replace water treatment facilities, pumps and pipelines.

“Our application balances the infrastructure investment and operations needed to maintain sustainable water and wastewater systems while addressing affordability and environmental sustainability,” said Kevin Tilden, President of California American Water. “This proposal seeks to continue to provide customers excellent value for their service and high-quality water and wastewater service.”

The infrastructure investments, which include upgrades to water distribution systems, water treatment facilities, storage tanks, meters and pumping stations, are necessary to maintain and improve water quality, reliability, fire protection and customer service for the communities served by California American Water.

The company will continue its commitment to conservation-oriented rate designs, which reward customers who conserve water with lower rates. The application also requests continuation of the company’s Customer Assistance Program and crisis assistance services to help customers experiencing financial hardship maintain their access to water service.

The increased rates proposed in the application are a request only and may change between the submittal date of May 2^nd and the final filing in July 2022. The CPUC will make the final decision regarding the actual increase. The CPUC will hold Public Participation Hearings to seek input from the public. California American Water will notify customers of the time, date and location once the hearings are set. This process will include independent review and public evidentiary hearings and rates will remain unchanged until this request undergoes extensive public scrutiny by the CPUC. The process is expected to conclude in late 2023, with new rates taking effect by January 1, 2024.

About California American Water: California American Water, a subsidiary of American Water (NYSE: AWK), provides high-quality and reliable water and wastewater services to more than 725,000 people. Information regarding California American Water’s service areas can be found on the company’s website www.californiaamwater.com.

About American Water: With a history dating back to 1886, American Water (NYSE: AWK) is the largest and most geographically diverse U.S. publicly traded water and wastewater utility company. The company employs more than 6,400 dedicated professionals who provide regulated and regulated-like drinking water and wastewater services to more than 14 million people in 24 states. American Water provides safe, clean, affordable and reliable water services to our customers to help keep their lives flowing. For more information, visit amwater.com and follow American Water on Twitter, Facebook and LinkedIn.

View source version on businesswire.com: https://www.businesswire.com/news/home/20220502005936/en/

California American Water Media

Evan Jacobs

California American Water

Director of External Affairs

Phone: 707-495-6135

Email: evan.jacobs@amwater.com

Source: California American Water

FAQ

What is the rate adjustment proposal submitted by California American Water?

California American Water has proposed a rate adjustment seeking to raise revenues by approximately $95 million over three years, starting with a $54 million increase on January 1, 2024.

When will the new rates for California American Water take effect?

The new rates are proposed to take effect on January 1, 2024, pending approval by the California Public Utilities Commission.

What is the purpose of the proposed infrastructure investments?

The proposed infrastructure investments of $585 million are aimed at maintaining high-quality water service and complying with environmental regulations.

How does California American Water support customers in financial hardship?

California American Water continues its Customer Assistance Program, which helps customers experiencing financial difficulties maintain access to water services.

What is the timeline for the CPUC decision on the rate adjustment?

The CPUC is expected to conclude its review and make a final decision on the rate adjustment by late 2023.