American States Water Company Announces Proposed Decision Adopting Settlement Agreement In Its Water Utility General Rate Case
American States Water Company (NYSE:AWR) received a proposed decision from the California Public Utilities Commission (CPUC) regarding its water utility subsidiary's general rate case for 2025-2027. The decision approves a settlement agreement authorizing $573.1 million in capital infrastructure investments over three years, plus $58.2 million in ongoing advice letter capital investments. The proposal adopts GSWC's sales forecast and a compromise on supply mix, but rejects requests for full sales and revenue decoupling mechanism, transitioning instead to a modified rate adjustment mechanism. New rates will be effective January 1, 2025, with additional increases for 2026 and 2027 subject to earnings tests and inflation adjustments.
American States Water Company (NYSE:AWR) ha ricevuto una decisione proposta dalla Commissione Pubblica Utilità della California (CPUC) riguardo al caso generale delle tariffe della sua sussidiaria per il periodo 2025-2027. La decisione approva un accordo di transazione che autorizza 573,1 milioni di dollari in investimenti infrastrutturali di capitale distribuiti su tre anni, oltre a 58,2 milioni di dollari in investimenti di capitale per lettere di consulenza in corso. La proposta adotta la previsione di vendite di GSWC e un compromesso sulla combinazione delle forniture, ma respinge le richieste per un meccanismo completo di disaccoppiamento delle vendite e dei ricavi, passando invece a un meccanismo di adeguamento delle tariffe modificato. Le nuove tariffe saranno efficaci dal 1° gennaio 2025, con ulteriori aumenti per il 2026 e 2027 soggetti a test sui guadagni e adeguamenti per l'inflazione.
American States Water Company (NYSE:AWR) recibió una decisión propuesta de la Comisión de Servicios Públicos de California (CPUC) respecto al caso general de tarifas de su subsidiaria de servicios de agua para 2025-2027. La decisión aprueba un acuerdo de conciliación que autoriza 573,1 millones de dólares en inversiones de infraestructura de capital a lo largo de tres años, además de 58,2 millones de dólares en inversiones de capital por cartas de asesoramiento en curso. La propuesta adopta la previsión de ventas de GSWC y un compromiso sobre la mezcla de suministros, pero rechaza las solicitudes para un mecanismo completo de desacoplamiento de ventas y ingresos, transitando en su lugar a un mecanismo de ajuste de tarifas modificado. Las nuevas tarifas entrarán en vigor el 1 de enero de 2025, con aumentos adicionales para 2026 y 2027 sujetos a pruebas de ganancias y ajustes por inflación.
American States Water Company (NYSE:AWR)는 캘리포니아 공공 유틸리티 위원회(CPUC)로부터 2025-2027년 기간에 대한 물 공공 회사를 위한 일반 요금 사건에 대한 제안된 결정을 받았습니다. 이 결정은 3년에 걸쳐 5억 7310만 달러의 자본 인프라 투자와 5820만 달러의 지속적인 자문서 자본 투자를 승인하는 합의안을 승인합니다. 이 제안은 GSWC의 판매 예측을 채택하고 공급 혼합에 대한 타협을 포함하지만, 판매 및 수익 완전 분리에 대한 요청을 거부하고 대신 수정된 요금 조정 메커니즘으로 전환합니다. 새로운 요금은 2025년 1월 1일부터 발효되며, 2026년과 2027년에는 추가적인 인상이 이루어지며 이는 이익 테스트와 인플레이션 조정에 따라 달라질 수 있습니다.
American States Water Company (NYSE:AWR) a reçu une décision proposée de la Commission des services publics de Californie (CPUC) concernant le cas général des tarifs de sa filiale de services d'eau pour 2025-2027. La décision approuve un accord de règlement autorisant 573,1 millions de dollars d'investissements en infrastructure de capital sur trois ans, ainsi que 58,2 millions de dollars d'investissements en capital liés à des lettres de conseil en cours. La proposition adopte la prévision de ventes de GSWC et un compromis sur le mélange des approvisionnements, mais rejette les demandes de mécanisme complet de découplage des ventes et des revenus, passant à un mécanisme d'ajustement tarifaire modifié. Les nouveaux tarifs entreront en vigueur le 1er janvier 2025, avec des augmentations supplémentaires pour 2026 et 2027 sous réserve de tests de gains et d'ajustements pour l'inflation.
American States Water Company (NYSE:AWR) erhielt eine vorgeschlagene Entscheidung von der California Public Utilities Commission (CPUC) bezüglich des allgemeinen Tarifszenarios ihrer Wasserversorgertochtergesellschaft für 2025-2027. Die Entscheidung genehmigt eine Einigungsvereinbarung, die 573,1 Millionen Dollar in Investitionen in wirtschaftliche Infrastruktur über drei Jahre sowie 58,2 Millionen Dollar in laufenden Beratungskapitalinvestitionen autorisiert. Der Vorschlag übernimmt die Verkaufsprognose von GSWC und einen Kompromiss zur Versorgungsmischung, lehnt jedoch Anträge auf ein vollständiges Entkopplungsmechanismus von Verkäufen und Einnahmen ab und wechselt stattdessen zu einem modifizierten Tarifanpassungsmechanismus. Die neuen Tarife treten am 1. Januar 2025 in Kraft, wobei zusätzliche Erhöhungen für 2026 und 2027 an Ertragstests und Inflationsanpassungen gebunden sind.
- Authorization for $573.1 million in capital infrastructure investments over three years
- Approval of $58.2 million in additional advice letter capital investments
- Adoption of company's recommended sales forecast
- Approval for revenue requirement increases in service charges to 45-48%
- Rejection of full sales and revenue decoupling mechanism request
- Rejection of full cost balancing account for water supply
- Denial of PFAS memorandum account modification for tracking capital investment carrying costs
- Rejection of sales reconciliation and supply mix adjustment mechanisms
Insights
The proposed CPUC decision marks a significant regulatory development for AWR's subsidiary GSWC. The approval of
The shift to a modified Monterey-style WRAM and incremental cost balancing creates a less favorable regulatory framework compared to the current structure. The approved rate design allowing 45-48% of revenue requirements in service charges provides some revenue stability, though not as comprehensive as requested. The PFAS-related capital recovery pathway through separate applications adds procedural complexity but maintains recovery opportunities.
The settlement's approval with infrastructure spending authorization provides clear visibility on medium-term growth drivers, though the modified regulatory mechanisms may introduce more earnings volatility than the company's historical experience.
This regulatory outcome presents mixed implications for AWR's financial outlook. The substantial
The approved rate design with higher fixed cost recovery through service charges (45-48%) helps mitigate some revenue risk. The attrition year increases for 2026 and 2027, though subject to earnings tests, provide potential upside if inflation remains elevated. The rejection of the PFAS memorandum account modification may impact the timing of cost recovery for related investments but doesn't eliminate recovery potential.
On July 12, 2024, GSWC and the Public Advocates Office (“Cal Advocates”) at the CPUC filed a joint motion to adopt a settlement agreement between GSWC and Cal Advocates in the general rate case proceeding. The proposed decision approves and adopts the settlement agreement in its entirety. Among other things, the settlement agreement authorizes GSWC to invest approximately
Furthermore, the proposed decision addressed the two remaining unresolved 2025 revenue requirement issues related to GSWC’s sales forecast and supply mix. The proposed decision adopts GSWC’s recommended sales forecast and adopts a supply mix that splits the difference between GSWC’s and Cal Advocates’ forecasts. The proposed decision also addressed the unresolved issues related to GSWC’s requests for certain regulatory mechanisms. With regards to these requests, the proposed decision (i) rejects GSWC’s request for continuation of a full sales and revenue decoupling mechanism and a full cost balancing account for water supply, and instead orders GSWC to transition to a modified rate adjustment mechanism (a Monterey-style WRAM or “M-WRAM”) and an incremental cost balancing account for supply costs, (ii) rejects GSWC’s sales reconciliation and supply mix adjustment mechanisms, and (iii) rejects GSWC’s request to modify the existing per- and polyfluoroalkyl substances (“PFAS”) memorandum account to track carrying costs on capital investments needed to comply with the new PFAS maximum contaminant levels established by the Environmental Protection Agency, and instead orders GSWC to file for recovery of PFAS-related capital projects through a separate application or future general rate case. The proposed decision adopts GSWC’s M-WRAM rate design proposal, authorizing GSWC to increase the revenue requirement in its service charges to between 45
"We are pleased to have received a proposed decision approving the settlement agreement in its entirety for our water general rate case, which allows GSWC to continue investing in utility infrastructure to deliver safe and reliable water services to the communities we serve," said Robert J. Sprowls, President and CEO of American States Water Company. "We are, however, disappointed that the proposed decision did not adopt the full sales and revenue decoupling mechanism and full cost balancing account for water supply because we believe the decision on those requests is inconsistent with
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements can often be identified by words such as “anticipate,” “estimate,” “expect,” “intend,” “may,” “should” and similar phrases and expressions, and variations or negatives of these words. They are not guarantees or assurances of any outcomes, financial results, levels of activity, performance or achievements, and readers are cautioned not to place undue reliance upon them. The forward-looking statements are subject to a number of estimates and assumptions, and known and unknown risks, uncertainties and other factors, including those described in greater detail in the Company’s filings with the SEC, particularly those described in the Company’s Annual Report on Form 10-K and Quarterly Reports on Form 10-Q. Readers are encouraged to review the Company’s filings with the SEC for a more complete discussion of risks and other factors that could affect any forward-looking statements. The statements made herein speak only as of the date of this press release and except as required by law, the Company does not undertake any obligation to publicly update or revise any forward-looking statement.
About American States Water Company
American States Water Company is the parent of Golden State Water Company, Bear Valley Electric Service, Inc. and American States Utility Services, Inc., serving over one million people in ten states. Through its water utility subsidiary, Golden State Water Company, the company provides water service to approximately 264,600 customer connections located within more than 80 communities in Northern, Coastal and
AWR has paid common dividends every year since 1931, and has increased the dividends received by shareholders each calendar year for 70 consecutive years, which places it in an exclusive group of companies on the New York Stock Exchange that have achieved that result. The company has grown its quarterly dividend rate at a compound annual growth rate (“CAGR”) of
View source version on businesswire.com: https://www.businesswire.com/news/home/20241120999837/en/
Eva G. Tang
Senior Vice President-Finance, Chief Financial Officer, Corporate Secretary and Treasurer
Telephone: (909) 394-3600, ext. 707
Source: American States Water Company
FAQ
What is the total capital infrastructure investment approved for AWR's subsidiary in the 2025-2027 rate case?
When will AWR's new water rates take effect under the proposed decision?
What regulatory mechanisms were rejected in AWR's rate case proposal?
What percentage of service charge increase was approved for AWR in the rate case?
