New Mexico Water Service Receives NMPRC Approval to Acquire Animas Valley Water System

Rhea-AI Summary

California Water Service Group (CWT) has received regulatory approval from the New Mexico Public Regulation Commission to acquire the Morningstar Water System from Animas Valley Land and Water, LLC. This acquisition will extend New Mexico Water Service's reach to 2,000 customers in the northwest region of the state, enhancing its service offerings. The deal is expected to close in the first half of 2022, pending final approval from the San Juan County Court. Group President and CEO Martin A. Kropelnicki expressed optimism about the integration and service enhancement for new customers.

Positive

• Regulatory approval received for the acquisition of Morningstar Water System.
• Expansion of customer base by 2,000 connections, enhancing market presence.
• Strategic move to improve service offerings in New Mexico.

Negative

• Acquisition is subject to customary closing conditions and final court approval, which poses a risk of delays.

SAN JOSE, Calif., Feb. 22, 2022 (GLOBE NEWSWIRE) -- New Mexico Water Service (New Mexico Water), a subsidiary of California Water Service Group (Group) (NYSE: CWT), has received approval by the New Mexico Public Regulation Commission to acquire the Morningstar Water System assets of Animas Valley Land and Water, LLC (AV Water) and provide regulated water utility service to its customers. AV Water’s 2,000 customer connections in the northwest part of the state will become New Mexico Water’s Morningstar District.

The purchase is subject to customary closing conditions, along with final approval by the San Juan County Court. The transaction is expected to close in the first half of 2022.

“We look forward to welcoming AV Water customers to New Mexico Water and providing them excellent quality, service, and value,” said Martin A. Kropelnicki, Group President and CEO. “We appreciate the diligence by the New Mexico Public Regulation Commission in reviewing this transaction and look forward to working with the court and court-appointed receiver to complete the acquisition of our new Morningstar District.”

About New Mexico Water Service and California Water Service Group
New Mexico Water Service currently serves about 16,000 people through 8,500 water and wastewater service connections in its Rio Communities, Rio Del Oro, Meadow Lake, Indian Hills, Squaw Valley, Elephant Butte, Sandia Knolls, Juan Tomas, and Cypress Gardens systems in New Mexico. California Water Service Group is the parent company of regulated utilities California Water Service, Hawaii Water Service, New Mexico Water Service, Washington Water Service, and Texas Water Service, a utility holding company. Together, these companies provide regulated and non-regulated water service to more than 2 million people in California, Hawaii, New Mexico, Texas, and Washington. California Water Service Group’s common stock trades on the New York Stock Exchange under the symbol “CWT.” Additional information is available online at www.calwatergroup.com.

This news release contains forward-looking statements within the meaning established by the Private Securities Litigation Reform Act of 1995 ("Act"). The forward-looking statements are intended to qualify under provisions of the federal securities laws for "safe harbor" treatment established by the Act. Forward-looking statements are based on currently available information, expectations, estimates, assumptions and projections, and management's judgment about the Company, the water utility industry and general economic conditions. Such words as would, expects, intends, plans, believes, estimates, assumes, anticipates, projects, predicts, forecasts or variations of such words or similar expressions are intended to identify forward-looking statements. The forward-looking statements are not guarantees of future performance. They are subject to uncertainty and changes in circumstances. Actual results may vary materially from what is contained in a forward-looking statement. Factors that may cause a result different than expected or anticipated include, but are not limited to: ability to close the acquisition of AV Water, integrate the business, and operate the AV Water system in an effective and accretive manner; natural disasters, public health crises, pandemics, epidemics or outbreaks of a contagious disease, such as the outbreak of coronavirus (or COVID‐19); governmental and regulatory commissions' decisions, including decisions on proper disposition of property; consequences of eminent domain actions relating to our water systems; changes in regulatory commissions' policies and procedures; the timeliness of regulatory commissions' actions concerning rate relief and other actions; changes in water quality standards; changes in environmental compliance and water quality requirements; electric power interruptions; housing and customer growth trends; the impact of opposition to rate increases; our ability to recover costs; availability of water supplies; issues with the implementation, maintenance or security of our information technology systems; civil disturbances or terrorist threats or acts; the adequacy of our efforts to mitigate physical and cyber security risks and threats; the ability of our enterprise risk management processes to identify or address risks adequately; labor relations matters as we negotiate with unions; changes in customer water use patterns and the effects of conservation; the impact of weather, climate, natural disasters, and diseases on water quality, water availability, water sales and operating results, and the adequacy of our emergency preparedness; and, other risks and unforeseen events. When considering forward-looking statements, you should keep in mind the cautionary statements included in this paragraph, as well as the annual 10-K, quarterly 10-Q, and other reports filed from time-to-time with the Securities and Exchange Commission (SEC). The Company assumes no obligation to provide public updates of forward-looking statements.

Media Contact
Tom Smegal (investors)
tsmegal@calwater.com, 408-267-8200
Yvonne Kingman (media)
ykingman@calwater.com, 310-257-1434

FAQ

What is the significance of California Water Service Group's acquisition of Morningstar Water System?

The acquisition will expand California Water Service Group's customer base by 2,000 connections, enhancing its market presence in New Mexico.

When is the expected closing date for the Morningstar Water System acquisition?

The acquisition is expected to close in the first half of 2022, pending final court approval.

What regulatory approval did California Water Service Group receive for the acquisition?

California Water Service Group received approval from the New Mexico Public Regulation Commission for the acquisition.

How many customers will California Water Service Group serve after the acquisition?

After the acquisition, California Water Service Group will serve an additional 2,000 customers in the northwest part of New Mexico.

What potential risks are associated with the acquisition of AV Water?

The acquisition is subject to customary closing conditions and final court approval, which could lead to delays or complications.