California Water Service Group Receives Proposed Decision on 2024 General Rate Case

Date: March 17, 2026

Contact: Jim Lynch, (408) 367-8200 | Shann, 367-8243

Key Highlights for Investors

• Proposed Decision Issued by California Public Utilities Commission (CPUC): On March 13, 2026, the CPUC issued a proposed decision (PD) on California Water Service’s (Cal Water) 2024 General Rate Case (GRC), which is a critical regulatory event for the company.
• Significant Authorized Revenue Increases:
  • 2026: Additional revenues of \$92.3 million (an 11.1% rate increase)
  • 2027: Additional revenues of \$50.8 million (a 5.5% rate increase)
  • 2028: Additional revenues of \$52.4 million (a 5.4% rate increase)

  These substantial rate increases are likely to have a direct impact on the Company’s earnings and cash flow in the coming years.

• Pending Infrastructure Investment Budget: The final infrastructure investment budget for 2025 through 2027 was not included in the PD but is expected as an attachment to the final decision. Investors should monitor for further updates, as approved capital investments could affect future rate base and earnings.

Details and Implications for Shareholders

• Regulatory Mechanism Updates: The PD does not authorize the company’s request to decouple sales from revenues, a mechanism that would have helped promote conservation and potentially lower water rates for low-income, low-water-using customers. However, the PD does reauthorize the Monterey-Style Water Revenue Adjustment Mechanism and water production incremental cost balancing accounts. This maintains some revenue stability for the company, but not to the full extent initially requested.
• Sales Reconciliation Mechanism: The decision establishes a new sales reconciliation mechanism, allowing Cal Water to adjust sales forecasts on an annual basis. This is expected to help the company better recover its fixed costs regardless of actual water sales, thus reducing volatility in earnings due to fluctuations in water usage.
• Next Steps and Potential Share Price Impact:
  • Cal Water will submit written comments by April 2, 2026, and oral arguments will be scheduled. The CPUC is expected to adopt a final decision on or shortly after April 30, 2026.
  • The outcome of these regulatory processes can be highly price-sensitive, as changes in authorized revenue, infrastructure spending, or rate mechanisms could significantly impact Cal Water’s future profitability and cash flow.
• Forward-Looking Statements and Risks: The release contains forward-looking statements, including expectations about regulatory outcomes. There are inherent uncertainties, and actual results may differ due to various risk factors identified in Cal Water’s filings with the SEC. Investors should remain aware of these risks when considering their positions.

About California Water Service Group

California Water Service Group (NYSE: CWT) is the parent company of regulated utilities in California, Hawaii, New Mexico, Washington, and Texas. It serves more than 2.1 million people and also provides non-regulated water and wastewater services. For more information, visit www.calwatergroup.com.

Potential Share Price Drivers

• The proposed rate increases (11.1% in 2026, 5.5% in 2027, 5.4% in 2028) could enhance revenue and profit outlook, which is typically a positive for share valuation.
• The final decision on infrastructure investments could lead to further re-rating of the shares, depending on the scale and approval of capital programs.
• The lack of approval for full revenue decoupling may temper the positive effects, as some earnings volatility remains tied to actual water sales.
• Any material change in the CPUC’s final decision, due in late April 2026, could quickly move the share price.

Next Milestones for Investors to Watch

• Written comments from Cal Water due by April 2, 2026.
• Oral arguments to be scheduled (date TBD).
• Final CPUC decision expected April 30, 2026, or shortly thereafter.

Disclaimer: This article contains information derived from public filings and statements by California Water Service Group. It may contain forward-looking statements subject to risks and uncertainties. Actual results may differ materially due to changes in regulatory decisions, market conditions, or other factors. This article does not constitute investment advice. Investors are encouraged to review the company’s filings with the SEC and consult their own advisors before making investment decisions. The author and publisher accept no liability for any actions taken based on this article.

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