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Cal Water filed its triennial, required GRC and Infrastructure Improvement Plan in July 2024. According to the CPUC's 18-month GRC cycle, any changes in rates determined by the CPUC for the period of 2026 through 2028 were to take effect Jan. 1, 2026.

The CPUC may authorize interim rates when a final decision in a regulated utility's rate case is delayed past the first day new rates would have become effective. Because the proceeding has been delayed through no fault of Cal Water, the CPUC approved the interim rates, as doing so may reduce the compounded effect of delayed recovery. Interim rates are subject to refund or adjustments, depending on the final, approved rates.

"As we keep affordability for our customers top of mind, we appreciate the CPUC for approving interim rate adjustments while it continues to review our Infrastructure Improvement Plan," said Martin A. Kropelnicki, California Water Service Group Chairman and CEO. "Because delayed rate case decisions can adversely impact customers by requiring higher retroactive recovery surcharges on top of final rate changes, these interim rates will help mitigate those impacts while also enabling us to continue making important infrastructure improvements to help keep the water we deliver safe, clean, and reliable."

This news release contains forward-looking statements within the meaning established by the Private Securities Litigation Reform Act of 1995 (PSLRA). The forward-looking statements are intended to qualify under provisions of the federal securities laws for "safe harbor" treatment established by the PSLRA. Forward-looking statements in this news release are based on currently available information, expectations, estimates, assumptions and projections, and our management's beliefs, assumptions, judgments and expectations about us, the water utility industry and general economic conditions. These statements are not statements of historical fact. When used in our documents, statements that are not historical in nature, including words like will, would, expects, intends, plans, believes, may, could, estimates, assumes, anticipates, projects, progress, predicts, hopes, targets, forecasts, should, seeks, commits or variations of these words or similar expressions are intended to identify forward-looking statements. Examples of forward-looking statements in this news release include, but are not limited to, statements describing the impact of the 2024 GRC and Infrastructure Improvement Plan decision and impacts of the interim rate adjustments authorized by the CPUC. Forward-looking statements are not guarantees of future performance. They are based on numerous assumptions that we believe are reasonable, but they are open to a wide range of uncertainties and business risks. Consequently, actual results or outcomes may vary materially from what is contained in a forward-looking statement. Factors that may cause actual results or outcomes to be different than those expected or anticipated include but are not limited to those described under the section titled "Risk Factors" and elsewhere in our most recent Annual Report on Form 10-K, our subsequent Quarterly Reports on Form 10-Q and our other Securities and Exchange Commission filings. In light of these risks, uncertainties and assumptions, investors are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date of this news release. We are not under any obligation, and we expressly disclaim any obligation to update or alter any forward-looking statements, whether as a result of new information, future events or otherwise.

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"As a trusted water provider, we work each day to provide firefighters the reliable water they need to protect our communities. As a valued community partner, it is important to us to go a meaningful step further," said Marty Kropelnicki, Cal Water Chairman and CEO. "By helping to fund the purchase of some of the critical resources and equipment our fire departments need, we can help our local heroes better protect our communities."

From larynogoscopes for pre-hospital emergency care to ventilation fans and gas detection equipment, the 2025 grants will offset costs associated with fire protection, personal protective equipment, training, and firefighter wellbeing. This year's recipients include:

• Bakersfield Fire Department, for specialized equipment that will support the department's Urban Search and Rescue response capability by enhancing the functionality of the GK1935 Shelter System, which serves as a deployable base of operations during significant incidents, disasters, or rescue missions.
• Chico Fire Department, for new gas detection equipment that will enhance firefighter safety and improve the department's ability to protect the public from unseen hazards.
• City of Lomita, to help make local fire station improvements.
• Los Angeles County Fire Department, to support its K9 search and rescue dog program.
• Salinas Fire Department, for video laryngoscopes to provide pre-hospital emergency care, which are designed to enhance the quality of life-saving interventions.
• San Mateo Consolidated Fire Department, for three 3,000-gallon SnapTanks, which are portable, collapsible water storage systems designed for rapid deployment in emergency and firefighting operations.
• South San Francisco Fire Department, for one LION Smart Dummy Thermal Manikin to more accurately simulate victims during fire training exercises.
• Stockton Fire Department, for essential wildland personal protective equipment and advanced wildland training to strengthen firefighter safety and operational readiness during wildland and wildland-urban interface incidents.
• Visalia Fire Department, for four Tempest VS-1.2 battery-powered positive pressure ventilation fans that will replace aging, gasoline-powered ventilation units mounted on front-line engines.

The firefighter grants are funded through Cal Water's philanthropic giving program and do not affect customer rates.

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"We thank Santa Claus, for once again, prioritizing the children of Southern Monterey County. With families from Lockwood to Soledad participating this year, the magic we can make together is growing," Monterey County Supervisor Chris Lopez said. "With over 100 elves from the community joining our partners, it shows that this is a community where we look out for one another. I hope these are memories that will last generations."

It was an honor to be a part of bringing joy to the community through Operation Santa, said Steve Vasquez, Operations Manager of California Water Service's King City District. "We are absolutely honored to be able to help serve our community and witness the joy of the season," he said. "At Cal Water, we aren't just a water company, we are part of our communities, and we recognize the importance of caring for the people in the communities we serve."

The event, in its fifth year, gave families a chance to enjoy food and music as they awaited Santa's arrival. Once on ground from the helicopter provided by Fort Hunter Liggett, Santa listened to little ones' requests and took photos before waving farewell to families that were leaving with pozole boxes and gifts in tow.

Operation Santa was brought to residents by Monterey County Supervisor Chris Lopez and local water utility California Water Service, and supported by Speaker of the Assembly Robert Rivas, Fort Hunter Liggett, Food Bank for Monterey County, City of King, King City Police Department, Chevron, Greenfield Police Department, Waste Management, Salinas Valley Fair King City, Clinica de Salud del Valle de Salinas, and County Employees Management Association.

About Supervisor Chris Lopez

Chris Lopez is the Supervisor to the constituents of Monterey County's Third District, which is home to some of the world's richest farmland and dedicated workforce of farmers, farmworkers, and laborers that feed the nation. The District stretches from Williams Road in Salinas in the North, to Bryson-Hesperia and Ranchita Canyon in the South. The District is also home to the cities of King City, Greenfield, Soledad, Gonzales, and Salinas, as well as the communities of Bryson-Hesperia, San Ardo, San Lucas, Parkfield, Ranchita Canyon, Jolon, Bradley, Lockwood, Pine Canyon, Arroyo Seco, Chualar, and others.

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Palm Mutual, located two miles from Cal Water's Northeast Bakersfield Treatment Plant, currently serves 63 residential customers. Cal Water already serves Palm Mutual through a master meter interconnection, since the latter does not own or operate its own sources of supply. Cal Water intends to upgrade the system's infrastructure over time to help provide consistent and high-quality operations to Palm Mutual customers.

"We appreciate the CPUC, along with the State Water Resources Control Board's Division of Drinking Water, for their diligence and efforts to help provide safe, reliable water to Palm Mutual's customers long-term," said Martin A. Kropelnicki, Cal Water Chairman and Chief Executive Officer. "We look forward to working through the final steps, completing the acquisition, and officially welcoming Palm Mutual's customers to the Cal Water family."

When the acquisition is finalized, Palm Mutual customers will be served by Cal Water's Bakersfield District. The Bakersfield District provides safe, clean, reliable water to about 445,600 people currently through approximately 120,000 service connections in its system along with the City of Bakersfield water system, which it operates. The purchase remains subject to customary closing conditions and is expected to close in the first quarter of 2026.

This news release contains forward-looking statements within the meaning established by the Private Securities Litigation Reform Act of 1995 (PSLRA). The forward-looking statements are intended to qualify under provisions of the federal securities laws for "safe harbor" treatment established by the PSLRA. Forward-looking statements in this news release are based on currently available information, expectations, estimates, assumptions and projections, and our management's beliefs, assumptions, judgments and expectations about us, the water utility industry and general economic conditions. These statements are not statements of historical fact. When used in our documents, statements that are not historical in nature, including words like will, would, expects, intends, plans, believes, may, could, estimates, assumes, anticipates, projects, progress, predicts, hopes, targets, forecasts, should, seeks, commits or variations of these words or similar expressions are intended to identify forward-looking statements. Examples of forward-looking statements in this news release include, but are not limited to, statements describing Cal Water's expectations for closing the Palm Mutual acquisition and operating and investing in the Palm Mutual water system. Forward-looking statements are not guarantees of future performance. They are based on numerous assumptions that we believe are reasonable, but they are open to a wide range of uncertainties and business risks. Consequently, actual results or outcomes may vary materially from what is contained in a forward-looking statement. Factors that may cause actual results or outcomes to be different than those expected or anticipated include but are not limited to our ability to satisfy closing conditions for the Palm Mutual acquisition and integrate the business and operate the Palm Mutual water system in an effective and accretive manner as well as those described under the section titled "Risk Factors" and elsewhere in our most recent Annual Report on Form 10-K, our subsequent Quarterly Reports on Form 10-Q and our other Securities and Exchange Commission filings. In light of these risks, uncertainties and assumptions, investors are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date of this news release. We are not under any obligation, and we expressly disclaim any obligation to update or alter any forward-looking statements, whether as a result of new information, future events or otherwise.

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Q: What advancements did Cal Water make across its water conservation efforts? 

A: In 2025, we made significant strides in our conservation efforts, driven by both our conservation programs and partnership with our communities. This year, we launched our Plant Local initiative to promote our Lawn-to-Garden rebate program and the use of California-native plants, which not only promote water conservation, but also contribute to soil health, support local pollinators, and store carbon dioxide to help mitigate climate change. We hosted in-person Adopt-a-Plant events, where customers received free low-water-use plants and learned about water-wise best practices. We estimate that the holistic implementation of our indoor and outdoor conservation rebates and programs in 2024 will save more than 470 million gallons over their lifetime.

Q: How did Cal Water further integrate climate change mitigation into planning and operations this year, particularly concerning energy use and efficiency?

A: At Cal Water, we continue to find ways to mitigate our contribution to climate change in our day-to-day operations through a strategic planning framework. We remain steadfast in focusing on how we can increase our renewable energy; in fact, Cal Water recently committed to two on-site solar projects at our facilities. We will have a solar installation at our San Jose headquarters spanning nearly 11,400 square feet to directly power our administrative operations. Additionally, we announced a 20-year partnership with EDP Renewables to support our Bakersfield Northeast Treatment Plant with 3,800 megawatt-hours annually, significantly reducing its reliance on traditional grid power. These initiatives represent our dedication to reducing our carbon footprint.

Q: Over the past year, how has Cal Water worked to prepare for emergencies such as wildfires?

A: As a California utility, we recognize that being as prepared as possible for natural disasters and emergencies is a fundamental responsibility. Our Wildfire Taskforce continues to lead the charge in shaping our fire hardening strategy by overseeing training, directing vegetation management efforts, and coordinating the placement of critical equipment. We regularly inspect and upgrade infrastructure and collaborate closely with local governments and community leaders, fire departments, and other first responders to best support our communities. While our long-term commitment to reducing greenhouse gas emissions aims to address the root causes of climate change, our immediate focus for wildfire preparedness is protecting our infrastructure, coordinating the delivery of water for firefighting, and safeguarding our communities.

Q: How did Cal Water's infrastructure improvement projects in 2025 contribute to long-term water supply reliability and resilience?

A: At Cal Water, the long-term reliability and resilience of our water infrastructure are paramount. We understand that consistent, strategic investment is essential to the delivery of safe, clean, and reliable water for our customers' everyday needs and fire protection-for generations to come. To uphold our commitment, we are continuously investing in infrastructure across our service areas with projects such as replacing aging water mains to prevent leaks and installing larger water tanks to support peak demand or emergencies. Ultimately, these proactive investments are how we work to secure a sustainable and resilient water future for our communities.

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"Our customers' health and safety is our top priority. This water infrastructure upgrade helps us continue to deliver safe, clean, and reliable water to the Oaks Hills' community," said Brenda Granillo, Salinas District Manager, of the upgrade that started in February 2025. "Meeting the everyday and emergency needs of our customers is a responsibility that we take seriously."

The infrastructure improvement is one of two groundwater well sources in the Oak Hills water system, which is part of Cal Water's Salinas District. It helps treat water by removing hexavalent chromium, a contaminant that can be found in groundwater, making it safe to drink and use. This is the first non-regenerable ion exchange system implemented by Cal Water, which means it is a single-use water treatment method where special resin is removed once its capacity for removing contaminants has been exhausted. It's located west of Oak Hills Private Tennis Courts and produces 300 gallons of water per minute. This is just one of Cal Water's efforts to continually modernize and upgrade its water system so that it continues meeting federal regulations for customers.

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Forty-four residences struggling with failing private wells in the disadvantaged community of West Goshen now have access to safe, clean, reliable drinking water, as Cal Water completed connecting its water system to the homes. This consolidation was made possible by advocacy from community residents and funding obtained by the County of Tulare, with support by Community Water Center (CWC), from the California Department of Water Resources (DWR).

Through DWR's Small Community Drought Relief Program, CWC helped Tulare County secure $3.45 million in 2022 for the consolidation. The grant funds enabled Cal Water to extend its service and connect the 44 customers, whose private groundwater wells had gone dry or were found to contain harmful contaminants, no longer meeting California water quality standards. Cal Water had previously connected about 80 customers who were part of West Goshen Mutual Water Company to its Visalia system in 2014.

"We believe that everyone should have access to safe, clean, and reliable water, regardless of where you live," said Marty Kropelnicki, Cal Water Chairman and CEO. "We are pleased to have joined forces with Tulare County, Community Water Center, and the Department of Water Resources to make that a reality for West Goshen residents with a goal of improving their quality of life. This project is an excellent example of government, the local community, and Cal Water working together to address critical issues and improve lives."

"This project marks a transformative moment for the community. After years of advocacy and collaboration, we're proud to see clean, reliable water finally flowing into homes," said Supervisor Eddie Valero, who represents Tulare County's Fourth District, which includes Goshen. "This is what progress looks like: neighbors coming together with public and private sectors, working side-by-side for a healthier and more secure future for everyone."

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"This project reflects our commitment to providing safe, clean, reliable water to our customers' homes in Visalia," said Stuart Skoglund, Interim Visalia District Manager. "Our investment in infrastructure helps us deliver safe, clean drinking water and improves emergency readiness."

The projects, which began last month, are expected to be completed in January 2026. Work is taking place on the two main replacement projects from 8 a.m. to 5 p.m., Monday through Friday, in the following areas:

• On North Turner, Jacob, Stevenson, Highland, and Willis streets between West Houston and Harold avenues.
• On West Sweet and Harold avenues between North Turner Street and North Dinuba Boulevard.

Cal Water crews are making every effort to minimize traffic delays during construction.

The main replacement projects are part of Cal Water's broader commitment to proactive, ongoing maintenance and upgrades that support safe, high-quality drinking water.

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