Cal Water news release

Disminución de tarifas solicitada

Woman holding glass of waterCosts Filing Reflects Regulated Utility's Actual Cost of Service

Cal Water submitted a filing with the California Public Utilities Commission (CPUC) yesterday to decrease revenue needed in its service areas by almost $18 million, due to changes in federal tax laws and CPUC-authorized capital equity and debt financing costs. If approved as submitted, new rates reflecting the lower tax rates and financing costs will be effective July 1, 2018.

Since the 2018 Tax Cuts and Jobs Act was enacted in December 2017, Cal Water has been tracking the effect of the new corporate tax rate and other tax law changes to deductions and deferred income taxes. The July 1 rate changes will reflect a decrease in the corporate tax rate from 35% to 21% as well as elimination of the Domestic Production Activities Deduction. In a later filing, Cal Water will apply a credit to customer bills to reflect the impact of all federal tax changes from Jan. 1 to June 30, 2018.

Additionally, earlier this year, the CPUC authorized lower capital financing costs for Cal Water for Jan. 1, 2018, through Dec. 31, 2020. The July 1 rates will reflect the lower authorized return on rate base of 7.48%, based on a 9.20% return on equity and 5.51% cost of debt. Similarly, in a later filing, Cal Water will apply a credit to customer bills to reflect the lower authorized financing costs from Jan. 1 to June 30, 2018.

In some service areas, previously requested revenue increases for water production costs and infrastructure improvements will go into effect at the same time. This decrease will offset the impact of any increases.

"At Cal Water, we are committed to providing a reliable supply of high-quality water to our customers. And, as a regulated utility, our water rates reflect the true cost of providing that service," said Martin A. Kropelnicki, President and CEO. "When costs increase, rates increase; however, when costs decrease, we will ensure our customers' rates also decrease. This is part of our promise to provide quality, service, and value."

Este comunicado de prensa incluye declaraciones prospectivas en concordancia con lo establecido por la Ley de Reforma de Litigios sobre Valores Privados de 1995 ("La Ley"). Tales declaraciones intentan tener la protección de lo dispuesto por las leyes de valores federales para los principios de "puerto seguro" establecidos por esta Ley. Dichas declaraciones se basan en información actualmente disponible, expectativas, estimaciones, presunciones y proyecciones y criterios de manejo sobre la Compañía, la industria de servicios públicos del agua y las condiciones económicas generales. Tales palabras como podría, espera, pretende, planea, cree, estima, asume, anticipa, proyecta, predice, pronostica o variaciones de dichas palabras o expresiones similares tienen la intención de identificar a las declaraciones prospectivas. Las declaraciones prospectivas no son garantías de acciones futuras. Las mismas están sujetas a los cambios e incertidumbre de las circunstancias. Los resultados reales pueden variar materialmente del contenido de las declaraciones prospectivas. Factors that may cause a result different than expected or anticipated include, but are not limited to: governmental and regulatory commissions' decisions; 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; inability to renew leases to operate city water systems on beneficial terms; changes in California State Water Resources Control Board water quality standards; changes in environmental compliance and water quality requirements; electric power interruptions; changes in customer water use patterns and the effects of conservation; the impact of weather and climate on water availability, water sales and operating results; the unknown impact of contagious diseases on the Company's operations; civil disturbances or terrorist threats or acts, or apprehension about the possible future occurrences of acts of this type; labor relations matters as we negotiate with the unions; restrictive covenants in or changes to the credit ratings on our current or future debt that could increase our financing costs or affect our ability to borrow, make payments on debt or pay dividends; and, other risks and unforeseen events. Al considerar las declaraciones prospectivas, usted debe tener en cuenta las declaraciones preventivas que se incluyen en este párrafo, al igual que el informe anual 10-K, el informe trimestral 10-Q y otros informes presentados ocasionalmente ante la Comisión de Valores y Bolsa (SEC, siglas en inglés). La Compañía no asume ninguna obligación de proporcionar actualizaciones de las declaraciones prospectivas por medios públicos.