California Water Service Group

California Water Service Group is a regulated water utility holding company based in San Jose, California, with roots dating back to 1926 through its operating company Cal Water. Its core business is the production, purchase, treatment, storage, distribution, and sale of water for domestic, industrial, public, and irrigation uses, along with some wastewater collection and treatment services. The company serves approximately two million people through regulated districts in California and additional operations in other western U.S. markets. It also earns non-regulated revenue from municipal system operations, billing, meter reading, lab services, antenna-site leases, and other water-related contracts.

32,9 %

13,3 %

+6,4 %

0.85

0.85

— California Water Service Group
%
Regulated water utility services91% Core CPUC-regulated water supply, treatment, storage, distribution, and fire-protection service to residential, commercial, industrial, and public customers.
Wastewater services3% Collection, treatment, and recycling services provided in selected service areas and through utility development projects.
Non-regulated municipal contracts4% Operation and maintenance of municipally owned or privately owned water systems, including billing and customer service work.
Leased water systems1% Revenue from operating leased systems such as the City of Hawthorne and City of Commerce under lease arrangements.
Other non-regulated services1% Communication antenna-site leases, lab services, and other utility-related services outside regulated tariffs.

The company primarily serves end users of water within its regulated service areas, including households, businesses,...

  • Regulated retail water customersprimary

    Households, businesses, industrial users, and public entities in CPUC-regulated districts buying essential water service and fire-protection capacity.

  • Municipal contract customerssecondary

    Cities and public agencies that outsource operation, maintenance, billing, and customer service for owned water systems.

  • Leased-system customerssecondary

    Customers served through the City of Hawthorne and City of Commerce lease arrangements, where the company operates the systems and keeps customer billings.

  • Private non-regulated customersemerging

    Private companies and other non-utility counterparties buying water-related support services such as lab work and system services.

California is the company’s dominant market, accounting for about 89.0% of customer connections and 91...

  • •California is the core market and the main source of regulated revenue
  • •20 CPUC-regulated districts create a dense but state-dependent footprint
  • •Western U.S. expansion is a strategic focus, especially Nevada and Oregon
  • •Hawaii adds a separate regulated utility market and rate-case exposure
  • •Non-regulated contracts are also concentrated in western municipalities
  • •Geography matters because drought, wildfire, and permitting affect operations

The company’s strategy is centered on expanding its regulated and non-regulated water and wastewater footprint in the...

01
Western U.S. expansionmedium-term

Adds regulated and contract-based growth opportunities beyond California and reduces reliance on a single state.

02
Infrastructure modernizationmedium-term

Pipeline replacement, water quality upgrades, and metering investments support reliability and future rate base growth.

03
Rate recovery and revenue stabilizationshort-term

Regulated utilities depend on timely approval of rates to recover costs and earn allowed returns.

The business is highly dependent on regulatory approvals, because most revenue comes from rates set by public utility...

high

Regulatory recovery risk

Most revenue depends on CPUC and other commission-approved rates, so delays or disallowances can leave costs unrecovered.

Scope
California regulated operations
Materiality
high
high

Water supply and drought risk

Supply depends on rainfall, reservoirs, groundwater, wholesalers, and legal use restrictions beyond management control.

Scope
All service territories, especially California
Materiality
high
high

Cybersecurity risk

Utility operations and third-party vendors are exposed to increasingly sophisticated attacks, and insurance may not cover all losses.

Scope
Operational technology and customer systems
Materiality
high
medium

Seasonality and weather-driven demand risk

Water usage is lower in wet winter months and can fall further in cool or wet summers, reducing cash flow and increasing borrowing needs.

Scope
Operating cash flow
Materiality
medium
medium

Municipal counterparty risk

Some contracts depend on the financial strength and operations of cities and other public entities.

Scope
Non-regulated contracts and leases
Materiality
medium
Regulated utility accounting
Affects earnings timing, balance sheet size, and comparability across periods
IRMA and MWRAM balancing accounts
Can materially increase or decrease reported revenue in a given quarter or year
Seasonality
Reduces quarter-to-quarter comparability
Income tax legislation and interpretation
Could change effective tax rate and deferred tax balances
Pensions and postretirement benefits
Affects operating expense and long-term liabilities

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: 11/08/2026