California Public Utilities Commission Approves Revised Cost of Capital Proposed Decision

California Water Service Return on Equity Set at 9.2%

SAN JOSE, Calif., March 22, 2018 (GLOBE NEWSWIRE) -- Today, the California Public Utilities Commission adopted a revised proposed decision in the cost of capital proceeding for California Water Service (Cal Water) and three other water utilities for the years 2018-2020, establishing for Cal Water a 9.20% return on equity and a 5.51% cost of debt, with a capital structure of 46.60% long-term debt and 53.40% common equity, and an authorized return on rate base of 7.48%, compared with Cal Water’s prior return on equity of 9.43%, cost of debt of 6.24%, and authorized return on rate base of 7.94%. The adopted capital structure did not change.  

The adopted returns on debt and equity will reduce Cal Water’s 2018 adopted revenue by approximately $6 million, of which $4.5 million is estimated to be driven by our lower cost of debt (which is a pass-through cost) and $1.5 million is estimated to be a reduction of return on equity for stockholders.

The Commission also authorized continuation of the Water Cost of Capital Mechanism (WCCM), which provides for an adjustment in the return on equity if the cost of long-term debt as defined by an index of utility debt rates varies from the most recent index by 100 basis points or more in 2019 and 2020. 

Cal Water is the largest subsidiary of California Water Service Group (NYSE:CWT).  Group’s subsidiaries, which also include Washington Water Service, New Mexico Water Service, and Hawaii Water Service, provide regulated and non-regulated water service to approximately 2 million people in more than 100 California, Washington, New Mexico, and Hawaii communities. Group's common stock trades on the New York Stock Exchange under the symbol "CWT." Additional information is available online at

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