SJW Group Announces Deferral of San Jose Water Company’s Cost of Capital Filing to May 1, 2026

Key Takeaways:

• Deferral of the Cost of Capital filing to May 1, 2026, effective January 1, 2027.
• Water Cost of Capital Mechanism remains in place until January 1, 2027.
• Return on equity maintained at 9.81%, prior to adjustments from the WCMA.
• Administrative costs reduced for both SJW Group and the CPUC staff.
• Deferral linked to conservation efforts due to a reservoir offline for seismic improvements.

SJW Group Announces Deferral of Cost Filing

San Jose, Calif., Jan. 16, 2025 — In a strategic move to enhance operational efficiency, SJW Group announced the deferral of San Jose Water Company’s Cost of Capital (COC) filing to May 1, 2026. The California Public Utilities Commission (CPUC) approved this postponement in a letter dated January 14, 2025.

Understanding the Cost of Capital Filings

Cost of Capital filings are regulatory submissions that outline a utility’s financial parameters, including return on equity and capital structure. Typically required every three years, these filings inform rate-setting processes that impact both the company and its customers. The last COC decision for San Jose Water Company was issued on June 29, 2023.

Details and Implications of the Deferral

Originally scheduled for May 1, 2025, the Joint Parties — comprising San Jose Water Company and three other California water utilities — sought a one-year deferral to alleviate administrative burdens. The CPUC granted this request, signaling a collaborative effort to streamline regulatory procedures.

“The deferral includes a provision that the Water Cost of Capital Mechanism (WCCM) remains in place until January 1, 2027,” the company stated. This mechanism allows for adjustments in return on equity in response to changes in the Moody’s Aa Utility Bond Index, ensuring financial stability during the deferral period.

Maintaining Financial Stability

San Jose Water Company will maintain a 9.81% return on equity, preserving the 10.01% rate prior to a 20 basis point reduction associated with the Water Conservation Memorandum Account (WCMA). This approach underscores SJW Group’s commitment to fiscal responsibility and investor confidence.

Administrative Efficiency and Cost Reduction

By postponing the filing, both the utility companies and CPUC staff anticipate a reduction in administrative processing costs. The deferral allows resources to be allocated more effectively, benefiting stakeholders across the board.

Environmental Considerations and Infrastructure

The WCMA plays a significant role due to a voluntary 15% water reduction requested from San Jose Water’s wholesaler. This conservation effort arises from a large reservoir being offline for seismic dam improvements, highlighting the company’s dedication to infrastructure safety and environmental stewardship.

Looking Ahead

As SJW Group continues to serve nearly 1.6 million people, the deferral of the Cost of Capital filing reflects its proactive approach to operational efficiency and regulatory compliance. The company remains focused on investing in its operations and delivering sustainable value to stockholders.

For more information about SJW Group, please visit www.sjwgroup.com .