Cover
Cover | 3 Months Ended |
Mar. 31, 2023 shares | |
Cover [Abstract] | |
Document Type | 10-Q |
Document Quarterly Report | true |
Document Period End Date | Mar. 31, 2023 |
Document Transition Report | false |
Entity File Number | 1-13883 |
Entity Registrant Name | CALIFORNIA WATER SERVICE GROUP |
Entity Incorporation, State or Country Code | DE |
Entity Tax Identification Number | 77-0448994 |
Entity Address, Address Line One | 1720 North First Street |
Entity Address, City or Town | San Jose |
Entity Address, State or Province | CA |
Entity Address, Postal Zip Code | 95112 |
City Area Code | 408 |
Local Phone Number | 367-8200 |
Title of 12(b) Security | Common Stock, $0.01 par value per share |
Trading Symbol | CWT |
Security Exchange Name | NYSE |
Entity Current Reporting Status | Yes |
Entity Interactive Data Current | Yes |
Entity Filer Category | Large Accelerated Filer |
Entity Small Business | false |
Entity Emerging Growth Company | false |
Entity Shell Company | false |
Entity Common Stock, Shares Outstanding | 55,991,000 |
Entity Central Index Key | 0001035201 |
Amendment Flag | false |
Current Fiscal Year End Date | --12-31 |
Document Fiscal Year Focus | 2023 |
Document Fiscal Period Focus | Q1 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Utility plant: | ||
Utility plant | $ 4,612,350 | $ 4,536,272 |
Less accumulated depreciation and amortization | (1,508,913) | (1,477,402) |
Net utility plant | 3,103,437 | 3,058,870 |
Current assets: | ||
Cash and cash equivalents | 52,286 | 62,100 |
Restricted cash | 34,153 | 22,925 |
Receivables: | ||
Customers, net | 46,539 | 55,079 |
Regulatory balancing accounts | 50,335 | 66,826 |
Other, net | 20,576 | 20,932 |
Unbilled revenue, net | 29,546 | 33,140 |
Materials and supplies | 13,287 | 12,564 |
Taxes, prepaid expenses, and other assets | 22,561 | 21,969 |
Total current assets | 269,283 | 295,535 |
Other assets: | ||
Regulatory assets | 293,263 | 283,620 |
Goodwill | 36,814 | 36,814 |
Other assets | 184,065 | 175,913 |
Total other assets | 514,142 | 496,347 |
TOTAL ASSETS | 3,886,862 | 3,850,752 |
Capitalization: | ||
Common stock, $0.01 par value; 136,000 shares authorized, 55,991 and 55,598 outstanding in 2023 and 2022, respectively | 560 | 556 |
Additional paid-in capital | 777,605 | 760,336 |
Retained earnings | 520,031 | 556,698 |
Noncontrolling interests | 4,792 | 4,804 |
Total equity | 1,302,988 | 1,322,394 |
Long-term debt, net | 1,052,337 | 1,052,487 |
Total capitalization | 2,355,325 | 2,374,881 |
Current liabilities: | ||
Current maturities of long-term debt, net | 3,300 | 3,310 |
Short-term borrowings | 130,000 | 70,000 |
Accounts payable | 120,198 | 140,986 |
Regulatory balancing accounts | 17,272 | 12,240 |
Accrued interest | 16,790 | 6,490 |
Accrued expenses and other liabilities | 62,744 | 61,624 |
Total current liabilities | 350,304 | 294,650 |
Deferred income taxes | 326,401 | 330,251 |
Pension | 79,245 | 78,443 |
Regulatory liabilities and other | 288,511 | 287,294 |
Advances for construction | 199,305 | 199,832 |
Contributions in aid of construction | 287,771 | 285,401 |
Commitments and contingencies (Note 10) | ||
TOTAL CAPITALIZATION AND LIABILITIES | $ 3,886,862 | $ 3,850,752 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Mar. 31, 2023 | Dec. 31, 2022 | Jul. 26, 2022 | Jul. 25, 2022 |
Statement of Financial Position [Abstract] | ||||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | $ 0.01 | |
Common stock, shares authorized (in shares) | 136,000,000 | 136,000,000 | 136,000,000 | 68,000,000 |
Common stock, shares outstanding (in shares) | 55,991,000 | 55,598,000 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Income Statement [Abstract] | ||
Operating revenue | $ 131,100 | $ 172,993 |
Operations: | ||
Water production costs | 55,008 | 61,538 |
Administrative and general | 35,986 | 33,411 |
Other operations | 16,604 | 25,852 |
Maintenance | 7,978 | 7,341 |
Depreciation and amortization | 29,915 | 28,770 |
Income tax benefit | (5,644) | (1,417) |
Property and other taxes | 8,777 | 8,360 |
Total operating expenses | 148,624 | 163,855 |
Net operating income | (17,524) | 9,138 |
Other income and expenses: | ||
Non-regulated revenue | 4,623 | 5,197 |
Non-regulated expenses | (2,275) | (6,986) |
Other components of net periodic benefit credit | 5,221 | 4,014 |
Allowance for equity funds used during construction | 1,404 | 975 |
Income tax expense on other income and expenses | (1,794) | (512) |
Net other income | 7,179 | 2,688 |
Interest expense: | ||
Interest expense | 12,818 | 11,495 |
Allowance for borrowed funds used during construction | (829) | (563) |
Net interest expense | 11,989 | 10,932 |
Net income | (22,334) | 894 |
Net (loss) income attributable to noncontrolling interests | (123) | (192) |
Net income attributable to California Water Service Group | $ (22,211) | $ 1,086 |
Earnings per share of common stock: | ||
Basic (in dollars per share) | $ (0.40) | $ 0.02 |
Diluted (in dollars per share) | $ (0.40) | $ 0.02 |
Weighted average shares outstanding: | ||
Basic (in shares) | 55,666 | 53,731 |
Diluted (in shares) | 55,666 | 53,775 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Operating activities: | ||
Net (loss) income | $ (22,334) | $ 894 |
Adjustments to reconcile net (loss) income to net cash provided by operating activities: | ||
Depreciation and amortization | 30,433 | 29,482 |
Change in value of life insurance contracts | (1,641) | 2,918 |
Allowance for equity funds used during construction | (1,404) | (975) |
Changes in operating assets and liabilities: | ||
Receivables and unbilled revenue | 17,089 | (10,079) |
Water Arrearages Payment Program | 0 | 20,836 |
Accounts payable | (11,230) | (11,617) |
Other current assets | (1,342) | (75) |
Other current liabilities | 10,024 | 12,656 |
Other changes in noncurrent assets and liabilities | 1,375 | 10,153 |
Net cash provided by operating activities | 20,970 | 54,193 |
Investing activities: | ||
Utility plant expenditures | (81,980) | (68,496) |
Life insurance proceeds | 0 | 1,727 |
Purchase of life insurance contracts | 0 | (1,727) |
Asset acquisition | (102) | (180) |
Net cash used in investing activities | (82,082) | (68,676) |
Financing activities: | ||
Short-term borrowings, net of issuance costs of $1,552 for 2023 and $0 for 2022 | 93,448 | 30,000 |
Repayment of short-term borrowings | (35,000) | (15,000) |
Repayment of long-term debt | (214) | (198) |
Advances and contributions in aid of construction | 3,696 | 7,774 |
Refunds of advances for construction | (2,248) | (2,355) |
Repurchase of common stock | (1,542) | (1,674) |
Issuance of common stock, net | 18,842 | 564 |
Dividends paid | (14,456) | (13,429) |
Net cash provided by financing activities | 62,526 | 5,682 |
Change in cash, cash equivalents, and restricted cash | 1,414 | (8,801) |
Cash, cash equivalents, and restricted cash at beginning of period | 85,025 | 80,653 |
Cash, cash equivalents, and restricted cash at end of period | 86,439 | 71,852 |
Supplemental information: | ||
Cash paid for interest (net of amounts capitalized) | 1,578 | 187 |
Supplemental disclosure of non-cash activities: | ||
Accrued payables for investments in utility plant | 42,038 | 57,733 |
Utility plant contribution by developers | $ 7,032 | $ 5,771 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Statement of Cash Flows [Abstract] | ||
Payments of debt issuance costs | $ 1,552 | $ 0 |
Organization and Operations and
Organization and Operations and Basis of Presentation | 3 Months Ended |
Mar. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Operations and Basis of Presentation | Organization and Operations and Basis of Presentation California Water Service Group (Company) is a holding company that provides water utility and other related services in California, Washington, New Mexico, Hawaii, and Texas through its wholly-owned and non-wholly owned subsidiaries. California Water Service Company (Cal Water), Washington Water Service Company (Washington Water), New Mexico Water Service Company (New Mexico Water), and Hawaii Water Service Company, Inc. (Hawaii Water), provide regulated utility services under the rules and regulations of their respective state’s regulatory commissions (jointly referred to as the Commissions). CWS Utility Services and HWS Utility Services LLC provide non-regulated water utility and utility-related services. TWSC, Inc. (Texas Water) holds regulated and contracted wastewater utilities. The Company operates in one reportable segment, providing water and water related utility services. Basis of Presentation The unaudited condensed consolidated interim financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP) for interim financial information and in accordance with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X promulgated by the Securities and Exchange Commission (SEC) and therefore do not contain all of the information and footnotes required by GAAP and the SEC for annual financial statements. Interim financial information includes the Company's accounts and those of its wholly and non-wholly owned subsidiaries. The non-wholly owned subsidiary was consolidated using the voting interest model as the Company owns a majority of the voting interests in the non-wholly owned subsidiary. The interim unaudited condensed consolidated financial statements should be read in conjunction with the Company’s consolidated financial statements included in its Annual Report on Form 10-K for the year ended December 31, 2022 as filed with the SEC on March 1, 2023. The preparation of the Company’s unaudited condensed consolidated interim financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the balance sheet dates and the reported amounts of revenues and expenses for the periods presented. These include, but are not limited to, estimates and assumptions used in determining the Company’s regulatory asset and liability balances based upon probability assessments of regulatory recovery, revenues earned but not yet billed, asset retirement obligations, allowance for credit losses, pension and other employee benefit plan liabilities, and income tax-related assets and liabilities. Actual results could materially differ from these estimates. In the opinion of management, the accompanying unaudited condensed consolidated interim financial statements reflect all adjustments, consisting of normal recurring transactions that are necessary to provide a fair presentation of the results for the periods covered. Due to the seasonal nature of the water business, the results for interim periods are not indicative of the results for a 12-month period. Revenue and income are generally higher in the warm, dry summer months when water usage and sales are greater. Revenue and income are generally lower in the winter months when cooler temperatures and rainfall curtail water usage and sales. Noncontrolling Interests Noncontrolling interests in the Company’s condensed consolidated financial statements represents a 6.2% interest not owned by Texas Water in a consolidated subsidiary. Texas Water obtained control over the subsidiary on May 1, 2021. Since the Company controls this subsidiary, its financial statements are consolidated with those of the Company, and the noncontrolling owner’s 6.2% share of the subsidiary’s net assets and results of operations is deducted and reported as noncontrolling interests on the condensed consolidated balance sheet and as net loss attributable to noncontrolling interests in the condensed consolidated statement of operations. The Company reports noncontrolling interests in consolidated entities as a component of equity separate from the Company’s equity. The Company’s net (loss) income attributable to California Water Service Group excludes a net loss attributable to the noncontrolling interests. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2023 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Operating revenue The following table disaggregates the Company’s operating revenue by source for the three months ended March 31, 2023 and 2022: Three Months Ended March 31 2023 2022 Revenue from contracts with customers $ 145,225 $ 158,933 Regulatory balancing account revenue (14,125) 14,060 Total operating revenue $ 131,100 $ 172,993 Revenue from contracts with customers The Company principally generates operating revenue from contracts with customers by providing regulated water and wastewater services at tariff-rates authorized by the Commissions in the states in which they operate and non-regulated water and wastewater services at rates authorized by contracts with government agencies. Revenue from contracts with customers reflects amounts billed for the volume of consumption at authorized per unit rates, for a service charge, and for other authorized charges. The Company satisfies its performance obligation to provide water and wastewater services over time as services are rendered. The Company applies the invoice practical expedient and recognizes revenue from contracts with customers in the amount for which the Company has a right to invoice. The Company has a right to invoice for the volume of consumption, for the service charge, and for other authorized charges. The measurement of sales to customers is generally based on the reading of their meters, which occurs on a systematic basis throughout the month. At the end of each month, the Company estimates consumption since the date of the last meter reading and the corresponding unbilled revenue is recognized. The estimate is based upon the number of unbilled days that month and the average daily customer billing rate from the previous month (which fluctuates based upon customer usage). Contract terms are generally short-term and at will by customers and, as a result, no separate financing component is recognized for the Company's collections from customers, which generally require payment within 30 days of billing. The Company applies judgment, based principally on historical payment experience, in estimating its customers’ ability to pay. Certain customers are not billed for volumetric consumption, but are instead billed a flat rate at the beginning of each monthly service period. The amount billed is initially deferred and subsequently recognized over the monthly service period, as the performance obligation is satisfied. The deferred revenue balance or contract liability, which is included in "accrued expenses and other liabilities" on the unaudited condensed consolidated balance sheets, is inconsequential. In the following table, revenue from contracts with customers is disaggregated by class of customers for the three months ended March 31, 2023 and 2022: Three Months Ended March 31 2023 2022 Residential $ 84,035 $ 91,743 Business 31,974 32,163 Multiple residential 14,997 14,817 Industrial 5,634 5,773 Public authorities 6,425 6,985 Other (a) 2,160 7,452 Total revenue from contracts with customers $ 145,225 $ 158,933 (a) Other includes accrued unbilled revenue. Regulatory balancing account revenue Regulatory balancing account revenue is revenue related to revenue mechanisms authorized in California by the California Public Utilities Commission (CPUC), which allow the Company to recognize revenue when it is objectively determinable, probable of recovery and expected to be collected within 24 months of the year-end in which the revenue is recognized, and are not considered contracts with customers. To the extent that revenue is estimated to be collectible beyond 24 months, recognition is deferred. Due to the delay in the resolution of the most recent General Rate Case (GRC) filing in California in July of 2021 by Cal Water (2021 GRC Filing), the Company did not benefit from any revenue mechanisms in the first quarter of 2023. For 2022, the Company's authorized revenue mechanisms included the Water Revenue Adjustment Mechanism (WRAM). The WRAM decoupled revenue from the volume of the sales and allowed the Company to recognize the adopted level of volumetric revenues. The variance between adopted volumetric revenues and actual billed volumetric revenues for metered accounts was recorded as regulatory balancing account revenue. No WRAM was recorded in 2023 as the revenue mechanism concluded on December 31, 2022. Regulatory balancing account revenue also includes revenue that is recognized for balancing accounts when it is probable that future recovery of previously incurred costs or future refunds that are to be credited to customers will occur through the ratemaking process. These mechanisms, such as the Modified Cost Balancing Account (MCBA), Conservation Expense Balancing Account (CEBA), Pension Cost Balancing Account (PCBA), and Health Cost Balancing Account (HCBA), generally provide for recovery of the adopted levels of expenses for purchased water, purchased power, pump taxes, water conservation program costs, pension, and health care. Variances between adopted and actual costs were recorded as regulatory balancing account revenue in 2022. In 2023, in connection with the CPUC's disallowance of the use of the WRAM, the variances for CEBA, HCBA, and PCBA are recorded against the originating expense. The MCBA was not recorded in 2023 as the mechanism concluded on December 31, 2022. The CPUC issued a decision effective August 27, 2020 requiring that Class A companies submitting GRC filings after the effective date be (i) precluded from proposing the use of a full decoupling WRAM in their next GRCs and (ii) allowed the use of Monterey-Style Water Revenue Adjustment Mechanisms (MWRAM). In addition, the CPUC's decision allowed for Incremental Cost Balancing Accounts (ICBAs) to replace the MCBA. The MWRAM tracks the difference between the revenue received for actual metered sales through the tiered volumetric rate and the revenue that would have been received with the same actual metered sales if a uniform rate had been in effect. The ICBA tracks differences between the authorized per-unit prices of water production costs and actual per-unit prices of water production costs. Cal Water complied with this decision in its 2021 GRC Filing and expects the MWRAM to be implemented in 2023 and effective retroactive back to January 1, 2023. For the first quarter of 2023, the Company did not record a regulatory asset or regulatory liability for the MWRAM or ICBAs. Non-regulated Revenue The following table disaggregates the Company’s non-regulated revenue by source for the three months ended March 31, 2023 and 2022: Three Months Ended March 31 2023 2022 Operating and maintenance revenue $ 3,235 $ 3,405 Other non-regulated revenue 782 1,150 Non-regulated revenue from contracts with customers 4,017 4,555 Lease revenue 606 642 Total non-regulated revenue $ 4,623 $ 5,197 Operating and maintenance services are provided for non-regulated water and wastewater systems owned by private companies and municipalities. The Company negotiates formal agreements with the customers, under which they provide operating, maintenance and customer billing services related to the customers’ water system. The formal agreements outline the fee schedule for the services provided. The agreements typically call for a fee-per-service or a flat-rate amount per month. The Company satisfies its performance obligation of providing operating and maintenance services over time as services are rendered; as a result, the Company employs the invoice practical expedient and recognizes revenue in the amount that it has the right to invoice. Contract terms are generally short-term and, as a result, no separate financing component is recognized for its collections from customers, which generally require payment within 30 days of billing. Other non-regulated revenue primarily relates to services for the design and installation of water mains and other water infrastructure for customers outside the regulated service areas and insurance program administration. Lease revenue is not considered revenue from contracts with customers and is recognized following operating lease standards. The Company is the lessor in operating lease agreements with telecommunications companies under which cellular phone antennas are placed on the Company's property. Allowance for credit losses The Company measures expected credit losses for Customer Receivables, Other Receivables, and Unbilled Revenue on an aggregated level. These receivables are generally trade receivables due in one year or less or expected to be billed and collected in one year or less. The expected credit losses for Other Receivables and Unbilled Revenue are inconsequential. Customer receivables include receivables for water and wastewater services provided to residential customers, business, industrial, public authorities, and other customers. The expected credit losses for business, industrial, public authorities, and other customers are inconsequential. The overall risks related to the Company’s receivables are low as water and wastewater services are seen as essential services. The estimate for the allowance for credit losses is based on a historical loss ratio, in conjunction with a qualitative assessment of elements that impact the collectability of receivables to determine if the allowance for credit losses should be further adjusted in accordance with the accounting guidance for credit losses. Management contemplates available current information such as changes in economic factors, regulatory matters, industry trends, payment options and programs available to customers, and the methods that the Company is able to utilize to ensure payment. The Company reviews its allowance for credit losses utilizing a quantitative assessment, which includes a trend analysis of customer billing and collection, aging by customer class, and unemployment rates. The Company also utilizes a qualitative assessment, which considers the future collectability on customer outstanding balances, management's estimate of the cash recovery, and a general assessment of the economic conditions of the locations the Company serves. Based on these assessments, the Company adjusted its allowance for credit losses accordingly. The following table presents the activity in the allowance for credit losses for the 3-month period ended March 31, 2023 and 12-month period ended December 31, 2022: Allowance for credit losses March 31, 2023 December 31, 2022 Beginning balance $ 5,629 $ 3,743 Provision for credit loss expense 939 5,887 Write-offs (1,592) (4,380) Recoveries 141 379 Total ending allowance balance $ 5,117 $ 5,629 Cash, Cash Equivalents, and Restricted Cash The following table provides a reconciliation of cash, cash equivalents, and restricted cash within the Condensed Consolidated Balance Sheets that sum to the total of the same such amounts shown on the Condensed Consolidated Statements of Cash Flows (see Note 10 for further details on restricted cash): March 31, 2023 December 31, 2022 Cash and cash equivalents $ 52,286 $ 62,100 Restricted cash 34,153 22,925 Total cash, cash equivalents, and restricted cash shown in the statements of cash flows $ 86,439 $ 85,025 |
Stock-based Compensation
Stock-based Compensation | 3 Months Ended |
Mar. 31, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Stock-based Compensation | Stock-based Compensation The Company's equity incentive plan was approved and amended by stockholders on April 27, 2005 and May 20, 2014, respectively. The Company is authorized to issue awards up to 2,000,000 shares of common stock. During the first three months of 2023, the Company granted Restricted Stock Awards (RSAs) to Officers and members of the Board of Directors. An RSA share represents the right to receive a restricted share of the Company's common stock and is valued based on the fair market value of the Company's common stock at the date of grant. RSAs granted to Officers vest over 36 months with the first year cliff vesting. In general, RSAs granted to Board members vest at the end of 12 months. The RSAs are recognized as expense evenly over 36 months for the shares granted to Officers and 12 months for the shares granted to Board members. As of March 31, 2023, there was approximately $3.5 million of total unrecognized compensation cost related to RSAs. The cost is expected to be recognized over a weighted average period of 2.0 years. A summary of the status of the outstanding RSAs as of March 31, 2023 is presented below: Number of RSA Shares Weighted-Average Grant-Date Fair Value RSAs at January 1, 2023 52,066 $ 55.77 Granted 42,301 55.46 Vested (28,426) 56.02 Forfeited — — RSAs at March 31, 2023 65,941 $ 55.47 During the first three months of 2023, the Company granted performance-based Restricted Stock Units (RSUs) to Officers. An RSU represents the right to receive a share of the Company's common stock. Each award reflects a target number shares of common stock that may be issued to the award recipient. The 2023 awards may be earned upon the completion of a 3-year performance period. Whether RSUs are earned at the end of the performance period will be determined based on the achievement of certain performance objectives set by the Organization and Compensation Committee of the Board of Directors in connection with the issuance of the RSUs. The performance objectives are based on the Company's business plan covering the performance period. The performance objectives include achieving the budgeted return on equity, growth in stockholders' equity, and environmental, social, and governance targets. Depending on the results achieved during the 3-year performance period, the actual number of shares that a grant recipient receives at the end of the performance period may range from 0% to 200% of the target shares granted, provided that the grantee is continuously employed by the Company through the vesting date. If prior to the vesting date employment is terminated by reason of death, disability or normal retirement, then a pro rata portion of this award will vest. The RSUs are recognized as expense ratably over the 3-year performance period using a fair market value of the Company's common share at the date of grant and an estimated number of RSUs that will vest during the performance period. As of March 31, 2023, there was approximately $3.9 million of total unrecognized compensation cost related to RSUs. The cost is expected to be recognized over a weighted average period of 2.1 years. A summary of the status of the outstanding RSUs as of March 31, 2023 is presented below: Number of RSU Shares Weighted-Average Grant-Date Fair Value RSUs at January 1, 2023 92,625 $ 54.06 Granted 42,464 55.46 Performance criteria adjustment 14,822 56.84 Vested (40,589) 56.84 Forfeited (9,250) 53.66 RSUs at March 31, 2023 100,072 $ 55.38 The Company has recorded compensation costs for the RSAs and RSUs that are included in administrative and general operating expenses in the amount of $0.1 million and $0.5 million for the three months ended March 31, 2023 and 2022, respectively. |
Equity
Equity | 3 Months Ended |
Mar. 31, 2023 | |
Equity [Abstract] | |
Equity | Equity On April 29, 2022, the Company entered into an equity distribution agreement to sell shares of its common stock having an aggregate gross sales price of up to $350.0 million from time to time depending on market conditions through an at-the-market equity program over the next three years. The Company intends to use the net proceeds from these sales, after deducting commissions on such sales and offering expenses, for general corporate purposes, which may include working capital, construction and acquisition expenditures, investments and repurchases, and redemptions of securities. The Company sold 326,042 shares of common stock through its at-the-market equity program and raised proceeds of $18.2 million, net of $0.2 million in commissions paid under the equity distribution agreement, during the three months ended March 31, 2023. As approved by the Company's stockholders at the 2022 Annual Meeting, effective July 26, 2022, the aggregate number of shares of common stock which the Company shall have authority to issue was increased from 68.0 million shares to 136.0 million shares. All of said 136.0 million shares shall be of one and the same series, namely shares with par value of $0.01 per share. The Company’s changes in total equity for the three months ended March 31, 2023 and 2022 were as follows: Three months ended March 31, 2023 Common Stock Additional Retained Noncontrolling Interests Total Equity Shares Amount (In thousands) Balance at January 1, 2023 55,598 $ 556 $ 760,336 $ 556,698 $ 4,804 $ 1,322,394 Net loss — — — (22,211) (123) (22,334) Issuance of common stock 420 4 17,380 — — 17,384 Repurchase of common stock (27) — — — — — Dividends paid on common stock ($0.2600 per share) — — — (14,456) — (14,456) Investment in business with noncontrolling interest — — (111) — 111 — Balance at March 31, 2023 55,991 560 777,605 520,031 4,792 1,302,988 Three months ended March 31, 2022 Common Stock Additional Retained Noncontrolling Interests Total Equity Shares Amount (In thousands) Balance at January 1, 2022 53,716 $ 537 $ 651,121 $ 514,873 $ 5,386 $ 1,171,917 Net income (loss) — — — 1,086 (192) 894 Issuance of common stock 85 1 1,106 — — 1,107 Repurchase of common stock (28) — (1,674) — — (1,674) Dividends paid on common stock ($0.2500 per share) — — — (13,429) — (13,429) Investment in business with noncontrolling interest — — (54) — 54 — Balance at March 31, 2022 53,773 538 650,499 502,530 5,248 1,158,815 |
(Loss) Earnings Per Share of Co
(Loss) Earnings Per Share of Common Stock | 3 Months Ended |
Mar. 31, 2023 | |
Earnings Per Share [Abstract] | |
(Loss) Earnings Per Share of Common Stock | arnings Per Share of Common Stock The computations of basic and diluted (loss) earnings per share of common stock are noted in the table below. Basic (loss) earnings per share of common stock is computed by dividing the net (loss) income attributable to California Water Service Group by the weighted average number of common shares outstanding during the period. RSAs are included in the weighted average common shares outstanding because the shares have all the same voting and dividend rights as issued and unrestricted common stock. Certain outstanding equity instruments are not included in the diluted (loss) earnings per share calculation because their inclusion would have been anti-dilutive. Three Months Ended March 31 2023 2022 (In thousands, except per share data) Net (loss) income $ (22,334) $ 894 Net loss attributable to noncontrolling interests $ (123) $ (192) Net loss attributable to California Water Service Group $ (22,211) $ 1,086 Weighted average common shares outstanding, basic 55,666 53,731 Weighted average common shares outstanding, dilutive 55,666 53,775 (Loss) earnings per share of common stock - basic $ (0.40) $ 0.02 (Loss) earnings per share of common stock - diluted $ (0.40) $ 0.02 |
Pension Plan and Other Postreti
Pension Plan and Other Postretirement Benefits | 3 Months Ended |
Mar. 31, 2023 | |
Retirement Benefits [Abstract] | |
Pension Plan and Other Postretirement Benefits | Pension Plan and Other Postretirement Benefits The Company provides a qualified, defined-benefit, non-contributory pension plan for substantially all employees. The Company makes annual contributions to fund the amounts accrued for in the qualified pension plan. The Company also maintains an unfunded, non-qualified, supplemental executive retirement plan. The costs of the plans are charged to expense or are capitalized in utility plant as appropriate. The Company offers medical, dental, vision, and life insurance benefits for retirees and their spouses and dependents. Participants are required to pay a premium, which offsets a portion of the cost. Cash contributions made by the Company to the pension plans were $2.9 million and $5.1 million for the three months ended March 31, 2023 and 2022, respectively. Cash contributions made by the Company to the other postretirement benefit plans were $0.2 million and $0.1 million for the three months ended March 31, 2023 and 2022, respectively. The total 2023 estimated cash contribution to the pension plans and other postretirement benefits plans are expected to be approximately $2.9 million and $0.2 million, respectively. The following tables list components of net periodic benefit costs for the pension plans and other postretirement benefits. The data listed under “pension plan” includes the qualified pension plan and the non-qualified supplemental executive retirement plan. The data listed under “other benefits” is for all other postretirement benefits. Three Months Ended March 31 Pension Plan Other Benefits 2023 2022 2023 2022 Service cost $ 6,046 $ 9,235 $ 1,126 $ 1,683 Interest cost 8,746 6,329 1,297 1,008 Expected return on plan assets (13,421) (11,307) (2,636) (2,482) Amortization of prior service cost 131 242 39 39 Recognized net actuarial (gain) loss (637) 999 (581) (228) Net periodic benefit cost (benefit) $ 865 $ 5,498 $ (755) $ 20 Service cost portion of the pension plan and other postretirement benefits is recognized in "administrative and general" expenses within the Condensed Consolidated Statements of Operations. Other components of net periodic benefit costs include interest costs, expected return on plan assets, amortization of prior service costs, and recognized net actuarial loss and are reported together as "other components of net periodic benefit cost" within the Condensed Consolidated Statements of Operations. |
Short-term and Long-term Borrow
Short-term and Long-term Borrowings | 3 Months Ended |
Mar. 31, 2023 | |
Debt Disclosure [Abstract] | |
Short-term and Long-term Borrowings | Short-term and Long-term Borrowings On March 31, 2023, the Company and Cal Water entered into syndicated credit agreements, which provide for unsecured revolving credit facilities of up to an initial aggregate amount of $600.0 million for a term of five years. The Company and subsidiaries that it designates may borrow up to $200.0 million under the Company’s revolving credit facility (the Company facility). Cal Water may borrow up to $400.0 million under its revolving credit facility (the Cal Water facility). Additionally, the credit facilities may be increased by up to an incremental $150.0 million under the Cal Water facility and $50.0 million under the Company facility, subject in each case to certain conditions. At the Company’s or Cal Water's option, as applicable, borrowings under the Company and Cal Water facilities, as applicable, will bear interest annually at a rate equal to (i) the base rate, plus an applicable margin of 0.00% to 0.250%, depending on the Company and its subsidiaries' consolidated total capitalization ratio, or (ii) Term SOFR, plus an applicable margin of 0.800% to 1.250%, depending on the Company and its subsidiaries' consolidated total capitalization ratio. The Company and Cal Water facilities contain affirmative and negative covenants and events of default customary for credit facilities of this type including, among other things, limitations and prohibitions relating to additional indebtedness, liens, mergers, and asset sales. Also, the Company and Cal Water facilities contain financial covenants governing the Company and its subsidiaries' consolidated total capitalization ratio and interest coverage ratio. As of March 31, 2023, the Company and Cal Water are in compliance with all of the covenant requirements and are eligible to use the full amount of the undrawn portion of the Company and Cal Water facilities, as applicable. The outstanding borrowings on the Company facility as of each of March 31, 2023 and December 31, 2022 were $35.0 million. Outstanding borrowings on the Cal Water facility as of March 31, 2023 and December 31, 2022 were $95.0 million and $35.0 million, respectively. The average borrowing rate for borrowings on the Company and Cal Water facilities during the three months ended March 31, 2023 was 5.49% compared to 0.98% for the same period last year. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The Company adjusts its effective tax rate each quarter to be consistent with the estimated annual effective tax rate. The Company also records the tax effect of unusual or infrequently occurring discrete items. The provision for income taxes is shown in the tables below: Three Months Ended March 31 2023 2022 Income tax benefit $ (3,850) $ (905) Income tax benefit increased $3.0 million to $3.9 million in the first quarter of 2023 as compared to $0.9 million income tax benefit in the first quarter of 2022, primarily due to an increase in the pre-tax loss in the first quarter of 2023 as compared to the first quarter of 2022. The Company’s effective tax rate was 14.6% before discrete items as of March 31, 2023 and 12.0% as of March 31, 2022. The increase in the effective tax rate was primarily due to a decrease in the refunds of excess deferred federal income taxes. The Company had unrecognized tax benefits of approximately $14.0 million and $16.2 million as of March 31, 2023 and 2022, respectively. Included in the balance of unrecognized tax benefits as of March 31, 2023 and 2022, is $4.5 million and $4.1 million, respectively, of tax benefits that, if recognized, would result in an adjustment to the Company’s effective tax rate. The Company does not expect its unrecognized tax benefits to change significantly within the next 12 months. |
Regulatory Assets and Liabiliti
Regulatory Assets and Liabilities | 3 Months Ended |
Mar. 31, 2023 | |
Regulated Operations [Abstract] | |
Regulatory Assets and Liabilities | Regulatory Assets and Liabilities Regulatory assets and liabilities were comprised of the following as of March 31, 2023 and December 31, 2022: Recovery Period March 31, 2023 December 31, 2022 Regulatory Assets Retiree group health Indefinitely $ — $ 171 Property-related temporary differences (tax benefits flowed through to customers) Indefinitely 143,546 143,546 Other accrued benefits Indefinitely 25,974 24,946 Net WRAM and MCBA long-term accounts receivable Various 49,243 41,558 Asset retirement obligations, net Indefinitely 25,335 24,548 Interim rates memorandum account (IRMA) long-term accounts receivable 1 - 2 years 3,533 3,682 Tank coating Various 16,507 16,395 Recoverable property losses Various 2,998 3,144 PCBA Various 19,233 19,091 General district balancing account receivable 1 year 383 377 Customer assistance program (CAP) and Rate support fund (RSF) accounts receivable 1 year 3,402 2,965 Other regulatory assets Various 3,109 3,197 Total Regulatory Assets $ 293,263 $ 283,620 Regulatory Liabilities Future tax benefits due to customers $ 131,155 $ 131,155 Pension and retiree group health 58,678 58,678 HCBA 15,312 14,318 PCBA 1,999 — CEBA 860 6,036 Net WRAM and MCBA long-term payable 262 172 Other components of net periodic benefit cost 4,059 2,475 Other regulatory liabilities 1,025 845 Total Regulatory Liabilities $ 213,350 $ 213,679 Short-term regulatory assets and liabilities are excluded from the above table. The short-term regulatory assets were $50.3 million as of March 31, 2023 and $66.8 million as of December 31, 2022. The short-term regulatory assets as of March 31, 2023 primarily consist of net WRAM and MCBA and IRMA receivables. As of December 31, 2022, the short-term regulatory assets primarily consist of net WRAM and MCBA, IRMA, and PCBA receivables. The short-term portions of regulatory liabilities were $17.3 million as of March 31, 2023 and $12.2 million as of December 31, 2022. The short-term regulatory liabilities as of March 31, 2023 primarily consist of TCJA and CEBA liabilities. As of December 31, 2022, the short-term regulatory liabilities primarily consist of TCJA liabilities. Cost of Capital Application On May 3, 2021, after an approved extension from a 2020 due date, Cal Water filed its required application with the CPUC to review its cost of capital for 2022 through 2024. Cal Water currently has an approved return on equity of 9.2%, a cost of debt of 5.51%, and a capital structure of 53.4% equity and 46.6% debt. Cal Water requested a return on equity of 10.35%, a cost of debt of 4.23%, and a capital structure of 53.4% equity and 46.6% debt. The California Public Advocates Office recommended a return on equity of 7.81%, a cost of debt of 4.23%, and a capital structure of 49.4% equity and 50.6% debt. Evidentiary hearings were held in May 2022 and the case was submitted to the CPUC at the end of the second quarter of 2022. In the first quarter of 2023, the CPUC extended its statutory deadline to issue a decision to August 10, 2023. In the |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Commitments The Company has significant commitments to purchase water from water wholesalers. The Company also has operating and finance leases for water systems, offices, land easements, licenses, equipment, and other facilities. These commitments and leases are described in the Company's Annual Report on Form 10-K for the year ended December 31, 2022. On August 16, 2022, BVRT Utility Holding Company (BVRT), a majority owned subsidiary of Texas Water, entered into a long-term water supply agreement with the Guadalupe Blanco River Authority (GBRA) through its wholly owned subsidiary, Camino Real Utility (Camino Real). The Company has provided a limited guarantee to GBRA for the agreed upon obligations. GBRA is a water conservation and reclamation district established by the Texas Legislature that oversees water resources for 10 counties. Under the terms of the agreement with GBRA, Camino Real is contracted to receive up to 2,419 acre-feet of potable water annually. The GBRA agreement involves four off-takers, including Camino Real, and GBRA plans to extend a potable water pipeline from the City of Lockhart to the City of Mustang Ridge and surrounding areas. Camino Real is contracted to be the utility service provider in this area of the Austin metropolitan region and to provide potable water, recycled water, and wastewater services to portions of the City of Mustang Ridge and surrounding areas. In 2022, Camino Real committed $21.5 million for its share of the cost of the pipeline project and committed an additional $11.1 million for its share of the cost of the pipeline project in January of 2023. As of March 31, 2023, this committed cash has not been transferred to GBRA and is classified as part of restricted cash on the Condensed Consolidated Balance Sheets. The Company currently expects this committed cash to be transferred to GBRA in the second quarter of 2023. Contingencies Groundwater Contamination The Company has undertaken litigation against third parties to recover past and anticipated costs related to groundwater contamination in our service areas. The cost of litigation is expensed as incurred and any settlement is first offset against such costs. The CPUC’s general policy requires all proceeds from groundwater contamination litigation to be used first to pay transactional expenses, then to make customers whole for water treatment costs to comply with the CPUC’s water quality standards. The CPUC allows for a risk-based consideration of contamination proceeds which exceed the costs of the remediation described above and may result in some sharing of proceeds with shareholders, determined on a case by case basis. The CPUC has authorized various memorandum accounts that allow the Company to track significant litigation costs and to request recovery of these costs in future filings. Other Legal Matters From time to time, the Company is involved in various disputes and litigation matters that arise in the ordinary course of business. The status of each significant matter is reviewed and assessed for potential financial exposure. If the potential loss from any claim or legal proceeding is considered probable and the amount of the range of loss can be estimated, a liability is accrued for the estimated loss in accordance with the accounting standards for contingencies. Legal proceedings are subject to uncertainties, and the outcomes are difficult to predict. Because of such uncertainties, accruals are based on the best information available at the time. While the outcome of these disputes and litigation matters cannot be predicted with any certainty, management does not believe, when taking into account existing reserves, the ultimate resolution of these matters will materially affect the Company’s financial position, results of operations, or cash flows. As of March 31, 2023 and December 31, 2022, the Company recognized a liability of $4.6 million and $5.3 million, respectively, for known legal matters primarily due to potable water leaks and other work-related legal matters. The cost of litigation is expensed as incurred and any settlement is first offset against such costs. Any settlement in excess of the cost to litigate is accounted for on a case by case basis, dependent on the nature of the settlement. |
Fair Value of Financial Assets
Fair Value of Financial Assets and Liabilities | 3 Months Ended |
Mar. 31, 2023 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Assets and Liabilities | Fair Value of Financial Assets and Liabilities The accounting guidance for fair value measurements and disclosures provides a single definition of fair value and requires certain disclosures about assets and liabilities measured at fair value. A hierarchical framework for disclosing the observability of the inputs utilized in measuring assets and liabilities at fair value is established by this guidance. The three levels in the hierarchy are as follows: Level 1 - Inputs to the valuation methodology are unadjusted quoted prices for identical assets or liabilities in active markets that the Company has the ability to access. Level 2 - Inputs to the valuation methodology include: • Quoted market prices for similar assets or liabilities in active markets; • Quoted prices for identical or similar assets or liabilities in inactive markets; • Inputs other than quoted prices that are observable for the asset or liability; and • Inputs that are derived principally from or corroborated by observable market data by correlation or other means. If the asset or liability has a specified (contractual) term, the level 2 input must be observable for substantially the full term of the asset or liability. Level 3 - Inputs to the valuation methodology are unobservable and significant to the fair value measurement. Specific valuation methods include the following: Cash, Accounts receivable, short-term borrowings, and accounts payable carrying amounts approximated the fair value because of the short-term maturity of the instruments. Long-term debt fair values were estimated using the published quoted market price of similar securities, if available, or the discounted cash flow analysis, based on the current rates available using a risk-free rate (a U.S. Treasury securities yield curve) plus a risk premium of 0.60%. March 31, 2023 Fair Value Cost Level 1 Level 2 Level 3 Total Long-term debt, including current maturities, net $ 1,055,637 — $ 1,023,472 — $ 1,023,472 December 31, 2022 Fair Value Cost Level 1 Level 2 Level 3 Total Long-term debt, including current maturities, net $ 1,055,797 $ — $ 977,227 $ — $ 977,227 |
Immaterial Restatement of Prior
Immaterial Restatement of Prior Period Financial Statements | 3 Months Ended |
Mar. 31, 2023 | |
Accounting Changes and Error Corrections [Abstract] | |
Immaterial Restatement of Prior Period Financial Statements | Immaterial Restatement of Prior Period Financial Statements Subsequent to the issuance of the Company's Consolidated Financial Statements for the year ended December 31, 2021, during the fourth quarter of 2022, the Company identified an immaterial error for a regulatory liability and corresponding decreases to operating revenue and deferred income taxes that were not recorded in 2019 associated with customer refunds. The error does not impact customer billings or cash refunded to customers. The Company corrected the error in the Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022, through a restatement of the opening retained earnings balance for the year ended December 31, 2020. The Company believes the error is immaterial to the previously issued Financial Statements for prior periods. The corrections to the Company’s retained earnings and total equity as of March 31, 2022, reported in note 4, were as follows: As of March 31, 2022 As Previously Reported Corrections As Corrected (In thousands) Retained earnings $ 513,593 $ (11,063) $ 502,530 Total equity $ 1,169,878 $ (11,063) $ 1,158,815 |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2023 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The unaudited condensed consolidated interim financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP) for interim financial information and in accordance with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X promulgated by the Securities and Exchange Commission (SEC) and therefore do not contain all of the information and footnotes required by GAAP and the SEC for annual financial statements. Interim financial information includes the Company's accounts and those of its wholly and non-wholly owned subsidiaries. The non-wholly owned subsidiary was consolidated using the voting interest model as the Company owns a majority of the voting interests in the non-wholly owned subsidiary. The interim unaudited condensed consolidated financial statements should be read in conjunction with the Company’s consolidated financial statements included in its Annual Report on Form 10-K for the year ended December 31, 2022 as filed with the SEC on March 1, 2023. The preparation of the Company’s unaudited condensed consolidated interim financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the balance sheet dates and the reported amounts of revenues and expenses for the periods presented. These include, but are not limited to, estimates and assumptions used in determining the Company’s regulatory asset and liability balances based upon probability assessments of regulatory recovery, revenues earned but not yet billed, asset retirement obligations, allowance for credit losses, pension and other employee benefit plan liabilities, and income tax-related assets and liabilities. Actual results could materially differ from these estimates. In the opinion of management, the accompanying unaudited condensed consolidated interim financial statements reflect all adjustments, consisting of normal recurring transactions that are necessary to provide a fair presentation of the results for the periods covered. Due to the seasonal nature of the water business, the results for interim periods are not indicative of the results for a 12-month period. Revenue and income are generally higher in the warm, dry summer months when water usage and sales are greater. Revenue and income are generally lower in the winter months when cooler temperatures and rainfall curtail water usage and sales. |
Revenue | Revenue from contracts with customers The Company principally generates operating revenue from contracts with customers by providing regulated water and wastewater services at tariff-rates authorized by the Commissions in the states in which they operate and non-regulated water and wastewater services at rates authorized by contracts with government agencies. Revenue from contracts with customers reflects amounts billed for the volume of consumption at authorized per unit rates, for a service charge, and for other authorized charges. The Company satisfies its performance obligation to provide water and wastewater services over time as services are rendered. The Company applies the invoice practical expedient and recognizes revenue from contracts with customers in the amount for which the Company has a right to invoice. The Company has a right to invoice for the volume of consumption, for the service charge, and for other authorized charges. The measurement of sales to customers is generally based on the reading of their meters, which occurs on a systematic basis throughout the month. At the end of each month, the Company estimates consumption since the date of the last meter reading and the corresponding unbilled revenue is recognized. The estimate is based upon the number of unbilled days that month and the average daily customer billing rate from the previous month (which fluctuates based upon customer usage). Contract terms are generally short-term and at will by customers and, as a result, no separate financing component is recognized for the Company's collections from customers, which generally require payment within 30 days of billing. The Company applies judgment, based principally on historical payment experience, in estimating its customers’ ability to pay. Certain customers are not billed for volumetric consumption, but are instead billed a flat rate at the beginning of each monthly service period. The amount billed is initially deferred and subsequently recognized over the monthly service period, as the performance obligation is satisfied. The deferred revenue balance or contract liability, which is included in "accrued expenses and other liabilities" on the unaudited condensed consolidated balance sheets, is inconsequential. In the following table, revenue from contracts with customers is disaggregated by class of customers for the three months ended March 31, 2023 and 2022: Three Months Ended March 31 2023 2022 Residential $ 84,035 $ 91,743 Business 31,974 32,163 Multiple residential 14,997 14,817 Industrial 5,634 5,773 Public authorities 6,425 6,985 Other (a) 2,160 7,452 Total revenue from contracts with customers $ 145,225 $ 158,933 (a) Other includes accrued unbilled revenue. Regulatory balancing account revenue Regulatory balancing account revenue is revenue related to revenue mechanisms authorized in California by the California Public Utilities Commission (CPUC), which allow the Company to recognize revenue when it is objectively determinable, probable of recovery and expected to be collected within 24 months of the year-end in which the revenue is recognized, and are not considered contracts with customers. To the extent that revenue is estimated to be collectible beyond 24 months, recognition is deferred. Due to the delay in the resolution of the most recent General Rate Case (GRC) filing in California in July of 2021 by Cal Water (2021 GRC Filing), the Company did not benefit from any revenue mechanisms in the first quarter of 2023. For 2022, the Company's authorized revenue mechanisms included the Water Revenue Adjustment Mechanism (WRAM). The WRAM decoupled revenue from the volume of the sales and allowed the Company to recognize the adopted level of volumetric revenues. The variance between adopted volumetric revenues and actual billed volumetric revenues for metered accounts was recorded as regulatory balancing account revenue. No WRAM was recorded in 2023 as the revenue mechanism concluded on December 31, 2022. Regulatory balancing account revenue also includes revenue that is recognized for balancing accounts when it is probable that future recovery of previously incurred costs or future refunds that are to be credited to customers will occur through the ratemaking process. These mechanisms, such as the Modified Cost Balancing Account (MCBA), Conservation Expense Balancing Account (CEBA), Pension Cost Balancing Account (PCBA), and Health Cost Balancing Account (HCBA), generally provide for recovery of the adopted levels of expenses for purchased water, purchased power, pump taxes, water conservation program costs, pension, and health care. Variances between adopted and actual costs were recorded as regulatory balancing account revenue in 2022. In 2023, in connection with the CPUC's disallowance of the use of the WRAM, the variances for CEBA, HCBA, and PCBA are recorded against the originating expense. The MCBA was not recorded in 2023 as the mechanism concluded on December 31, 2022. The CPUC issued a decision effective August 27, 2020 requiring that Class A companies submitting GRC filings after the effective date be (i) precluded from proposing the use of a full decoupling WRAM in their next GRCs and (ii) allowed the use of Monterey-Style Water Revenue Adjustment Mechanisms (MWRAM). In addition, the CPUC's decision allowed for Incremental Cost Balancing Accounts (ICBAs) to replace the MCBA. The MWRAM tracks the difference between the revenue received for actual metered sales through the tiered volumetric rate and the revenue that would have been received with the same actual metered sales if a uniform rate had been in effect. The ICBA tracks differences between the authorized per-unit prices of water production costs and actual per-unit prices of water production costs. Cal Water complied with this decision in its 2021 GRC Filing and expects the MWRAM to be implemented in 2023 and effective retroactive back to January 1, 2023. For the first quarter of 2023, the Company did not record a regulatory asset or regulatory liability for the MWRAM or ICBAs. |
Non-regulated Revenue | Non-regulated Revenue The following table disaggregates the Company’s non-regulated revenue by source for the three months ended March 31, 2023 and 2022: Three Months Ended March 31 2023 2022 Operating and maintenance revenue $ 3,235 $ 3,405 Other non-regulated revenue 782 1,150 Non-regulated revenue from contracts with customers 4,017 4,555 Lease revenue 606 642 Total non-regulated revenue $ 4,623 $ 5,197 Operating and maintenance services are provided for non-regulated water and wastewater systems owned by private companies and municipalities. The Company negotiates formal agreements with the customers, under which they provide operating, maintenance and customer billing services related to the customers’ water system. The formal agreements outline the fee schedule for the services provided. The agreements typically call for a fee-per-service or a flat-rate amount per month. The Company satisfies its performance obligation of providing operating and maintenance services over time as services are rendered; as a result, the Company employs the invoice practical expedient and recognizes revenue in the amount that it has the right to invoice. Contract terms are generally short-term and, as a result, no separate financing component is recognized for its collections from customers, which generally require payment within 30 days of billing. |
Lease revenue | Lease revenue is not considered revenue from contracts with customers and is recognized following operating lease standards. The Company is the lessor in operating lease agreements with telecommunications companies under which cellular phone antennas are placed on the Company's property. |
Allowance for credit losses | Allowance for credit losses The Company measures expected credit losses for Customer Receivables, Other Receivables, and Unbilled Revenue on an aggregated level. These receivables are generally trade receivables due in one year or less or expected to be billed and collected in one year or less. The expected credit losses for Other Receivables and Unbilled Revenue are inconsequential. Customer receivables include receivables for water and wastewater services provided to residential customers, business, industrial, public authorities, and other customers. The expected credit losses for business, industrial, public authorities, and other customers are inconsequential. The overall risks related to the Company’s receivables are low as water and wastewater services are seen as essential services. The estimate for the allowance for credit losses is based on a historical loss ratio, in conjunction with a qualitative assessment of elements that impact the collectability of receivables to determine if the allowance for credit losses should be further adjusted in accordance with the accounting guidance for credit losses. Management contemplates available current information such as changes in economic factors, regulatory matters, industry trends, payment options and programs available to customers, and the methods that the Company is able to utilize to ensure payment. The Company reviews its allowance for credit losses utilizing a quantitative assessment, which includes a trend analysis of customer billing and collection, aging by customer class, and unemployment rates. The Company also utilizes a qualitative assessment, which considers the future collectability on customer outstanding balances, management's estimate of the cash recovery, and a general assessment of the economic conditions of the locations the Company serves. Based on these assessments, the Company adjusted its allowance for credit losses accordingly. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Accounting Policies [Abstract] | |
Disaggregation of Revenue | The following table disaggregates the Company’s operating revenue by source for the three months ended March 31, 2023 and 2022: Three Months Ended March 31 2023 2022 Revenue from contracts with customers $ 145,225 $ 158,933 Regulatory balancing account revenue (14,125) 14,060 Total operating revenue $ 131,100 $ 172,993 In the following table, revenue from contracts with customers is disaggregated by class of customers for the three months ended March 31, 2023 and 2022: Three Months Ended March 31 2023 2022 Residential $ 84,035 $ 91,743 Business 31,974 32,163 Multiple residential 14,997 14,817 Industrial 5,634 5,773 Public authorities 6,425 6,985 Other (a) 2,160 7,452 Total revenue from contracts with customers $ 145,225 $ 158,933 (a) Other includes accrued unbilled revenue. The following table disaggregates the Company’s non-regulated revenue by source for the three months ended March 31, 2023 and 2022: Three Months Ended March 31 2023 2022 Operating and maintenance revenue $ 3,235 $ 3,405 Other non-regulated revenue 782 1,150 Non-regulated revenue from contracts with customers 4,017 4,555 Lease revenue 606 642 Total non-regulated revenue $ 4,623 $ 5,197 |
Schedule of Allowance for Credit Losses | The following table presents the activity in the allowance for credit losses for the 3-month period ended March 31, 2023 and 12-month period ended December 31, 2022: Allowance for credit losses March 31, 2023 December 31, 2022 Beginning balance $ 5,629 $ 3,743 Provision for credit loss expense 939 5,887 Write-offs (1,592) (4,380) Recoveries 141 379 Total ending allowance balance $ 5,117 $ 5,629 |
Schedule of Cash and Cash Equivalents | The following table provides a reconciliation of cash, cash equivalents, and restricted cash within the Condensed Consolidated Balance Sheets that sum to the total of the same such amounts shown on the Condensed Consolidated Statements of Cash Flows (see Note 10 for further details on restricted cash): March 31, 2023 December 31, 2022 Cash and cash equivalents $ 52,286 $ 62,100 Restricted cash 34,153 22,925 Total cash, cash equivalents, and restricted cash shown in the statements of cash flows $ 86,439 $ 85,025 |
Stock-based Compensation (Table
Stock-based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Schedule of Restricted Stock and Restricted Stock Unit Activity | A summary of the status of the outstanding RSAs as of March 31, 2023 is presented below: Number of RSA Shares Weighted-Average Grant-Date Fair Value RSAs at January 1, 2023 52,066 $ 55.77 Granted 42,301 55.46 Vested (28,426) 56.02 Forfeited — — RSAs at March 31, 2023 65,941 $ 55.47 A summary of the status of the outstanding RSUs as of March 31, 2023 is presented below: Number of RSU Shares Weighted-Average Grant-Date Fair Value RSUs at January 1, 2023 92,625 $ 54.06 Granted 42,464 55.46 Performance criteria adjustment 14,822 56.84 Vested (40,589) 56.84 Forfeited (9,250) 53.66 RSUs at March 31, 2023 100,072 $ 55.38 |
Equity (Tables)
Equity (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Equity [Abstract] | |
Schedule of Changes in Total Common Stockholders' Equity | The Company’s changes in total equity for the three months ended March 31, 2023 and 2022 were as follows: Three months ended March 31, 2023 Common Stock Additional Retained Noncontrolling Interests Total Equity Shares Amount (In thousands) Balance at January 1, 2023 55,598 $ 556 $ 760,336 $ 556,698 $ 4,804 $ 1,322,394 Net loss — — — (22,211) (123) (22,334) Issuance of common stock 420 4 17,380 — — 17,384 Repurchase of common stock (27) — — — — — Dividends paid on common stock ($0.2600 per share) — — — (14,456) — (14,456) Investment in business with noncontrolling interest — — (111) — 111 — Balance at March 31, 2023 55,991 560 777,605 520,031 4,792 1,302,988 Three months ended March 31, 2022 Common Stock Additional Retained Noncontrolling Interests Total Equity Shares Amount (In thousands) Balance at January 1, 2022 53,716 $ 537 $ 651,121 $ 514,873 $ 5,386 $ 1,171,917 Net income (loss) — — — 1,086 (192) 894 Issuance of common stock 85 1 1,106 — — 1,107 Repurchase of common stock (28) — (1,674) — — (1,674) Dividends paid on common stock ($0.2500 per share) — — — (13,429) — (13,429) Investment in business with noncontrolling interest — — (54) — 54 — Balance at March 31, 2022 53,773 538 650,499 502,530 5,248 1,158,815 |
(Loss) Earnings Per Share of _2
(Loss) Earnings Per Share of Common Stock (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Earnings Per Share [Abstract] | |
Schedule basic and Diluted Earnings Per Share | The computations of basic and diluted (loss) earnings per share of common stock are noted in the table below. Basic (loss) earnings per share of common stock is computed by dividing the net (loss) income attributable to California Water Service Group by the weighted average number of common shares outstanding during the period. RSAs are included in the weighted average common shares outstanding because the shares have all the same voting and dividend rights as issued and unrestricted common stock. Certain outstanding equity instruments are not included in the diluted (loss) earnings per share calculation because their inclusion would have been anti-dilutive. Three Months Ended March 31 2023 2022 (In thousands, except per share data) Net (loss) income $ (22,334) $ 894 Net loss attributable to noncontrolling interests $ (123) $ (192) Net loss attributable to California Water Service Group $ (22,211) $ 1,086 Weighted average common shares outstanding, basic 55,666 53,731 Weighted average common shares outstanding, dilutive 55,666 53,775 (Loss) earnings per share of common stock - basic $ (0.40) $ 0.02 (Loss) earnings per share of common stock - diluted $ (0.40) $ 0.02 |
Pension Plan and Other Postre_2
Pension Plan and Other Postretirement Benefits (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Retirement Benefits [Abstract] | |
Schedule of components of net periodic benefit costs for the pension plans and other postretirement benefits | The following tables list components of net periodic benefit costs for the pension plans and other postretirement benefits. The data listed under “pension plan” includes the qualified pension plan and the non-qualified supplemental executive retirement plan. The data listed under “other benefits” is for all other postretirement benefits. Three Months Ended March 31 Pension Plan Other Benefits 2023 2022 2023 2022 Service cost $ 6,046 $ 9,235 $ 1,126 $ 1,683 Interest cost 8,746 6,329 1,297 1,008 Expected return on plan assets (13,421) (11,307) (2,636) (2,482) Amortization of prior service cost 131 242 39 39 Recognized net actuarial (gain) loss (637) 999 (581) (228) Net periodic benefit cost (benefit) $ 865 $ 5,498 $ (755) $ 20 |
Income Taxes (Tables)
Income Taxes (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
Schedule of Components of Income Tax Expense (Benefit) | The provision for income taxes is shown in the tables below: Three Months Ended March 31 2023 2022 Income tax benefit $ (3,850) $ (905) |
Regulatory Assets and Liabili_2
Regulatory Assets and Liabilities (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Regulated Operations [Abstract] | |
Schedule of Regulatory Assets and Liabilities | Regulatory assets and liabilities were comprised of the following as of March 31, 2023 and December 31, 2022: Recovery Period March 31, 2023 December 31, 2022 Regulatory Assets Retiree group health Indefinitely $ — $ 171 Property-related temporary differences (tax benefits flowed through to customers) Indefinitely 143,546 143,546 Other accrued benefits Indefinitely 25,974 24,946 Net WRAM and MCBA long-term accounts receivable Various 49,243 41,558 Asset retirement obligations, net Indefinitely 25,335 24,548 Interim rates memorandum account (IRMA) long-term accounts receivable 1 - 2 years 3,533 3,682 Tank coating Various 16,507 16,395 Recoverable property losses Various 2,998 3,144 PCBA Various 19,233 19,091 General district balancing account receivable 1 year 383 377 Customer assistance program (CAP) and Rate support fund (RSF) accounts receivable 1 year 3,402 2,965 Other regulatory assets Various 3,109 3,197 Total Regulatory Assets $ 293,263 $ 283,620 Regulatory Liabilities Future tax benefits due to customers $ 131,155 $ 131,155 Pension and retiree group health 58,678 58,678 HCBA 15,312 14,318 PCBA 1,999 — CEBA 860 6,036 Net WRAM and MCBA long-term payable 262 172 Other components of net periodic benefit cost 4,059 2,475 Other regulatory liabilities 1,025 845 Total Regulatory Liabilities $ 213,350 $ 213,679 |
Fair Value of Financial Asset_2
Fair Value of Financial Assets and Liabilities (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value of Long-term Debt | March 31, 2023 Fair Value Cost Level 1 Level 2 Level 3 Total Long-term debt, including current maturities, net $ 1,055,637 — $ 1,023,472 — $ 1,023,472 December 31, 2022 Fair Value Cost Level 1 Level 2 Level 3 Total Long-term debt, including current maturities, net $ 1,055,797 $ — $ 977,227 $ — $ 977,227 |
Immaterial Restatement of Pri_2
Immaterial Restatement of Prior Period Financial Statements (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Accounting Changes and Error Corrections [Abstract] | |
Schedule of Error Corrections and Prior Period Adjustments | The corrections to the Company’s retained earnings and total equity as of March 31, 2022, reported in note 4, were as follows: As of March 31, 2022 As Previously Reported Corrections As Corrected (In thousands) Retained earnings $ 513,593 $ (11,063) $ 502,530 Total equity $ 1,169,878 $ (11,063) $ 1,158,815 |
Organization and Operations a_2
Organization and Operations and Basis of Presentation (Details) | 3 Months Ended |
Mar. 31, 2023 segment | |
Noncontrolling Interest [Line Items] | |
Number of reportable segments | 1 |
BVRT Water Company | |
Noncontrolling Interest [Line Items] | |
Noncontrolling interest | 6.20% |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Disaggregation of Revenue [Line Items] | ||
Revenue from contracts with customers | $ 145,225 | $ 158,933 |
Regulatory balancing account revenue | (14,125) | 14,060 |
Operating revenue | 131,100 | 172,993 |
Total non-regulated revenue | 4,623 | 5,197 |
Residential | ||
Disaggregation of Revenue [Line Items] | ||
Revenue from contracts with customers | 84,035 | 91,743 |
Business | ||
Disaggregation of Revenue [Line Items] | ||
Revenue from contracts with customers | 31,974 | 32,163 |
Multiple residential | ||
Disaggregation of Revenue [Line Items] | ||
Revenue from contracts with customers | 14,997 | 14,817 |
Industrial | ||
Disaggregation of Revenue [Line Items] | ||
Revenue from contracts with customers | 5,634 | 5,773 |
Public authorities | ||
Disaggregation of Revenue [Line Items] | ||
Revenue from contracts with customers | 6,425 | 6,985 |
Other | ||
Disaggregation of Revenue [Line Items] | ||
Revenue from contracts with customers | 2,160 | 7,452 |
Operating and maintenance revenue | ||
Disaggregation of Revenue [Line Items] | ||
Revenue from contracts with customers | 3,235 | 3,405 |
Other non-regulated revenue | ||
Disaggregation of Revenue [Line Items] | ||
Revenue from contracts with customers | 782 | 1,150 |
Non-regulated revenue from contracts with customers | ||
Disaggregation of Revenue [Line Items] | ||
Revenue from contracts with customers | 4,017 | 4,555 |
Lease revenue | 606 | 642 |
Total non-regulated revenue | $ 4,623 | $ 5,197 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Allowance for Credit Losses (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2023 | Dec. 31, 2022 | |
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | ||
Beginning balance | $ 5,629 | $ 3,743 |
Provision for credit loss expense | 939 | 5,887 |
Write-offs | (1,592) | (4,380) |
Recoveries | 141 | 379 |
Total ending allowance balance | $ 5,117 | $ 5,629 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Cash, Cash Equivalents, and Restricted Cash (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 | Mar. 31, 2022 | Dec. 31, 2021 |
Accounting Policies [Abstract] | ||||
Cash and cash equivalents | $ 52,286 | $ 62,100 | ||
Restricted cash | 34,153 | 22,925 | ||
Total cash, cash equivalents, and restricted cash shown in the statements of cash flows | $ 86,439 | $ 85,025 | $ 71,852 | $ 80,653 |
Stock-based Compensation - Narr
Stock-based Compensation - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Stock-based Compensation | ||
Shares authorized to be issued under the plan (in shares) | 2,000,000 | |
Recorded compensation costs for the RSAs and RSUs | $ 0.1 | $ 0.5 |
RSAs | ||
Stock-based Compensation | ||
Period for recognition | 2 years | |
Unrecognized compensation cost | $ 3.5 | |
Performance-Based Restricted Stock Unit Awards (RSUs) | ||
Stock-based Compensation | ||
Period for recognition | 2 years 1 month 6 days | |
Unrecognized compensation cost | $ 3.9 | |
Performance period | 3 years | |
Performance-Based Restricted Stock Unit Awards (RSUs) | Minimum | ||
Stock-based Compensation | ||
Options vested on anniversary date | 0% | |
Performance-Based Restricted Stock Unit Awards (RSUs) | Maximum | ||
Stock-based Compensation | ||
Options vested on anniversary date | 200% | |
Officer | RSAs | ||
Stock-based Compensation | ||
Vesting period | 36 months | |
Period for recognition | 36 months | |
Director | RSAs | ||
Stock-based Compensation | ||
Vesting period | 12 months | |
Period for recognition | 12 months |
Stock-based Compensation - RSAs
Stock-based Compensation - RSAs & Performance-Based RSUs (Details) | 3 Months Ended |
Mar. 31, 2023 $ / shares shares | |
RSAs | |
Number of shares | |
Beginning balance (in shares) | shares | 52,066 |
Granted (in shares) | shares | 42,301 |
Vested (in shares) | shares | (28,426) |
Forfeited (in shares) | shares | 0 |
Ending balance (in shares) | shares | 65,941 |
Weighted average price at grant | |
Beginning balance (in dollars per share) | $ / shares | $ 55.77 |
Granted (in dollars per share) | $ / shares | 55.46 |
Vested (in dollars per share) | $ / shares | 56.02 |
Forfeited (in dollars per share) | $ / shares | 0 |
Ending balance (in dollars per share) | $ / shares | $ 55.47 |
RSUs | |
Number of shares | |
Beginning balance (in shares) | shares | 92,625 |
Granted (in shares) | shares | 42,464 |
Performance criteria adjustment (in shares) | shares | 14,822 |
Vested (in shares) | shares | (40,589) |
Forfeited (in shares) | shares | (9,250) |
Ending balance (in shares) | shares | 100,072 |
Weighted average price at grant | |
Beginning balance (in dollars per share) | $ / shares | $ 54.06 |
Granted (in dollars per share) | $ / shares | 55.46 |
Performance criteria adjustment (in dollars per share) | $ / shares | 56.84 |
Vested (in dollars per share) | $ / shares | 56.84 |
Forfeited (in dollars per share) | $ / shares | 53.66 |
Ending balance (in dollars per share) | $ / shares | $ 55.38 |
Equity - Narrative (Details)
Equity - Narrative (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | ||||
Apr. 29, 2022 | Mar. 31, 2023 | Dec. 31, 2022 | Jul. 26, 2022 | Jul. 25, 2022 | |
Equity [Abstract] | |||||
Maximum consideration on transaction | $ 350 | ||||
Sale of stock, agreement term | 3 years | ||||
Sale of stock, number of shares issued in transaction (in shares) | 326,042 | ||||
Issuance of common stock, net | $ 18.2 | ||||
Payments for commissions | $ 0.2 | ||||
Common stock, shares authorized (in shares) | 136,000,000 | 136,000,000 | 136,000,000 | 68,000,000 | |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | $ 0.01 |
Equity - Changes in Equity (Det
Equity - Changes in Equity (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||
Balance at beginning of period (in shares) | 55,598,000 | |
Balance at beginning of period | $ 1,322,394 | $ 1,171,917 |
Net income (loss) | (22,334) | 894 |
Issuance of common stock | 17,384 | 1,107 |
Repurchase of common stock | 0 | (1,674) |
Dividends paid on common stock | (14,456) | (13,429) |
Investment in business with noncontrolling interest | $ 0 | 0 |
Balance at end of period (in shares) | 55,991,000 | |
Balance at end of period | $ 1,302,988 | $ 1,158,815 |
Dividends paid on common stock (in dollars per share) | $ 0.2600 | $ 0.2500 |
Common Stock | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||
Balance at beginning of period (in shares) | 55,598,000 | 53,716,000 |
Balance at beginning of period | $ 556 | $ 537 |
Issuance of common stock (in shares) | 420,000 | 85,000 |
Issuance of common stock | $ 4 | $ 1 |
Repurchase of common stock (in shares) | (27,000) | (28,000) |
Balance at end of period (in shares) | 55,991,000 | 53,773,000 |
Balance at end of period | $ 560 | $ 538 |
Additional Paid-in Capital | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||
Balance at beginning of period | 760,336 | 651,121 |
Issuance of common stock | 17,380 | 1,106 |
Repurchase of common stock | 0 | (1,674) |
Investment in business with noncontrolling interest | (111) | (54) |
Balance at end of period | 777,605 | 650,499 |
Retained Earnings | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||
Balance at beginning of period | 556,698 | 514,873 |
Net income (loss) | (22,211) | 1,086 |
Dividends paid on common stock | (14,456) | (13,429) |
Balance at end of period | 520,031 | 502,530 |
Noncontrolling Interests | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||
Balance at beginning of period | 4,804 | 5,386 |
Net income (loss) | (123) | (192) |
Investment in business with noncontrolling interest | 111 | 54 |
Balance at end of period | $ 4,792 | $ 5,248 |
(Loss) Earnings Per Share of _3
(Loss) Earnings Per Share of Common Stock (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Earnings Per Share [Abstract] | ||
Net (loss) income | $ (22,334) | $ 894 |
Net loss attributable to noncontrolling interests | (123) | (192) |
Net income attributable to California Water Service Group | $ (22,211) | $ 1,086 |
Weighted average common shares outstanding, basic (in shares) | 55,666 | 53,731 |
Weighted average common shares outstanding, dilutive (in shares) | 55,666 | 53,775 |
(Loss) earnings per share of common stock - basic (in dollars per share) | $ (0.40) | $ 0.02 |
(Loss) earnings per share of common stock - diluted (in dollars per share) | $ (0.40) | $ 0.02 |
Pension Plan and Other Postre_3
Pension Plan and Other Postretirement Benefits (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Pension Plan | ||
Pension Plan and Other Postretirement Benefits | ||
Employer cash contributions | $ 2,900 | $ 5,100 |
Estimated cash contributions in the current fiscal year | 2,900 | |
Components of the pension plans and other postretirement benefits | ||
Service cost | 6,046 | 9,235 |
Interest cost | 8,746 | 6,329 |
Expected return on plan assets | (13,421) | (11,307) |
Amortization of prior service cost | 131 | 242 |
Recognized net actuarial (gain) loss | (637) | 999 |
Net periodic benefit cost (benefit) | 865 | 5,498 |
Other Benefits | ||
Pension Plan and Other Postretirement Benefits | ||
Employer cash contributions | 200 | 100 |
Estimated cash contributions in the current fiscal year | 200 | |
Components of the pension plans and other postretirement benefits | ||
Service cost | 1,126 | 1,683 |
Interest cost | 1,297 | 1,008 |
Expected return on plan assets | (2,636) | (2,482) |
Amortization of prior service cost | 39 | 39 |
Recognized net actuarial (gain) loss | (581) | (228) |
Net periodic benefit cost (benefit) | $ (755) | $ 20 |
Short-term and Long-term Borr_2
Short-term and Long-term Borrowings (Details) - USD ($) | 3 Months Ended | ||||
Mar. 31, 2023 | Mar. 29, 2019 | Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Cal Water | |||||
Debt Instrument [Line Items] | |||||
Outstanding borrowings | $ 95,000,000 | $ 95,000,000 | $ 35,000,000 | ||
Parent Company | |||||
Debt Instrument [Line Items] | |||||
Outstanding borrowings | 35,000,000 | 35,000,000 | $ 35,000,000 | ||
Revolving Credit Facility | |||||
Debt Instrument [Line Items] | |||||
Maximum borrowing capacity | $ 600,000,000 | $ 600,000,000 | |||
Debt instrument, term | 5 years | ||||
Average borrowing rate | 5.49% | 0.98% | |||
Revolving Credit Facility | Base Rate | Minimum | |||||
Debt Instrument [Line Items] | |||||
Interest rate | 0% | ||||
Revolving Credit Facility | Base Rate | Maximum | |||||
Debt Instrument [Line Items] | |||||
Interest rate | 0.25% | ||||
Revolving Credit Facility | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate | Minimum | |||||
Debt Instrument [Line Items] | |||||
Interest rate | 0.80% | ||||
Revolving Credit Facility | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate | Maximum | |||||
Debt Instrument [Line Items] | |||||
Interest rate | 1.25% | ||||
Revolving Credit Facility | Cal Water | |||||
Debt Instrument [Line Items] | |||||
Maximum borrowing capacity | $ 400,000,000 | $ 400,000,000 | |||
Incremental expansion of borrowing capacity | 150,000,000 | 150,000,000 | |||
Revolving Credit Facility | Parent Company | |||||
Debt Instrument [Line Items] | |||||
Maximum borrowing capacity | 200,000,000 | 200,000,000 | |||
Incremental expansion of borrowing capacity | $ 50,000,000 | $ 50,000,000 |
Income Taxes - Provision for In
Income Taxes - Provision for Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Income Tax Disclosure [Abstract] | ||
Income tax benefit | $ (3,850) | $ (905) |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Income Tax Disclosure [Abstract] | ||
Increase in income tax expense | $ 3,000 | |
Income tax benefit | $ 3,850 | $ 905 |
Effective tax rate estimate | 14.60% | 12% |
Unrecognized tax benefits | $ 14,000 | $ 16,200 |
Tax benefits that, if recognized, would affect the effective tax rate | $ 4,500 | $ 4,100 |
Regulatory Assets and Liabili_3
Regulatory Assets and Liabilities - Schedule of Regulatory Assets and Liabilities (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Dec. 31, 2022 | |
Regulatory Assets and Liabilities | ||
Total Regulatory Assets | $ 293,263 | $ 283,620 |
Total Regulatory Liabilities | 213,350 | 213,679 |
Future tax benefits due to customers | ||
Regulatory Assets and Liabilities | ||
Total Regulatory Liabilities | 131,155 | 131,155 |
Pension and retiree group health | ||
Regulatory Assets and Liabilities | ||
Total Regulatory Liabilities | 58,678 | 58,678 |
PCBA | ||
Regulatory Assets and Liabilities | ||
Total Regulatory Liabilities | 1,999 | 0 |
HCBA | ||
Regulatory Assets and Liabilities | ||
Total Regulatory Liabilities | 15,312 | 14,318 |
CEBA | ||
Regulatory Assets and Liabilities | ||
Total Regulatory Liabilities | 860 | 6,036 |
Net WRAM and MCBA long-term payable | ||
Regulatory Assets and Liabilities | ||
Total Regulatory Liabilities | 262 | 172 |
Other components of net periodic benefit cost | ||
Regulatory Assets and Liabilities | ||
Total Regulatory Liabilities | 4,059 | 2,475 |
Other regulatory liabilities | ||
Regulatory Assets and Liabilities | ||
Total Regulatory Liabilities | 1,025 | 845 |
Retiree group health | ||
Regulatory Assets and Liabilities | ||
Total Regulatory Assets | 0 | 171 |
Future tax benefits due to customers | ||
Regulatory Assets and Liabilities | ||
Total Regulatory Assets | 143,546 | 143,546 |
Other accrued benefits | ||
Regulatory Assets and Liabilities | ||
Total Regulatory Assets | 25,974 | 24,946 |
Net WRAM and MCBA long-term accounts receivable | ||
Regulatory Assets and Liabilities | ||
Total Regulatory Assets | 49,243 | 41,558 |
Asset retirement obligations, net | ||
Regulatory Assets and Liabilities | ||
Total Regulatory Assets | 25,335 | 24,548 |
Interim rates memorandum account (IRMA) long-term accounts receivable | ||
Regulatory Assets and Liabilities | ||
Total Regulatory Assets | 3,533 | 3,682 |
Tank coating | ||
Regulatory Assets and Liabilities | ||
Total Regulatory Assets | 16,507 | 16,395 |
Recoverable property losses | ||
Regulatory Assets and Liabilities | ||
Total Regulatory Assets | 2,998 | 3,144 |
PCBA | ||
Regulatory Assets and Liabilities | ||
Total Regulatory Assets | $ 19,233 | 19,091 |
General district balancing account receivable | ||
Regulatory Assets and Liabilities | ||
Recovery Period | 1 year | |
Total Regulatory Assets | $ 383 | 377 |
Customer assistance program (CAP) and Rate support fund (RSF) accounts receivable | ||
Regulatory Assets and Liabilities | ||
Recovery Period | 1 year | |
Total Regulatory Assets | $ 3,402 | 2,965 |
Other regulatory assets | ||
Regulatory Assets and Liabilities | ||
Total Regulatory Assets | $ 3,109 | $ 3,197 |
Minimum | Interim rates memorandum account (IRMA) long-term accounts receivable | ||
Regulatory Assets and Liabilities | ||
Recovery Period | 1 year | |
Maximum | Interim rates memorandum account (IRMA) long-term accounts receivable | ||
Regulatory Assets and Liabilities | ||
Recovery Period | 2 years |
Regulatory Assets and Liabili_4
Regulatory Assets and Liabilities - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Schedule of Regulatory Assets and Liabilities [Line Items] | |||
Short-term portion of the regulatory assets | $ 50,335 | $ 66,826 | |
Short-term portion of the regulatory liabilities | $ 17,272 | $ 12,240 | |
Return on equity | 9.20% | ||
Approved debt | 5.51% | ||
Approved equity | 53.40% | ||
Approved equity to debt ratio | 46.60% | ||
Proposed return on equity | 10.35% | ||
Requested debt | 4.23% | ||
Requested equity | 53.40% | ||
Requested equity to debt ratio | 46.60% | ||
Decrease on annual revenue | $ 11,000 | $ 11,000 | |
California Public Advocates Office | |||
Schedule of Regulatory Assets and Liabilities [Line Items] | |||
Recommended return on equity | 7.81% | ||
Recommended debt | 4.23% | ||
Recommended equity | 49.40% | ||
Recommended equity to debt ratio | 50.60% |
Commitments and Contingencies -
Commitments and Contingencies - Narrative (Details) - USD ($) $ in Millions | 1 Months Ended | 12 Months Ended | |
Jan. 31, 2023 | Dec. 31, 2022 | Mar. 31, 2023 | |
Lessee, Lease, Description [Line Items] | |||
Contingency loss recognized liability | $ 5.3 | $ 4.6 | |
Camino Real | Supply Commitment | |||
Lessee, Lease, Description [Line Items] | |||
Payments for other commitments | $ 11.1 | $ 21.5 |
Fair Value of Financial Asset_3
Fair Value of Financial Assets and Liabilities - Narrative (Details) | 3 Months Ended |
Mar. 31, 2023 | |
Fair Value Disclosures [Abstract] | |
Risk premium (as a percent) | 0.60% |
Fair Value of Financial Asset_4
Fair Value of Financial Assets and Liabilities - Schedule of Long Term Debt at Fair Value (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Cost | ||
Fair Value of Financial Assets and Liabilities | ||
Long-term debt, including current maturities, net | $ 1,055,637 | $ 1,055,797 |
Fair Value | ||
Fair Value of Financial Assets and Liabilities | ||
Long-term debt, including current maturities, net | 1,023,472 | 977,227 |
Fair Value | Level 1 | ||
Fair Value of Financial Assets and Liabilities | ||
Long-term debt, including current maturities, net | 0 | 0 |
Fair Value | Level 2 | ||
Fair Value of Financial Assets and Liabilities | ||
Long-term debt, including current maturities, net | 1,023,472 | 977,227 |
Fair Value | Level 3 | ||
Fair Value of Financial Assets and Liabilities | ||
Long-term debt, including current maturities, net | $ 0 | $ 0 |
Immaterial Restatement of Pri_3
Immaterial Restatement of Prior Period Financial Statements (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 | Mar. 31, 2022 | Dec. 31, 2021 |
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||
Retained earnings | $ 520,031 | $ 556,698 | $ 502,530 | |
Total equity | $ 1,302,988 | $ 1,322,394 | 1,158,815 | $ 1,171,917 |
As Previously Reported | ||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||
Retained earnings | 513,593 | |||
Total equity | 1,169,878 | |||
Corrections | ||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||
Retained earnings | (11,063) | |||
Total equity | $ (11,063) |