San Jose Water (SJW), a wholly-owned subsidiary of SJW Group, has reached a settlement agreement in its 2025-2027 General Rate Case (GRC) with the California Public Utilities Commission (CPUC). The agreement, which was reached in collaboration with the Public Advocates Office (PAO), provides for a substantial investment of $450 million over three years in drinking water infrastructure.
The settlement, which was filed with the CPUC on August 19, 2024, outlines a comprehensive plan to enhance and maintain the water systems that serve San Jose Water’s customers. This investment is intended to support day-to-day water system functions, ensure reliable service, and bolster fire protection, economic vibrancy, and environmental conservation efforts within the local community.
“I am grateful to the PAO for diligently working with us to achieve this constructive agreement that reflects our shared goal of ensuring that customers have high-quality drinking water and reliable service at fair rates,” said Tanya Moniz-Witten, President of SJW. “This agreement enables SJW to invest $450 million over three years in drinking water infrastructure in our local service area. We are committed to our daily mission of serving our customers, communities, and the environment at best-in-class levels. The settlement agreement positions us to deliver on this promise more effectively.”
In addition to the $450 million capital budget, the settlement agreement includes several key provisions:
- Further aligns actual compared to authorized usage through a lower sales forecast;
- Provides for greater revenue recovery through the service charge; and,
- Approves the recovery of $15.8 million from balancing and memorandum accounts.
However, the settlement excludes two policy issues that will be litigated separately. These issues involve the inclusion of chemical and waste disposal costs in the company's full cost balancing account and adjustments to the service charge calculation. Briefs for these matters were filed on August 1, 2024, and will be addressed independently.
Notably, the Water Rate Advocates for Transparency, Equity, and Sustainability (WRATES), which initially agreed to the settlement in principle on June 14, 2024, has since withdrawn its support and declined to sign the agreement.
The CPUC, which oversees the regulation of water utilities in California, will review the settlement agreement as part of a transparent public process. This process includes public hearings and opportunities for stakeholders to provide feedback, ensuring that the final rates are just, reasonable, and conducive to safe and reliable infrastructure. The CPUC is expected to issue a decision on the settlement in the fourth quarter of 2024, with the new rates set to take effect on January 1, 2025.
