California Water Service Group (CWT) has secured a one‑year extension to its Cost of Capital application from the California Public Utilities Commission, moving the deadline from May 1 2026 to May 1 2027. The extension preserves the company’s return on equity at 10.27 % and its cost of debt at 4.23 %, keeping the capital structure unchanged at 53.40 % common equity and 46.60 % long‑term debt.
The decision also reauthorizes the Water Cost of Capital Mechanism (WCCM), which automatically adjusts the rate of return in line with fluctuations in the Moody’s Utilities Bond Index. The next measurement date for the WCCM is set for September 30 2026, with any resulting changes to the return on equity taking effect on January 1 2027. This mechanism ensures that CWT’s cost of capital remains aligned with market conditions while protecting customers from abrupt rate swings.
CWT’s chairman and CEO, Martin A. Kropelnicki, said the extension would help manage the California Public Utilities Commission’s heavy workload—six water utility General Rate Cases and three rulemaking proceedings are currently in process. He added that the extension would reduce the frequency of rate changes for customers, providing greater predictability for both the company and its service area.
The CPUC has granted CWT similar one‑year extensions in the past, most recently in January 2025 when the deadline was moved from May 1 2025 to May 1 2026. The recurring pattern underscores the regulatory environment’s complexity and the need for periodic extensions to accommodate the commission’s schedule.
By extending the application period, CWT secures financial stability and regulatory certainty. Maintaining the current return on equity and cost of debt allows the company to continue financing infrastructure investments without altering its capital mix. The reduced rate‑change frequency also benefits customers, who experience fewer adjustments to their water and wastewater bills.
The announcement did not trigger a notable market reaction, reflecting the regulatory nature of the event rather than a direct impact on earnings or valuation.
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