QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(State or other jurisdiction | (I.R.S. Employer Identification No.) | |||||||
of incorporation or organization) |
Title of Each Class: | Trading Symbol(s) | Name of Each Exchange on Which Registered: | ||||||||||||
☒ | Accelerated filer | ☐ | |||||||||
Non-accelerated filer | ☐ | Smaller reporting company | |||||||||
Emerging growth company |
Page | ||||||||
March 31, 2024 | December 31, 2023 | ||||||||||
ASSETS | |||||||||||
Utility plant: | |||||||||||
Utility plant | $ | $ | |||||||||
Less accumulated depreciation and amortization | ( | ( | |||||||||
Net utility plant | |||||||||||
Current assets: | |||||||||||
Cash and cash equivalents | |||||||||||
Restricted cash | |||||||||||
Receivables: | |||||||||||
Customers, net | |||||||||||
Regulatory balancing accounts | |||||||||||
Other, net | |||||||||||
Unbilled revenue, net | |||||||||||
Materials and supplies | |||||||||||
Taxes, prepaid expenses, and other assets | |||||||||||
Total current assets | |||||||||||
Other assets: | |||||||||||
Regulatory assets | |||||||||||
Goodwill | |||||||||||
Other | |||||||||||
Total other assets | |||||||||||
TOTAL ASSETS | $ | $ | |||||||||
CAPITALIZATION AND LIABILITIES | |||||||||||
Capitalization: | |||||||||||
Common stock, $ | $ | $ | |||||||||
Additional paid-in capital | |||||||||||
Retained earnings | |||||||||||
Accumulated other comprehensive loss | ( | ||||||||||
Noncontrolling interests | |||||||||||
Total equity | |||||||||||
Long-term debt, net | |||||||||||
Total capitalization | |||||||||||
Current liabilities: | |||||||||||
Current maturities of long-term debt, net | |||||||||||
Short-term borrowings | |||||||||||
Accounts payable | |||||||||||
Regulatory balancing accounts | |||||||||||
Accrued interest | |||||||||||
Accrued expenses and other liabilities | |||||||||||
Total current liabilities | |||||||||||
Deferred income taxes | |||||||||||
Regulatory liabilities and other | |||||||||||
Pension | |||||||||||
Advances for construction | |||||||||||
Contributions in aid of construction | |||||||||||
Commitments and contingencies (Note 9) | |||||||||||
TOTAL CAPITALIZATION AND LIABILITIES | $ | $ |
Three Months Ended March 31, | |||||||||||
2024 | 2023 | ||||||||||
Operating revenue | $ | $ | |||||||||
Operating expenses: | |||||||||||
Operations: | |||||||||||
Water production costs | |||||||||||
Administrative and general | |||||||||||
Other operations | |||||||||||
Maintenance | |||||||||||
Depreciation and amortization | |||||||||||
Income tax expense (benefit) | ( | ||||||||||
Property and other taxes | |||||||||||
Total operating expenses | |||||||||||
Net operating income (loss) | ( | ||||||||||
Other income and expenses: | |||||||||||
Non-regulated revenue | |||||||||||
Non-regulated expenses | ( | ( | |||||||||
Other components of net periodic benefit credit | |||||||||||
Allowance for equity funds used during construction | |||||||||||
Income tax expense on other income and expenses | ( | ( | |||||||||
Net other income | |||||||||||
Interest expense: | |||||||||||
Interest expense | |||||||||||
Allowance for borrowed funds used during construction | ( | ( | |||||||||
Net interest expense | |||||||||||
Net income (loss) | ( | ||||||||||
Net loss attributable to noncontrolling interests | ( | ( | |||||||||
Net income (loss) attributable to California Water Service Group | $ | $ | ( | ||||||||
Earnings (loss) per share: | |||||||||||
Basic | $ | $ | ( | ||||||||
Diluted | $ | $ | ( | ||||||||
Weighted average shares outstanding: | |||||||||||
Basic | |||||||||||
Diluted |
Three Months Ended March 31, | ||||||||||||||
2024 | 2023 | |||||||||||||
Operating activities: | ||||||||||||||
Net income (loss) | $ | $ | ( | |||||||||||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||||||||||||||
Depreciation and amortization | ||||||||||||||
Change in value of life insurance contracts | ( | ( | ||||||||||||
Allowance for equity funds used during construction | ( | ( | ||||||||||||
Changes in operating assets and liabilities: | ||||||||||||||
Receivables and unbilled revenue | ||||||||||||||
Accounts payable | ( | ( | ||||||||||||
Other current assets | ( | ( | ||||||||||||
Other current liabilities | ||||||||||||||
Other changes in noncurrent assets and liabilities | ( | |||||||||||||
Net cash provided by operating activities | ||||||||||||||
Investing activities: | ||||||||||||||
Utility plant expenditures | ( | ( | ||||||||||||
Life insurance proceeds | ||||||||||||||
Purchase of life insurance contracts | ( | |||||||||||||
Asset acquisitions | ( | |||||||||||||
Net cash used in investing activities | ( | ( | ||||||||||||
Financing activities: | ||||||||||||||
Short-term borrowings, net of debt issuance costs of $ | ||||||||||||||
Repayment of short-term borrowings | ( | ( | ||||||||||||
Repayment of long-term debt | ( | ( | ||||||||||||
Advances and contributions in aid of construction | ||||||||||||||
Refunds of advances for construction | ( | ( | ||||||||||||
Repurchase of common stock | ( | ( | ||||||||||||
Issuance of common stock | ||||||||||||||
Dividends paid | ( | ( | ||||||||||||
Others | ||||||||||||||
Net cash provided by financing activities | ||||||||||||||
Change in cash, cash equivalents, and restricted cash | ||||||||||||||
Cash, cash equivalents, and restricted cash at beginning of period | ||||||||||||||
Cash, cash equivalents, and restricted cash at end of period | $ | $ | ||||||||||||
Supplemental information: | ||||||||||||||
Cash paid for interest (net of amounts capitalized) | $ | $ | ||||||||||||
Supplemental disclosure of non-cash activities: | ||||||||||||||
Accrued payables for investments in utility plant | $ | $ | ||||||||||||
Utility plant contribution by developers | $ | $ |
Three Months Ended March 31, | |||||||||||
2024 | 2023 | ||||||||||
Revenue from contracts with customers | $ | $ | |||||||||
Regulatory balancing account revenue | ( | ||||||||||
Total operating revenue | $ | $ |
Three Months Ended March 31, | |||||||||||
2024 | 2023 | ||||||||||
Residential | $ | $ | |||||||||
Business | |||||||||||
Multiple residential | |||||||||||
Industrial | |||||||||||
Public authorities | |||||||||||
Other (a) | ( | ||||||||||
Total revenue from contracts with customers | $ | $ |
Three Months Ended March 31, | |||||||||||
2024 | 2023 | ||||||||||
Operating and maintenance revenue | $ | $ | |||||||||
Other non-regulated revenue | |||||||||||
Non-regulated revenue from contracts with customers | |||||||||||
Lease revenue | |||||||||||
Total non-regulated revenue | $ | $ |
March 31, 2024 | December 31, 2023 | ||||||||||
Beginning balance | $ | $ | |||||||||
Provision for credit loss expense | |||||||||||
Write-offs | ( | ( | |||||||||
Recoveries | |||||||||||
Total ending allowance balance | $ | $ |
March 31, 2024 | December 31, 2023 | ||||||||||
Cash and cash equivalents | $ | $ | |||||||||
Restricted cash | |||||||||||
Total cash, cash equivalents, and restricted cash shown in the statements of cash flows | $ | $ |
Number of RSA Shares | Weighted-Average Grant-Date Fair Value | ||||||||||
RSAs at January 1, 2024 | $ | ||||||||||
Vested | ( | ||||||||||
RSAs at March 31, 2024 | $ |
Number of RSU Shares | Weighted-Average Grant-Date Fair Value | ||||||||||
RSUs at January 1, 2024 | $ | ||||||||||
Performance criteria adjustment | |||||||||||
Vested | ( | ||||||||||
RSUs at March 31, 2024 | $ |
Three Months Ended March 31, 2024 | |||||||||||||||||||||||||||||||||||||||||
Common Stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Loss | Noncontrolling Interests | Total Equity | ||||||||||||||||||||||||||||||||||||
Shares | Amount | ||||||||||||||||||||||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||||||||||||||||||
Balance at January 1, 2024 | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | ( | ||||||||||||||||||||||||||||||||||||
Issuance of common stock | — | — | — | ||||||||||||||||||||||||||||||||||||||
Repurchase of common stock | ( | — | ( | — | — | — | ( | ||||||||||||||||||||||||||||||||||
Dividends paid on common stock ($ | — | — | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||||
Adjustment for unrecoverable pension benefit plan costs | — | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||
Amounts reclassified to earnings (a) | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Investment in business with noncontrolling interest | — | — | ( | — | — | ||||||||||||||||||||||||||||||||||||
Balance at March 31, 2024 | ( | ||||||||||||||||||||||||||||||||||||||||
Three Months Ended March 31, 2023 | |||||||||||||||||||||||||||||||||||
Common Stock | Additional Paid-in Capital | Retained Earnings | Noncontrolling Interests | Total Equity | |||||||||||||||||||||||||||||||
Shares | Amount | ||||||||||||||||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||||||||||||
Balance at January 1, 2023 | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||
Net loss | — | — | — | ( | ( | ( | |||||||||||||||||||||||||||||
Issuance of common stock | — | — | |||||||||||||||||||||||||||||||||
Repurchase of common stock | ( | — | — | — | — | ||||||||||||||||||||||||||||||
Dividends paid on common stock ($ | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||
Investment in business with noncontrolling interest | — | — | ( | — | |||||||||||||||||||||||||||||||
Balance at March 31, 2023 | |||||||||||||||||||||||||||||||||||
Three Months Ended March 31, | |||||||||||||||||||||||
Pension Plan | Other Benefits | ||||||||||||||||||||||
2024 | 2023 | 2024 | 2023 | ||||||||||||||||||||
Service cost | $ | $ | $ | $ | |||||||||||||||||||
Interest cost | |||||||||||||||||||||||
Expected return on plan assets | ( | ( | ( | ( | |||||||||||||||||||
Amortization of prior service cost | |||||||||||||||||||||||
Recognized net actuarial (gain) loss | ( | ( | ( | ||||||||||||||||||||
Net periodic benefit cost (credit) | $ | $ | $ | $ | ( |
Three Months Ended March 31, | |||||||||||
2024 | 2023 | ||||||||||
Income tax (benefit) expense | $ | $ | ( |
Recovery Period | March 31, 2024 | December 31, 2023 | |||||||||||||||
Regulatory Assets | |||||||||||||||||
Property-related temporary differences (tax benefits flowed through to customers) | Indefinite | ||||||||||||||||
Other accrued benefits | Indefinite | ||||||||||||||||
Net WRAM and Modified Cost Balancing Account (MCBA) long-term accounts receivable | Various | ||||||||||||||||
Asset retirement obligations, net | Indefinite | ||||||||||||||||
IRMA long-term accounts receivable | |||||||||||||||||
MWRAM | |||||||||||||||||
Tank coating | Various | ||||||||||||||||
Recoverable property losses | Various | ||||||||||||||||
Pension Cost Balancing Account (PCBA) | Various | ||||||||||||||||
Customer assistance program (CAP) and Rate support fund (RSF) accounts receivable | |||||||||||||||||
Other regulatory assets | Various | ||||||||||||||||
Total Regulatory Assets | $ | $ | |||||||||||||||
Regulatory Liabilities | |||||||||||||||||
Cost of removal | $ | $ | |||||||||||||||
Future tax benefits due to customers | |||||||||||||||||
Pension and retiree group health | |||||||||||||||||
Incremental cost balancing account (ICBA) | |||||||||||||||||
IRMA long-term regulatory liability | |||||||||||||||||
Health Cost Balancing Account (HCBA) | |||||||||||||||||
PCBA | |||||||||||||||||
Conservation Expense Balancing Account | |||||||||||||||||
Net WRAM and MCBA long-term payable | |||||||||||||||||
Other components of net periodic benefit cost | |||||||||||||||||
RSF regulatory liability | |||||||||||||||||
Other regulatory liabilities | |||||||||||||||||
Total Regulatory Liabilities | $ | $ |
March 31, 2024 | |||||||||||||||||||||||||||||
Fair Value | |||||||||||||||||||||||||||||
Cost | Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||||||||
Long-term debt, including current maturities, net | $ | $ | $ | $ | $ |
December 31, 2023 | |||||||||||||||||||||||||||||
Fair Value | |||||||||||||||||||||||||||||
Cost | Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||||||||
Long-term debt, including current maturities, net | $ | $ | $ | $ | $ |
Net change due to rate changes, usage, and other (1) | $ | 13,986 | |||
Interim Rates Memorandum Account (IRMA) revenue (2) | 80,664 | ||||
Monterey-Style Water Revenue Adjustment Mechanism (MWRAM) revenue (3) | 31,066 | ||||
Deferral of revenue (4) | 13,933 | ||||
Net operating revenue increase | $ | 139,649 |
Three Months Ended March 31, | |||||||||||
2024 | 2023 | ||||||||||
Well production | 54 | % | 48 | % | |||||||
Purchased | 45 | % | 49 | % | |||||||
Surface | 1 | % | 3 | % | |||||||
Total | 100 | % | 100 | % |
Three Months Ended March 31, | |||||||||||||||||
2024 | 2023 | Change | |||||||||||||||
Purchased water | $ | 40,227 | $ | 42,738 | $ | (2,511) | |||||||||||
Purchased power | 10,032 | 8,390 | 1,642 | ||||||||||||||
Pump taxes | 5,047 | 3,880 | 1,167 | ||||||||||||||
ICBA | 8,879 | — | 8,879 | ||||||||||||||
Total | $ | 64,185 | $ | 55,008 | $ | 9,177 |
Summarized Statement of Operations | |||||||||||||||||||||||
(in thousands) | Three Months Ended March 31, 2024 | Twelve Months Ended December 31, 2023 | |||||||||||||||||||||
Issuer | Guarantor | Issuer | Guarantor | ||||||||||||||||||||
Net sales | $ | 253,439 | $ | — | $ | 720,577 | $ | — | |||||||||||||||
Gross profit | $ | 193,604 | $ | — | $ | 449,221 | $ | — | |||||||||||||||
Income from operations | $ | 81,266 | $ | 257 | $ | 82,157 | $ | 590 | |||||||||||||||
Equity in earnings of guarantor | $ | — | $ | 69,002 | $ | — | $ | 49,998 | |||||||||||||||
Net income | $ | 73,579 | $ | 69,690 | $ | 57,168 | $ | 51,376 |
Summarized Balance Sheet Information | |||||||||||||||||||||||
(in thousands) | As of March 31, 2024 | As of December 31, 2023 | |||||||||||||||||||||
Issuer | Guarantor | Issuer | Guarantor | ||||||||||||||||||||
Current assets | $ | 196,749 | $ | 9,568 | $ | 213,469 | $ | 10,126 | |||||||||||||||
Intercompany receivable from Non-guarantors | $ | 3,436 | $ | 53,618 | $ | 3,664 | $ | 44,882 | |||||||||||||||
Other assets | $ | 603,153 | $ | 1,247,621 | $ | 479,642 | $ | 1,190,076 | |||||||||||||||
Long-term intercompany receivable from Non-issuers | $ | — | $ | 85,678 | $ | — | $ | 82,610 | |||||||||||||||
Net utility plant | $ | 3,554,567 | $ | — | $ | 3,487,788 | $ | — | |||||||||||||||
Total assets | $ | 4,357,905 | $ | 1,396,485 | $ | 4,184,563 | $ | 1,327,694 | |||||||||||||||
Current liabilities | $ | 413,610 | $ | 67,778 | $ | 351,964 | $ | 53,069 | |||||||||||||||
Intercompany payable to Non-guarantors and Guarantor | $ | 114 | $ | — | $ | — | $ | — | |||||||||||||||
Long-term debt | $ | 1,051,952 | $ | — | $ | 1,052,350 | $ | — | |||||||||||||||
Other liabilities | $ | 1,663,456 | $ | 3,335 | $ | 1,595,852 | $ | 3,068 | |||||||||||||||
Total Liabilities | $ | 3,129,132 | $ | 71,113 | $ | 3,000,166 | $ | 56,137 |
Exhibit Number | Description | ||||||||||
3.1 | |||||||||||
3.2 | |||||||||||
3.3 | |||||||||||
3.4 | |||||||||||
3.5 | |||||||||||
4.0 | The Company agrees to furnish upon request to the Securities and Exchange Commission a copy of each instrument defining the rights of holders of long-term debt of the Company. | ||||||||||
31.1 | |||||||||||
31.2 | |||||||||||
32 | |||||||||||
101 | The following materials from this Quarterly Report on Form 10-Q formatted in iXBRL (Inline eXtensible Business Reporting Language): (i) Condensed Consolidated Balance Sheets, (ii) Condensed Consolidated Statements of Operations, (iii) Condensed Consolidated Statements of Cash Flows, (iv) the Notes to the Condensed Consolidated Financial Statements, and (v) Part II, Item 5(c). | ||||||||||
104 | The cover page from this Quarterly Report on Form 10-Q formatted in iXBRL (included as Exhibit 101) |
CALIFORNIA WATER SERVICE GROUP | ||||||||
Registrant | ||||||||
April 25, 2024 | By: | /s/ James P. Lynch | ||||||
James P. Lynch | ||||||||
Senior Vice President, Chief Financial Officer and Treasurer | ||||||||
(Principal Financial Officer) | ||||||||
Date: April 25, 2024 | By: | /s/ Martin A. Kropelnicki | ||||||
MARTIN A. KROPELNICKI | ||||||||
Chairman, President and Chief Executive Officer | ||||||||
Date: April 25, 2024 | By: | /s/ James P. Lynch | ||||||
JAMES P. LYNCH | ||||||||
Senior Vice President, Chief Financial Officer and Treasurer | ||||||||
(Principal Financial Officer) | ||||||||
Date: April 25, 2024 | By: | /s/ Martin A. Kropelnicki | ||||||
MARTIN A. KROPELNICKI | ||||||||
Chairman, President and Chief Executive Officer | ||||||||
California Water Service Group | ||||||||
Date: April 25, 2024 | By: | /s/ James P. Lynch | ||||||
JAMES P. LYNCH | ||||||||
Senior Vice President, Chief Financial Officer and Treasurer | ||||||||
(Principal Financial Officer) | ||||||||
California Water Service Group | ||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares |
Mar. 31, 2024 |
Dec. 31, 2023 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 136,000,000 | 136,000,000 |
Common stock, shares outstanding (in shares) | 57,754,000 | 57,724,000 |
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
|
Statement of Cash Flows [Abstract] | ||
Payments of debt issuance costs | $ 0 | $ 1,552 |
Organization and Operations and Basis of Presentation |
3 Months Ended |
---|---|
Mar. 31, 2024 | |
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 non-wholly owned subsidiary’s voting interests. 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, 2023 as filed with the SEC on February 29, 2024. 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, utility plant useful lives, 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 the 7.4% 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 7.4% 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 income (loss) attributable to California Water Service Group excludes the net loss attributable to the noncontrolling interests.
|
Summary of Significant Accounting Policies |
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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, 2024 and 2023:
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, 2024 and 2023:
(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). For certain revenue mechanisms, the Company recognizes revenue when it is objectively determinable, probable of recovery and expected to be collected within 24 months following the end of the accounting period. To the extent that revenue is estimated to be collectible beyond 24 months, recognition is deferred. These mechanisms include the Monterey-Style Water Revenue Adjustment Mechanism (MWRAM) which was approved in Cal Water’s most recent General Rate Case (GRC) filing in July 2021 (2021 GRC) in March of 2024. 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 MWRAM is effective retroactive to January 1, 2023. In the first quarter of 2024, the Company recorded $31.1 million of revenue for the MWRAM. These mechanisms also include the Water Revenue Adjustment Mechanism (WRAM) which 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. The WRAM concluded on December 31, 2022; however, the Company has a net WRAM receivable balance for which the Company continues to defer revenue recognition for amounts estimated to be collected beyond 24 months following the end of the accounting period. The Company intends to apply the proceeds from the California Extended Water and Wastewater Arrearages Payment Program (Extended Program) to eligible customer WRAM balances. Regulatory balancing accounts also include revenue that is recognized for balancing and memorandum 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. As a result of the delay in the approval of the 2021 GRC, the CPUC authorized Cal Water to track the effect of the delay on customer billings in an Interim Rates Memorandum Account (IRMA) effective January 1, 2023. Variances between actual customer billings and those that would have been billed assuming the 2021 GRC had been implemented on January 1, 2023 are recorded as regulatory balancing account revenue. The 2021 GRC was approved in March of 2024 and final authorized rates have not yet been implemented as of March 31, 2024; as a result, Cal Water calculated and recorded this difference for all of 2023 and the first three months of 2024. Cal Water determined that the IRMA met regulatory asset recognition criteria under accounting standards for regulated utilities. In the first quarter of 2024, the Company recorded $80.7 million of revenue for the IRMA. Non-Regulated Revenue The following table disaggregates the Company’s non-regulated revenue by source for the three months ended March 31, 2024 and 2023:
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 the Company provides 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 use to ensure payment. The Company reviews its allowance for credit losses utilizing a quantitative assessment, which includes a trend analysis of customer billings and collections, agings 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 in the locations the Company serves. Based on these assessments, the Company adjusts its allowance for credit losses. The Company has also taken into account $82.0 million of funds that the Company received in April of 2024 from the Extended Program for eligible customers in California (refer to Note 11, “Subsequent Events” for more details). The Extended Program was created by the California Legislature, and is administered by the State Water Resources Control Board (Water Board) and provides relief to community water and wastewater systems for unpaid bills – arrearages – related to the COVID-19 pandemic. Based on the above assessments, the Company adjusted its allowance for credit losses accordingly. The following table presents the activity in the allowance for credit losses for the three months ended March 31, 2024 and twelve months ended December 31, 2023:
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 9 for further details on restricted cash):
Earnings (Loss) per Share Basic earnings (loss) per share of common stock is computed by dividing the net income (loss) attributable to California Water Service Group by the weighted average number of common shares outstanding during the period. Diluted earnings per share reflect the potential dilution that could occur if securities or other contracts were exercised or converted into common stock. Restricted Stock Awards (RSAs) are included in the common shares outstanding because the shares have all the same voting and dividend rights as issued and unrestricted common stock. New Accounting Standards and SEC Rules In November 2023, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures which expands annual and interim disclosure requirements for reportable segments, primarily through enhanced disclosures about significant segment expenses. ASU 2023-07 is effective for the Company’s annual periods beginning January 1, 2024, and for interim periods beginning January 1, 2025, with early adoption permitted. The guidance requires retrospective presentation of all prior periods presented in the financial statements. The Company is currently evaluating the potential effect that the updated standard will have on its financial statement disclosures and does not expect to early adopt. In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures to expand the disclosure requirements for income taxes, specifically related to the rate reconciliation and income taxes paid. ASU 2023-09 is effective for the Company's annual periods beginning January 1, 2025, with early adoption permitted. The guidance is applied prospectively with the option of retrospective application for each period presented. The Company is currently evaluating the potential effect that the updated standard will have on its financial statement disclosures and does not expect to early adopt. In March 2024, the SEC issued SEC Release No. 33-11275, The Enhancement and Standardization of Climate-Related Disclosures for Investors. The final rules enhance disclosures related to the risks and impacts of climate-related matters and, in April 2024, the SEC voluntarily stayed the new rules as a result of pending legal challenges. The new rules, if they become effective as adopted, would require various disclosures related to climate-related risks if those risks could have a material impact on the Company’s business, results of operations, or financial condition. Required disclosures would also include information about the Company’s greenhouse gas emissions, if material. In addition, the rules would require disclosure of certain climate-related financial metrics in the Company’s financial statements. The final rules, if they become effective as adopted, would be effective no earlier than the Company’s Annual Report on Form 10-K for the year ending December 31, 2025. The Company is currently evaluating the potential effect that the rules will have on its financial statement disclosures.
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Stock-Based Compensation | Stock-Based Compensation. For the three months ended March 31, 2024, the Company did not grant any RSAs of common stock to Officers or to members of the Board of Directors (Directors). Generally, an RSA share represents the right to receive a 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 the Directors 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 the Directors. As of March 31, 2024, there was approximately $1.3 million of total unrecognized compensation cost related to RSAs. The cost is expected to be recognized over a weighted average period of 1.6 years. A summary of the status of the outstanding RSAs as of March 31, 2024 is presented below:
For the three months ended March 31, 2024, the Company did not grant any performance-based Restricted Stock Units (RSUs) to Officers. Generally, a RSU represents the right to receive a share of the Company’s common stock. Each award reflects a target number of shares of common stock that may be issued to the award recipient. 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. 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 stock at the date of grant and an estimated number of RSUs earned during the performance period. As of March 31, 2024, there was approximately $2.0 million of total unrecognized compensation cost related to RSUs. The cost is expected to be recognized over a weighted average period of 1.5 years. A summary of the status of outstanding RSUs as of March 31, 2024 is presented below:
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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 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 did not utilize its at-the-market equity program during the three months ended March 31, 2024. During the three months ended March 31, 2023, 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 sales commissions. The Company’s changes in total equity for the three months ended March 31, 2024 and 2023 were as follows:
(a) This accumulated other comprehensive loss component is included in the computation of net periodic costs for the Company’s supplemental executive retirement plan (SERP), specifically the following components: amortization of unrecognized (gain) loss and amortization of prior service credit.
In Cal Water’s 2021 GRC decision that was issued in March of 2024, SERP expenses were not approved to be recovered from customers for the years 2023, 2024 and 2025. Without regulatory recovery, Cal Water no longer meets the regulatory asset recognition criteria to record the unrecognized prior service costs and actuarial gain and loss amounts related to the SERP as a regulatory asset. The Company has applied compensation recognition guidance and recorded the unrecognized prior service costs and actuarial gains and losses to accumulated other comprehensive loss. As of March 31, 2024, the Company reclassified $13.7 million to accumulated other comprehensive loss, which is Cal Water’s cumulative portion of the regulatory asset.
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Pension Plan and Other Postretirement Benefits |
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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 its employees. The Company makes annual contributions to fund amounts accrued for the qualified pension plan. The Company also maintains an unfunded, non-qualified SERP. 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. No cash contributions were made by the Company to the pension plans nor the other postretirement benefit plans for the three months ended March 31, 2024. The Company made cash contributions of $2.9 million and $0.2 million, respectively, to the pension plans and other postretirement benefit plan for the three months ended March 31, 2023. The Company estimates in 2024 that the annual contribution to the pension plans will be $0.7 million and the annual contribution to the other postretirement plan will be $0.2 million. The following table lists 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 SERP. The data listed under “other benefits” is for all other postretirement benefits.
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.
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Short-term and Long-term Borrowings |
3 Months Ended |
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Mar. 31, 2024 | |
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, 2024, 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. Borrowings on the Company lines of credit as of March 31, 2024 and December 31, 2023 were $65.0 million and $50.0 million, respectively. Outstanding borrowings on the Cal Water lines of credit as of March 31, 2024 and December 31, 2023 were $215.0 million and $130.0 million, respectively. The average borrowing rate for borrowings on the Company and Cal Water lines of credit during the three months ended March 31, 2024 was 6.38% compared to 5.49% for the same period last year.
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Income Taxes |
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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:
Income tax expense increased $20.7 million to $16.9 million for the three months ended March 31, 2024 as compared to $3.9 million tax benefit for the three months ended March 31, 2023, primarily due to an increase in pre-tax operating income in the first three months ended March 31, 2024 as compared to 2023. The increase in income tax expense was primarily due to the recognition of income related to the 2021 GRC decision. The Company’s effective tax rate was 19.6% and 14.6% before discrete items as of March 31, 2024 and March 31, 2023. The increase in the effective tax rate was primarily due to the recognition of the 2021 GRC. The Company had unrecognized tax benefits of approximately $16.6 million and $14.0 million as of March 31, 2024 and 2023, respectively. Included in the balance of unrecognized tax benefits as of March 31, 2024 and 2023, is $5.0 million and $4.5 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.
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Regulatory Assets and Liabilities |
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Regulated Operations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Regulatory Assets and Liabilities | Regulatory Assets and Liabilities Regulatory assets and liabilities were comprised of the following as of March 31, 2024 and December 31, 2023:
The IRMA regulatory asset increase was for the additional amount the Company would have billed customers in 2023 and the first quarter of 2024 had the 2021 GRC been approved on time. The IRMA regulatory liability represents additional CAP and RSF credits the Company would have provided to customers in 2023 and the first quarter of 2024 had the 2021 GRC been approved on time. The MWRAM regulatory asset represents 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 prices of water production costs and actual prices of water production costs. In the first quarter of 2024, the Company recorded a regulatory liability for certain service territories of $10.8 million as the authorized water production costs were higher than actual water production costs. The Company also recorded a regulatory asset for certain service territories of $1.6 million as the authorized water production costs were lower than actual water production costs. The ICBA regulatory asset is part of “Other regulatory assets” in the table above. Short-term regulatory assets and liabilities are excluded from the above table. The short-term regulatory assets were $56.1 million as of March 31, 2024 and $64.2 million as of December 31, 2023. The short-term regulatory assets as of March 31, 2024 and December 31, 2023, primarily consisted of net WRAM and MCBA, and PCBA receivables and are included in current assets as part of regulatory balancing accounts on the Condensed Consolidated Balance Sheets. The short-term portion of regulatory liabilities were $16.6 million as of March 31, 2024 and $21.5 million as of December 31, 2023. The short-term regulatory liabilities as of March 31, 2024 and December 31, 2023, primarily consisted of Tax Cuts and Jobs Act regulatory liabilities and HCBA liabilities and are included in current liabilities as part of regulatory balancing accounts on the Condensed Consolidated Balance Sheets.
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Commitments and Contingencies |
3 Months Ended |
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Mar. 31, 2024 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Commitments The Company has long-term 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, 2023. 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 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. In 2023, Camino Real committed an additional $22.3 million for its share of the cost of the pipeline project. As of March 31, 2024, 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 the committed cash to be transferred to GBRA before the end of 2024. Contingencies Groundwater Contamination The Company has undertaken litigation against third parties to recover past and future costs related to groundwater contamination in our service areas. The cost of litigation is generally expensed as incurred and any settlement is first offset against such costs. The CPUC’s general policy requires all proceeds from 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 the shareholder, 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 and uses of proceeds to comply with CPUC’s general policy. 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, 2024 and December 31, 2023, the Company recognized a liability of $6.9 million and $6.0 million, respectively, primarily due to potable water main 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.
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Fair Value of Financial Assets and Liabilities |
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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. Pension and other postretirement benefit plan assets are measured at either net asset value or level 1 depending on the investment. Long-term debt fair values were estimated using the published quoted market price, 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%.
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Subsequent Event |
3 Months Ended |
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Mar. 31, 2024 | |
Subsequent Events [Abstract] | |
Subsequent Event | Subsequent Event California Extended Water and Wastewater Arrearages Payment Program The California Water and Wastewater Arrearages Payment Program was created by the California Legislature to be administered by the Water Board in order to provide relief to community water and wastewater systems for unpaid bills (arrearages) related to the COVID-19 pandemic. In 2023, the Extended Program was established and extended the relief period to include arrearages accrued from June 16, 2021 to December 31, 2022. In response to the Extended Program, Cal Water submitted an application for $82.0 million in eligible customer arrearages and $1.0 million in program administrative costs which was approved by the Water Board. Cal Water received the funds in April of 2024 and intends to apply the funds to identified eligible past due customer balances during the second quarter of 2024.
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Pay vs Performance Disclosure - USD ($) $ in Thousands |
3 Months Ended | |
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Mar. 31, 2024 |
Mar. 31, 2023 |
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Pay vs Performance Disclosure | ||
Net Income (Loss) | $ 69,917 | $ (22,211) |
Insider Trading Arrangements |
3 Months Ended |
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Mar. 31, 2024 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
Summary of Significant Accounting Policies (Policies) |
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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 non-wholly owned subsidiary’s voting interests. 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, 2023 as filed with the SEC on February 29, 2024. 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, utility plant useful lives, 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.
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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, 2024 and 2023:
(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). For certain revenue mechanisms, the Company recognizes revenue when it is objectively determinable, probable of recovery and expected to be collected within 24 months following the end of the accounting period. To the extent that revenue is estimated to be collectible beyond 24 months, recognition is deferred. These mechanisms include the Monterey-Style Water Revenue Adjustment Mechanism (MWRAM) which was approved in Cal Water’s most recent General Rate Case (GRC) filing in July 2021 (2021 GRC) in March of 2024. 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 MWRAM is effective retroactive to January 1, 2023. In the first quarter of 2024, the Company recorded $31.1 million of revenue for the MWRAM. These mechanisms also include the Water Revenue Adjustment Mechanism (WRAM) which 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. The WRAM concluded on December 31, 2022; however, the Company has a net WRAM receivable balance for which the Company continues to defer revenue recognition for amounts estimated to be collected beyond 24 months following the end of the accounting period. The Company intends to apply the proceeds from the California Extended Water and Wastewater Arrearages Payment Program (Extended Program) to eligible customer WRAM balances. Regulatory balancing accounts also include revenue that is recognized for balancing and memorandum 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. As a result of the delay in the approval of the 2021 GRC, the CPUC authorized Cal Water to track the effect of the delay on customer billings in an Interim Rates Memorandum Account (IRMA) effective January 1, 2023. Variances between actual customer billings and those that would have been billed assuming the 2021 GRC had been implemented on January 1, 2023 are recorded as regulatory balancing account revenue. The 2021 GRC was approved in March of 2024 and final authorized rates have not yet been implemented as of March 31, 2024; as a result, Cal Water calculated and recorded this difference for all of 2023 and the first three months of 2024. Cal Water determined that the IRMA met regulatory asset recognition criteria under accounting standards for regulated utilities. In the first quarter of 2024, the Company recorded $80.7 million of revenue for the IRMA.
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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, 2024 and 2023:
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 the Company provides 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. |
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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 use to ensure payment. The Company reviews its allowance for credit losses utilizing a quantitative assessment, which includes a trend analysis of customer billings and collections, agings 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 in the locations the Company serves. Based on these assessments, the Company adjusts its allowance for credit losses. The Company has also taken into account $82.0 million of funds that the Company received in April of 2024 from the Extended Program for eligible customers in California (refer to Note 11, “Subsequent Events” for more details). The Extended Program was created by the California Legislature, and is administered by the State Water Resources Control Board (Water Board) and provides relief to community water and wastewater systems for unpaid bills – arrearages – related to the COVID-19 pandemic. Based on the above assessments, the Company adjusted its allowance for credit losses accordingly.
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Earnings (Loss) per Share | Earnings (Loss) per Share Basic earnings (loss) per share of common stock is computed by dividing the net income (loss) attributable to California Water Service Group by the weighted average number of common shares outstanding during the period. Diluted earnings per share reflect the potential dilution that could occur if securities or other contracts were exercised or converted into common stock. Restricted Stock Awards (RSAs) are included in the common shares outstanding because the shares have all the same voting and dividend rights as issued and unrestricted common stock.
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New Accounting Standards and SEC Rules | New Accounting Standards and SEC Rules In November 2023, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures which expands annual and interim disclosure requirements for reportable segments, primarily through enhanced disclosures about significant segment expenses. ASU 2023-07 is effective for the Company’s annual periods beginning January 1, 2024, and for interim periods beginning January 1, 2025, with early adoption permitted. The guidance requires retrospective presentation of all prior periods presented in the financial statements. The Company is currently evaluating the potential effect that the updated standard will have on its financial statement disclosures and does not expect to early adopt. In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures to expand the disclosure requirements for income taxes, specifically related to the rate reconciliation and income taxes paid. ASU 2023-09 is effective for the Company's annual periods beginning January 1, 2025, with early adoption permitted. The guidance is applied prospectively with the option of retrospective application for each period presented. The Company is currently evaluating the potential effect that the updated standard will have on its financial statement disclosures and does not expect to early adopt. In March 2024, the SEC issued SEC Release No. 33-11275, The Enhancement and Standardization of Climate-Related Disclosures for Investors. The final rules enhance disclosures related to the risks and impacts of climate-related matters and, in April 2024, the SEC voluntarily stayed the new rules as a result of pending legal challenges. The new rules, if they become effective as adopted, would require various disclosures related to climate-related risks if those risks could have a material impact on the Company’s business, results of operations, or financial condition. Required disclosures would also include information about the Company’s greenhouse gas emissions, if material. In addition, the rules would require disclosure of certain climate-related financial metrics in the Company’s financial statements. The final rules, if they become effective as adopted, would be effective no earlier than the Company’s Annual Report on Form 10-K for the year ending December 31, 2025. The Company is currently evaluating the potential effect that the rules will have on its financial statement disclosures.
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Summary of Significant Accounting Policies (Tables) |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disaggregation of Revenue | The following table disaggregates the Company’s operating revenue by source for the three months ended March 31, 2024 and 2023:
In the following table, revenue from contracts with customers is disaggregated by class of customers for the three months ended March 31, 2024 and 2023:
(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, 2024 and 2023:
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Schedule of Allowance for Credit Losses | The following table presents the activity in the allowance for credit losses for the three months ended March 31, 2024 and twelve months ended December 31, 2023:
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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 9 for further details on restricted cash):
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Stock-Based Compensation (Tables) |
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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, 2024 is presented below:
A summary of the status of outstanding RSUs as of March 31, 2024 is presented below:
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Equity (Tables) |
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Changes in Total Common Stockholders' Equity | The Company’s changes in total equity for the three months ended March 31, 2024 and 2023 were as follows:
(a) This accumulated other comprehensive loss component is included in the computation of net periodic costs for the Company’s supplemental executive retirement plan (SERP), specifically the following components: amortization of unrecognized (gain) loss and amortization of prior service credit.
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Pension Plan and Other Postretirement Benefits (Tables) |
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Retirement Benefits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of components of net periodic benefit costs for the pension plans and other postretirement benefits | The following table lists 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 SERP. The data listed under “other benefits” is for all other postretirement benefits.
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Income Taxes (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Components of Income Tax Expense (Benefit) | The provision for income taxes is shown in the tables below:
|
Regulatory Assets and Liabilities (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Regulated Operations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Regulatory Assets and Liabilities | Regulatory assets and liabilities were comprised of the following as of March 31, 2024 and December 31, 2023:
|
Fair Value of Financial Assets and Liabilities (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Fair Value of Long-term Debt |
|
Organization and Operations and Basis of Presentation (Details) |
3 Months Ended |
---|---|
Mar. 31, 2024
segment
| |
Noncontrolling Interest [Line Items] | |
Number of reportable segments | 1 |
BVRT Water Company | |
Noncontrolling Interest [Line Items] | |
Noncontrolling interest | 7.40% |
Summary of Significant Accounting Policies - Narrative (Details) - USD ($) $ in Millions |
3 Months Ended | 4 Months Ended | 15 Months Ended |
---|---|---|---|
Mar. 31, 2024 |
Apr. 30, 2024 |
Mar. 31, 2024 |
|
Disaggregation of Revenue [Line Items] | |||
Maximum collection period in which deferred net WRAM and MCBA revenues and associated costs will be recognized | 24 months | ||
Subsequent Event | |||
Disaggregation of Revenue [Line Items] | |||
Application amount for eligible customer arrearages | $ 82.0 | ||
IRMA long-term regulatory liability | |||
Disaggregation of Revenue [Line Items] | |||
Regulated revenue | $ 80.7 | ||
MWRAM | |||
Disaggregation of Revenue [Line Items] | |||
Regulated revenue | $ 31.1 |
Summary of Significant Accounting Policies - Allowance for Credit Losses (Details) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended |
---|---|---|
Mar. 31, 2024 |
Dec. 31, 2023 |
|
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | ||
Beginning balance | $ 2,854 | $ 5,629 |
Provision for credit loss expense | 1,052 | 2,480 |
Write-offs | (1,288) | (5,795) |
Recoveries | 126 | 540 |
Total ending allowance balance | $ 2,744 | $ 2,854 |
Summary of Significant Accounting Policies - Cash, Cash Equivalents, and Restricted Cash (Details) - USD ($) $ in Thousands |
Mar. 31, 2024 |
Dec. 31, 2023 |
Mar. 31, 2023 |
Dec. 31, 2022 |
---|---|---|---|---|
Accounting Policies [Abstract] | ||||
Cash and cash equivalents | $ 42,814 | $ 39,591 | ||
Restricted cash | 45,449 | 45,375 | ||
Total cash, cash equivalents, and restricted cash shown in the statements of cash flows | $ 88,263 | $ 84,966 | $ 86,439 | $ 85,025 |
Stock-Based Compensation - Narrative (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
|
Stock-based Compensation | ||
Recorded compensation costs for the RSAs and RSUs | $ 0.7 | $ 0.1 |
RSAs | ||
Stock-based Compensation | ||
Period for recognition | 1 year 7 months 6 days | |
Unrecognized compensation cost | $ 1.3 | |
Performance-Based Restricted Stock Unit Awards (RSUs) | ||
Stock-based Compensation | ||
Period for recognition | 1 year 6 months | |
Unrecognized compensation cost | $ 2.0 | |
Performance period | 3 years | |
Performance-Based Restricted Stock Unit Awards (RSUs) | Minimum | ||
Stock-based Compensation | ||
Options vested on anniversary date | 0.00% | |
Performance-Based Restricted Stock Unit Awards (RSUs) | Maximum | ||
Stock-based Compensation | ||
Options vested on anniversary date | 200.00% | |
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 & Performance-Based RSUs (Details) |
3 Months Ended |
---|---|
Mar. 31, 2024
$ / shares
shares
| |
RSAs | |
Number of shares | |
Beginning balance (in shares) | shares | 53,303 |
Vested (in shares) | shares | (28,843) |
Ending balance (in shares) | shares | 24,460 |
Weighted average price at grant | |
Beginning balance (in dollars per share) | $ / shares | $ 55.48 |
Vested (in dollars per share) | $ / shares | 55.23 |
Ending balance (in dollars per share) | $ / shares | $ 55.78 |
RSUs | |
Number of shares | |
Beginning balance (in shares) | shares | 93,078 |
Performance criteria adjustment (in shares) | shares | 13,735 |
Vested (in shares) | shares | (36,394) |
Ending balance (in shares) | shares | 70,419 |
Weighted average price at grant | |
Beginning balance (in dollars per share) | $ / shares | $ 55.41 |
Performance criteria adjustment (in dollars per share) | $ / shares | 53.96 |
Vested (in dollars per share) | $ / shares | 53.96 |
Ending balance (in dollars per share) | $ / shares | $ 55.87 |
Equity - Narrative (Details) - USD ($) $ in Millions |
3 Months Ended | ||
---|---|---|---|
Apr. 29, 2022 |
Mar. 31, 2023 |
Mar. 31, 2024 |
|
Equity [Abstract] | |||
Maximum consideration on transaction | $ 350.0 | ||
Sale of stock, agreement term | 3 years | ||
Sale of stock, number of shares issued in transaction (in shares) | 326,042 | ||
Issuance of common stock | $ 18.2 | ||
Payments for commissions | $ 0.2 | ||
Service costs and actuarial gains and losses reclassified to other comprehensive loss | $ 13.7 |
Income Taxes - Provision for Income Taxes (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
|
Income Tax Disclosure [Abstract] | ||
Income tax (benefit) expense | $ 16,859 | $ (3,850) |
Income Taxes - Narrative (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
|
Income Tax Disclosure [Abstract] | ||
Decrease in income tax expense | $ 20,700 | |
Income tax expense (benefit) | $ 16,859 | $ (3,850) |
Effective tax rate estimate | 19.60% | 14.60% |
Unrecognized tax benefits | $ 16,600 | $ 14,000 |
Tax benefits that, if recognized, would affect the effective tax rate | $ 5,000 | $ 4,500 |
Regulatory Assets and Liabilities - Narrative (Details) - USD ($) $ in Thousands |
3 Months Ended | 15 Months Ended | ||
---|---|---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
Mar. 31, 2024 |
Dec. 31, 2023 |
|
Schedule of Regulatory Assets and Liabilities [Line Items] | ||||
Water production costs | $ 64,185 | $ 55,008 | ||
Short-term portion of the regulatory assets | 56,125 | $ 56,125 | $ 64,240 | |
Short-term portion of the regulatory liabilities | $ 16,644 | 16,644 | $ 21,540 | |
Incremental cost balancing account (ICBA) | ||||
Schedule of Regulatory Assets and Liabilities [Line Items] | ||||
Water production costs | 1,600 | |||
Incremental cost balancing account (ICBA) | ||||
Schedule of Regulatory Assets and Liabilities [Line Items] | ||||
Water production costs | $ 10,800 |
Commitments and Contingencies - Narrative (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2023 |
Dec. 31, 2022 |
Mar. 31, 2024 |
|
Lessee, Lease, Description [Line Items] | |||
Contingency loss recognized liability | $ 6.0 | $ 6.9 | |
Camino Real | Supply Commitment | |||
Lessee, Lease, Description [Line Items] | |||
Payments for other commitments | $ 22.3 | $ 21.5 |
Fair Value of Financial Assets and Liabilities - Narrative (Details) |
3 Months Ended |
---|---|
Mar. 31, 2024 | |
Fair Value Disclosures [Abstract] | |
Risk premium (as a percent) | 0.60% |
Fair Value of Financial Assets and Liabilities - Schedule of Long Term Debt at Fair Value (Details) - USD ($) $ in Thousands |
Mar. 31, 2024 |
Dec. 31, 2023 |
---|---|---|
Cost | ||
Fair Value of Financial Assets and Liabilities | ||
Long-term debt, including current maturities, net | $ 1,053,275 | $ 1,053,440 |
Fair Value | ||
Fair Value of Financial Assets and Liabilities | ||
Long-term debt, including current maturities, net | 939,102 | 965,444 |
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 | 939,102 | 965,444 |
Fair Value | Level 3 | ||
Fair Value of Financial Assets and Liabilities | ||
Long-term debt, including current maturities, net | $ 0 | $ 0 |
Subsequent Event (Details) - Subsequent Event $ in Millions |
4 Months Ended |
---|---|
Apr. 30, 2024
USD ($)
| |
Subsequent Event [Line Items] | |
Application amount for eligible customer arrearages | $ 82.0 |
Application amount for program administrative costs | $ 1.0 |
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