10-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-K

☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2019

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from              to             

Commission file number: 001-8966

SJW GROUP

(Exact name of registrant as specified in its charter)

Delaware			77-0066628
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)
110 West Taylor Street,	San Jose,	CA	95110
(Address of principal executive offices)			(Zip Code)

(408) 279-7800

(Registrant’s telephone number, including area code)

Not Applicable

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.001 per share	SJW	New York Stock Exchange LLC

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.    Yes  ☒    No  ☐

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.    Yes  ☐    No  ☒

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ☒    No  ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  ☒    No  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or emerging growth company. See definition of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company,” in Rule 12b-2 of the Exchange Act.

Large accelerated filer  ☒    Accelerated filer  ☐    Non-accelerated filer  ☐    Smaller reporting company  ☐ Emerging growth company  ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ☐    No  ☒

As of June 30, 2019, the aggregate market value of the registrant’s common stock held by non-affiliates of the registrant was approximately $1,586 million based on the closing sale price as reported on the New York Stock Exchange.

Indicate the number of shares outstanding of registrant’s common stock, as of the latest practicable date.

Class	Outstanding at February 24, 2020
Common Stock, $0.001 par value per share	28,493,151

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the registrant’s Proxy Statement relating to the registrant’s Annual Meeting of Stockholders, to be held on April 29, 2020, are incorporated by reference into Part III of this Form 10-K where indicated.

TABLE OF CONTENTS

		Page
PART I
Forward-Looking Statements		3
Item 1.	Business	4
Item 1A.	Risk Factors	13
Item 1B.	Unresolved Staff Comments	25
Item 2.	Properties	25
Item 3.	Legal Proceedings	26
Item 4.	Mine Safety Disclosures	27
PART II
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	28
Item 6.	Selected Financial Data	29
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	30
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	47
Item 8.	Financial Statements and Supplementary Data	48
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	88
Item 9A.	Controls and Procedures	88
Item 9B.	Other Information	89
PART III
Item 10.	Directors, Executive Officers and Corporate Governance	89
Item 11.	Executive Compensation	89
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	89
Item 13.	Certain Relationships and Related Transactions, and Director Independence	89
Item 14.	Principal Accountant Fees and Services	90
PART IV
Item 15.	Exhibits and Financial Statement Schedules	91
Exhibit Index		92
Signatures		100

PART I

Forward-Looking Statements

This report contains forward-looking statements within the meaning of the federal securities laws relating to future events and future results of SJW Group and its subsidiaries that are based on current expectations, estimates, forecasts, and projections about SJW Group and its subsidiaries and the industries in which SJW Group and its subsidiaries operate and the beliefs and assumptions of the management of SJW Group. Some of these forward-looking statements can be identified by the use of forward-looking words including “believes”, “expects”, “estimates”, “anticipates”, “intends”, “seeks”, “approximately”, “plans”, “projects”, “may”, “should”, “will”, or the negative of those words or other comparable terminology. These forward-looking statements are only predictions and are subject to risks, uncertainties, and assumptions that are difficult to predict. Therefore, actual results may differ materially and adversely from those expressed in any forward-looking statements. Important factors that could cause or contribute to such differences include, but are not limited to, those discussed in this report under Item 1A, “Risk Factors,” and Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and elsewhere, and in other reports and documents SJW Group files with the Securities and Exchange Commission (the “SEC”), specifically the most recent Form 10-Q and the registration statement on Form S-3, as amended, and reports on Form 8-K filed with the SEC, each as it may be amended from time to time.

The accuracy of such statements is subject to a number of risks, uncertainties and assumptions including, but not limited to, the following factors:

• the risk that the benefits expected from the merger of SJW Group and Connecticut Water Service, Inc. will not be realized;

• the risk that the integration of Connecticut Water Service, Inc. will be more difficult, time-consuming or expensive than anticipated;

• the effect of water, utility, environmental and other governmental policies and regulations, including actions concerning rates, authorized return on equity, authorized debt-to-equity ratios, capital expenditures and other decisions;

• the outcome of the California Public Utilities Commission’s investigation into the Merger;

• litigation;

• changes in demand for water and other products and services;

• unanticipated weather conditions and changes in seasonality;

• climate change and the effects thereof;

• catastrophic events such as fires, earthquakes, explosions, floods, ice storms, tornadoes, hurricanes, terrorist acts, physical attacks, cyber-attacks, epidemic or pandemic illness events, or other similar occurrences that could adversely affect our facilities, operations, financial condition, results of operations and reputation;

• unexpected costs, charges or expenses;

• our ability to successfully evaluate investments in new business and growth initiatives;

• the risk of work stoppages, strikes and other labor-related actions;

• changes in general economic, political, business and financial market conditions;

• the ability to obtain financing on favorable terms, which can be affected by various factors, including credit ratings, changes in interest rates, compliance with regulatory requirements, compliance with the terms and conditions of our outstanding indebtedness, and general market and economic conditions; and

• legislative and economic developments.

Actual results are subject to other risks and uncertainties that relate more broadly to our overall business, including those more fully described in our filings with the SEC, including our most recent reports on Form 10-K, Form 10-Q and Form 8-K. Forward-looking statements are not guarantees of performance, and speak only as of the date made, and SJW Group undertakes no obligation to update or revise any forward-looking statements except as required by law.

3

Item 1. Business

General Development of Business

SJW Group was initially incorporated as SJW Corp. in the state of California on February 8, 1985. SJW Group is a holding company with four wholly-owned subsidiaries:

• San Jose Water Company (“SJWC”) with its headquarters located at 110 West Taylor Street in San Jose, California 95110, was originally incorporated under the laws of the State of California in 1866. As part of a reorganization on February 8, 1985, SJWC became a wholly owned subsidiary of SJW Group. SJWC is a public utility in the business of providing water service to approximately 231,000 connections that serve a population of approximately one million people in an area comprising approximately 139 square miles in the metropolitan San Jose, California area.

• SJWNE LLC, a Delaware limited liability company, was formed in 2019, and is a wholly-owned subsidiary of SJW Group. SJWNE LLC is a special purpose entity established to hold SJW Group’s investment in Connecticut Water Service, Inc. (“CTWS”). CTWS with its headquarters located in Clinton, Connecticut was incorporated in 1974 in the state of Connecticut. As part of the merger transaction between SJW Group and CTWS on October 9, 2019, CTWS became a wholly-owned subsidiary of SJWNE LLC. CTWS is a holding company with six wholly-owned subsidiaries. The Connecticut Water Company (“Connecticut Water”), The Heritage Village Water Company (“HVWC”), The Avon Water Company (“Avon Water”) and The Maine Water Company (“Maine Water”) are public utilities in the business of providing water service to approximately 137,000 connections that serve a population of approximately 480,000 people in 80 municipalities throughout Connecticut and Maine and more than 3,000 wastewater connections in Southbury, Connecticut. The remaining two subsidiaries are Chester Realty, Inc., a real estate company in Connecticut, and New England Water Utility Services, Inc. (“NEWUS”), which provides contract water and sewer operations and other water related services.

• SJWTX, Inc. was incorporated in the state of Texas in 2005. SJWTX, Inc. is doing business as Canyon Lake Water Service Company (“CLWSC”). CLWSC is a public utility in the business of providing water service to approximately 18,000 connections that serve approximately 54,000 people. CLWSC’s service area comprises more than 246 square miles in the southern region of the Texas Hill Country in Blanco, Comal, Hays and Travis counties, the growing region between San Antonio and Austin, Texas. SJWTX, Inc. has a 25% interest in Acequia Water Supply Corporation (“Acequia”). The water supply corporation has been determined to be a variable interest entity within the scope of Financial Accounting Standards Board (“FASB”) Accounting Standard Codification (“ASC”) Topic 810, “Consolidation” with SJWTX, Inc. as the primary beneficiary. As a result, Acequia has been consolidated with SJWTX, Inc.

• SJW Land Company was incorporated in 1985. SJW Land Company owns undeveloped land and operates commercial buildings in Tennessee. SJW Land also has a 70% limited partnership interest in 444 West Santa Clara Street, L.P. The partnership owned a commercial building in California which was sold by the partnership on April 6, 2017. See Note 1 of “Notes to Consolidated Financial Statements” for discussion of the sales transaction.

Texas Water Alliance Limited (“TWA”), was previously a wholly owned subsidiary of SJW Group undertaking activities to develop a water supply project in Texas. On November 16, 2017, SJW Group sold all of its equity interest in TWA to Guadalupe-Blanco River Authority (“GBRA”) for $31.0 million. See Note 1 of “Notes to Consolidated Financial Statements” for a more detailed discussion of the sales transaction.

Together, SJWC, Connecticut Water, CLWSC, Maine Water, HVWC, Avon Water, NEWUS and TWA (through the date of sale in 2017), are referred to as “Water Utility Services.”

SJW Land Company and its consolidated variable interest entity, 444 West Santa Clara Street, L.P. which operated a commercial building rental, and Chester Realty, Inc. are collectively referred to as “Real Estate Services.”

SJW Group and CTWS Merger

On October 9, 2019, SJW Group completed its previously announced acquisition of CTWS pursuant to the terms of the Second Amended and Restated Agreement and Plan of Merger, dated as of August 5, 2018, by and among SJW Group, Hydro Sub, Inc., a Connecticut corporation and a wholly-owned subsidiary of SJW Group, and CTWS. SJW Group acquired all of the outstanding stock of CTWS for $70.00 per share in cash (without interest and less any applicable withholding taxes). The total cash purchase price is approximately $838.5 million, less cash received of $3.0 million, and approximately $6.4 million related to outstanding awards of restricted stock units and deferred share units assumed in connection with the CTWS merger. SJW Group financed the acquisition with net proceeds from its December 2018 sale of 7,762,000 common equity shares of

4

approximately $411.1 million, and the October 2019 issuance of $427.4 million in new fixed rate term loans. SJW Group raised an additional $18.5 million in the debt financing to partially finance transaction costs incurred in connection with the CTWS acquisition. Along with the acquisition debt financing, SJW Group raised $60.0 million of new proceeds used to partially refinance certain CTWS short-term borrowings on its existing lines of credit after the CTWS acquisition closed.

Regulation and Rates

California Regulatory Affairs

SJWC’s rates, service and other matters affecting its business are subject to regulation by the California Public Utilities Commission (“CPUC”).

Generally, there are three types of rate adjustments that affect SJWC’s revenue collection: general rate adjustments, cost of capital adjustments, and offset rate adjustments. General rate adjustments are authorized in general rate case decisions, which usually authorize an initial rate adjustment followed by two annual escalation adjustments. General rate applications are normally filed and processed during the last year covered by the most recent general rate case as required by the CPUC in order to avoid any gaps in regulatory decisions on general rate adjustments.

Cost of capital adjustments are rate adjustments resulting from the CPUC’s usual tri-annual establishment of a reasonable rate of return for SJWC’s capital investments.

The purpose of an offset rate adjustment is to compensate utilities for changes in specific pre-authorized offsettable capital investments or expenses, primarily for purchased water, groundwater extraction, purchased power and pensions. Pursuant to Section 792.5 of the California Public Utilities Code, a balancing account must be maintained for each expense item for which such revenue offsets have been authorized. Memorandum accounts track revenue impacts due to catastrophic events, certain unforeseen water quality expenses related to new federal and state water quality standards, energy efficiency, water conservation during periods of mandated water restrictions, water tariffs and other approved activities or as directed by the CPUC such as the memorandum account for the Tax Cuts and Jobs Act (H.R. 1) (the “Tax Act”). The purpose of balancing and memorandum accounts is to track the under-collection or over-collection associated with such expense changes and activities.

On January 4, 2018, SJWC filed General Rate Case Application No. 18-01-004 (“GRC”) with the CPUC requesting authority for an increase of revenue of $34.3 million, or 9.76%, in 2019, $14.2 million, or 3.7%, in 2020 and $20.6 million, or 5.17%, in 2021. Among other things, the application also included requests to recover $20.7 million from balancing and memorandum accounts, the establishment of a Water Revenue Adjustment Mechanism and Sales Reconciliation Mechanism (“WRAM/SRM”), and a shift to greater revenue collection in the service charge. On June 28, 2018, the CPUC issued an order in the case identifying the issues to be considered, including whether the proposed merger between SJW Group and CTWS will have any ratemaking impact on the customers of SJWC (see discussion on the merger with CTWS at Note 12). This consideration was subsequently removed from the GRC to be considered in an Order Instituting Investigation (“OII”) on the proposed merger issued on July 20, 2018, see below for further discussion. On August 10, 2018, SJWC and the Office of Ratepayer Advocates filed a joint motion for partial settlement (“Settlement”) of the GRC with the CPUC, resolving all issues in the GRC with the exception of authorization of a WRAM/SRM and the recovery of the balance in the Hydro Generation Research, Development and Demonstration Memorandum Account, such issues being subsequently contested in legal briefs. The Settlement also lowered authorized sales to a level that aligns more closely with current actual consumption.  In addition, it allowed for a shift in cost recovery allowing 40% of total revenue to be collected through the fixed charge. On October 16, 2018, the CPUC issued a Proposed Decision adopting the Settlement in part, without any impact on the proposed revenue requirement outlined in the Settlement, and delaying ruling on the contested issues in order to allow the Settlement rates to become effective January 1, 2019. On December 4, 2018, the CPUC issued Decision 18-11-025 authorizing new rates for 2019. Accordingly, SJWC filed Advice Letter No. 528/528A on December 7, 2018, requesting authorization to increase revenue requirement by $16.4 million or 4.55% in 2019 and to implement surcharges to recover $27.0 million of under-collections from memorandum and balancing accounts. This was approved on December 28, 2018, and new rates became effective January 1, 2019.

On July 20, 2018, the CPUC issued an Order Instituting Investigation (“OII”) No. 18-07-007 concerning SJW Group’s then proposed merger with CTWS. A Scoping Memorandum was issued on September 7, 2018, which identified the issues to be considered in the proceeding as to whether the proposed merger is subject to CPUC approval and to evaluate the merger’s likely impacts within California. On September 14, 2018, SJW Group and SJWC submitted joint comments in response to the issues identified in accordance with the Scoping Memorandum’s adopted schedule, and reply comments were submitted on October 19, 2018. A Public Participation Hearing was held on January 31, 2019. On March 4, 2019, the CPUC suspended this proceeding due to SJW Group’s announcement of its intention to file a new merger approval application with the Connecticut Public Utilities Regulatory Authority (“PURA”). On April 3, 2019, SJW Group and CTWS jointly filed a new merger application with PURA. After securing the required approvals from both PURA and the Maine Public Utilities Commission (“MPUC”), SJW Group announced the close of the merger on October 9, 2019, and notified the CPUC accordingly.

5

In January 2017, a SJWC customer inquired about the company’s billing practice as it related to the proration of service charges in billing cycles where a rate change occurred. On June 22, 2017, SJWC was served with Complaint 17-06-009 regarding its billing practice for service charge rate changes. The billing issue was made a part of SJWC’s GRC proceeding and a settlement agreement was reached with the Office of Ratepayer Advocates (now the Public Advocates Office) on May 23, 2018, limiting the duration from which to calculate customer refunds from June 1, 2011, through December 31, 2016. Accordingly, SJWC provided an additional reserve to cover the remaining period covered by the settlement. In accordance with Decision 18-11-025 for the GRC, SJWC filed Advice Letter No. 530 proposing total refunds of $2.0 million for the period from June 1, 2011 through December 31, 2016. This advice letter became effective February 8, 2019, and refunds were completed by mid-May 2019. On April 22, 2019, the CPUC dismissed Complaint 17-07-009 citing the relief provided in Advice Letter No. 530 and the current OII on this matter (see below for further discussion). The Complainant filed an appeal with the CPUC to dispute the dismissal. This appeal was rejected and the Complaint was dismissed via CPUC Decision No. 19-09-040 on September 24, 2019.

On September 14, 2018, the CPUC issued OII No. 18-09-003 to which SJWC was named as Respondent. The OII will determine whether the company unlawfully overcharged customers over a 30-year period by failing to pro-rate service charges when increases occurred during a billing period, and whether the company double-billed service charges during one billing period when allegedly switching from billing such charges in advance to billing in arrears.  The OII resulted from a report by the CPUC’s Consumer Protection and Enforcement Division (“CPED”), dated August 16, 2018, recommending an investigation into SJWC’s billing practice.  CPED calculated a refund obligation of approximately $2.1 million for the years 2014 to 2016 that had been the subject of SJWC’s Advice Letter No. 510.  CPED calculated a further refund obligation of approximately $2.0 million for the years 1987 to 2013.  CPED also asserted that the company double-billed its customers during a billing period when it allegedly converted from billing in advance to billing in arrears, assumed that such double-billing occurred in January 2011, and calculated a refund obligation of approximately $4.9 million.  The OII notes these estimates and identifies the proper refund amount as an issue in the proceeding.  The OII also identifies the CPUC’s authority to consider imposing penalties on SJWC in amounts ranging from $500 to $50,000 per offense, per day. On July 24, 2019, SJWC and CPED jointly filed a motion for CPUC approval of a Settlement Agreement (“Agreement”) over SJWC’s past customer billing practices. The Agreement requires the company to pay approximately $2.1 million in customer credits, consisting of $1.8 million for refunds during the period from 1987 to 2011 and an additional $0.4 million in customer credits to low income water customers, and invest $5.0 million in utility plant that is not allowed an investment return or rate recovery. SJWC has recorded the $2.1 million customer credit expense as an offset to revenues in the accompanying December 31, 2019, Consolidated Statements of Comprehensive Income. The $5.0 million commitment to invest in utility plant will be recognized as plant in service on the SJWC’s financial statements once invested. The Agreement is subject to final approval by the CPUC. A CPUC Presiding Officer’s Decision approved the Agreement in December 2019, but an appeal was filed in January 2020 by a group of SJWC customers. A final CPUC decision approving the Settlement and dismissing the appeal was approved on February 27, 2020.

On February 28, 2019, SJWC filed Advice Letter No. 531 with the CPUC requesting to adjust the Utilities Reimbursement Account User Fees as directed by CPUC Resolution M-4839. The reimbursement fee was reduced from 1.4% to 1.23%. This request was approved and the new fee became effective on April 1, 2019.

On March 29, 2019, SJWC filed Advice Letter No. 532 with the CPUC requesting authorization to recover its balance in its 2018 Water Conservation Memorandum Account (“WCMA”) for the period of January 1, 2018, through December 31, 2018. On December 19, 2019, the CPUC denied the recovery via Resolution W-5210 citing the elimination of mandatory conservation requirements. During the year ended December 31, 2019, SJWC recorded a reduction of balancing and memorandum accounts of $9.4 million with an offset to revenues for the 2018 WCMA and reversed revenues of $0.6 million recorded in the 2019 WCMA balance.

On June 19, 2019, the CPUC issued its final decision resolving the remaining issues in SJWC’s GRC. Decision 19-06-010 denied the establishment of a WRAM/SRM and authorized the recovery of the Hydro Generation Research, Development and Demonstration Memorandum Account balance of $1.2 million. SJWC filed Advice Letter No. 534 on August 1, 2019, to recover this amount via a surcharge over a three-year period. The CPUC rejected the advice letter on October 10, 2019, citing an error and recommended a correction and a new filing for recovery. SJWC has made a filing to correct the record and is awaiting the CPUC’s decision. A new advice letter for recovery is anticipated to be filed in the first quarter of 2020 pending the decision.

On August 30, 2019, SJWC filed Advice Letter No. 535 with the CPUC requesting authorization to increase the total 2019 authorized revenue requirements by $0.7 million or 0.17% for plant additions related to the Montevina Water Treatment Plant Upgrade Project in 2018. This advice letter became effective on September 29, 2019.

SJWC filed Advice Letter No. 537 with the CPUC requesting authorization to refund the balance in its 2018 Tax Accounting Memorandum Account as required by the GRC decision on October 18, 2019.  On December 3, 2019, Advice Letter 537-A was filed to refund the balance via a one-time surcredit. For a typical residential customer with a 3/4-inch meter, the one-time

6

refund will be $20.84.  This advice letter was approved effective January 1, 2020, and refunds to customers began on January 27, 2020.

SJWC filed Advice Letter No. 541 on November 20, 2019, with the CPUC requesting authorization to increase revenue requirement by $8.6 million or 2.28% in 2020 for the first escalation year authorized in our 2018 General Rate Case Decision 18-011-025 which established rates for 2019, 2020, and 2021. This advice letter was approved on December 26, 2019, and new rates became effective January 1, 2020.

On December 6, 2019, SJWC filed Application No. 19-12-002 with the CPUC requesting approval for cost recovery to deploy Advanced Metering Infrastructure throughout its service area.  The application seeks revenue increases of $2.3 million or 0.61% in 2021, $4.0 million or 1.04% in 2022, and $2.5 million or 0.65% in 2023, and $0.3 million or 0.09% in 2024 based on current rates in effect.  A decision from the CPUC is anticipated in the fourth quarter of 2020.

On January 22, 2020, SJWC, along with California-American Water Company, California Water Service Company, and Golden State Water Company, filed a joint request for a one-year deferment on the Cost of Capital filings which would otherwise be due on May 1, 2020. Postponing the filing one year would alleviate administrative processing costs on the utilities as well as the CPUC staff, and provide relief for both CPUC and utility resources already strained by numerous other proceedings. The request is conditioned on no changes to the current Water Cost of Capital Mechanism in place during the one-year deferment. A CPUC decision is expected in the first quarter of 2020.

Connecticut Regulatory Affairs

Connecticut Water, HVWC and Avon Water’s rates, service and other matters affecting its business are subject to regulation by the PURA. Our Connecticut regulated operations seek rate relief as necessary to enable it to achieve an authorized rate of return.

PURA generally establishes rates in Connecticut on a company-wide basis and allows the Connecticut regulated operations to add surcharges to customers’ bills in order to recover certain costs associated with approved eligible capital projects through the Water Infrastructure Conservation Adjustment (“WICA”) in between full rate cases, as well as approved surcharges for the Water Revenue Adjustment (“WRA”). Connecticut Water and HVWC mitigate the risk associated with changes in demand through a PURA approved WRA mechanism. The WRA is used to reconcile actual water demands with the demands projected in the most recent general rate case and allows companies to implement a surcharge or surcredit as necessary to recover the revenues approved in the general rate case. The WRA removes the financial disincentive for water utilities to develop and implement effective water conservation programs. The WRA allows water companies to defer on the balance sheet, as a regulatory asset or liability, for later collection from or crediting to customers the amount by which actual revenues deviate from the revenues allowed in the most recent general rate proceedings, including WICA proceedings. Projects eligible for WICA surcharges include certain types of aging utility plant, primarily water mains, meters, and service lines. Additionally, certain energy conservation projects, improvements required to comply with streamflow regulations, and improvements to acquired systems are eligible for WICA surcharges. Avon Water does not currently use the WRA mechanism.

As of December 31, 2019, WICA surcharges for Connecticut Water and Avon Water were 3.24% and 9.31%, respectively. HVWC does not currently have an approved WICA surcharge. On January 28, 2020, Connecticut Water filed a WICA application representing an additional 2.6% surcharge, for a cumulative WICA surcharge of 5.84%. Additionally, on February 7, 2020, Connecticut Water filed its annual WICA reconciliation which called for a 0.09% reduction of the WICA surcharge. If approved as filed, Connecticut Water will begin to charge customers a cumulative WICA surcharge of 5.75% on April 1, 2020.

Connecticut Water and HVWC’s allowed revenues, as approved by PURA during each company’s last general rate case and including subsequently approved WICA surcharges for Connecticut Water, were approximately $18.6 million for the period ended October 9, 2019 through December 31, 2019. Through the normal billing, for the period ended October 9, 2019 through December 31, 2019, revenues received from water and wastewater customers would have been approximately $20.4 million. As a result of the utilization of the WRA mechanism, Connecticut Water and HVWC recorded an approximate $1.8 million reduction in revenues for the period ended October 9, 2019 through December 31, 2019.

Texas Regulatory Affairs

CLWSC’s rates are subject to the economic regulation of the Public Utilities Commission of Texas (“PUCT”). The PUCT authorize rate increases after the filing of an Application for a Rate/Tariff Change. Rate cases may be filed as they become necessary, provided there is no current rate case outstanding. Further, rate cases may not be filed more frequently than once every 12 months.

As required, CLWSC submitted on January 28, 2019, its Water Pass-Through Charge (“WPC”) true-up report for the Canyon Lake area systems 2018 purchased water costs to the PUCT reflecting a change from $1.13 to $1.05 per thousand gallons. The WPC is the annual filing to change that component of CLWSC’s water rates for the changes in purchased water costs since the

7

last annual true-up report. This change for 2019 became effective on water bills being prepared as of February 1, 2019. Two WPC true-up reports were filed to report the year 2019 costs. The changes in the purchased water costs for the Deer Creek Ranch water system resulted in a decrease in the usage charge from $2.19 to $2.02 per thousand gallons, and an increase in the monthly base charge of $3.04 per residential account. These Deer Creek Ranch rate changes became effective October 1, 2019. The 2019 WPC true-up report for the water systems located in the Canyon Lake area resulted in a reduction of the WPC usage rate from $1.05 to $0.95 per thousand gallons which became effective on February 1, 2020.

Maine Regulatory Affairs

Maine Water’s rates, service and other matters affecting its business are subject to regulation by the MPUC. As with the Connecticut regulated operations, rate relief is sought as necessary to enable the company to achieve an authorized rate of return. MPUC approves rates on a division-by-division basis in Maine and allows Maine Water to add surcharges to customers’ bills in order to recover certain costs associated with capital projects through the Water Infrastructure Surcharge (“WISC”) in between general rate cases. Projects eligible for WISC surcharges include all infrastructure replacement or repair projects, excluding meters, that are necessary for the transmission, distribution or treatment of water.

In 2015, a WRA mechanism law in Maine became available to regulated water utilities. Maine’s rate-adjustment mechanism could provide revenue stabilization in divisions with declining water consumption and Maine Water expects to request usage of this mechanism in future rate filings when consumption trends support its use.

On December 20, 2019, Maine Water filed a general a rate increase for their Skowhegan Division seeking approximately $0.2 million, or 14.7%, in additional revenue with the MPUC. A final decision from the MPUC is expected in the second quarter of 2020. On January 20, 2020, Maine Water filed WISC applications with the MPUC in four divisions requesting an increase between 1.76% and 3.00%, representing approximately $0.4 million in additional revenues. The WISC application was approved on February 26, 2020 and the surcharges are effective March 1, 2020.

Please also see Item 1A, “Risk Factors,” Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and Note 1 of “Notes to Consolidated Financial Statements.”

Description of Business

General

The principal business of Water Utility Services consists of the production, purchase, storage, purification, distribution, wholesale, retail sale of water and wastewater services. SJWC provides water services to approximately 231,000 connections that serve approximately one million people residing in portions of the cities of San Jose and Cupertino and in the cities of Campbell, Monte Sereno, Saratoga and the Town of Los Gatos, and adjacent unincorporated territories, all in the County of Santa Clara in the State of California. The CTWS companies provide water service to approximately 137,000 service connections that serve a population of approximately 480,000 people in 80 municipalities with a service area of approximately 269 square miles throughout Connecticut and Maine and 3,000 wastewater connections in Southbury, Connecticut. CLWSC provides water service to approximately 18,000 connections that serve approximately 54,000 people in a service area comprising more than 246 square miles in the growing region between San Antonio and Austin, Texas. Together, the Water Utility Services distribute water to customers in their respective service areas in accordance with accepted water utility methods.

SJWC, Avon Water, HVWC and Maine Water provide non-tariffed services under agreements with municipalities and other utilities. These non-tariffed services include water system operations, maintenance agreements and antenna site leases. In addition, in October 1997, SJWC commenced operation of the City of Cupertino municipal water system under the terms of a 25-year lease. The system is adjacent to the SJWC service area and has approximately 4,600 service connections. Under the terms of the lease, SJWC paid an upfront $6.8 million concession fee to the City of Cupertino that is being amortized over the contract term. SJWC assumed responsibility for all maintenance and operating costs of the system, while receiving all payments for water service. SJWC and the City of Cupertino signed an amendment to the lease agreement dated January 8, 2020. Under the terms of the amended lease agreement, SJWC agreed to invest up to $5 million of capital improvements in the City of Cupertino’s municipal water system prior to the expiration of the lease in September 2022. Any unspent funds at lease termination remain the property of the City of Cupertino.

NEWUS provides contracted services to water utilities in the State of Connecticut, as well as offering Linebacker®, our subscription service line protection plan for public drinking water customers. Linebacker covers a limited amount of the cost of repairs for leaking or broken water service lines which provide drinking water to a customer’s home. Additionally, Linebacker will repair or replace a leaking or broken water service line, curb box, curb box cover, meter pit, meter pit cover, meter pit valve plus in-home water main shut off valve before the meter.

8

SJW Land Company owns an undeveloped real estate property, commercial and warehouse properties in Tennessee and holds a 70% limited partnership interest in 444 West Santa Clara Street, L.P. Chester Realty, Inc. owns commercial properties and parcels of land in Connecticut.

Among other things, operating results from the water business fluctuate according to the demand for water, which is often influenced by seasonal conditions, such as impact of drought, summer temperatures or the amount and timing of precipitation in Water Utility Services’ service areas. Revenue, production expenses and income are affected by changes in water sales and the availability of surface water supply. Overhead costs, such as payroll and benefits, depreciation, interest on long-term debt, and property taxes, remain fairly constant despite variations in the amount of water sold. As a result, earnings are highest in the higher demand, warm summer months and lowest in the lower demand, cool winter months.

Water Supply

California Water Supply

SJWC’s water supply consists of groundwater from wells, surface water from watershed run-off and diversion, reclaimed water, and imported water purchased from the Santa Clara Valley Water District (“Valley Water”) under the terms of a master contract with Valley Water expiring in 2051. During non-drought years, purchased water provides approximately 40% to 50% of SJWC’s annual production. An additional 40% to 50% of its water supply is pumped from the underground basin which is subject to a groundwater extraction charge paid to Valley Water. Surface supply, which during a normal rainfall year satisfies about 6% to 8% of SJWC’s annual water supply needs, provides approximately 1% of its water supply in a dry year and approximately 14% in a wet year. In dry years, the decrease in water from surface run-off and diversion and the corresponding increase in purchased and pumped water increases production expenses substantially.

The pumps and motors at SJWC’s groundwater production facilities are propelled by electric power. SJWC has installed standby power generators at 36 of its strategic water production sites and manages a fleet of 21 portable generators deployed throughout the distribution system for power outages at remaining pumping facilities. In addition, the commercial office and operations control centers are outfitted with standby power equipment that allow critical distribution and customer service operations to continue during a power outage. Valley Water has informed SJWC that its filter plants, which deliver purchased water to SJWC, are also equipped with standby generators. In the event of a power outage, SJWC believes it will be able to prevent an interruption of service to customers for a limited period by pumping water using generator power and by using purchased water from Valley Water.

In 2019, the level of water in the Santa Clara Valley groundwater basin, which is managed by the Valley Water, experienced a decrease due to a decrease in managed groundwater recharge. As reported by Valley Water at the end of 2019, the groundwater level in the Santa Clara Plain was 4 feet lower compared to the same time in 2018, and 10 feet higher than the five-year average. The total groundwater storage at the end of 2019 was within Stage 1 (Normal) of the Valley Water’s Water Shortage Contingency Plan. On January 1, 2020, Valley Water’s 10 reservoirs were 34% full with 56,644 acre-feet of water in storage. As of December 31, 2019, SJWC’s Lake Elsman was 17.1% full with 1,050 acre-feet of water, approximately 35.1% of the five-year seasonal average. In addition, the rainfall at SJWC’s Lake Elsman was measured at 15.75 inches for the period from July 1, 2019 through December 31, 2019, which is 105.3% of the five-year average. Local surface water is a less costly source of water than groundwater or purchased water and its availability significantly impacts SJWC’s results of operations. SJWC’s Montevina Water Treatment Plant treated 15,023 acre-feet of water in 2019, which is 363.6% of the five-year average. SJWC believes that its various sources of water supply will be sufficient to meet customer demand in 2020.

California also faces long-term water supply challenges. SJWC actively works with Valley Water to meet the challenges by continuing to educate customers on responsible water use practices and conducting long-range water supply planning.

Connecticut Water Supply

As of December 31, 2019, the Connecticut water utility services’ infrastructure consisted of 65 noncontiguous water systems in the State of Connecticut.  These systems, in total, consist of approximately 1,800 miles of water main and reservoir storage capacity of 2.4 billion gallons.  The safe, dependable yield from our 235 active wells and 18 surface water supplies is approximately 65 million gallons per day.  Water sources vary among the individual systems, but overall approximately 80% of the total dependable yield comes from surface water supplies and 20% from wells. The Connecticut water utilities supplement their water supplies with purchase water contracts with neighboring utilities.

Texas Water Supply

CLWSC’s water supply consists of groundwater from wells and purchased treated and raw water from the GBRA. CLWSC has long-term agreements with the GBRA, which expire in 2037, 2040, 2044 and 2050. The agreements, which are take-or-pay contracts, provide CLWSC with an aggregate of 6,900 acre-feet of water per year from Canyon Lake at prices that may be adjusted periodically by GBRA. In 2018, CLWSC acquired raw water supply agreements with the Lower Colorado River Authority (“LCRA”) and West Travis Public Utility Agency (“WTPUA”) expiring in 2053 and 2046, respectively, to provide

9

for 250 acre-feet of water per year from Lake Austin and the Colorado River, respectively, at prices that may be adjusted periodically by the agencies.

Maine Water Supply

As of December 31, 2019, the Maine Water infrastructure consisted of 12 noncontiguous water systems in the State of Maine.  These systems, in total, consists of approximately 500 miles of water main and reservoir storage capacity of 7.0 billion gallons.  The safe, dependable yield from our 14 active wells and 7 surface water supplies is approximately 120 million gallons per day.  Water sources vary among the individual systems, but overall approximately 80% of the total dependable yield comes from surface water supplies and 20% from wells. Maine Water supplements their water supplies with purchase water contracts with neighboring utilities.

Please also see further discussion under Item 1A, “Risk Factors” and Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

Franchises

Franchises granted by local jurisdictions permit Water Utility Services to construct, maintain, and operate water distribution systems within the streets and other public properties of a given jurisdiction.

SJWC holds the necessary franchises to provide water in portions of the cities of San Jose and Cupertino and in the cities of Campbell, Monte Sereno and Saratoga, the Town of Los Gatos and the unincorporated areas of Santa Clara County. None of the franchises have a termination date, other than the franchise for the unincorporated areas of Santa Clara County, which terminates in June 2020. The renewal process began in 2019 and a resolution is expected to be presented and voted on by the the County of Santa Clara in the first quarter of 2020.

The Connecticut water utility services hold the necessary franchises to provide water in portions of the towns of Ashford, Avon, Beacon Falls, Bethany, Bolton, Brooklyn, Burlington, Canton, Chester, Clinton, Colchester, Columbia, Coventry, Deep River, Durham, East Granby, East Haddam, East Hampton, East Windsor, Ellington, Enfield, Essex, Farmington, Griswold, Guilford, Hebron, Killingly, Killingworth, Lebanon, Madison, Manchester, Mansfield, Marlborough, Middlebury, Naugatuck, Old Lyme, Old Saybrook, Oxford, Plainfield, Plymouth, Portland, Prospect, Simsbury, Somers, Southbury, South Windsor, Stafford, Stonington, Suffield, Thomaston, Thompson, Tolland, Vernon, Voluntown, Waterbury, Westbrook, Willington, Windsor Locks and Woodstock. Additionally, HVWC serves the Town of Southbury with wastewater services. None of the franchises of the Connecticut water utility services have a termination date.

Maine Water holds franchises in the towns served are Biddeford, Saco, Old Orchard Beach, Scarborough (Pine Point), Porter, Parsonsfield, Hiram, Freeport, Camden, Rockland, Rockport, Owls Head, Union, Thomaston, Warren, Bucksport, Skowhegan, Oakland, Hartland, Millinocket and Greenville. None of the franchises with Maine Water have a termination date.

CLWSC holds the franchises for water and wastewater services to the City of Bulverde and the City of Spring Branch, which terminate in 2029 and 2036, respectively. The unincorporated areas that CLWSC serves in Comal, Blanco, Hays, and Travis Counties do not require water service providers to obtain franchises.

Seasonal Factors

Water sales are seasonal in nature and influenced by weather conditions. The timing of precipitation and climatic conditions can cause seasonal water consumption by customers to vary significantly. Demand for water is generally lower during the cooler and rainy winter months. Demand increases in the spring when the temperature rises and rain diminishes.

Competition

The regulated operations of Water Utility Services are public utilities regulated by the CPUC in California, PURA in Connecticut, PUCT in Texas and MPUC in Maine (collectively, “the Regulators”) and operate within service areas approved by the regulators. Statutory laws provide that no other investor-owned public utility may operate in the public utilities’ service areas without first obtaining from the regulator a certificate of public convenience and necessity or similar authorization. Past experience shows such a certificate will be issued only after demonstrating that service in such area is inadequate.

California law also provides that whenever a public agency constructs facilities to extend utility service to the service area of a privately-owned public utility, like SJWC, such an act constitutes the taking of property and is conditioned upon payment of just compensation to the private utility.

Under the California law, municipalities, water districts and other public agencies have been authorized to engage in the ownership and operation of water systems. Such agencies are empowered to condemn properties operated by privately-owned public utilities upon payment of just compensation and are further authorized to issue bonds (including revenue bonds) for the purpose of acquiring or constructing water systems.

10

Under Connecticut law, any condemnation of water utility property by a municipality or any unit of state government requires the payment of just compensation for the taking.  Further, any condemnation of utility land by a state department, institution or agency (including a municipality) requires the approval of the PURA.

Under Texas law, municipalities, water districts and other public agencies are authorized to engage in the ownership and operation of water systems. Such entities are empowered to acquire property, whether public or private, real or personal, by the exercise of the right of eminent domain, which entails payment to the owner of the just compensation for the property taken. However, under current case law those entities may not exercise that right of eminent domain to take the entire operation of an investor-owned utility.

Under Maine law, municipalities-individually and collectively, consumer-owned and standard water districts, and other public agencies are authorized to engage in the ownership and operation of water systems.  Such entities may acquire the real and personal property of a privately-owned water company, and take over the company’s operations, by exercising the power of eminent domain. In such a taking, the acquiring entity must furnish the condemnee just compensation.

To the company’s knowledge, no municipality, water district or other public agency has pending any proceeding to condemn any part of its existing water systems. The company is also unaware of any eminent domain proceeding to take any of its property or operations.

Environmental Matters

Water Utility Services produce potable water and wastewater services in accordance with all applicable county, state and federal environmental rules and regulations. Additionally, public utilities are subject to environmental regulation by various other state and local governmental authorities.

Water Utility Services is currently in compliance with all of the United States Environmental Protection Agency’s (the “EPA”) surface water treatment performance standards, drinking water standards for disinfection by-products and primary maximum contaminant levels. These standards have been adopted and are enforced by the California State Water Board, Division of Drinking Water, the Connecticut Department of Public Health, the Maine Department of Health and Human Services, and the Texas Commission on Environmental Quality for SJWC, Connecticut Water, Maine Water and CLWSC, respectively.

Other state and local environmental regulations apply to our Water Utility Services’ operations and facilities. These regulations relate primarily to the handling, storage and disposal of hazardous materials and discharges to the environment, including wastewater operations in the State of Connecticut. SJWC began performing hazardous materials site assessments and remediation prior to the construction phase of capital projects in 2006. The site assessments are performed to remove any legacy materials and to obtain site closures from the Santa Clara County Department of Environmental Health under its Voluntary Cleanup Program.

SJWC is currently in compliance with all state and local regulations governing hazardous materials, point and non-point source discharges and the warning provisions of the California Safe Drinking Water and Toxic Enforcement Act of 1986.

CTWS and its subsidiaries are currently in compliance with all state and local regulations governing their operations.

Please also see Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

Employees

As of December 31, 2019, SJW Group had 732 full-time employees, of whom 361 were SJWC employees, 214 were Connecticut Water employees, 81 were Maine Water employees, 68 were CLWSC employees, and 8 were employees of HVWC. At SJWC, 136 were executive, administrative or supervisory personnel, and 225 were members of unions. No employees in Connecticut Water, Maine Water, CLWSC and HVWC are represented by unions. On November 12, 2019 and February 20, 2020, SJWC reached three-year bargaining agreements with the International Union of Operating Engineers, representing certain employees in the engineering department, and the Utility Workers of America, representing the majority of all nonadministrative employees at SJWC, respectively, covering January 1, 2020 through December 31, 2022. The agreements include a 3% wage increase in 2020, 3% in 2021 and 4% in 2022 for the union workers.

11

Executive Officers of the Registrant

The following table summarizes the name, age, offices held and business experience for each of our senior executive officers, as of March 2, 2020:

Name	Age	Offices and Experience
Andrew R. Gere	53	SJWC—President and Chief Operating Officer. Mr. Gere has served as President since April 2016 and as Chief Operating Officer since April 2015. From 2013 to April 2015, Mr. Gere was Vice President of Operations. From 2008 to 2013, Mr. Gere was Chief of Operations. From 2006 to 2008, Mr. Gere was Director of Maintenance. From 2005 to 2006, Mr. Gere was Director of Operations and Water Quality. From 2003 to 2005, Mr. Gere was Manager of Operations and Water Quality. Mr. Gere has been with SJWC since 1995. As of October 2019, Mr. Gere serves as Chairman of the National Association of Water Companies (“NAWC”).
Kristen A. Johnson	53	SJW Group—Chief Administrative Officer. Ms. Johnson currently serves as the Chief Administrative Officer of SJW Group and the Senior Vice President of Administration for CTWS and its subsidiaries and Corporate Secretary of Maine Water all as of November 1, 2019. Previously, Ms. Johnson served as Director of Human Resources, Vice President of Human Resources and the Vice President and Corporate Secretary of CTWS from 2007, 2008, and 2010, respectively.
James P. Lynch	60	SJW Group—Chief Financial Officer and Treasurer.  Mr. Lynch has served as Chief Financial Officer and Treasurer since October 2010. He is also Chief Financial Officer and Treasurer of SJWC, SJW Land Company, and SJWTX, Inc. and Vice President and Treasurer of SJWNE LLC. Mr. Lynch served as Chief Financial Officer and Treasurer of Texas Water Alliance Limited from October 2010 until November 16, 2017. Prior to joining the SJW Group, Mr. Lynch was an Audit Partner with KPMG LLP. Mr. Lynch was with KPMG LLP for 26 years. Mr. Lynch is a certified public accountant.
Suzy Papazian	44	SJW Group—General Counsel and Vice President.  Ms. Papazian serves as the General Counsel and Vice President for SJW Group and SJWC since January 1, 2020 and was previously the General Counsel and Corporate Secretary since April 2014. From February 2005 to April 2014, Ms. Papazian was Corporate Secretary and Attorney. She is also the Vice President of SJW Land Company and SJWTX, Inc. since January 1, 2020 and was previously the Corporate Secretary since 2009. From 2009 until 2017, Ms. Papazian served as Secretary of Texas Water Alliance Limited. She was admitted to the California State Bar in January 2000 and thereafter was an Associate Attorney at The Corporate Law Group from March 2000 until February 2005.
Eric W. Thornburg	59	SJW Group—President, Chief Executive Officer and Chairman of the Board.  Mr. Thornburg has served as President and Chief Executive Officer of SJW Group and SJW Land Company and Chief Executive Officer of SJWC and SJWTX, Inc. since November 6, 2017. He has served as the Chairman of the Board of Directors of SJW Group, SJWC, SJW Land Company and SJWTX, Inc. since April 25, 2018 and Chairman of the Board of Directors of SJWNE LLC, CTWS and its subsidiaries since October 9, 2019. Prior to joining SJW Group, Mr. Thornburg served as President and Chief Executive Officer of CTWS since 2006, and Chairman of the Board of CTWS since 2007.  Mr. Thornburg served as President of Missouri-American Water, a subsidiary of American Water Works Corporation from 2000 to 2004.  From July 2004 to January 2006, he served as Central Region Vice President-External Affairs for American Water Works Corporation.
Andrew F. Walters	49	SJW Group—Chief Corporate Development Officer and Integration Executive. Mr. Walters serves as Chief Corporate Development Officer and Integration Executive of SJW Group as of November 1, 2019 and previously served as Chief Administrative Officer of SJWC since January 31, 2014. Mr. Walters is also currently the Vice President of Business Planning of CTWS and Connecticut Water as of November 7, 2019. Prior to joining SJWC, Mr. Walters was a managing director and a senior acquisitions officer in the Infrastructure Investments Group of JP Morgan Asset Management from January 2009 to June 2013.
Maureen P. Westbrook	61	CTWS—President. Ms. Westbrook has been the President of CTWS and its subsidiaries, except Maine Water, since December 2019 and President of SJWNE LLC since October 2019. Ms. Westbrook has been Chief Executive Officer of MWC since December 2019. Initially hired as Connecticut Water’s Manager of Source Protection, Ms. Westbrook has held various positions of increasing scope and responsibility. She had served as the Vice President of Customer and Regulatory Affairs of Connecticut Water since 2008, assuming that role for Avon Water and HVWC when those utilities were acquired by CTWS. Prior to joining Connecticut Water in 1988 she worked at the Connecticut Department of Public Health and in local and regional planning.

12

Principal Accounting Officer of the Registrant

The following table summarizes the name, age, offices held and business experience for our principal accounting officer, as of March 2, 2020:

Name	Age	Offices and Experience
Wendy L. Avila-Walker	56	SJW Group—Vice President of Finance, Controller and Assistant Treasurer.  Ms. Avila-Walker has served as Vice President of Finance, Controller and Assistant Treasurer of SJWC and SJW Group since April 2018. Ms. Avila-Walker is also the Assistant Treasurer and Assistant Secretary of SJWNE LLC. From September 2009 to April 2018, Ms. Avila-Walker served as Controller of SJWC and from October 2014 to April 2018, Ms. Avila-Walker was Controller of SJW Group. From August 2008 to September 2009, Ms. Avila-Walker served as Director of Compliance of SJWC. From May 2005 to May 2008, Ms. Avila-Walker served as Director of Reporting and Finance of SJWC.

Available Information

SJW Group’s Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, and amendments to these reports, are made available free of charge through SJW Group’s website at http://www.sjwgroup.com, as soon as reasonably practicable, after SJW Group electronically files such material with, or furnishes such materials to, the SEC. The content of SJW Group’s website is not incorporated by reference to or part of this report.

You may obtain electronic copies of our reports filed with the SEC on the SEC internet website at http://www.sec.gov.

Item 1A. Risk Factors

Investors should carefully consider the following risk factors and warnings before making an investment decision. The risks described below are not the only ones facing SJW Group and its subsidiaries. Additional risks that SJW Group and its subsidiaries does not yet know of or that it currently thinks are immaterial may also impair its business operations. If any of the following risks actually occur, SJW Group and its subsidiaries’ business, operating results or financial condition could be materially affected. In such case, the trading price of SJW Group’s common stock could decline and you may lose part or all of your investment. Investors should also refer to the other information set forth in this Annual Report on Form 10-K, including the consolidated financial statements and the notes thereto.

Risks Related to Our Business

Our business is regulated and may be adversely affected by changes to the regulatory environment.

Our Water Utility Services are regulated public utilities. The operating revenue of SJWC, Connecticut Water, CLWSC, Maine Water, Avon Water and HVWC is generated primarily from the sale of water at rates authorized by the Regulators. The Regulators set rates that are intended to provide revenues sufficient to recover normal operating expenses, provide funds for replacement of water infrastructure and produce a fair and reasonable return on stockholder common equity. Please refer to Part I, Item 1, “Regulation and Rates” for a discussion of the most recent regulatory proceedings affecting the rates of SJWC and CLWSC. Consequently, our revenue and operating results depend substantially upon the rates the Regulators authorize.

In our applications for rate approvals, we rely upon estimates and forecasts to propose rates for approval by the Regulators. No assurance can be given that our estimates and forecasts will be accurate or that the Regulators will agree with our estimates and forecasts and approve our proposed rates. To the extent our authorized rates may be too low, revenues may be insufficient to cover Water Utility Services’ operating expenses, capital requirements and SJW Group’s historical dividend rate. In addition, delays in approving rate increases may negatively affect our operating results and our operating cash flows.

In addition, policies and regulations promulgated by the regulators govern the recovery of capital expenditures, the treatment of gains from the sale of real utility property, the offset of production and operating costs, the recovery of the cost of debt, the optimal equity structure, and the financial and operational flexibility to engage in non-tariffed operations. If the regulators implement policies and regulations that will not allow SJWC, Connecticut Water, CLWSC, Maine Water, Avon Water and HVWC to accomplish some or all of the items listed above, Water Utility Services’ future operating results may be adversely affected. Further, from time to time, the commissioners at the Regulators may change. Such changes could lead to changes in policies and regulations and there can be no assurance that the resulting changes in policies and regulation, if any, will not adversely affect our operating results or financial condition.

If the CPUC disagrees with our calculation of SJWC’s memorandum and balancing accounts, we may be required to make adjustments that could adversely affect our results of operations.

13

Under a 2007 Connecticut law, PURA authorizes regulated water companies to use a rate adjustment mechanism, known as WICA, for eligible projects completed and in service for the benefit of the customers. During 2013, the Maine legislature enacted a law that allows Maine Water for expedited recovery of investments in water systems infrastructure replacement, both treatment and distribution, through WISC, similar to WICA in Connecticut. Maine Water began to use the WISC during 2014. There is no guarantee that these regulatory authorities will approve our applications to recover all or a portion of our capital expenditure or infrastructure investment through such rate adjustment mechanisms, and their failure to do so will adversely affect our financial conditions and results of operations.

Recovery of regulatory assets is subject to adjustment by the regulatory agencies and could impact the operating results of Water Utility Services.

Generally accepted accounting principles for water utilities include the recognition of regulatory assets and liabilities as permitted by FASB ASC Topic 980—“Regulated Operations.” In accordance with ASC Topic 980, Water Utility Services record deferred costs and credits on the balance sheet as regulatory assets and liabilities when it is probable that these costs and credits will be recovered in the ratemaking process in a period different from when the costs and credits were incurred. Please refer to Note 1 of the “Notes to Consolidated Financial Statements” for a summary of net regulatory assets. If the assessment of the probability of recovery in the ratemaking process is incorrect and the applicable ratemaking body determines that a deferred cost is not recoverable through future rate increases, the regulatory assets or liabilities would need to be adjusted, which could have an adverse effect on our results of operations and financial condition.

Changes in water supply, water supply costs or the mix of water supply could adversely affect the operating results and business of Water Utility Services.

SJWC’s supply of water primarily relies upon three main sources: treated water purchased from Valley Water, surface water from its Santa Cruz Mountains watershed, and pumped underground water. Changes and variations in quantities from each of these three sources including changes due to production assets being taken off-line for renovation or non-compliance with regulations affect the overall mix of the water supply, thereby affecting the cost of the water supply. If there is an adverse change to the mix of water supply and SJWC is not allowed by CPUC to recover the additional or increased water supply costs, its operating results may be adversely affected.

Valley Water receives an allotment of water from state and federal water projects. If SJWC has difficulties obtaining a high quality water supply from Valley Water due to availability, environmental, legal or regulatory actions or other restrictions (see also Part I, Item 1, “Water Supply”), it may not be able to fully satisfy customer demand in its service area and its operating results and business may be adversely affected. Additionally, the availability of water from SJWC’s Santa Cruz Mountain watershed depends on the weather and fluctuates with each season. In a normal year, surface water supply provides 6% to 8% of the total water supply of the system. In a season with little rainfall, such as the record drought conditions in 2015 and most of 2016, water supply from surface water sources may be low, thereby causing SJWC to increase the amount of water purchased from outside sources at a higher cost than surface water, thus increasing water production expenses. When drought conditions occur, we may be required to rely more heavily on purchased water than surface water, which would increase our costs and adversely affect our results of operations.

In addition, SJWC’s ability to use surface water is subject to regulations regarding water quality and volume limitations. If new regulations are imposed or existing regulations are changed or given new interpretations, the availability of surface water may be materially reduced. A reduction in surface water could result in the need to procure more costly water from other sources, thereby increasing overall water production expenses and adversely affecting our operating results.

Because the extraction of water from the groundwater basin and the operation of the water distribution system require a significant amount of energy, increases in energy prices could increase operating expenses of SJWC. The cost of energy is beyond our control and can change unpredictably and substantially based on load supply and demand. Therefore, SJWC cannot be certain that it will be able to contain energy costs into the future.

SJWC continues to utilize Pacific Gas & Electric’s time of use rate schedules to minimize its overall energy costs primarily for groundwater pumping. Optimization and energy management efficiency are achieved through the implementation of software applications that control pumps based on demand and cost of energy. An increase in demand or a reduction in the availability of surface water or import water could result in the need to pump more water during peak hours which may adversely affect the operating results of SJWC.

SJWC has been granted permission by CPUC to employ certain balancing accounts to track various water supply expenses and revenues. There is no assurance that CPUC will allow recovery or refund of these balances when submitted by SJWC.

CLWSC’s primary water supply is 6,900 acre-feet of water which is pumped from Canyon Lake at three lake intakes or delivered as treated water from GBRA’s Western Canyon Pipeline, in accordance with the terms of its contracts with the GBRA, which are long-term take-or-pay contracts. This supply is supplemented by groundwater pumped from wells. While

14

the contract provides a committed long-term water supply for future demand, CLWSC customers currently do not use the volume of water allowed under the contracts which increases the cost of water for existing customers, and there is no assurance that future demands up to the committed supply volume will occur. Texas faces long-term water supply constraints similar to California as described above and while current water supply exceeds demand, CLWSC may not be able to obtain adequate water supply to meet customer demand or may be required to procure more costly water from other sources. (See also Part I, Item 1, “Water Supply”).

The Connecticut regulated operations derive their rights and franchises to operate from state laws that are subject to alteration, amendment or repeal.   Our franchises are free from restrictions, are unlimited as to time, and authorize us to sell potable water in all towns we now serve.  Under Connecticut law, these rights and franchises are transferred to the surviving corporation in any merger.  None of the Connecticut regulated operations were parties in the recent merger between the parent companies CTWS and SJW Group and no conditions were imposed that would adversely impact those rights and franchises.  The companies further rely on environmental permits or registrations authorizing the use of water supplies in Connecticut, and those were not altered as a result of the merger with SJW Group.  There is the possibility that the state could revoke our franchises and allow a governmental entity to take over some or all of our systems or could modify laws related to water supply use.  From time to time such legislation has been contemplated. The Connecticut regulated operations do not face long-term water supply constraints, however, in times of persistent dry weather and continued drought conditions, Connecticut Water has requested that customers voluntarily reduce water usage.

Maine Water Company relies on legislatively granted water rights in order to serve customers. In some instances, these rights were granted to predecessor water companies specially chartered by the Maine legislature many decades ago, with those entities later having been merged into Maine Water. The legislation incorporating these predecessor water companies did not address whether chartered rights may be transferred to another entity without special legislative action. The Maine Business Corporation Act generally provides that property and contract rights of a merged corporation are vested in the survivor corporation without reversion or impairment. In the MPUC proceedings that approved the mergers of these Maine Water predecessor companies, the survivorship of water rights was not contested and Maine Water has not sought specific legislation to reaffirm the transfer of chartered rights granted to predecessor water companies. Maine Water does not face long-term water supply constraints.

Climate change may also impact water supply. For example, severity of drought conditions may impact the availability of water to all Water Utility Services and rising sea levels may impact the availability of groundwater available to SJWC and CLWSC.

Fluctuations in customer demand for water due to seasonality, restrictions of use, weather, and lifestyle can adversely affect operating results.

Water Utility Services are seasonal, thus quarterly fluctuation in results of operations may be significant. Rainfall and other weather conditions also affect Water Utility Services. Water consumption typically increases during the third quarter of each year when weather tends to be warm and dry. In periods of drought, if customers are encouraged or required to conserve water due to a shortage of water supply or restriction of use, revenue tends to be lower. Similarly, in unusually wet periods, water supply tends to be higher and customer demand tends to be lower, again resulting in lower revenues. Furthermore, certain lifestyle choices made by customers can affect demand for water. For example, a significant portion of residential water use is for outside irrigation of lawns and landscaping. If there is a decreased desire by customers to maintain landscaping for their homes or restrictions are placed on outside irrigation, residential water demand would decrease, which would result in lower revenues.

Conservation efforts and construction codes, which require the use of low-flow plumbing fixtures, could diminish water consumption and result in reduced revenue. In addition, in time of drought, water conservation may become a regulatory requirement that impacts the water usage of our customers. For example, in response to the severe drought in California in 2015 and 2016, Valley Water extended their call for 30% conservation and restrictions on outdoor watering of ornamental landscapes two days a week through June 30, 2016. Following the improvement of drought condition in late 2016 and 2017, Valley Water reduced its conservation target from 30% to 20% and also increased the number of outdoor watering days from two days to three days effective July 1, 2016 through January 31, 2017. On January 24, 2017, Valley Water maintained their call for 20% conservation and restrictions on outdoor watering for ornamental landscapes to no more than three days a week, effective February 1, 2017. On June 13, 2017, Valley Water adopted Resolution 17-43 to encourage making water conservation a way of life in California through recommendations on watering schedules and a call for customers to achieve a 20% reduction in water use as compared to 2013. While the drought has ended Valley Water has maintained a conservation target at 20%. (See also Part I, Item 1, “Water Supply”).

The implementation of mandatory conservation measures has resulted and is expected to result in lower water usage by our customers which may adversely affect our results of operation. If the current conservation measures continue, or if new measures are imposed in response to drought conditions in the future, we may experience fluctuations in the timing of or a reduction in customer revenue. Furthermore, while the CPUC previously approved a WCMA which allows companies to

15

recover revenue reductions due to water conservation activities and certain conservation related costs, collection of such memorandum accounts are subject to a review and approval process by CPUC, which can be lengthy, and there is no assurance that we will be able to recover in a timely manner all or some of the revenue and costs recorded in the memorandum accounts. If drought conditions ease and the State Water Board and Valley Water no longer mandate water conservation, the Company may no longer be allowed to recover revenue lost due to continued conservation activities under the WCMA account and would therefore be exposed to differences between actual and authorized usage. This could result in lower revenues. In December 2019, the CPUC denied SJWC’s request in Advice Letter No. 532 to recover the 2018 balances of WCMA and was ordered to remove the WCMA accounts. As a result of the decision, during the year ended December 31, 2019, SJWC wrote off a total balance of $9.4 million recorded in the 2018 WCMA and $0.6 million recorded in the 2019 WCMA memorandum accounts. (See also Note 1, “Summary of Accounting Principles” in the consolidated financial statements).

Similar to SJWC, Connecticut Water, Avon Water, HVWC and Maine Water have also been impacted by increased water conservation, as well as the use of more efficient household fixtures and appliances among residential users. There has been a trend of declining per customer residential water usage in Connecticut and Maine over the last several years. CTWS’s regulated businesses at Maine Water and at Avon Water are heavily dependent on revenue generated from rates it charges to its residential customers for the volume of water they use. The rates Connecticut Water, Avon Water, HVWC and Maine Water charge for its water is regulated by PURA in Connecticut and MPUC in Maine, and CTWS’s water services subsidiaries may not unilaterally adjust their rates to reflect changes in demand. A declining volume of residential water usage may have a negative impact on our operating revenues in the future if regulators do not reflect usage declines in the rate setting design process. Although the legislatures in Maine and Connecticut have provided enabling legislation for water utilities to implement revenue adjustment mechanisms to allow for recovery of authorized rates where conservation has occurred and consumption has declined and such a mechanism has been approved by PURA for Connecticut Water and Heritage Village Water, this mechanism has yet to be implemented at Avon Water and Maine Water.

Streamflow Regulations in New England could potentially impact our ability to serve our customers.

In December 2011, regulations concerning the flow of water in Connecticut’s rivers and streams were adopted. As promulgated, the regulations require that certain downstream releases be made from seven of Connecticut Water’s eighteen active reservoirs no later than ten years following the adoption of stream classifications by the Department of Energy and Environmental Protection (“DEEP”). Currently, downstream releases are made at two locations. No groundwater supply wells are affected by the regulations.

DEEP has finalized stream classifications in all areas of Connecticut where Connecticut Water maintains and operates sources of supply. The Company remains engaged in the process in order to minimize impact to our available water supply. Although modified from prior versions, the regulations still have the potential to lower our safe yield, raise our capital and operating expenses and adversely affect our revenues and earnings. Although costs associated with the regulations may be recovered in the form of higher rates and Connecticut law allows for a WICA surcharge to recover capital improvement costs necessary to achieve compliance with the regulations, there can be no assurance PURA would approve rate increases to enable us to recover all such costs and surcharges.

Maine also has regulations that govern the flow of water in rivers and streams and also govern lake levels on great ponds. Code of Maine Rules Chapter 587 (“Chapter 587”) regulates any activity that alters the flow or level of classified state waters after August 2007. Maine Water operates five water systems that use surface waters governed by Chapter 587. Maine Water has operated in full compliance with the chapter since its effective date and fully expects continued compliance. For public water systems, Chapter 587 allows the Maine Department of Environmental Protection (“MDEP”) to impose site specific conditions in locations where Maine’s water quality classifications are not being met. Any conditions proposed on a water withdrawal by a public water system must consider the provisions of any legislative charter, the watershed protection benefits provided by the utility and the financial viability of the utility. Further, any conditions imposed must be accommodated by the existing MPUC approved rate schedule for the utility and may not, in and of themselves, cause a utility to request a rate increase from their customers. To date, the MDEP has not imposed any withdrawal conditions on any public water system in Maine.

A contamination event or other decline in source water quality could affect the water supply of Water Utility Services and therefore adversely affect our business and operating results.

Water Utility Services is required under environmental regulations to comply with water quality requirements. Through water quality compliance programs, Water Utility Services continually monitors for contamination and pollution of its sources of water. In addition, a watershed management program provides a proactive approach to minimize potential contamination activities. There can be no assurance that Water Utility Services will continue to comply with all applicable water quality requirements. In the event a contamination is detected, Water Utility Services must either commence treatment to remove the contaminant or procure water from an alternative source. Either of these results may be costly, may increase future capital expenditures and there can be no assurance that the regulators would approve a rate increase to enable us to recover the costs arising from such remedies. In addition, we could be held liable for consequences arising from hazardous substances or

16

contamination in our water supplies or other environmental damages. Our insurance policies may not cover or may not be sufficient to cover the costs of these claims.

CTWS’s wastewater operations, wastewater collection and treatment and septage pumping and sludge hauling also involve various unique risks that could impact our company. If collection or treatment systems operated by HVWC fail or do not operate properly, or if there is a spill, untreated or partially treated wastewater could discharge onto property or into nearby streams and rivers, causing various damages and injuries, including environmental damage. These risks are most acute during periods of substantial rainfall or flooding, which are the main causes of wastewater overflow and system failure. Liabilities resulting from such damages and injuries could harm our business, financial condition, and results of operations.

Water Utility Services is subject to litigation risks concerning water quality and contamination.

Although Water Utility Services is not a party to any environmental and product-related lawsuits, there is no guarantee that such lawsuits will not occur in the future. If Water Utility Services is subject to an environmental or product-related lawsuit, they might incur significant legal costs and it is uncertain whether it would be able to recover the legal costs from ratepayers or other third parties. Although Water Utility Services has liability insurance coverage for bodily injury and property damage, pollution liability is excluded from this coverage and our excess liability coverage.  Pollution liability coverage is in place for the majority of the SJW Group locations and operations, but is subject to exclusions and limitations. Costs for defense are included within the limit of insurance on the pollution liability policy. In addition, any complaints or lawsuits against us based on water quality and contamination may receive negative publicity that can damage our reputation and adversely affect our business and trading price of our common stock.

Water Utility Services is subject to possible litigation or regulatory enforcement action concerning water discharges to Waters of the United States (“WOTUS”).

Regulatory actions and fines related to discharges of water to WOTUS against other water utilities have increased in frequency in recent years. If Water Utility Services is subject to a litigation or regulatory enforcement action, it might incur significant costs in fines and restoration efforts, and it is uncertain whether Water Utility Services would be able to recover some or all of such costs from ratepayers or other third parties. In addition, any litigation or regulatory enforcement action against us regarding a water discharge and/or resulting environmental impact may receive negative publicity that can damage our reputation and adversely affect our business and the trading price of our common stock.

New or more stringent environmental regulations could increase Water Utility Services’ operating costs and affect its business.

Water Utility Services are subject to water quality and pollution control regulations issued by the EPA and environmental laws and regulations administered by the respective states and local regulatory agencies.

New or more stringent environmental and water quality regulations could increase Water Utility Services’ water quality compliance costs, hamper Water Utility Services’ available water supplies, and increase future capital expenditures.

Under the federal Safe Drinking Water Act, Water Utility Services is subject to regulation by the EPA relating to the quality of water it sells and treatment techniques it uses to make the water potable. The EPA promulgates, from time to time, nationally applicable standards, including maximum contaminant levels for drinking water. Additional or more stringent requirements may be adopted by each state. There can be no assurance that Water Utility Services will be able to continue to comply with all water quality requirements.

Water Utility Services has implemented monitoring activities and installed specific water treatment improvements in order to comply with existing maximum contaminant levels and plan for compliance with future drinking water regulations. However, the EPA and the respective state agencies have continuing authority to issue additional regulations under the Safe Drinking Water Act. New or more stringent environmental standards could be imposed that will raise Water Utility Services’ operating costs and capital expenditures, including requirements for increased monitoring, additional treatment of underground water supplies, fluoridation of all supplies, more stringent performance standards for treatment plants, additional procedures to further reduce levels of disinfection by-products, and more comprehensive measures to monitor, reduce or eliminate known or newly identified contaminants. There are currently limited regulatory mechanisms and procedures available to us for the recovery of such costs and there can be no assurance that such costs will be fully recovered and failure to do so may adversely affect our operating results.

17

The water utility business requires significant capital expenditures that are dependent on our ability to secure appropriate funding. If SJW Group and its subsidiaries are unable to generate sufficient operating cash flows and obtain sufficient capital or if the rates at which we and our subsidiaries borrow increase, there would be a negative impact on our results of operations.

The water utility business is capital-intensive. Expenditure levels for renewal and modernization of the system will grow at an increasing rate as components reach the end of their useful lives. SJW Group’ subsidiaries fund capital expenditures through a variety of sources, including cash received from operations, funds received from developers as contributions or advances, borrowings through lines of credit and debt financings, as well as equity financings by SJW Group. We cannot provide any assurance that the historical sources of funds for capital expenditures will continue to be adequate or that the cost of funds will remain at levels permitting us to earn a reasonable rate of return. A significant change in any of the funding sources could impair the ability of Water Utility Services to fund its capital expenditures, which could impact our ability to grow our utility asset base and earnings. Any increase in the cost of capital through higher interest rates or otherwise could adversely affect our results of operations.

Our ability to raise capital through equity or debt may be affected by the economy and condition of the debt and equity markets. Disruptions in the capital and credit markets or deteriorations in the strength of financial institutions could adversely affect SJW Group’s ability to draw on its lines of credit, issue long-term debt or sell its equity. In addition, government policies, the state of the credit markets and other factors could result in increased interest rates, which would increase SJW Group’s cost of capital. Furthermore, equity financings may result in dilution to our existing stockholders and debt financings may contain covenants that restrict the actions of SJW Group and its subsidiaries. The senior note borrowings of SJW Group, SJWC and CLWSC include certain financial covenants regarding a maximum debt to equity ratio and an interest coverage requirement. In the event the relevant borrower exceeds the maximum debt to equity ratio or interest coverage requirement, we may be restricted from issuing future debt. In addition, the pollution control revenue bonds issued on behalf of SJWC contain affirmative and negative covenants customary for a loan agreement relating to revenue bonds, including, among other things, certain disclosure obligations, the tax exempt status of the interest on the bonds, and limitations and prohibitions on the transfer of projects funded by the loan proceeds and assignment of the loan agreement. CTWS and its subsidiaries are required to comply with certain covenants in connection with their various long term loan agreements.  The most restrictive of these covenants is to maintain a consolidated debt to capitalization ratio of not more than 60%. Additionally, Maine Water has restrictions on cash dividends paid based on restricted net assets. In the event that we violate any of these covenants, an event of default may occur and all amounts due under such bonds may be called by the Trustee, which would have an adverse effect on our business operations and financial conditions.

We operate in areas subject to natural disasters or that may be the target of terrorist activities.

We operate in areas that are prone to earthquakes, fires and other natural disasters. A significant seismic event in northern California, where the majority of our operations are concentrated, or other natural disaster in northern California, Connecticut, Texas or Maine could adversely impact our ability to deliver water to our customers and our costs of operations. A major disaster could damage or destroy substantial capital assets. The Regulators have historically allowed utilities to establish catastrophic event memorandum accounts as a possible mechanism to recover costs. However, we can give no assurance that our regulators, or any other commission would allow any such cost recovery mechanism in the future.

In light of the potential threats to the nation’s health and security due to terrorist attacks, we have taken steps to increase security measures at our facilities and heighten employee awareness of threats to our water supply. We have also tightened our security measures regarding the delivery and handling of certain chemicals used in our business. We have and will continue to bear increased costs for security precautions to protect our facilities, operations and supplies. These costs may be significant.

While some of these costs are likely to be recovered in the form of higher rates, there can be no assurance that the Regulators will approve a rate increase to recover all or part of such costs and, as a result, our operating results and business may be adversely affected. Further, despite these tightened security measures, we may not be in a position to control the outcome of terrorist events should they occur.

Our operations, liquidity, and earnings may be adversely affected by wildfires and risk of fire hazards.

It is possible that wildfires and other fire hazards may occur more frequently, be of longer duration or impact larger areas as a result of drought-damaged plants and trees, lower humidity or higher winds that might be occurring as result of changed weather patterns. The effects of these natural disasters in California’s drought-prone areas, such as the Santa Cruz Mountains, the watershed where SJWC obtains approximately 10% of its water supply, may temporarily compromise its surface water supply, resulting in disruption in our services and litigation which could adversely affect our business, operating results, and financial condition.

If our surface water supply is compromised, we may have to interrupt the use of that water supply until we are able to substitute the flow of water from an alternative water source. If there is an adverse change to the mix of water supply, it may cause an

18

increase in our purchased and pumped water and increase our production expenses substantially, which would adversely affect the operating results of SJWC. There can be no assurance that the CPUC will allow SJWC to recover the additional or increased production expenses.

In addition, we may incur significant costs in order to treat the impacted source through expansion of our current treatment facilities, or development of new treatment methods. If we are unable to substitute water supply from an alternative water source, or to adequately treat the impacted water source in a cost-effective manner, there may be an adverse effect on our revenues, operating results, and financial condition. The costs we incur to secure an alternative water source or an increase in draws from our underground water system could be significant and may not be recoverable in rates.

Wildfires may destroy or cause damage to properties, facilities, equipment and other assets owned and operated by SJWC or result in personal injuries to our employees and personnel, which may cause temporary or permanent disruption to our water services. In such a case, we may be required to incur significant expenses to repair, replace or upgrade our assets, or to defend against costly litigation or disputes with third parties, any of which may adversely affect our business operations or financial conditions.

While we maintain a business insurance policy, such policy includes limitation and retention that may reduce, or in some cases eliminate, our ability to recover all or a substantial portion of the losses and damages due to wildfire. Our inability to rely fully on insurance coverage may negatively impact our results of operations. Losses by insurance companies resulting from wildfires in California may also cause insurance coverage for wildfire risks to become more expensive or unavailable under reasonable terms, and our insurance may be inadequate to recover all our losses incurred in a wildfire. Furthermore, we might not be allowed to recover in our rates any increased costs of wildfire insurance or the costs of any uninsured wildfire losses.

A failure of our reservoirs, storage tanks, mains or distribution networks could result in losses and damages that may adversely affect our financial condition and reputation.

We distribute water through an extensive network of mains and store water in reservoirs and storage tanks located across our service areas. The Water Utility Services’ distribution systems were constructed during the period from the early 1900’s through today. A failure of major mains, reservoirs, or tanks could result in injuries and damage to residential and/or commercial property for which we may be responsible, in whole or in part. The failure of major mains, reservoirs or tanks may also result in the need to shut down some facilities or parts of our water distribution network in order to conduct repairs. Such failures and shutdowns may limit our ability to supply water in sufficient quantities to our customers and to meet the water delivery requirements prescribed by governmental regulators, which could adversely affect our financial condition, results of operations, cash flow, liquidity and reputation. We also own and operate numerous dams throughout Connecticut and Maine, and a failure of such dams could result in losses and damages that may adversely effect our financial condition and reputation. Any business interruption or other losses might not be covered by existing insurance policies or be recoverable in rates, and such losses may make it difficult for us to secure insurance in the future at acceptable rates.

Operating under contract water and waste systems in Maine and Connecticut will expose us to new risks.

CTWS operates a number of water and wastewater systems under operation and maintenance contracts that we assumed with the consummation of the merger with CTWS. Pursuant to these contracts, such systems are operated according to the standards set forth in the applicable contract, and it is generally the responsibility of the owner of the system to undertake capital improvements. We may not be able to convince the owner to make needed improvements in order to maintain compliance with applicable regulations. Although violations and fines incurred by water and wastewater systems may be the responsibility of the owner of the system under these contracts, those non-compliance events may reflect poorly on us as the operator of the system and harm our reputation, and in some cases, may result in liability to the same extent as if we were the owner.

Water Utility Services rely on information technology and systems that are key to business operations. A system malfunction, security breach, cyber-attacks or other disruptions could compromise our information and expose us to liability, which could adversely affect business operations.

Information technology is key to the operation of Water Utility Services, including but not limited to payroll, general ledger activities, outsourced bill preparation and remittance processing, providing customer service and the use of Supervisory Control and Data Acquisition systems to operate our distribution system. Among other things, system malfunctions, computer viruses and security breaches could prevent us from operating or monitoring our facilities, billing and collecting cash accurately and timely analysis of financial results. In addition, we collect, process, and store sensitive data from our customers and employees, including personally identifiable information, on our networks. Despite our security measures, our information technology and infrastructure may be vulnerable to attacks by hackers or breached due to employee error, malfeasance or other disruptions. Any such breach could compromise our networks and the information stored there could be accessed without our authorization, publicly disclosed, lost or stolen which could result in legal claims or proceedings, violation of privacy laws or damage to our reputation and customer relationships. Our profitability and cash flow could be affected negatively in the event these systems do not operate effectively or are breached. In addition, we may not be able to develop or acquire information technology that is

19

competitive and responsive to the needs of our business, and we may lack sufficient resources to make the necessary upgrades or replacements of our outdated existing technology to allow us to continue to operate at our current level of efficiency.

SJW Land Company and Chester Realty, Inc. have real estate holdings that are subject to various business and investment risks.

SJW Land Company owns real estate in Tennessee and Chester Realty, Inc. owns real estate in Connecticut. The risks in investing directly in real estate vary depending on the investment strategy and investment objective and include the following:

• Liquidity risk—real estate investments are illiquid. The lag time to build or reduce the real estate portfolio is long.

• Obsolescence risk—real estate property is location specific. Location obsolescence can occur due to a decline of a particular sub-market or neighborhood. Functional obsolescence can also occur from physical depreciation, wear and tear, and other architectural and physical features which could be curable or incurable.

• Market and general economic risks—real estate investment is tied to overall domestic economic growth and, therefore, carries market risk which cannot be eliminated by diversification. Generally, all property types benefit from national economic growth, though the benefits range according to local factors, such as local supply and demand and job creation. Because real estate leases are typically staggered and last for multiple years, there is generally a delayed effect in the performance of real estate in relation to the overall economy. This delayed effect can insulate or deteriorate the financial impact to SJW Land Company and Chester Realty, Inc. in a downturn or an improved economic environment.

• Concentration/Credit risk—the risk of a tenant declaring bankruptcy and seeking relief from its contractual rental obligation could affect the income and the financial results of SJW Land Company and Chester Realty, Inc. This risk is most prevalent in a recessionary environment.

Vacancy rates can climb and market rents can be impacted and weakened by general economic forces, therefore affecting income to SJW Land Company and Chester Realty, Inc.

The value of real estate can decrease materially due to a deflationary market, decline in rental income, market cycle of supply and demand, long lag time in real estate development, legislative and governmental actions, environmental concerns, increases in rates of returns demanded by investors, and fluctuation of interest rates, eroding any unrealized capital appreciation and, potentially, invested capital.

A decrease in the value of a real estate property or increase in vacancy could result in reduced future cash flows to amounts below the property’s current carrying value and could result in an impairment charge.

The success of SJW Land Company and Chester Realty, Inc.’s real estate investment strategy depend largely on ongoing local, state and federal land use development activities and regulations, future economic conditions, the development and fluctuations in the sale of the undeveloped properties, the ability to identify the developer/potential buyer of the available-for-sale real estate, the timing of the transaction, favorable tax law, and the ability to maintain and manage portfolio properties. There is no guarantee that we will be able to execute the strategy successfully and failure to do so may adversely affect our operating results and financial condition.

The price of our common stock may be volatile and may be affected by market conditions beyond our control.

The trading price of our common stock may fluctuate in the future based on a variety of factors, many of which are beyond our control and unrelated to our financial results. Factors that could cause fluctuations in the trading price of our common stock include volatility of the general stock market or the utility index, regulatory developments, public announcement of material development in strategic transactions general economic conditions and trends, actual or anticipated changes or fluctuations in our results of operations, actual or anticipated changes in the expectations of investors or securities analysts, actual or anticipated developments in our competitors’ businesses or the competitive landscape generally, litigation involving us or our industry, and major catastrophic event(s) or sales of large blocks of our stock. Furthermore, we believe that stockholders invest in public stocks in part because they seek reliable dividend payments. If there is an over supply of stock of public utilities in the market relative to demand by such investors, the trading price of our common stock may decrease. Additionally, if interest rates rise above the dividend yield offered by our common stock, demand for our stock and its trading price may also decrease.

Our business strategy, which includes acquiring water systems and expanding non-tariffed services, will expose us to new risks which could have a material adverse effect on our business.

Our business strategy focuses on the following:

(1) Regional regulated water utility operations;

20

(2) Regional non-tariffed water utility related services provided in accordance with the guidelines established by the Regulators; and

(3) Out-of-region water and utility related services.

As part of our pursuit of the above three strategic areas, we consider from time to time opportunities to acquire businesses and assets, for example the merger with CTWS. However, we cannot be certain we will be successful in identifying and consummating any strategic business combination or acquisitions relating to such opportunities. In addition, the execution of our business strategy will expose us to different risks than those associated with the current utility operations. We expect to incur costs in connection with the execution of this strategy and any integration of an acquired business could involve significant costs, the assumption of certain known and unknown liabilities related to the acquired assets, the diversion of management’s time and resources, the potential for a negative impact on SJW Group’s financial position and operating results, entering markets in which SJW Group has no or limited direct prior experience and the potential loss of key employees of any acquired company. Any strategic combination or acquisition we decide to undertake may also impact our ability to finance our business, affect our compliance with regulatory requirements, and impose additional burdens on our operations. Any businesses we acquire may not achieve sales, customer growth and projected profitability that would justify the investment. Any difficulties we encounter in the integration process, including the integration of controls necessary for internal control and financial reporting, could interfere with our operations, reduce our operating margins and adversely affect our internal controls. SJW Group cannot be certain that any transaction will be successful or that it will not materially harm operating results or our financial condition.

We must continue to attract and retain qualified technical and managerial personnel in order to succeed.

Our future success depends largely upon our ability to attract and retain highly skilled technical, operational and financial managers. There is a significant competition for such personnel in our industry. The loss of the services of any member of our management team or the inability to hire and retain experienced management personnel could have an adverse effect on our business, as our management team has knowledge of our industry and customers and would be difficult to replace. We try to ensure that we offer competitive compensation and benefits as well as opportunities for continued development, and we continually strive to recruit and train qualified personnel and retain key employees. There can be no assurance, however, that we will continue to be successful in attracting and retaining the personnel we require to grow and operate profitably.

Adverse investment returns and other factors may increase our pension costs and pension plan funding requirements.

A substantial number of our employees are covered by a defined benefit pension plan. Our pension costs and the funded status of the plan are affected by a number of factors including the discount rate, applicable mortality tables, mortality rates of plan participants, investment returns on plan assets, and pension reform legislation. Any change in such factors could result in an increase in future pension costs and an increase in our pension liability, requiring an increase in plan contributions which may adversely affect our financial conditions and results of operations.

Work stoppages, other labor relations matters and epidemic or pandemic illness events could adversely affect our business and operating results.

As of December 31, 2019, 225 of our 732 total employees were union members. Most of our unionized employees are represented by the Utility Workers of America, except certain employees in the engineering department who are represented by the International Union of Operating Engineers. Only employees at SJWC are union members.

We may experience difficulties and delays in the collective bargaining process to reach suitable agreements with union employees, particularly in light of increasing healthcare and pension costs. In addition, changes in applicable law and regulations could have an adverse effect on management’s negotiating position with the unions. Labor actions, work stoppages or the threat of work stoppages, and our failure to obtain favorable labor contract terms during future negotiations may adversely affect our business, financial condition, results of operations, cash flows and liquidity.

Additionally, an epidemic or pandemic illness event could result in part, or all, of our workforce being unable to operate or maintain our infrastructure, provide customer service or perform other tasks necessary to conduct SJW Group’s business. We can give no assurance that in the event of an epidemic or pandemic illness event we would be able to maintain sufficient human resources to ensure uninterrupted service in all of the areas that we serve and any interruption or slowdown in our service may adversely affect our business, financial condition and results of operations.

21

Our business has inherently dangerous workplaces. If we fail to maintain safe work sites, we can be exposed to not only people impacts but also to financial losses such as penalties and other liabilities.

Our safety record is critical to our reputation. We maintain health and safety standards to protect our employees, customers, vendors and the public. Although we intend to adhere to such health and safety standards and aim for zero injuries, it is extremely difficult to avoid accidents at all times.

Our business sites, including construction and maintenance sites, often put our employees and others in close proximity with large pieces of equipment, moving vehicles, pressurized water, underground trenches and vaults, chemicals and other regulated materials. On many sites we are responsible for safety and, accordingly, must implement safety procedures. If we fail to implement such procedures or if the procedures we implement are ineffective or are not followed by our employees or others, our employees and others may be injured or die. Unsafe work sites also have the potential to increase employee turnover and raise our operating costs. Any of the foregoing could result in financial losses, which could have a material adverse impact on our business, financial condition, results of operations and cash flows.

In addition, our operations can involve the handling and storage of hazardous chemicals, which, if improperly handled, stored or disposed of, could subject us to penalties or other liabilities. We are also subject to regulations dealing with occupational health and safety. Although we maintain functional employee groups whose primary purpose is to ensure we implement effective health, safety, and environment work procedures throughout our organization, including construction sites and maintenance sites, the failure to comply with such regulations or procedures could subject us to a liability.

We may be at risk for litigation under the principle of inverse condemnation for activities in the normal course of business which have a damaging effect on private property.

Under the California legal doctrine of inverse condemnation, a public utility taking or damaging private property can be responsible to the property owners for compensation, even when damage occurs through no fault or negligence of the utility company and regardless of whether the damage could be foreseen. Based upon existing California case law, SJWC could be sued under the doctrine of inverse condemnation and held liable if its facilities, operations or property, such as mains, fire hydrants, power lines and other equipment, damage private property.

A court finding of inverse condemnation does not obligate the CPUC to allow SJWC to recover damage awards or pass on costs to ratepayers. SJWC’s liquidity, earnings, and operations may be adversely affected if we are unable to recover the costs of paying claims for damages caused by the operation and maintenance of our property from customers or through insurance.

Our charter documents and Delaware law could prevent a takeover that stockholders consider favorable and could also make it more difficult for stockholders to influence our policies or may reduce the rights of stockholders.

SJW Group’s Certificate of Incorporation and Bylaws contain provisions that could delay or prevent a change in control of SJW Group. These provisions could also make it more difficult for our stockholders to elect directors and take other corporate actions. These provisions include, but are not limited to, the following:

• Authorizing Board of Directors to issue “blank check” preferred stock;

• Prohibiting cumulative voting in the election of directors;

• Limiting the ability of stockholders to call a special meeting of stockholders to only stockholders holding not less than 20% of outstanding voting power; and

• Requiring advance notification of stockholder nomination of directors and proposals.

These provisions may frustrate or prevent any attempts by stockholders of SJW Group to replace or remove its current management by making it more difficult for stockholders to replace members of the Board of Directors, which is responsible for appointing the members of management. In addition, the provisions of Section 203 of the Delaware General Corporate Law (“DGCL”) govern SJW Group. These provisions may prohibit large stockholders, in particular those owning 15% or more of our outstanding voting stock, from merging or combining with us for a certain period of time without the consent of the Board of Directors.

Furthermore, SJW Group’s Certificate of Incorporation provides that a state or federal court located within Delaware is the sole and exclusive forum (unless the company consents in writing to the selection of an alternate forum) for (i) any derivative action or proceeding brought on behalf of SJW Group, (ii) any action asserting a claim of breach of a fiduciary duty owed by any director, officer or other employee of SJW Group to the company or its stockholders, (iii) any action asserting a claim arising pursuant to any provision of the DGCL, or (iv) any action asserting a claim governed by the internal affairs doctrine. Such “exclusive forum” provision may limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with SJW Group or its directors, officers or other employees, which may discourage such lawsuits against us and our directors, officers and other employees.

22

Risks Related to SJW Group and CTWS as a Combined Company Following Closing of the Merger

CPUC has initiated an investigation to review the merger with CTWS, which may impose costs or certain conditions on us, but the merger was consummated prior to CPUC’s issuance of an order with respect to its investigation.

CPUC at its July 12, 2018 meeting approved an OII into the merger with CTWS. The order includes: investigating CPUC’s authority over the merger, whether the merger is in the public interest; whether the merger preserves CPUC’s jurisdiction over SJWC and CPUC’s capacity to effectively regulate utility operations in the State of California; the effect of the Merger on our and CTWS’s employees, shareholders, customers and communities in which they operate and the State of California; whether the benefits likely exceed any detrimental effects of the merger; and whether the CPUC should consider conditions or mitigation measures to prevent any adverse consequences which may result from the merger, and if so, what should be those conditions or measures. The order had stated that CPUC planned to substantially complete the inquiry in a manner sufficiently timely to allow the merger to go forward by the end of 2018, if appropriate. However, as a result of unexpected delays in CPUC’s scheduling of a planned public participation hearing, which was held January 31, 2019, issuance of a proposed decision was delayed. On March 4, 2019, the presiding administrative law judge suspended CPUC investigation until a final decision was reached by PURA. After securing the required approvals from both PURA and MPUC, SJW Group announced the close of the merger on October 9, 2019, and notified the CPUC accordingly.

Completion of CPUC’s investigation was not a condition to the consummation of the merger. We are unable to predict what action, if any, the CPUC will take with respect to the merger upon the conclusion of the OII proceeding. Such actions may impose significant costs and conditions on us, which may have an adverse effect on our business operation and financial conditions, and may negate some or all of the benefits that we expect as a result of the Merger.

We incurred substantial additional indebtedness to finance the merger with CTWS, and this additional indebtedness may reduce our business and operational flexibility and increase our borrowing costs.

To finance the merger, we incurred an aggregate of $510 million of additional indebtedness, a substantial increase compared to our indebtedness prior to the merger. Our increased indebtedness and higher debt-to-equity ratio in comparison to that of our recent historical basis may have the effect, among other things, of: reducing our flexibility to respond to changing business, industry and economic conditions; increasing borrowing costs; placing us at a competitive disadvantage relative to other companies in our industry with less debt; potentially having an adverse affect on our issuer and issue ratings; requiring additional cash flow to be used to service debt instead of for other purposes; and potentially impairing our ability to obtain other financing.

In addition, the terms and conditions of such indebtedness, including financial covenants and restrictive covenants, may reduce our business flexibility and adversely affect our business, financial condition, results of operations and prospects. The agreements governing the indebtedness incurred in connection with the merger contain covenants that impose significant operating and financial limitations and restrictions on us, including restrictions on the ability to enter particular transactions and engage in other activities that we may believe will be advisable or necessary for the combined company’s business. In addition, failure to comply with any of the covenants in our existing or future debt agreements could result in a default under those agreements and under other existing agreements containing cross-default provisions. A default would permit lenders to accelerate the maturity of indebtedness under these agreements and to foreclose upon any collateral securing such indebtedness. Under certain circumstances, we may not have sufficient funds or other resources to satisfy all of our obligations under our indebtedness, including principal and interest payments, which, if not cured, may cause an event of default.

We may not have discovered undisclosed liabilities of CTWS during our due diligence process.

In the course of the due diligence review of CTWS that we conducted prior to the execution of the merger agreement, we may not have discovered, or may have been unable to quantify, undisclosed liabilities of CTWS and its subsidiaries, and our stockholders may not be indemnified for any of these liabilities. Examples of such undisclosed liabilities may include, but are not limited to, pending or threatened litigation or regulatory matters. Any such undisclosed liabilities could have an adverse effect the business, results of operations, financial condition and cash flows of the combined company and on the value of our stock following the completion of the merger.

Uncertainties associated within the combined company may cause a loss of management personnel and other key employees which could adversely affect the future business and operations of the combined company.

The combined companies are dependent on the experience and industry knowledge of the officers and other key employees to execute their business plans, and its success will depend in part upon its ability to retain key management personnel and other key employees. Current and prospective employees of the combined company may experience uncertainty about their roles, which may have an adverse effect on the ability of the combined company to attract or retain key management and other key personnel. Accordingly, no assurance can be given that the combined company will be able to attract or retain key management

23

personnel and other key employees to the same extent that SJW Group and CTWS were previously able to attract or retain their own employees before the merger. A failure by the combined company to attract, retain and motivate executives and other key employees could have a negative impact on its businesses.

The combined company is expected to incur additional costs in connection with the CTWS merger, including costs to integrate SJW Group and CTWS.

SJW Group has incurred, and is expected to incur additional, substantial expenses in connection with integrating SJW Group and CTWS. Close of the CTWS merger occurred on October 9, 2019. There is a large number of processes, policies, procedures, operations, technologies and systems at each company that must be integrated, including accounting and finance, payroll, revenue management, commercial operations, risk management and employee benefits. While we assumed that a certain level of integration expenses would be incurred, there are many factors beyond our control that could affect the total amount or the timing of such expenses, and we may encounter unexpected difficulties and challenges that would require us to incur additional expenses. Moreover, many of the expenses that will be incurred are, by their nature, difficult to estimate accurately. In addition, integration expenses could, particularly in the near term, exceed the benefits that the combined company expects to achieve from the elimination of duplicative public company and other related costs expected from the transaction. These integration expenses could result in the combined company taking significant charges against earnings and the amount and timing of such charges are uncertain at present.

SJW Group has committed to certain “ring-fencing” measures which will enhance CTWS’s separateness from SJW Group, which may limit SJW Group’s ability to influence the management and policies of CTWS (beyond the limitations included in other existing governance mechanisms).

Pursuant to the agreements related to the Merger and commitments made by SJW Group as part of the application for PURA and MPUC approval of the merger with CTWS, SJW Group has instituted certain “ring-fencing” measures to enhance CTWS’s separateness from SJW Group and to mitigate the risk that CTWS would be negatively impacted in the event of a bankruptcy or other adverse financial developments affecting SJW Group or its non-ring-fenced affiliates. These commitments became effective upon the closing of the Merger.

In order to satisfy the ring-fencing commitments, SJW Group formed SJWNE, LLC a wholly-owned special purpose entity (“SPE”) to own the capital stock of CTWS. The SPE, CTWS and its subsidiaries (collectively, the “CTWS Entities”) adopted certain measures designed to enhance their separateness from SJW Group, with the intention of mitigating the effects on the CTWS Entities of any bankruptcy of SJW Group and its affiliates other than the CTWS Entities (collectively, the “Non-CTWS Entities”). As a result of these ring-fencing measures, in certain situations, SJW Group will be restricted in its ability to access assets of the CTWS Entities as dividends or intracompany loans to satisfy the debt or contractual obligations of any Non-CTWS Entity, including any indebtedness or other contractual obligations of SJW Group. In addition, the ring-fencing structure may negatively impact SJW Group’s ability to achieve certain benefits, including synergies and economies of scale to reduce operating costs of the combined entity, that it anticipates will result from the merger. This ring-fencing structure also subjects SJW Group and the CTWS Entities to certain governance, operational and financial restrictions following the closing of the merger. Accordingly, SJW Group may be restricted in its ability to direct the management, policies and operations of the CTWS Entities, including the deployment or disposition of their respective assets, declarations of dividends, strategic planning and other important corporate issues. Further, the CTWS Entities’ directors have considerable autonomy and, as described in our commitments, have a duty to act in the best interest of the CTWS Entities consistent with the ring-fencing structure and applicable law, which may be contrary to SJW Group’s best interests or be in opposition to SJW Group’s preferred strategic direction for the CTWS Entities. To the extent they take actions that are not in SJW Group’s interests, our financial condition, results of operations and prospects may be materially adversely affected.

The combined company is and will be affected by developments in the water utility industry, including changes in regulation. A failure to adapt to the changing regulatory environment could adversely affect the stability of the combined company’s earnings.

Because the SJW Group and its subsidiaries are regulated in the United States at the federal level and in California, Texas, Connecticut and Maine at the state level, it is and will continue to be affected by legislative and regulatory developments. The combined company and/or its subsidiaries are now subject in the United States to federal regulation as well as to extensive state regulation in the states in which the combined company operates. The costs, burdens and complexities associated with complying with these regulatory jurisdictions may have an adverse effect on the combined company. Moreover, potential legislative or regulatory changes may create greater risks to the stability of the combined company’s earnings generally.

24

SJW Group’s dividend policy is subject to the discretion of our board of directors and may be limited by legal and contractual requirements.

We anticipate to continue to pay a regular quarterly dividend now that the merger is completed, though any such determination to pay dividends will be at the discretion of our board of directors and will be dependent on then-existing conditions, including our financial condition, earnings, legal requirements, including limitations under Delaware law, restrictions in our credit agreements and other debt instruments that limit our ability to pay dividends to stockholders and other factors the board of directors deems relevant. The board of directors of SJW Group may, in its sole discretion, change the amount or frequency of dividends or discontinue the payment of dividends entirely. In addition, our subsidiaries may be subject to restrictions on their ability to pay dividends to us, including under state law, pursuant to regulatory commitments and under their credit agreements and other debt instruments. In this regard, the CTWS Entities are limited from paying dividends to us in certain circumstances under PURA and MPUC regulatory commitments. Any inability of our subsidiaries to pay us dividends may have a material and adverse effect on our ability to pay dividends to our stockholders.

Item 1B. Unresolved Staff Comments

None.

Item 2. Properties

The properties of SJWC consist of a unified water production system located in the County of Santa Clara in the State of California. In general, the property is comprised of franchise rights, water rights, necessary rights-of-way, approximately 7,000 acres of land held in fee (which is primarily non-developable watershed), impounding reservoirs with a capacity of approximately 2.256 billion gallons, 2,479 miles of transmission and distribution mains, distribution storage of approximately 223 million gallons, wells, boosting facilities, diversions, surface water treatment plants, equipment, office buildings and other property necessary to provide water service to its customers.

SJWC maintains all of its properties in good operating condition in accordance with customary practice for a water utility. SJWC’s groundwater pumping stations have a production capacity of approximately 246 million gallons per day and the present capacity for taking purchased water is approximately 109 million gallons per day. The surface water collection system has a physical delivery capacity of approximately 35 million gallons per day. During 2019, a maximum and average of 140 million gallons and 100 million gallons of water per day, respectively, were delivered to the system.

The properties of CTWS consist of land, easements, rights (including water rights), buildings, reservoirs with a capacity of approximately 9.4 billion gallons, standpipes, dams, wells, supply lines, water treatment plants, pumping plants, 2,342 miles of transmission and distribution mains and other facilities and equipment used for the collection, purification, storage and distribution of water throughout Connecticut and Maine. In certain cases, Connecticut Water and Maine Water are or may be a party to limited contractual arrangements for the provision of water supply from neighboring utilities.

Sources of water supply owned, maintained and operated by CTWS include 25 surface water reservoirs and 108 well fields. In addition, Connecticut Water, HVWC, Avon Water and Maine Water have agreements with various neighboring water utilities to provide water, at negotiated rates, to our water systems. Collectively, these sources have the capacity to deliver approximately 84 million gallons of potable water daily to the 27 major operating systems. CTWS also owns, maintains and operates 50 small, non-interconnected satellite and consecutive water systems, that combined, have the ability to deliver about 3.5 million gallons of additional water per day to their respective systems. For some small consecutive water systems, purchased water supplier may comprise substantially all the of the total available supply of the system. CTWS’s 30 water treatment plants have a combined treatment capacity of approximately 52 million gallons per day.

CLWSC maintains a service area that covers approximately 246 square miles located in the southern region of the Texas hill country in Blanco, Comal, Hays and Travis counties. The majority of the service area surrounds an 8,200 surface acre reservoir (Canyon Lake). CLWSC production wells have the ability to pump a combined 3.55 billion gallons annually. CLWSC has contracts for 2 billion gallons of untreated surface water and 235 million gallons of treated surface water from the GBRA annually. CLWSC owns and operates three surface water treatment plants with a combined production capacity of 9 million gallons per day. CLWSC has 644 miles of transmission and distribution mains and maintains 63 storage tanks with a total storage capacity of 7.8 million gallons. CLWSC owns and operates three wastewater treatment plants with a combined capacity of 96,500 gallons per day.

Water Utility Services hold all of its principal properties in fee simple, subject to current tax and assessment liens, rights-of-way, easements, and certain minor defects in title which do not materially affect their use. A substantial portion of treatment, storage and distribution properties owned by Maine Water are subject to liens of mortgage or indentures that secure bonds, notes and other evidences of long-term indebtedness.

25

As of December 31, 2019, SJW Land Company owns approximately 55 acres of property in the state of Tennessee. SJW Land Company also owns a 70% limited partnership interest in 444 West Santa Clara Street, L.P. SJW Land Company consolidates its limited partnership interest in 444 West Santa Clara Street, L.P. as a variable interest entity within the scope of ASC Topic 810. In 2017, 444 West Santa Clara Street, L.P. sold all of its interests in a commercial building and land the partnership owned and operated. See also Note 1 of “Notes to Consolidated Financial Statements”.

The following table is a summary of SJW Land Company properties described previously:

				% for Year Ended December 31, 2019 of SJW Land Company
Description	Location	Acreage	Square Footage	Revenue		Expense
Warehouse building	Knoxville, Tennessee	30	361,500	46	%	40	%
Commercial building	Knoxville, Tennessee	15	135,000	54	%	60	%
Undeveloped land and parking lot	Knoxville, Tennessee	10	N/A	N/A		N/A

As of December 31, 2019, Chester Realty, Inc. owns less than 100 acres of property in the State of Connecticut.

Item 3. Legal Proceedings

Class Action Suits Related to the merger with CTWS

On June 14, 2018, certain shareholders of CTWS (the “Plaintiffs”) filed two nearly identical class-action complaints in Connecticut state court against the CTWS board of directors, SJW Group, Eric W. Thornburg, Chairman, President and Chief Executive Officer of SJW Group, and CTWS (the “Defendants”). The complaints, as amended on September 18, 2018 and September 20, 2018, allege that the CTWS board breached its fiduciary duties in connection with the Merger, that CTWS’s preliminary proxy statement, filed with the SEC on August 20, 2018, omitted certain material information and that SJW Group and Mr. Thornburg aided and abetted the alleged breaches by the CTWS board of directors. Among other remedies, the actions sought to recover rescissory and other damages and attorney’s fees and costs. SJW Group believed the claims in these complaints were without merit and vigorously defended against such complaints. The parties to the lawsuits agreed in principle to settle the lawsuits in exchange for the issuance of additional disclosures by CTWS. Pursuant to the agreements to settle the lawsuits, the Plaintiffs reserved the right to seek a mootness fee from CTWS. The parties moved to stay proceedings, other than fee-related proceedings, until the closing of the merger with CTWS, and the court initially granted the parties’ motion to stay on November 14, 2018. The initial stay of proceedings had expired on February 28, 2019 and after multiple motions by the parties and granting of extensions, the stay of the proceedings continued until November 11, 2019. On November 20, 2018, the Plaintiffs filed an opening brief in support of their mootness fee demand of $1.5 million. The merger with CTWS closed on October 9, 2019, and pursuant to the agreement in principle to settle the litigation, the complaints would be dismissed after the closing. On November 12, 2019, the Defendants filed an opposition to the Plaintiffs’ fee demand.  On November 27, 2019, the Plaintiffs filed a reply brief in further support of their mootness fee demand. On January 8, 2020, the court entered an order dismissing Plaintiffs’ complaints. On January 10, 2020, the parties entered into an agreement pursuant to which the Defendants would pay a mootness fee amount of $325,000 in exchange for the release of all of the Plaintiffs’ claims.

Billing Practice OII with CPUC

On September 14, 2018, the CPUC issued OII No. 18-09-003 to which SJWC was named as Respondent. The OII will determine whether the company unlawfully overcharged customers over a 30-year period by failing to pro-rate service charges when increases occurred during a billing period, and whether the company double-billed service charges during one billing period when allegedly switching from billing such charges in advance to billing in arrears. By a decision adopted November 29, 2018, in SJWC’s then-pending GRC, the CPUC approved a settlement to resolve the alleged overcharging issue for the period since June 2011 by requiring customer credits to customers totaling $2 million. That amount was refunded to customers pursuant to SJWC’s Advice Letter No. 530, effective February 8, 2019. See discussion on the matter in Note 8, “Contingencies.” On July 24, 2019, SJWC and CPED jointly filed a motion for CPUC approval of a Settlement Agreement (“Agreement”) over SJWC’s past customer billing practices. The Agreement requires the company to pay approximately $2.1 million in additional customer refunds, consisting of $1.8 million for refunds during the period from 1987 to 2011 and $0.4 million in customer credits to low income water customers, and invest $5 million in utility plant that is not allowed an investment return or rate recovery. SJWC recorded the $2.1 million customer credit expense as an offset to revenues during the second quarter of 2019. The $5 million commitment to invest in utility plant will be recognized as plant in service on the company’s financial statements once invested. A CPUC Presiding Officer’s Decision approved the Agreement in December 2019, but an appeal was filed in January 2020 by a group of SJWC customers. On February 27, 2020, the CPUC adopted a

26

modified version of the Agreement, which found the appeal to be without merit and approved the Agreement. The CPUC’s adopted decision is scheduled to become final on March 28, 2020.

SJW Group is subject to ordinary routine litigation incidental to its business. Except as disclosed above, there are no pending legal proceedings to which SJW Group or any of its subsidiaries is a party, or to which any of its properties is the subject, that are expected to have a material effect on SJW Group’s business, financial position, results of operations or cash flows.

Item 4. Mine Safety Disclosures

None.

27

PART II

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

Market Information

SJW Group’s common stock is traded on the New York Stock Exchange under the symbol “SJW”. As of December 31, 2019, there were 320 record holders of SJW Group’s common stock.

Five-Year Performance Graph

The following performance graph compares the changes in the cumulative stockholder return on SJW Group’s common stock with the cumulative total return on a Water Utility Index and the Standard & Poor’s 500 Index during the last five years ended December 31, 2019. The comparison assumes $100 was invested on December 31, 2014 in SJW Group’s common stock and in each of the foregoing indices and assumes reinvestment of dividends.

COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN

Among SJW Group, a Water Utility Index and the S&P 500 Index

The following descriptive data of the performance graph is supplied in accordance with Rule 304(d) of Regulation S-T (numbers represent U.S. dollars ($)):

	2014		2015	2016	2017	2018	2019
SJW Group	$	100	95	183	212	188	245
Water Utility Index	$	100	113	138	177	181	254
S&P 500 Index	$	100	101	114	138	132	174

The Water Utility Index is the 9 water company Water Utility Index (including CTWS up to the time of its merger with SJW Group) prepared by Wells Fargo Securities, LLC. The above performance graph and related information shall not be deemed “soliciting material” or to be “filed” with the SEC, nor shall such information be incorporated by reference into any future filing under the Securities Act of 1933 or Securities Exchange Act of 1934, each as amended, except to the extent that the company specifically incorporates it by reference into such filing.

28

Item 6. Selected Financial Data

FIVE YEAR FINANCIAL AND STATISTICAL REVIEW

SJW Group and Subsidiaries

	2019			2018		2017		2016		2015
CONSOLIDATED RESULTS OF OPERATIONS (in thousands)
Operating revenue	$	420,482		397,699		389,225		339,706		305,082
Operating expense:
Purchased water	99,118			97,378		86,456		72,971		61,089
Power	7,443			6,180		7,295		6,102		6,121
Groundwater extraction charges	43,917			46,770		47,817		32,088		31,240
Other production expenses	25,291			18,398		16,571		14,470		13,606
Administrative and general	66,301			48,933		48,940		41,529		40,388
Maintenance	20,505			18,414		18,361		18,361		15,926
Property taxes and other non-income taxes	19,068			14,975		13,642		12,123		11,667
Depreciation and amortization	65,592			54,601		48,292		44,625		40,740
Merger related expenses	15,768			18,610		—		—		—
Total operating expense	363,003			324,259		287,374		242,269		220,777
Operating income	57,479			73,440		101,851		97,437		84,305
Interest expense, other income and expense	(25,398		)	(24,608	)	(5,358	)	(11,056	)	(23,151	)
Income before income taxes	32,081			48,832		96,493		86,381		61,154
Provision for income taxes	8,454			10,065		35,393		33,542		23,272
Net income before noncontrolling interest	23,627			38,767		61,100		52,839		37,882
Less net income attributable to the noncontrolling interest	224			—		1,896		—		—
SJW Group net income	$	23,403		38,767		59,204		52,839		37,882
Dividends paid	$	34,134		23,074		21,332		16,559		15,885
CONSOLIDATED PER SHARE DATA
Earnings per share - diluted	0.82			1.82		2.86		2.57		1.85
Dividends paid	1.20			1.12		1.04		0.81		0.78
Book value per common share	31.28			31.31		22.57		20.61		18.83
CONSOLIDATED BALANCE SHEET (in thousands)
Utility plant and intangible assets	$	3,168,505		1,935,911		1,792,323		1,666,381		1,524,422
Less accumulated depreciation and amortization	962,019			607,090		553,059		520,018		487,659
Net utility plant	2,206,486			1,328,821		1,239,264		1,146,363		1,036,763
Net real estate investment	44,102			44,009		45,081		50,459		61,434
Total assets	3,132,470			1,956,389		1,458,001		1,443,376		1,337,325
Capitalization:
Stockholders’ equity	889,984			889,312		463,209		421,646		383,783
Long-term debt, less current portion	1,283,597			431,424		431,092		433,335		377,187
Total capitalization	$	2,173,581		1,320,736		894,301		854,981		760,970
OTHER STATISTICS—WATER UTILITY SERVICES
Average revenue per connection (in thousands)	$	1,087		1,609		1,594		1,402		1,263
Investment in gross utility plant per connection (in thousands)	$	8,195		7,832		7,340		6,874		6,311
Connections at year-end	386,607			247,267		244,133		242,421		241,555
Miles of main at year-end	5,465			3,091		3,082		3,069		3,031
Water production (million gallons)	42,216			40,053		38,584		35,847		36,535
Maximum daily production (million gallons)	206			149		148		136		130
Population served (estimate)	1,604,442			1,114,200		1,100,200		1,092,600		1,089,000
Note:  2019 information including Other Statistics includes CTWS for the period ended October 9, 2019 through December 31, 2019

29

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

(Dollar amounts in thousands, except where otherwise noted)

Description of Business

SJW Group is a publicly traded company and is a holding company with four subsidiaries:

SJWC, a wholly-owned subsidiary, is a public utility in the business of providing water service to approximately 231,000 connections that serve a population of approximately one million people in an area comprising approximately 139 square miles in the metropolitan San Jose, California area.

SJWNE LLC, a wholly-owned subsidiary of SJW Group. On October 9, 2019, CTWS became a wholly-owned subsidiary of SJWNE LLC. CTWS is a holding company whose subsidiaries are primarily public utilities providing water service to approximately 137,000 service connections that serve a population of approximately 480,000 people in 80 municipalities with a service area of approximately 269 square miles throughout Connecticut and Maine and 3,000 wastewater connections in Southbury, Connecticut.

SJWTX, Inc., a wholly owned subsidiary of SJW Group, doing business as Canyon Lake Water Service Company, is a public utility in the business of providing water service to approximately 18,000 connections that serve approximately 54,000 people. CLWSC’s service area comprises more than 246 square miles in Blanco, Comal, Hays and Travis County in the growing region between San Antonio and Austin, Texas. SJWTX, Inc. has a 25% interest in Acequia Water Supply Corporation. Acequia has been determined to be a variable interest entity within the scope of ASC Topic 810 with SJWTX, Inc. as the primary beneficiary. As a result, Acequia has been consolidated with SJWTX, Inc.

SJW Land Company, a wholly owned subsidiary of SJW Group, owns undeveloped land in the states of California and Tennessee, owns and operates commercial buildings in Tennessee and has a 70% limited partnership interest in 444 West Santa Clara Street, L.P. 444 West Santa Clara Street, L.P. has been determined to be a variable interest entity within the scope of ASC Topic 810 with SJW Land Company as the primary beneficiary. As a result, 444 West Santa Clara Street L.P. has been consolidated with SJW Land Company. In 2017, 444 West Santa Clara Street, L.P. sold all of its interests in the commercial building and land the partnership owned and operated and SJW Land Company also sold certain undeveloped land located in San Jose, California.

TWA, formerly a wholly owned subsidiary of SJW Group, was undertaking activities that were necessary to develop a water supply project in Texas. In 2017, SJW Group sold all of its equity interest in TWA to GBRA for $31.0 million.

Business Strategy for Water Utility Services

SJW Group focuses its business initiatives in three strategic areas:

(1) Regional regulated water utility operations;

(2) Regional non-tariffed water utility related services provided in accordance with the guidelines established by the CPUC in California, PURA in Connecticut, PUCT in Texas, and MPUC in Maine; and

(3) Out-of-region water and utility related services.

Regional Regulated Activities

SJW Group’s regulated utility operation is conducted through SJWC, Connecticut Water, HVWC, Avon Water, CLWSC and Maine Water. SJW Group plans and applies a diligent and disciplined approach to maintaining and improving its water system infrastructures and also seeks to acquire regulated water systems adjacent to or near its existing service territory. CTWS also provides regulated wastewater services through HVWC.

The United States water utility industry is largely fragmented and is dominated by municipal-owned water systems. The water industry is regulated, and provides a life-sustaining product. This makes water utilities subject to lower business cycle risks than non-tariffed industries.

Regional Non-tariffed Activities

Operating in accordance with guidelines established by the CPUC, SJWC provides non-tariffed services, such as water system operations, maintenance agreements and antenna site leases under agreements with municipalities and other utilities. CLWSC provides non-tariffed wholesale water service to adjacent utilities and non-tariffed wastewater services. CTWS provides non-tariffed services, such as water system operations and maintenance agreements under agreements with municipalities and other utilities. Additionally, CTWS offers Linebacker, an optional service line protection program offered by CTWS to eligible residential customers through NEWUS in Connecticut and Maine Water in Maine covering the cost of repairs for leaking or broken water service lines which provide drinking water to a customer’s home. For customers who enroll in this program,

30

CTWS will repair or replace a leaking or broken water service line, curb box, curb box cover, meter pit, meter pit cover, meter pit valve plus in-home water main shut off valve before the meter. Additionally, NEWUS offers expanded coverage to Connecticut Water customers for failure of in-home plumbing, sewer and septic drainage lines and implemented modified terms and conditions with limitations on certain coverages.

SJW Group also seeks appropriate non-tariffed business opportunities that complement its existing operations or that allow it to extend its core competencies beyond existing operations. SJW Group seeks opportunities to fully utilize its capabilities and existing capacity by providing services to other regional water systems, which also will benefit its existing regional customers.

Out-of-Region Opportunities

SJW Group also from time to time pursues opportunities to participate in out-of-region water and utility related services, particularly regulated water businesses. SJW Group evaluates out-of-region and out-of-state opportunities that meet SJW Group’s risk and return profile.

The factors SJW Group considers in evaluating such opportunities include:

• Potential profitability;

• Regulatory environment;

• Additional growth opportunities within the region;

• Water supply, water quality and environmental issues;

• Capital requirements;

• General economic conditions; and

• Synergy potential.

As part of our pursuit of the above three strategic areas, we consider from time to time opportunities to acquire businesses and assets, for example the merger with CTWS. However, we cannot be certain we will be successful in identifying and consummating any strategic business combination or acquisitions relating to such opportunities. In addition, the execution of our business strategy will expose us to different risks than those associated with the current utility operations. We expect to incur costs in connection with the execution of this strategy and any integration of an acquired business could involve significant costs, the assumption of certain known and unknown liabilities related to the acquired assets, the diversion of management’s time and resources, the potential for a negative impact on SJW Group’s financial position and operating results, entering markets in which SJW Group has no or limited direct prior experience and the potential loss of key employees of any acquired company. Any strategic combination or acquisition we decide to undertake may also impact our ability to finance our business, affect our compliance with regulatory requirements, and impose additional burdens on our operations. Any businesses we acquire may not achieve sales, customer growth and projected profitability that would justify the investment. Any difficulties we encounter in the integration process, including the integration of controls necessary for internal control and financial reporting, could interfere with our operations, reduce our operating margins and adversely affect our internal controls. SJW Group cannot be certain that any transaction will be successful or that it will not materially harm operating results or our financial condition.

Real Estate Services

SJW Group’s real estate investment activity is conducted through SJW Land Company and Chester Realty, Inc. SJW Land Company owns undeveloped land in Tennessee and owns and operates commercial buildings in Tennessee. SJW Land Company also owns a limited partnership interest in 444 West Santa Clara Street, L.P. The partnership owned a commercial building in San Jose, California. In 2017, 444 West Santa Clara Street, L.P. sold all of its interests in the commercial building and land the partnership owned and operated and SJW Land Company sold the undeveloped land located in San Jose, California. SJW Land Company manages its remaining acquired income producing and other properties until such time a determination is made to reinvest proceeds from sale of such properties. Chester Realty, Inc. owns and operates land and commercial buildings in the State of Connecticut. Chester Realty, Inc. manages its income producing and other properties until such time a determination is made to reinvest proceeds from sale of such properties. SJW Land Company and Chester Realty, Inc.’s real estate investments diversify SJW Group’s asset base.

31

Critical Accounting Policies

SJW Group has identified accounting policies delineated below as the policies critical to its business operations and the understanding of the results of operations. The preparation of consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the consolidated financial statements and revenues and expenses during the reporting period. SJW Group bases its estimates on historical experience and other assumptions that are believed to be reasonable under the circumstances. For a detailed discussion on the application of these and other accounting policies, see Note 1 of “Notes to Consolidated Financial Statements.” SJW Group’s critical accounting policies are as follows:

Balancing and Memorandum Accounts

The purpose of a balancing account is to track the under-collection or over-collection associated with expense changes and the revenue authorized by the CPUC to offset those expense changes. Pursuant to Section 792.5 of the California Public Utilities Code, a balancing account must be maintained for expense items for which revenue offsets have been authorized.

Balancing accounts are currently being maintained for the following items: purchased water, purchased power, groundwater extraction charges, pensions, and general rate case true-ups. The amount in the water production balancing accounts varies with the seasonality of the water utility business such that, during the summer months when the demand for water is at its peak, the account tends to reflect an under-collection, while during the winter months when demand for water is relatively lower, the account tends to reflect an over-collection. The pension balancing account is intended to capture the difference between actual pension expense and the amount approved in rates by the CPUC. The general rate case true-up accounts are a result of revenue shortfalls authorized for collection by the CPUC due to delayed rate case decisions.

SJWC also maintains memorandum accounts to track revenue impacts due to catastrophic events, certain unforeseen water quality expenses related to new federal and state water quality standards, energy efficiency, water conservation, water tariffs, and other approved activities or as directed by the CPUC. The Monterey Water Revenue Adjustment Mechanism 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 would have been in effect.

Balancing and memorandum accounts are recognized by SJWC 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. In addition, in the case of special revenue programs such as the WCMA, SJWC follows the requirements of ASC Topic 980-605-25—“Alternative Revenue Programs” in determining revenue recognition, including the requirement that such revenues will be collected within 24 months of the year-end in which the revenue is recorded. A reserve is recorded for amounts SJW Group estimates will not be collected within the 24-month period. This reserve is based on an estimate of actual usage over the recovery period, offset by applicable drought surcharges. In assessing the probability criteria for balancing and memorandum accounts between general rate cases, SJWC considers evidence that may exist prior to CPUC authorization that would satisfy ASC Topic 980 subtopic 340-25 recognition criteria. Such evidence may include regulatory rules and decisions, past practices, and other facts and circumstances that would indicate that recovery or refund is probable. When such evidence provides sufficient support, the balances are recorded in SJW Group’s financial statements.

It is typical for the CPUC to incorporate any over-collected and/or under-collected balances in balancing or memorandum accounts into customer rates at the time rate decisions are made as part of SJWC’s general rate case proceedings by assessing temporary surcredits and/or surcharges. In the case where SJWC’s balancing or memorandum-type accounts that have been authorized by the CPUC reach certain thresholds or have termination dates, SJWC can request the CPUC to recognize the amounts in customer rates prior to the next regular general rate case proceeding by filing an advice letter.

Recognition of Regulatory Assets and Liabilities

Generally accepted accounting principles for water utilities include the recognition of regulatory assets and liabilities as permitted by ASC Topic 980. In accordance with ASC Topic 980, Water Utility Services, to the extent applicable, records deferred costs and credits on the balance sheet as regulatory assets and liabilities when it is probable that these costs and credits will be recognized in the ratemaking process in a period different from when the costs and credits are incurred. Accounting for such costs and credits is based on management’s judgment and prior historical ratemaking practices, and it occurs when management determines that it is probable that these costs and credits will be recognized in the future revenue of Water Utility Services through the ratemaking process. The regulatory assets and liabilities recorded by Water Utility Services primarily relate to the recognition of deferred income taxes for ratemaking versus tax accounting purposes, balancing and memorandum accounts, postretirement pension benefits, medical costs, accrued benefits for vacation and asset retirement obligations that have not been passed through in rates. The company adjusts the related asset and liabilities for these items through its regulatory asset and liability accounts at year-end, except for certain postretirement benefit costs and balancing and memorandum accounts which are adjusted monthly. The disallowance of any asset in future ratemaking, including deferred

32

regulatory assets, would require SJWC to immediately recognize the impact of the costs for financial reporting purposes. In December 2019, CPUC denied SJWC’s request in Advice Letter No. 532 to recover the 2018 balances of WCMA and was ordered to remove the WCMA accounts from the preliminary statement book. As a result of the decision, SJWC wrote off the total 2018 WCMA balance of $9.4 million and $0.6 million recorded in its 2019 WCMA memorandum accounts. (See also Note 1, “Summary of Accounting Principles” in the consolidated financial statements). No other disallowances were recognized during the years ending December 31, 2019 and 2018.

Business Combinations

SJW Group applies the provisions of ASC Topic 805—“Business Combinations” for the purchase accounting related to the merger with CTWS on October 9, 2019. Topic 805 requires SJW Group to recognize separately from goodwill the assets acquired and the liabilities assumed at the acquisition date fair values. Goodwill as of the acquisition date is measured as the excess of consideration transferred over the net of the acquisition date fair values of the assets acquired and the liabilities assumed. While SJW Group uses our best estimates and assumptions to accurately value assets acquired and liabilities assumed at the acquisition date, our estimates are inherently uncertain and subject to refinement. As a result, during the measurement period, which may be up to one year from the acquisition date, we record adjustments to the assets acquired and liabilities assumed with the corresponding offset to goodwill. Upon the conclusion of the measurement period or final determination of the values of assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recorded to our Consolidated Statements of Comprehensive Income. Accounting for business combinations requires SJW Group to make significant estimates and assumptions, especially at the acquisition date, including estimates for intangible assets, contractual obligations assumed and pre-acquisition contingencies. Although SJW Group believes that the assumptions and estimates we make are reasonable and appropriate, they are based in part on historical experience and information obtained from CTWS’s management and are inherently uncertain. Events and circumstances may occur that may affect the accuracy or validity of such assumptions, estimates or actual results. The purchase price allocation process requires management to make significant estimates and assumptions with respect to intangible assets. Although SJW Group believes the assumptions and estimates made are reasonable, they are based in part on historical experience, market conditions and information obtained from management of the acquired companies and are inherently uncertain. Examples of critical estimates in valuing certain of the intangible assets we have acquired or may acquire in the future include, but are not limited to: future expected cash flows from services; historical and expected customer attrition rates and anticipated growth in revenue from acquired customers; the expected use of the acquired assets; and discount rates. As of December 31, 2019, the preliminary value of the acquired deferred tax assets and deferred tax liabilities are based on a preliminary analysis, and our estimates and assumptions are subject to change within the measurement period (up to one year from the acquisition date). In addition, management is still evaluating CTWS’s acquisition accounting in the opening balance sheet.

Factors Affecting Our Results of Operations

SJW Group’s financial condition and results of operations are influenced by a variety of factors including the following:

• Economic utility regulation;

• Infrastructure investment;

• Compliance with environmental, health and safety standards;

• Production expenses;

• Customer growth;

• Water usage per customer;

• Weather conditions, seasonality and sources of water supply; and

• Merger and acquisition activities, if any.

Economic Utility Regulation

Water Utility Services is generally subject to economic regulation by the Regulators overseeing public utilities. Regulatory policies vary from state to state and may change over time. In addition, there may be regulatory lag between the time a capital investment is made, a consumption decrease occurs, or an operating expense increases and when those items are adjusted in utility rates.

SJWC employs a forward-looking test year and has been authorized to use several mechanisms to mitigate risks faced due to regulatory lag and new and changing legislation, policies and regulation. These include memorandum accounts to track revenue impacts due to catastrophic events, certain unforeseen water quality expenses related to new federal and state water quality standards, energy efficiency, water conservation, water tariffs, and other approved activities or as directed by the CPUC.

33

Rate recovery for the balances in these memorandum accounts is generally allowed in a subsequent general rate case. SJWC also maintains balancing accounts to track changes in purchased water, purchased power, groundwater extraction charges and pension costs for later rate recovery.

Regulatory risk is mitigated in California by use of a forward-looking test year which allows the return on and return of utility plant on a forecasted basis as it is placed in service, and in some cases interim rate relief is allowed in the event of regulatory lag.

Pursuant to Connecticut regulations, Connecticut Water, Avon Water and HVWC employ a historical test year. To address regulatory risk due to regulatory lag and changing legislation policies and regulations, rate cases may be filed as necessary in Connecticut. Additionally, to mitigate regulatory lag for pipeline replacement and conservation related projects, the Connecticut State Legislature has approved of WICA that allows for a surcharge to be added to customer bills semi-annually for certain eligible pre-approved projects.

Pursuant to Texas regulation, CLWSC employs a historical test year. To address regulatory risk due to regulatory lag and changing legislation policies and regulations, rate cases may be filed as necessary in Texas, provided there is no current rate case outstanding. Further, rate cases may not be filed more frequently than once every 12 months.

Pursuant to Maine regulations, Maine Water employs a historical test year. To address regulatory risk due to regulatory lag and changing legislation policies and regulations, rate cases may be filed as necessary in Maine. Additionally, to mitigate regulatory lag for all infrastructure replacements (except meters), the Maine State Legislature has approved of WISC that allows for a surcharge to be added to customer bills semi-annually for certain pre-approved projects.

Infrastructure Investment

The water utility business is capital-intensive. In 2019 and 2018, company-funded capital improvements were $164,325 and $135,973, respectively, for additions to, or replacements of, property, plant and equipment for our Water Utility Services. We plan to spend approximately $225,869 in 2020 and $1,188,360 over the next five years for capital improvements, subject to CPUC, PURA, PUCT, and MPUC approval. SJW Group funds these expenditures through a variety of sources, including earnings received from operations, debt and equity issuances and borrowings. SJW Group relies upon lines of credit to fund capital expenditures in the short term and has historically issued long-term debt to refinance our short-term debt. While our ability to obtain financing will continue to be a key risk, we believe that based on our 2019 activities, we will have access to the external funding sources necessary to implement our on-going capital investment programs in the future.

Compliance with Environmental, Health and Safety Standards

Water Utility Services’ operations are subject to water quality and pollution control regulations issued by the EPA and environmental laws and regulations administered by the respective states and local regulatory agencies. Under the federal Safe Drinking Water Act, Water Utility Services is subject to regulation by the EPA of the quality of water it sells and treatment techniques it uses to make the water potable. The EPA promulgates nationally applicable standards, including maximum contaminant levels for drinking water. Water Utility Services has implemented monitoring activities and installed specific water treatment improvements enabling it to comply with existing maximum contaminant levels and plan for compliance with future drinking water regulations. However, the EPA and the respective state agencies have continuing authority to issue additional regulations under the Safe Drinking Water Act. Water Utility Services incur substantial costs associated with compliance with environmental, health and safety and water quality regulation to which our water services are subject.

Environmental, health and safety and water quality regulations are complex and change frequently, and the overall trend has been that they have become more stringent over time. It is possible that new or more stringent environmental standards and water quality regulations could be imposed that will increase Water Utility Services’ water quality compliance costs, hamper Water Utility Services’ available water supplies, and increase future capital expenditures. Future drinking water regulations may require increased monitoring, additional treatment of underground water supplies, fluoridation of all supplies, more stringent performance standards for treatment plants and procedures to further reduce levels of disinfection by-products. In the past, Water Utility Services have generally been able to recover expenses associated with compliance related to environmental, health and safety standards, but future recoveries could be affected by regulatory lag and the corresponding uncertainties surrounding rate recovery.

Production Expenses

Water Utility Services’ operations require significant production inputs which result in substantial production expenses. These expenses include power, which is used to operate pumps and other equipment, purchased water and groundwater extraction charges. For 2019, production expenses accounted for approximately 51% of our total operating expenses excluding merger related expenses. Price increases associated with these production inputs would adversely impact our results of operations until rate relief is granted.

34

Customer Growth

Customer growth in our water Water Utility Services’ is driven by: (i) organic population growth within our authorized service areas and (ii) the addition of new customers to our regulated customer base by acquiring regulated water systems adjacent to or near our existing service territories. During 2019, 2018 and 2017, we had capitalized cash outflows of $835,465, $2,496 and $1,149, respectively, for business acquisitions and water rights which we believe will allow SJW Group to expand our regulated customer base. In addition, we had $15,768 and $18,610 in merger related costs reflected in our consolidated statements of comprehensive income related to the Merger in 2019 and 2018, respectively. Before entering new regulated markets, we evaluate the regulatory environment to ensure that we will have the opportunity to achieve an appropriate rate of return on our investment while maintaining our high standards for quality, reliability and compliance with environmental, health and safety and water quality standards.

Water Usage Per Customer

Fluctuations in customer demand for water could be due to seasonality, restrictions of use, weather or lifestyle choices, all of which could affect Water Utility Services’ results of operations. SJWC residential usage decreased 0.8% from 2018 to 2019 and increased 3.8% from 2017 to 2018. SJWC business usage decreased 1.0% and increased 3.0% from 2018 to 2019 and from 2017 to 2018, respectively. In addition, 2019 residential and business usage was 0.4% and 3.94% lower, respectively, than the amount authorized in our 2019-2021 general rate case. Residential usage and business usage in 2018 was 11.9% and 6.6%, respectively, lower than the amount authorized in our 2016-2018 general rate case. CLWSC residential and business usage increased 2.1% from 2018 to 2019 and decreased 3.5% from 2017 to 2018. From the date of merger, October 9, 2019, to December 31, 2019, CTWS residential and business usage per cubic feet was 16.59 and 57.72, respectively. With the availability of the WRA in Connecticut that allows for recovery of authorized revenues, decreases in consumption year to year do not present the same financial risk as had historically been the case.

Weather Conditions, Seasonality and Sources of Water Supply

Our ability to meet the existing and future water demands of our customers depends on an adequate supply of water. Drought, governmental restrictions, overuse of sources of water, the protection of threatened species or habitats or other factors may limit the availability of ground and surface water. Also, customer usage of water is affected by weather conditions, in particular during the warmer months. Our water systems experience higher demand in the summer due to the warmer temperatures and increased usage by customers for outside irrigation of lawns and landscaping. In periods of drought, if customers are encouraged or required to conserve water due to a shortage of supply or restriction of use, revenue tends to be lower. Water use restrictions may be imposed at a regional or state level and may affect our service areas regardless of our readiness to meet unrestricted customer demands. Similarly, in unusually wet periods, water supply tends to be higher and customer demand tends to be lower, again resulting in lower revenues.

SJWC believes that its various sources of water supply, which consists of groundwater from wells, surface water from watershed run-off and diversion, reclaimed water, and purchased imported water, will be sufficient to meet customer demand for 2020. In addition, SJWC actively works with Valley Water to address California’s long-term water supply challenges by continuing to educate customers on responsible water use practices and to conduct long-range water supply planning. Connecticut Water and Maine Water believes that they will be able to meet customer demand for 2020 with their water supply which consists of groundwater from wells, surface water in reservoirs and purchased treated by neighboring water utilities. CLWSC believes that it will be able to meet customer demand for 2020 with their water supply which consists of groundwater from wells and purchased treated and raw water from the GBRA.

Merger and Acquisition Activities

From time to time there may be opportunities to acquire businesses and assets. We cannot be certain we will be successful in identifying and consummating any strategic business combination or acquisitions relating to such opportunities. We expect to incur costs in connection with the execution of this pursuit and any integration of an acquired business could involve significant costs, the assumption of certain known and unknown liabilities related to the acquired assets, the diversion of management’s time and resources, the potential for a negative impact on SJW Group’s financial position and operating results. Any strategic combination or acquisition we decide to undertake may also impact our ability to finance our business, affect our compliance with regulatory requirements, and impose additional burdens on our operations. Any businesses we acquire may not achieve sales, customer growth and projected profitability that would justify the investment. Any difficulties we encounter in the integration process, including the integration of controls necessary for internal control and financial reporting, could interfere with our operations, reduce our operating margins and adversely affect our internal controls. SJW Group cannot be certain that any transaction will be successful or that it will not materially harm operating results or our financial condition. During the years ended December 31, 2019 and 2018, SJW Group spent $15,768 and $18,610, respectively, on merger costs related to the merger with CTWS which was completed on October 9, 2019.

35

Results of Operations

Among other things, water sales are seasonal in nature and influenced by weather conditions. The timing of precipitation and climatic conditions can cause seasonal water consumption by customers to vary significantly. Revenue is generally higher in the warm, dry summer months when water usage and sales are greater and lower in the winter months when cooler temperatures and increased rainfall curtail water usage and sales.

See Item 1, “Business” for a discussion of SJW Group’s general business and regulatory activities.

Overview

SJW Group’s consolidated net income for the year ended December 31, 2019 was $23,403, compared to $38,767 for the same period in 2018. This represents a decrease of $15,364 or 40%, from 2018. The decrease in net income was primarily due to costs incurred related to integration with the new operations in CTWS, an increase in production expenses due to higher usage and higher per unit costs for purchased water, ground water extraction and energy charges, and higher depreciation expenses due to assets placed in service in 2018, partially offset by an increase in operating revenue and decrease in costs due to the increased use of surface water. The increase in operating revenue was primarily due to an increase of $21,660 from the new CTWS operations following the completion of the merger on October 9, 2019, an increase in authorized rates, and net recognition of certain balancing and memorandum accounts, offset by a write-off of revenue related to amounts recorded in our 2019 WCMA and 2018 WCMA.

Operating Revenue

Operating revenue by segment was as follows:

Operating Revenue

	2019		2018	2017
Water Utility Services	$	415,085	392,217	383,523
Real Estate Services	5,397		5,482	5,702
	$	420,482	397,699	389,225

The change in consolidated operating revenues was due to the following factors:

	2019 vs. 2018 Increase/(decrease)					2018 vs. 2017 Increase/(decrease)
Water Utility Services:
Consumption changes	$	(1,813	)	—	%	$	7,376		2	%
Increase in customers	2,673			1	%	2,298			—	%
Rate increases	13,877			3	%	17,516			4	%
OII customer rate credits	(2,107		)	—	%	—			—	%
Recycled	403			—	%	789			—	%
Balancing and memorandum accounts:
Cost recovery recorded prior year	—			—	%	(3,864		)	(1	)%
2016 WCMA revision to new customer classification	—			—	%	(1,371		)	—	%
Cost of capital memorandum account	1,349			—	%	(1,379		)	—	%
Water Conservation Memorandum Account	(19,841		)	(5	)%	(5,462		)	(1	)%
Tax Act	6,366			2	%	(6,504		)	(2	)%
All other	301			—	%	(705		)	—	%
Revenue from acquisition of SJWNE LLC	21,660			5	%	—			—	%
Real Estate Services	(85		)	—	%	(220		)	—	%
	$	22,783		6	%	$	8,474		2	%

36

2019 vs. 2018

The revenue increase consists of $22,868 from Water Utility Services offset by a decrease of $85 from Real Estate Services.

The revenue increase for Water Utility Services is primarily due to the merger with CTWS which generated an increase of $21,660, an increase in authorized rates which resulted in $13,877 of additional revenue, and an increase of $2,673 due to new customers. These increases were partially offset by a net decrease in revenue recognized from certain balancing and memorandum accounts, which included a decrease of $19,841 in WCMA, partially offset by increases of $6,366 from the Tax Act and $1,349 in the Cost of Capital Memorandum Account.

2018 vs. 2017

The revenue increase consists of $8,694 from Water Utility Services offset by a decrease of $220 from Real Estate Services.

The revenue increase for Water Utility Services is primarily due to an increase in rates which resulted in $17,516 of additional revenue and an increase of $7,376 due to higher water usage. The Company also recognized a revenue increase due to new customers of $2,298. These increases were partially offset by decreases in revenue recognized from certain balancing and memorandum accounts, which included a decrease of $6,504 as a result of the Tax Act, a $5,462 decrease in the WCMA, a $3,864 decrease in cost recovery recorded in the prior year, a $1,379 decrease in the Cost of Capital Memorandum Account, and a $1,371 decrease due to the 2016 WCMA revision to new customer classification.

Water Utility Services’ Operating Revenue and Customer Counts

The following tables present operating revenues and number of customers by customer group of Water Utility Services:

Operating Revenue by Customer Group

	2019			2018	2017
Residential and business	$	384,448		356,535	331,835
Industrial	2,514			2,215	1,987
Public authorities	17,892			18,049	16,448
Others	18,157			12,519	11,066
Balancing and memorandum accounts	(7,926		)	2,899	22,187
	$	415,085		392,217	383,523

Number of Customers

	2019	2018	2017
Residential and business	370,074	241,253	238,231
Industrial	596	76	75
Public authorities	2,398	1,343	1,349
Others	13,539	4,595	4,478
	386,607	247,267	244,133

Operating Expense

Operating expense by segment was as follows:

Operating Expense

	2019		2018	2017
Water Utility Services	$	334,963	299,548	280,916
Real Estate Services	3,751		3,539	3,688
All Other	24,289		21,172	2,770
	$	363,003	324,259	287,374

37

The change in consolidated operating expenses was due to the following factors:

 

	2019 vs. 2018 Increase/(decrease)					2018 vs. 2017 Increase/(decrease)
Water production expenses:
Change in surface water supply	$	(11,348	)	(4	)%	$	(7,998	)	(3	)%
Change in usage and new customers	(795		)	—	%	5,077			2	%
Purchased water and groundwater extraction charge and energy price increase	12,125			4	%	14,931			6	%
Balance and memorandum account cost recovery	1,211			—	%	(1,423		)	—	%
Production expenses related to acquisition of SJWNE LLC	5,850			2	%	—			—	%
Total water production expenses	7,043			2	%	10,587			5	%
Administrative and general	16,891			5	%	1,215			—	%
Balance and memorandum account cost recovery	477			—	%	(1,222		)	—	%
Maintenance	2,091			1	%	53			—	%
Property taxes and other non-income taxes	4,093			1	%	1,333			—	%
Depreciation and amortization	10,991			4	%	6,309			2	%
Merger related expenses	(2,842		)	(1	)%	18,610			6	%
	$	38,744		12	%	$	36,885		13	%

Sources of Water Supply

SJWC’s water supply consists of groundwater from wells, surface water from watershed run-off and diversion, reclaimed water, and imported water purchased from Valley Water under the terms of a master contract with Valley Water expiring in 2051. Surface water, which is the least expensive water supply, is sourced from SJWC’s 7,000 acre of watershed in the Santa Cruz mountains. Changes and variations in quantities from each of these sources affect the overall mix of the water supply, thereby affecting the cost of the water supply. In addition, the water rates for purchased water and the groundwater extraction charge may be increased by Valley Water at any time. If an increase occurs, then SJWC would file an advice letter with the CPUC seeking authorization to increase revenues to offset the rate increase.

The Connecticut water utility services’ infrastructure consisted of 65 noncontiguous water systems in the State of Connecticut.  These systems, in total, consist of approximately 1,800 miles of water main and reservoir storage capacity of 2.4 billion gallons.  The safe, dependable yield from our 235 active wells and 18 surface water supplies is approximately 65 million gallons per day.  Water sources vary among the individual systems, but overall approximately 80% of the total dependable yield comes from surface water supplies and 20% from wells.

CLWSC’s water supply consists of groundwater from wells and purchased treated and raw water from the GBRA. CLWSC has long-term agreements with the GBRA, which expire in 2037, 2040, 2044 and 2050. The agreements, which are take-or-pay contracts, provide CLWSC with an aggregate of 6,900 acre-feet of water per year from Canyon Lake at prices that may be adjusted periodically by GBRA.

Maine Water’s infrastructure consisted of 12 noncontiguous water systems in the State of Maine.  These systems, in total, consists of approximately 500 miles of water main and reservoir storage capacity of 7.0 billion gallons.  The safe, dependable yield from our 14 active wells and 7 surface water supplies is approximately 120 million gallons per day.  Water sources vary among the individual systems, but overall approximately 80% of the total dependable yield comes from surface water supplies and 20% from wells.

38

The following table presents the sources of water supply for water utility services:

	Source of Water Supply
	2019		2018	2017
	(million gallons) (MG)
Purchased water	22,385		24,110	22,913
Groundwater	12,038		12,507	14,444
Surface water	7,061		2,674	620
Reclaimed water	732		762	607
	42,216		40,053	38,584
Average water production expense per MG	$	4,162	4,213	4,063

Water production in 2019 for water utility services increased 2,163 million gallons from 2018. Water production in 2018 for water utility services increased 1,469 million gallons from 2017. The changes are primarily attributable to changes in consumption by customers and are consistent with the changes in the related water production expenses.

The contract water rates for SJWC are determined by Valley Water. These rates are adjusted periodically and coincide with Valley Water’s fiscal year, which ends on June 30. The contract water rate for Valley Water’s fiscal years 2019, 2018 and 2017 was $4.5, $4.3 and $3.9 per million gallons, respectively. The contractual cost of the groundwater extraction charge for water pumped from the ground basin was $4.2, $3.9, and $3.6 per million gallons for Valley Water’s fiscal years 2020, 2019, and 2018, respectively. Unaccounted-for water for 2019 and 2018 approximated 7.2% and 7.0%, respectively, as a percentage of production. The unaccounted-for water estimate is based on the results of past experience and the impact of flows through the system, partially offset by SJWC’s main replacements and lost water reduction programs.

Connecticut Water has an agreement with the South Central Connecticut Regional Water Authority (“RWA”) to purchase water from RWA. The agreement was signed in April 2006 and became effective upon the receipt of all regulatory approvals in 2008 and will remain in effect for a minimum of fifty years upon becoming effective. Connecticut Water will pay RWA $75 per year as part of a capacity agreement, for a total of 14 years, starting on the effective date of the agreement. In addition, Connecticut Water is able, but under no obligation, to purchase up to one million gallons of water per day at the then current wholesale rates per the agreement. Connecticut Water has an agreement with The Metropolitan District (“MDC”) to purchase water from MDC to serve the Unionville system. The agreement became effective on October 6, 2000 and has a term of fifty years beginning May 19, 2003, the date the water supply facilities related to the agreement were placed in service. Connecticut Water has agreed to purchase 283 million gallons of water annually from MDC.

Maine Water has an agreement with the Kennebec Water District for potable water service. The agreement was extended and became effective on November 7, 2015 for a new term of 5 years. Maine Water guarantees a minimum consumption of 60 million gallons of water annually. Water sales to Maine Water are billed at a flat rate per gallon plus the monthly minimum tariff rate for a 4-inch metered service.

The various components of operating expenses are discussed below.

Water production expenses

2019 vs. 2018

Water production expenses increased $12,125 due to higher per unit costs paid for purchased water, groundwater extraction and energy charges, $5,850 due to the new CTWS operations and $1,211 due to changes in water production balancing and memorandum accounts, offset by decreases of $11,348 due to an increase in the use of available surface water in 2019 compared to 2018, and $795 due to a decrease in customer usage. Effective July 2019, Valley Water increased the unit price of purchased water by approximately 6.1% and the groundwater extraction charge by approximately 6.6%.

2018 vs. 2017

Water production expenses increased $14,931 due to higher per unit costs paid for purchased water, groundwater extraction and energy charges, and $5,077 due to an increase in customer usage, offset by a decrease of $7,998 due to an increase in the use of available surface water in 2018 compared to 2017 and a decrease of $1,423 in the balancing and memorandum accounts. Effective July 2018, Valley Water increased the unit price of purchased water by approximately 9% and the groundwater extraction charge by approximately 10%.

39

Administrative and General Expense

Administrative and general expenses include payroll related to administrative and general functions, all employee benefits charged to expense accounts, insurance expenses, legal fees, regulatory utility commissions’ expenses, expenses associated with being a public company, and general corporate expenses.

2019 vs. 2018

Administrative and general expense increased $17,368 in 2019, or 5%, in comparison to 2018. The increase consisted primarily of: (1) $7,295 due to the new CTWS operations, (2) $4,860 increase in integration costs related to the merger, (3) $1,539 increase in accounting and legal fees, (4) $1,491 increase in contracted work primarily related to the recycled water retrofit program, social media outreach, accounting services and customer service strategy, (5) $677 increase in salaries and wages, and (6) $605 in cost recoveries other than pension costs through balance and memorandum accounts.

2018 vs. 2017

Administrative and general expense decreased $7 in 2018, or less than 1%, in comparison to 2017. The decrease consisted primarily of: (1) $606 in cost recoveries other than pension costs through balance and memorandum accounts, and (2) $509 decrease in legal fees, partially offset by, (3) $593 increase in group insurance costs, (4) $428 increase in contracted work primarily related to the recycled water retrofit program, and (5) $401 increase in rate case expenses.

Maintenance Expense

Maintenance expense increased $2,091 in 2019, or 1%, in comparison to 2018, and increased $53 in 2018, or less than 1%, in comparison to 2017. The increase in 2019 consisted primarily of $1,128 increase due to the new CTWS operations. The increase in 2018 consisted primarily of: (1) $520 increase in salaries and wages, partially offset by (2) a $524 decrease in contracted work as a result of increased capitalized projects.

Property Taxes and Other Non-income Taxes

Property taxes and other non-income taxes for 2019 and 2018 increased $4,093 and $1,333 from prior years, respectively. The increases were primarily a result of increased utility plant. The increase in 2019 also included $3,096 due to the new CTWS operations. SJW Group anticipates increases in 2020 for property taxes and other non-income taxes due to increases in utility plant.

Depreciation and Amortization

Depreciation and amortization expense increased $10,991 in 2019, or 4%, in comparison to 2018, and increased $6,309 in 2018, or 2%, in comparison to 2017. The increase were primarily due to increases in utility plant. The increase in 2019 also included an increase of $4,903 due to the new CTWS operations. SJW Group anticipates increases in 2019 for depreciation expense due to increases in utility plant.

Other Income and Expense

The change in other (expense) income in 2019 compared to 2018 was primarily due an increase in interest on long-term debt as a result the issuance of SJWC’s Series M note and SJW Group’s Series 2019A, B & C notes. In addition, interest income increased due to the invested proceeds from our equity offering in December 2018. The new CTWS operations generated an increase of $2,025 in expense.

The change in other (expense) income in 2018 compared to 2017 was primarily due to a $12,501 pre-tax gain on sale of the equity interests in TWA and a pre-tax gain of $6,903, reduced by the noncontrolling interest’s of $1,896, on the sale of our limited partnership’s properties and undeveloped land in San Jose, California recorded in the prior year.

SJW Group’s consolidated weighted-average cost of long-term debt, including the mortgages and the amortization of debt issuance costs, was 4.4%, 6.0% and 6.0% for the years ended December 31, 2019 and 2018 and 2017.

Provision for Income Taxes

Income tax expense for 2019 was $8,454, compared to $10,065 in 2018. The effective consolidated income tax rate was 26% for 2019, 21% for 2018 and 37% for 2017. The decrease in income tax expense was primarily due due to lower pre-tax income and flow-through deductions which were partially offset by the write-off of non-deductible merger costs.

SJW Group expects the Internal Revenue Service to issue guidance in future periods that will determine the final disposition of the excess deferred taxes and other impacts of the Tax Act. At this time, the Company has applied a reasonable interpretation of the Tax Act. Future clarification of the Tax Act may change the estimated amounts.

40

Please refer to Note 5, “Income Taxes,” of Notes to Consolidated Financial Statements for a reconciliation of actual to expected income tax expense.

Other Comprehensive (Loss) Income

The change in other comprehensive income in 2019 was primarily due to the change in the benefit obligation for Connecticut Water’s supplemental executive retirement agreements as a result of a decrease in the discount rate.

The change in other comprehensive income in 2018 was due to a change in accounting for the fair value of the company’s investment in California Water Service Group as a result of the adoption of ASU 2016-01, “Financial Instruments - Overall” effective January 1, 2018.

Liquidity and Capital Resources

Water Utility Services’ business derives the majority of its revenue directly from residential and business customers. Water Utility Services bills the majority of its customers on a bi-monthly basis. Payments from customers are impacted by the general economic conditions in the areas where SJW Group operates. Payment delinquencies are mitigated by service interruptions due to non-payment. As of December 31, 2019, the change in allowance for doubtful accounts was due to the increased number of customers from the merger with CTWS. Write-offs for uncollectible accounts remain less than 1% of total revenue consistent prior year. Management believes it can continue to collect its accounts receivable balances at its historical collection rate.

Funds collected from Water Utility Services’ customers are used to pay for water production expenses, in addition to costs associated with general operations. Funds were also generated from borrowings. From these amounts, SJW Group paid cash dividends of approximately $34,134 and funded its 2019 working capital and capital expenditure programs.

SJW Group also obtained funds through the issuance of common stock in December of 2018 to partially finance our merger with CTWS and to pay related fees and expenses. Pending close of the merger on October 9, 2019, SJW Group had invested the funds raised in a short-term money market fund which was managed by a reputable financial institution. See Note 2 of “Notes to Consolidated Financial Statements” for a discussion of the equity offering. The remaining funding for the all-cash merger with CTWS was provided through proceeds from a debt financing in October 2019, existing cash balances and cash flows from operations. See Note 4 of “Notes to Consolidated Financial Statements” for discussion on the debt financing activities of SJW Group.

The condition of the capital and credit markets or the strength of financial institutions could impact SJW Group’s ability to draw on its lines of credit, issue long-term debt, sell its equity or earn interest income. In addition, government policies, the state of the credit markets and other factors could result in increased interest rates, which would increase SJW Group’s cost of capital. While our ability to obtain financing will continue to be a key risk, we believe that based on our 2019 activities, we will have access to the external funding sources necessary to implement our on-going capital investment programs in the future. On October 16, 2019, Standard & Poor’s Ratings Service initiated coverage on SJW Group assigning a company rating of A-, with a stable outlook and affirming its company rating of SJWC of A, with a stable outlook.  In addition, on October 14, 2019, S&P affirmed its ratings of CTWS and Connecticut Water of A- with a stable outlook.

In 2019, the common dividends declared and paid on SJW Group’s common stock represented 146% of net income. Dividends have been paid on SJW Group’s and its predecessor’s common stock for 305 consecutive quarters and the annual dividend amount has increased in each of the last 52 years. While historically SJW Group has generally paid dividends equal to approximately 50% to 60% of its net income, SJW Group cannot guarantee that this trend will continue in the future.

Cash Flow from Operations

In 2019, SJW Group generated cash flow from operations of approximately $130,005 compared to $91,343 in 2018 and $101,112 in 2017. Cash flow from operations is primarily generated by net income from revenue producing activities, adjusted for non-cash expenses for depreciation and amortization, deferred income taxes, gains on the sale of assets, and changes in working capital items. Cash flow from operations increased in 2019 by approximately $38,700. The increase was primarily due to a combination of the following factors: (1) an increase in the collection of the balancing and memorandum accounts of $37,300, (2) an increase in accrued groundwater extraction charges, purchased water and power of $3,600, and (3) general working capital and net income, adjusted for non-cash items increased by $9,700, offset by (4) net collection of taxes receivable which was $11,900 less than in prior year. Cash flow from operations decreased in 2018 by approximately $9,800. The decrease was primarily due to a combination of the following factors: (1) a decrease in the collection of the balancing and memorandum accounts of $5,500, (2) a decrease in accrued groundwater extraction charges, purchased water and power of $4,200, and (3) general working capital and net income, adjusted for non-cash items decreased by $3,700, offset by (4) an increase of a net collection of taxes receivable which was $3,600 more than in prior year.

41

Cash Flow from Investing Activities

In 2019, SJW Group used approximately $164,300 of cash for Company funded capital expenditures, $13,600 for developer funded capital expenditures, $5,000 in utility plant retirement costs, $835,500 for the purchase of CTWS, and $100 for real estate investments related to leasehold improvement additions for the properties located in Knoxville, Tennessee. These uses were offset by cash proceeds of $745 from the sale of real estate investments and utility property. In 2018, SJW Group used approximately $136,000 of cash for Company funded capital expenditures, $8,500 for developer funded capital expenditures, $3,900 in utility plant retirement costs, $2,500 for water service asset acquisitions, and $100 for real estate investments related to leasehold improvement additions for the properties located in Knoxville, Tennessee. These uses were offset by cash proceeds of $4,100 from the sale of remaining shares of California Water Service Group stock.

Water Utility Services budgeted capital expenditures for 2020, excluding capital expenditures financed by customer contributions and advances is as follows:

	Budgeted Capital Expenditures 2020
Water treatment	$	27,124	12	%
Source of supply	7,016		3	%
Reservoirs and tanks	39,770		18	%
Pump stations and equipment	6,953		3	%
Equipment and other	21,773		9	%
Distribution system	123,233		55	%
	$	225,869	100	%

The 2020 capital expenditures budget is concentrated in main replacements. Included in the distribution system budgeted capital expenditures of $123,233 is approximately $59,763 that is planned to be spent to replace Water Utility Services’ pipes and mains.

Water Utility Services’ capital expenditures are incurred in connection with normal upgrading and expansion of existing facilities and to comply with environmental regulations. Over the next five years, Water Utility Services expects to incur approximately $1,188,360 in capital expenditures. A significant portion of this amount is subject to future approval from the Regulators. Capital expenditures have the effect of increasing utility plant rate base on which Water Utility Services earns a return. Water Utility Services’ actual capital expenditures may vary from projections due to changes in the expected demand for services, weather patterns, actions by governmental agencies and general economic conditions. Total additions to utility plant normally exceed company-financed additions as a result of new facilities construction funded with advances from developers and contributions in aid of construction.

The Water Utility Services’ distribution systems were constructed during the period from the early 1900’s through today. Expenditure levels for renewal and modernization will occur as the components reach the end of their useful lives. In most cases, replacement cost will significantly exceed the original installation cost of the retired assets due to increases in the costs of goods and services and increased regulation.

Cash Flow from Financing Activities

Net cash provided by financing activities for the year ended December 31, 2019 increased by approximately $16,600 from the same period in the prior year, primarily as a result of cash proceeds from long-term debt issued in current year and increase in receipts of advances and contributions in aid of construction, partially offset by the the proceeds from the prior year issuance of SJW Group’s common stock, a decrease in the amount of net borrowings on our lines of credit, a decrease in net other changes for equity plan payments, broker fees and debt issuance costs, and an increase in dividends paid to stockholders. SJW Group’s cash management policy includes the issuance of long-term debt to pay down borrowings on our lines of credit. As such, when long-term borrowings are high, borrowings on our line of credit tend to be low and when long-term borrowings are low, borrowings on our line of credit tend to be high.

SJW Group, SJW Land Company, SJWTX, Inc., SJWC and CTWS have unsecured bank lines of credit totaling $255,000 as of December 31, 2019. Drawdowns on our lines of credit are restricted by our funded debt not exceeding a percent of total capitalization as defined in our debt covenants. SJW Group expects to periodically draw down on its lines of credit as dictated by our funding needs and subsequently repay such borrowings with cash from operations and issuance of long-term debt or equity. See also “Sources of Capital” below.

42

Sources of Capital

SJW Group’s regulated operations ability to finance future construction programs and sustain dividend payments depends on its ability to maintain or increase internally generated funds and obtain external financing through the issuance of new long-term debt or issuance of equity. The level of future earnings and the related cash flow from operations is dependent, in large part, on the timing and outcome of regulatory proceedings.

SJWC’s financing activity is designed to achieve a capital structure consistent with regulatory guidelines of approximately 47% debt and 53% equity. As of December 31, 2019, SJWC’s long-term debt and equity were approximately 48% and 52%, respectively. The average borrowing rate of SJWC’s long-term debt was 5.9% as of December 31, 2019.

SJWC has outstanding $330,000 of unsecured senior notes as of December 31, 2019. The senior note agreements of SJWC generally have terms and conditions that restrict SJWC from issuing additional funded debt if: (1) the funded debt would exceed 66-2/3% of total capitalization, and (2) net income available for interest charges for the trailing 12-calendar-month period would be less than 175% of interest charges. As of December 31, 2019, SJWC was not restricted from issuing future indebtedness as a result of these terms and conditions.

SJWC also has obligations pursuant to loan agreements with the California Pollution Control Financing Activity (“CPCFA”) supporting $120,000 in aggregate principal amount of CPCFA revenue bonds outstanding as of December 31, 2019. The loan agreements contain affirmative and negative covenants customary for loan agreements relating to revenue bonds, containing, among other things, certain disclosure obligations, the tax exempt status of the interest on the bonds and limitations, and prohibitions on the transfer of projects funded by the loan proceeds and assignment of the loan agreements. As of December 31, 2019, SJWC was in compliance with all such covenants.

SJWTX, Inc. has an outstanding $15,000 senior note as of December 31, 2019. The senior note agreement has terms and conditions that restrict SJWTX, Inc. from issuing additional funded debt if: (1) the funded debt would exceed 66-2/3% of total capitalization, and (2) net income available for interest charges for the trailing 12-calendar-month period would be less than 175% of interest charges. In addition, SJW Group is a guarantor of SJWTX, Inc.’s senior note which has terms and conditions that restrict SJW Group from issuing additional funded debt if: (1) the funded consolidated debt would exceed 66-2/3% of total capitalization, and (2) the minimum net worth of SJW Group becomes less than $125,000 plus 30% of Water Utility Services’ cumulative net income, since December 31, 2005. As of December 31, 2019, SJWTX, Inc. and SJW Group were not restricted from issuing future indebtedness as a result of these terms and conditions.

SJW Group has outstanding a $560,000 unsecured senior notes as of December 31, 2019. The senior notes have terms and conditions that restrict SJW Group from issuing additional funded debt if: (1) the funded consolidated debt would exceed 66-2/3% of total capitalization, (2) the minimum net worth of SJW Group becomes less than $175,000 plus 30% of Water Utility Services’ cumulative net income, since June 30, 2011, and (3) net income available for interest charges for the trailing 12-calendar-month period would be less than 175% of interest charges. As of December 31, 2019, SJW Group was not restricted from issuing future indebtedness as a result of these terms and conditions.

CTWS has outstanding term loans with a commercial bank in an aggregate amount of $23,935 as of December 31, 2019. Under the master loan agreement, CTWS is required to comply with certain financial ratio and operational covenants. The most restrictive of these covenants is to maintain a consolidated (CTWS and its subsidiaries) debt to capitalization ratio of not more than 60%. As of December 31, 2019, CTWS was in compliance with all covenants under the master loan agreement.

Connecticut Water has outstanding term loans with a commercial bank in an aggregate amount of $119,090 as of December 31, 2019. Under its master loan agreement, Connecticut Water is required to comply with financial and operational covenants substantially identical to those found in CTWS’ master loan agreement. Connecticut Water is required to maintain a debt to capitalization ratio of not more than 60%. As of December 31, 2019, Connecticut Water was in compliance with all covenants under its master loan agreement.

Connecticut Water has outstanding $44,556 of tax exempt and taxable Water Facilities Revenue Bonds issued through Connecticut Innovations (formerly the Connecticut Development Authority). The bond indentures and loan agreements contain customary affirmative and negative covenants and require compliance with financial and operational covenants, and also provide for the acceleration of the Revenue Bonds upon the occurrence of stated events of default. As of December 31, 2019, Connecticut Water was in compliance with all covenants of the bond indentures and loan agreements.

Connecticut Water has a $35,000 unsecured senior note that has terms and conditions that restrict Connecticut Water from issuing additional debt or paying a dividend to CTWS if such debt or distribution would trigger an event of default. The senior note agreement also requires Connecticut Water to maintain a debt to capitalization ratio of not more than 60%. As of December 31, 2019, Connecticut Water was in compliance with all financial ratio and operational covenants under this agreement.

43

Maine Water has outstanding $16,032 of First Mortgage Bonds issued to the Maine Municipal Bond Bank through the State Safe Drinking Water Revolving Loan Fund and $4,500 of First Mortgage Bonds issued to One America. The associated bond indentures and loan agreements contain customary affirmative and negative covenants, including a prohibition on the issuance of indebtedness secured by assets or revenue of Maine Water where the lien is senior to the lien of the bond trustee under the above bonds except as permitted by the bond indentures and related loan and security agreements, a requirement to maintain a debt to capitalization ratio of not more than 65%, required compliance with various financial and operational covenants, and a provision for maturity acceleration upon the occurrence of stated events of default. As of December 31, 2019, Maine Water was in compliance with all covenants in its bond indentures and related loan agreements.

Maine Water has outstanding term loans with a commercial bank in an aggregate amount of $17,500 as of December 31, 2019. Under its master loan agreement, Maine Water is required to comply with financial and operational covenants substantially identical to those found in CTWS and Connecticut Water’s master loan agreements. Maine is required to maintain a debt to capitalization ratio of not more than 60%. As of December 31, 2019, Maine Water was in compliance with all covenant under its master loan agreement.

HVWC has a term loan with a commercial bank, due in 2034. The loan bears interest at a rate of 4.75% with monthly payments of principal and interest of $31. The loan is secured by real property owned by HVWC. The loan agreement restricts HVWC’s ability to incur additional debt and requires compliance with a funded debt to capitalization covenant and other operational covenants. As of December 31, 2019, HVWC was in compliance with all covenants of the loan.

Avon Water has a mortgage loan that is due in 2033. This loan amortizes over 20 years and carries a fixed interest rate of 3.05% with monthly principal and interest payments of $22. The loan agreement (1) generally restricts the ability of Avon Water to incur additional debt or make dividend payments other than in the ordinary course of business, and (2) requires submission of periodic financial reports as part of loan covenants. As of December 31, 2019, Avon Water was in compliance with all covenants of the loan.

As of December 31, 2019, SJW Group and its subsidiaries are in compliance with all of their debt covenants.

On June 1, 2016, SJWC entered into a $125,000 Credit Agreement (the “Credit Agreement”) with JPMorgan Chase Bank, N.A., as the lender (the “Lender”). The Credit Agreement provides an unsecured credit facility with a letter of credit sublimit of $10,000. Proceeds of borrowings under the Credit Agreement may be used to refinance existing debt, for working capital, and for general corporate purposes. The Credit Agreement has a maturity date of June 1, 2021.

On June 1, 2016, SJW Group and SJW Land Company (collectively, the “Borrowers”), entered into a $15,000 credit agreement with the Lender (the “SJW Group Credit Agreement”), which provides an unsecured credit facility to the Borrowers with a letter of credit sublimit of $5,000. The SJW Group Credit Agreement matures on June 1, 2021. Borrowings under the SJW Group Credit Agreement bear interest under the same terms and conditions as those in the Credit Agreement.

In addition, on June 1, 2016, SJW Group, as guarantor, and SJWTX, Inc. (the “Borrower”), entered into a $5,000 credit agreement with the Lender (the “SJWTX Credit Agreement”), which provides an unsecured credit facility to the Borrower with a letter of credit sublimit of $1,000. The SJWTX Credit Agreement matures on June 1, 2021.

On June 29, 2009, CTWS entered into a $15,000 credit agreement with CoBank, ACB, which matures on July 1, 2020. Borrowings under this credit agreement bear interest at 3.54%. CTWS maintains an additional credit agreement of $95,000 with RBS Citizens, N.A., which will be reduced to $75,000 on March 1, 2020, with a final maturity on December 14, 2023. Borrowings under this credit agreement bear interest at the daily LIBOR rate, plus 100 basis points as of December 31, 2019.

All of SJW Group’s and subsidiaries lines of credit contain customary representations, warranties and events of default, as well as certain restrictive covenants customary for facilities of this type, including restrictions on indebtedness, liens, acquisitions and investments, restricted payments, asset sales, and fundamental changes. All of the lines of credit also include certain financial covenants that require the Company to maintain a maximum funded debt to capitalization ratio and a minimum interest coverage ratio.

As of December 31, 2019, SJW Group and its subsidiaries had unsecured bank lines of credit, allowing aggregate short-term borrowings of up to $255,000. At December 31, 2019, the total amount available under these lines of credits was $137,791. The cost of borrowing on SJW Group’s short-term credit facilities has averaged 3.73% as of December 31, 2019. As of December 31, 2019, SJW Group and its subsidiaries were in compliance with all covenants on their lines of credit.

In December 2018, SJW Group received net proceeds of approximately $358,256 from the sale of 6,750,000 shares of common stock in a public offering pursuant to an effective shelf registration and received net proceeds of approximately $53,738 from the sale of an additional 1,012,500 shares of common stock, in each case after deducting the underwriting discounts and commissions and estimated offering expenses payable by SJW Group. Prior to the close of the merger with CTWS, the company invested the net offering proceeds in money-market funds.

44

Funding for SJW Group’s all-cash merger with CTWS which closed on October 9, 2019 was provided through proceeds from the company’s equity offering in December 2018 and the debt financing in October 2019, existing cash balances and cash flow from operations. SJW Group had previously received a financing commitment letter from lenders, including JPMorgan Chase Bank, N.A., Barclays Bank PLC, Royal Bank of Canada and UBS AG, Stamford Branch to provide a senior unsecured bridge loan facility of up to $975 million in the event that SJW Group was unable to secure other financing for the merger at or prior to the time the merger is completed. Subsequent to the net proceeds received by SJW Group from the public offering of common stock in 2018, the facility commitment was reduced to $563 million. On October 9, 2019, the commitment was terminated in connection with the closing of the merger and no amount was funded under such commitment.

Off-Balance Sheet Arrangement/Contractual Obligations

SJW Group has no significant contractual obligations not fully recorded on its Consolidated Balance Sheet or not fully disclosed in the Notes to Consolidated Financial Statements.

SJW Group’s contractual obligations and commitments as of December 31, 2019 are as follows:

	Total		Contractual Obligations Due in
			Less than 1 Year	1-3 Years	3-5 Years	After 5 Years
Senior notes, Water Utility Services	$	384,500	10,900	21,800	41,800	310,000
Bank term loans, Water Utility Services	140,754		8,180	15,184	4,928	112,462
Advances for construction, SJWC (1)	63,978		2,890	5,780	5,677	49,631
California Pollution Control Financing Authority Revenue Bonds, SJWC	120,000		—	—	—	120,000
Connecticut Innovations Revenue Bonds, Connecticut Water	44,556		—	22,506	—	22,050
State revolving fund loans, Maine Water	16,032		1,325	2,724	2,608	9,375
Senior notes, SJW Group	560,000		—	50,000	—	510,000
Bank term loans, CTWS	23,935		1,759	3,741	4,059	14,376
Mortgage loan, Avon Water	2,809		179	376	400	1,854
Total contractual cash obligation	$	1,356,564	25,233	122,111	59,472	1,149,748
Total interest on contractual obligations	$	681,831	52,380	96,677	87,563	445,211

___________________________________

(1) As of December 31, 2019, advances for construction was $112,339 of which $21,463 was related to non-refundable advances for construction and $26,898 was related to advances which are refundable based on service connections made.

In regards to uncertain tax positions, we are unable to predict the timing of tax settlements as tax audits can involve complex issues and the resolution of those issues may span multiple years, particularly if subject to negotiation or litigation. For further discussion on uncertain tax positions, please see Note 5 of “Notes to Consolidated Financial Statements.”

SJWC purchases water from Valley Water under terms of a master contract expiring in 2051. Delivery schedules for purchased water are based on a contract year beginning July 1, and are negotiated every three years under terms of the master contract with Valley Water. For the years ended December 31, 2019, 2018 and 2017, SJWC purchased from Valley Water 21,862 million gallons ($96,285), 21,345 million gallons ($87,702) and 20,857 million gallons ($78,703), respectively, of contract water. On June 13, 2017, Valley Water Board of Directors approved treated water deliveries reflecting the contractual delivery schedule reduced by 10% through June 30, 2019. Based on current prices and estimated deliveries, SJWC is committed to purchase from Valley Water a minimum of 90% of the reduced delivery schedule, or 19,794 million gallons ($89,539) of water at the current contract water rate of $4.5 per million gallons in the year ending December 31, 2020. Additionally, SJWC purchases non-contract water from Valley Water on an “as needed” basis if the water supply is available. The contract water rates for SJWC are determined by Valley Water. These rates are adjusted periodically and coincide with Valley Water’s fiscal year, which ends on June 30. The contract water rate for Valley Water’s fiscal years 2019, 2018 and 2017 was $4.5, $4.3 and $3.9 per million gallons, respectively.

SJWC also pumps water from the local groundwater basin. There are no delivery schedules or contractual obligations associated with the purchase of groundwater. Valley Water determines the groundwater extraction charge and it is applied on a per unit basis. In addition to the Valley Water groundwater extraction charge, SJWC also incurs power costs to pump the groundwater from the basin.

45

Connecticut Water has an agreement with the South Central Connecticut RWA to purchase water from RWA. The agreement was signed in April 2006 and became effective upon the receipt of all regulatory approvals in 2008 and will remain in effect for a minimum of fifty years upon becoming effective. Connecticut Water will pay RWA seventy-five dollars per year as part of a capacity agreement, for a total of 14 years, starting on the effective date of the agreement. In addition, Connecticut Water has the option, but is under no obligation, to purchase up to one million gallons of water per day at the then current wholesale rates per the agreement ($2.621 per million gallons as of December 31, 2019). Connecticut Water has an agreement with the MDC to purchase water from MDC to serve the Unionville system. The agreement became effective on October 6, 2000 and has a term of fifty years beginning May 19, 2003, the date the water supply facilities related to the agreement were placed in service. Connecticut Water has agreed to purchase 283 million gallons of water annually from MDC. The rate charged by the MDC at December 31, 2019 were $3.50 per hundred cubic feet.

Maine Water has an agreement with the Kennebec Water District for potable water service. The agreement was extended and became effective on November 7, 2015 for a new term of 5 years. Maine Water guarantees a minimum consumption of 60 million gallons of water annually. Water sales to Maine Water are billed at a flat rate of $5 per year plus the monthly minimum tariff rate of $1.51 per hundred cubic feet for a 4-inch metered service as of December 31, 2019.

CLWSC has long-term contracts with the GBRA. The agreements expire in 2037, 2040, 2044 and 2050. The agreements, which are take-or-pay contracts, provide CLWSC with 6,900 acre-feet per year of water supply from Canyon Lake. The water rate may be adjusted by GBRA at any time, provided GBRA gives CLWSC a 60-day written notice on the proposed adjustment. In 2018, CLWSC acquired raw water supply agreements with the LCRA and WTPUA expiring in 2053 and 2046, respectively, for 250 acre-feet of water per each agreement per year from Lake Austin and the Colorado River, respectively, at prices that may be adjusted periodically by the agencies.

SJWC and CTWS sponsor noncontributory defined benefit pension plans and provide health care and life insurance benefits for retired employees. In 2019, SJW Group contributed $9,476 and $738 to the pension plan and other postretirement benefit plan, respectively. CTWS had no contributions for the period from the merger date, October 9, 2019, to December 31, 2019. In 2020, SJWC and CTWS expect to make required and discretionary cash contributions of up to $8,404 to the pension plans and other postretirement benefit plans. The amount of required contributions for years thereafter is not actuarially determinable.

SJWC’s other benefit obligations include employees’ and directors’ postretirement benefits, an Executive Supplemental Retirement Plan, Cash Balance Executive Supplemental Retirement Plan, Special Deferral Election Plan and Deferral Election Program for non-employee directors. Under these benefit plans, SJWC is committed to pay approximately $1,591 annually to former officers and directors. Future payments may fluctuate depending on the life span of the retirees and as current officers and executives retire.

CTWS’s other benefit obligations include employees’ postretirement benefits, supplemental executive retirement agreements and deferred compensation agreements and plan. Future payments may fluctuate depending on the contribution rates of employees into the deferred compensation plan and the life span of the retirees and as current officers and executives retire. Under these benefit plans, CTWS is committed to pay approximately $952 annually to former officers and directors.

444 West Santa Clara Street, L.P.

SJW Land Company owns a 70% limited partnership interest in 444 West Santa Clara Street, L.P., a real estate limited partnership. A real estate development firm owns the remaining 30% limited partnership interest. A commercial building was constructed on the property of 444 West Santa Clara Street, L.P. and was leased to an international real estate firm. SJW Land Company consolidates its limited partnership interest in 444 West Santa Clara Street, L.P. as a variable interest entity within the scope of ASC Topic 810. On January 10, 2017, 444 West Santa Clara Street, L.P. entered into a purchase and sale agreement for the sale of all of its interests in the commercial building and land the partnership owns and operates for a purchase price of $11,000. The sales transaction closed on April 6, 2017 and SJW Land Company and the noncontrolling interest recognized a pre-tax gain on sale of real estate investments of $4,427 and $1,896, respectively.

Impact of Recent Accounting Pronouncements

In June 2016, the FASB issued ASU 2016-13, “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments,” and subsequent amendments. Topic 326 requires measurement and recognition of expected credit losses for financial assets held. This is effective for SJW Group in the first quarter of fiscal 2020, and adoption is not expected to have a material impact on our consolidated financial statements. 

In August 2018, the FASB issued ASU 2018-14, “Compensation - Retirement Benefits - Defined Benefit Plans - General (Subtopic 715-20:  Disclosure Framework - Changes to the Disclosure Requirements for Defined Benefit Plans,” which aims to improve the overall usefulness of disclosure to financial statement users and reduce unnecessary costs to companies when preparing defined benefit plan disclosures.  This is effective for SJW Group during the year ending December 31, 2020. 

46

Retrospective adoption is required and early adoption is permitted.  Management is currently evaluating the effect that the new standard will have on its defined benefit plan disclosures.   

On December 2019, the FASB issued ASU 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes.” The decisions reflected in the ASU update specific areas of Topic 740, Income Taxes, to reduce complexity while maintaining or improving the usefulness of the information provided to users of financial statements. The amendments in ASU 2019-12 are effective for fiscal years beginning after December 15, 2020 and early adoption is permitted. SJW Group does not plan on early adoption and is in the early stages of analyzing the impact of the amendments. The amendments to changes in reporting related to foreign equity method investments and foreign subsidiaries are not anticipated to apply to SJW Group. Amendments to changes in reporting taxes not based on income (such as equity or capital) and changes in tax laws during interim periods are to be further analyzed as applicable. Management is currently evaluating the effect that the new standard will have on its consolidated financial statements.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

SJW Group is subject to market risks in the normal course of business, including changes in interest rates, pension plan asset values, and equity prices. The exposure to changes in interest rates can result from the issuance of debt and short-term funds obtained through the company’s variable rate lines of credit. SJWC and Connecticut Water sponsor noncontributory pension plans for its employees. Pension costs and the funded status of the plan are affected by a number of factors including the discount rate, mortality rates of plan participants, investment returns on plan assets, and pension reform legislation.

SJW Group has no derivative financial instruments, financial instruments with significant off-balance sheet risks, or financial instruments with concentrations of credit risk.

47

Item 8. Financial Statements and Supplementary Data

Report of Independent Registered Public Accounting Firm

To the Stockholders and Board of Directors

SJW Group:

Opinions on the Consolidated Financial Statements and Internal Control Over Financial Reporting

We have audited the accompanying consolidated balance sheets of SJW Group and subsidiaries (the “Company”) as of December 31, 2019 and 2018, the related consolidated statements of comprehensive income, changes in stockholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2019, and the related notes and financial statement schedule II (collectively, the consolidated financial statements). We also have audited the Company’s internal control over financial reporting as of December 31, 2019, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2019 and 2018, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2019, in conformity with U.S. generally accepted accounting principles. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2019, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

The Company completed its merger with Connecticut Water Service, Inc. (“CTWS”) on October 9, 2019 and management excluded from its assessment of the effectiveness of the Company’s internal control over financial reporting as of December 31, 2019, CTWS’s internal control over financial reporting associated with total assets of $970.0 million and total revenues of $21.7 million included in the consolidated financial statements of the Company as of and for the year ended December 31, 2019. Our audit of internal control over financial reporting of the Company also excluded an evaluation of the internal control over financial reporting of CTWS.

Basis for Opinions

The Company’s management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Report on Internal Control over Financial Reporting appearing in Item 9A. Our responsibility is to express an opinion on the Company’s consolidated financial statements and an opinion on the Company’s internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.

Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

Definition and Limitations of Internal Control Over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain

48

to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgment. The communication of a critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Evaluation of regulatory assets and liabilities

As discussed in Note 1 to the consolidated financial statements, the Company accounts for its regulated operations in accordance with Financial Accounting Standards Board Accounting Standard Codification (ASC) Topic 980, Regulated Operations. Pursuant to the requirements of ASC Topic 980, the financial statements of a rate-regulated enterprise reflect the actions of regulators. These actions may result in the recognition of revenue and expenses in time periods that are different than non-rate-regulated enterprises. The Company capitalizes, as regulatory assets, costs that are probable of recovery in future water rates. In addition, obligations to refund previously collected revenue or to spend revenue collected from customers on future costs are recorded as regulatory liabilities.

We identified the evaluation of regulatory assets and liabilities as a critical audit matter. This was due to the extent of auditor effort required in the evaluation of complex regulations that result in regulatory assets and liabilities.

The primary procedures we performed to address this critical audit matter included the following. We tested certain internal controls over the Company’s regulatory accounting process, including controls related to the Company’s application of ASC Topic 980 and the Company’s calculation and review of regulatory assets and liabilities. We selected regulatory assets and liabilities and assessed the Company’s application of ASC Topic 980 by evaluating the underlying orders, statutes, rulings, memorandums, filings or publications issued by the respective regulator. We selected a sample of the activity increasing and decreasing regulatory assets and liabilities and agreed the amounts to documents in the Company’s underlying books and records.

/s/ KPMG LLP

We have served as the Company’s auditor since 1933.

Santa Clara, California

March 2, 2020

49

SJW Group and Subsidiaries

CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share data)

	December 31,
	2019		2018
Assets
Utility plant:
Land	$	34,395	18,296
Depreciable plant and equipment	2,988,454		1,833,051
Construction in progress	112,232		68,765
Intangible assets	33,424		15,799
	3,168,505		1,935,911
Less accumulated depreciation and amortization	962,019		607,090
	2,206,486		1,328,821
Real estate investments	57,699		56,336
Less accumulated depreciation and amortization	13,597		12,327
	44,102		44,009
Current assets:
Cash and cash equivalents:
Cash	12,944		8,722
Restricted fund	5,000		—
Money market fund	—		412,000
Accounts receivable:
Customers, net of allowances for uncollectible accounts of $1,512 and $272 in 2019 and 2018, respectively	36,305		19,154
Income tax	8,837		1,888
Other	2,833		1,203
Accrued unbilled utility revenue	40,102		27,974
Current regulatory assets, net	6,472		26,910
Other current assets	9,553		4,871
	122,046		502,722
Other assets:
Net regulatory assets, less current portion	113,945		76,715
Investments	12,928		—
Goodwill	628,287		1,680
Other	4,676		2,442
	759,836		80,837
	$	3,132,470	1,956,389

See Accompanying Notes to Consolidated Financial Statements.

50

SJW Group and Subsidiaries

CONSOLIDATED BALANCE SHEETS (Continued)

(in thousands, except share and per share data)

	December 31,
	2019		2018
Capitalization and Liabilities
Capitalization:
Stockholders’ equity:
Common stock, $0.001 par value; authorized 70,000,000 shares in 2019 and 36,000,000 shares in 2018; issued and outstanding 28,456,508 shares in 2019 and 28,404,316 shares in 2018	$	28	28
Additional paid-in capital	506,639		495,366
Retained earnings	383,191		393,918
Accumulated other comprehensive income	126		—
Total stockholders’ equity	889,984		889,312
Long-term debt, less current portion	1,283,597		431,424
	2,173,581		1,320,736
Current liabilities:
Lines of credit	117,209		100,000
Current portion of long-term debt	22,272		—
Accrued groundwater extraction charges, purchased water and power	17,211		13,694
Accounts payable	34,886		24,937
Accrued interest	13,140		7,132
Accrued property taxes and other non-income taxes	2,039		1,926
Accrued payroll	11,570		7,181
Other current liabilities	16,240		9,115
	234,567		163,985
Deferred income taxes	195,598		79,651
Advances for construction	112,339		80,610
Contributions in aid of construction	286,035		168,243
Postretirement benefit plans	108,044		70,490
Regulatory liabilities, net	—		59,149
Other noncurrent liabilities	22,306		13,525
Commitments and contingencies	—		—
	$	3,132,470	1,956,389

See Accompanying Notes to Consolidated Financial Statements.

51

SJW Group and Subsidiaries

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

Years ended December 31 (in thousands, except share and per share data)

	2019			2018		2017
Operating revenue	$	420,482		397,699		389,225
Operating expense:
Production Expenses:
Purchased water	99,118			97,378		86,456
Power	7,443			6,180		7,295
Groundwater extraction charges	43,917			46,770		47,817
Other production expenses	25,291			18,398		16,571
Total production expenses	175,769			168,726		158,139
Administrative and general	66,301			48,933		48,940
Maintenance	20,505			18,414		18,361
Property taxes and other non-income taxes	19,068			14,975		13,642
Depreciation and amortization	65,592			54,601		48,292
Merger related expenses	15,768			18,610		—
Total operating expense	363,003			324,259		287,374
Operating income	57,479			73,440		101,851
Other (expense) income:
Interest on long-term debt, mortgage and other interest expense	(31,796		)	(24,332	)	(22,929	)
Pension non-service cost	(3,158		)	(2,356	)	(3,772	)
Unrealized loss on California Water Service Group stock	—			(527	)	—
Gain on sale of California Water Service Group stock	—			104		—
(Loss) gain on sale of utility property	(20		)	9		12,499
Gain on sale of real estate investments	929			—		6,903
Interest income on money market fund	6,536			155		—
Other, net	2,111			2,339		1,941
Income before income taxes	32,081			48,832		96,493
Provision for income taxes	8,454			10,065		35,393
Net income before noncontrolling interest	23,627			38,767		61,100
Less net income attributable to the noncontrolling interest	224			—		1,896
SJW Group net income	23,403			38,767		59,204
Other comprehensive income:
Unrealized gain on investment, net of taxes of $43 in 2019, $0 in 2018 and $466 in 2017	117			—		679
Adjustment to pension benefit plans, net of taxes of $22 in 2019	9			—		—
SJW Group comprehensive income	$	23,529		38,767		59,883
SJW Group earnings per share
—Basic	$	0.82		1.83		2.89
—Diluted	$	0.82		1.82		2.86
Weighted average shares outstanding
—Basic	28,443,052			21,214,277		20,506,960
—Diluted	28,562,546			21,332,387		20,685,118

See Accompanying Notes to Consolidated Financial Statements.

52

SJW Group and Subsidiaries

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

(in thousands, except share and per share data)

	Common Stock			Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Income		Noncontrolling Interest		Total Stockholders’ Equity
	Number of Shares	Amount
Balances, December 31, 2016	20,456,225	$	21	81,715		338,386		1,524		—		421,646
Net income	—	—		—		59,204		—		1,896		61,100
Distribution to noncontrolling interest	—	—		—		—		—		(1,896	)	(1,896	)
Unrealized income on investment, net of tax effect of $466	—	—		—		—		679		—		679
Share-based compensation	—	—		2,643		(139	)	—		—		2,504
Issuance of restricted and deferred stock units	36,888	—		(707	)	—		—		—		(707	)
Employee stock purchase plan	27,743	—		1,215		—		—		—		1,215
Dividends paid ($1.04 per share)	—	—		—		(21,332	)	—		—		(21,332	)
Balances, December 31, 2017	20,520,856	21		84,866		376,119		2,203		—		463,209
Net income	—	—		—		38,767		—		—		38,767
Cumulative effect of change in accounting principle, net of tax effect of $1,507	—	—		—		2,203		(2,203	)	—		—
Share-based compensation	—	—		2,117		(97	)	—		—		2,020
Issuance of restricted and deferred stock units	95,053	—		(4,057	)	—		—		—		(4,057	)
Employee stock purchase plan	25,907	—		1,371		—		—		—		1,371
Common stock issued	7,762,500	7		411,069		—		—		—		411,076
Dividends paid ($1.12 per share)	—	—		—		(23,074	)	—		—		(23,074	)
Balances, December 31, 2018	28,404,316	28		495,366		393,918		—		—		889,312
Net income	—	—		—		23,403		—		224		23,627
Distribution to noncontrolling interest	—	—		—		—		—		(224	)	(224	)
Cumulative effect of change in accounting principle, net of tax effect of $33	—	—		—		97		—		—		97
Unrealized income on investment, net of tax effect of $43	—	—		—		—		117		—		117
Adjustment to pension benefit plans, net of taxes of $22	—	—		—		—		9		—		9
Share-based compensation	—	—		3,406		(93	)	—		—		3,313
Share-based compensation related to business combination	—	—		6,384		—		—		—		6,384
Issuance of restricted and deferred stock units	21,909			(110	)	—		—		—		(110	)
Employee stock purchase plan	30,283			1,603		—		—		—		1,603
Common stock issuance cost	—	—		(10	)	—		—		—		(10	)
Dividends paid ($1.20 per share)	—	—		—		(34,134	)	—		—		(34,134	)
Balances, December 31, 2019	28,456,508	$	28	506,639		383,191		126		—		889,984

See Accompanying Notes to Consolidated Financial Statements.

53

SJW Group and Subsidiaries

CONSOLIDATED STATEMENTS OF CASH FLOWS

Years ended December 31 (in thousands)

	2019			2018		2017
Operating activities:
Net income before noncontrolling interest	$	23,627		38,767		61,100
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	68,489			56,907		50,501
Deferred income taxes	(1,249		)	(9,486	)	(436	)
Share-based compensation	3,406			2,117		2,643
Gain on sale of real estate investments	(929		)	—		(6,903	)
Loss (gain) on sale of utility property	20			(9	)	(12,499	)
Unrealized loss on California Water Service Group stock	—			527		—
Gain on sale of California Water Service Group stock	—			(104	)	—
Changes in operating assets and liabilities, net of acquired assets and liabilities:
Accounts receivable and accrued unbilled utility revenue	(3,860		)	(2,003	)	(1,702	)
Accounts payable and other current liabilities	1,946			2,130		2,888
Accrued groundwater extraction charges, purchased water and power	2,853			(688	)	3,536
Tax receivable and accrued taxes	(6,044		)	5,841		2,164
Postretirement benefits	(4,000		)	203		(769	)
Regulatory asset related to balancing and memorandum accounts	30,838			(6,488	)	(979	)
Other noncurrent assets and noncurrent liabilities	7,439			1,923		741
Other changes, net	7,469			1,706		827
Net cash provided by operating activities	130,005			91,343		101,112
Investing activities:
Additions to utility plant:
Company-funded	(164,325		)	(135,973	)	(141,213	)
Contributions in aid of construction	(13,563		)	(8,454	)	(7,842	)
Additions to real estate investment	(137		)	(123	)	(116	)
Payments for business/asset acquisition and water rights	(835,465		)	(2,496	)	(1,149	)
Cost to retire utility plant, net of salvage	(5,026		)	(3,909	)	(3,356	)
Proceeds from sale of real estate investments and utility property	745			—		39,802
Proceeds from sale of California Water Service Group stock	—			4,112		—
Net cash used in investing activities	(1,017,771		)	(146,843	)	(113,874	)
Financing activities:
Borrowings from lines of credit	105,349			76,000		56,500
Repayments of lines of credit	(192,055		)	(1,000	)	(45,700	)
Long-term borrowings	590,000			—		—
Long-term borrowings held as restricted cash	5,000			—		—
Repayments of long-term borrowings	(1,400		)	—		(2,717	)
Debt issuance costs	(4,918		)	—		—
Dividends paid	(34,134		)	(23,074	)	(21,332	)
Receipts of advances and contributions in aid of construction	18,904			10,890		12,581
Refunds of advances for construction	(2,911		)	(2,700	)	(2,622	)
Issuance of common stock, net of issuance costs	(10		)	411,385		—
Other changes, net	1,163			(3,078	)	(1,499	)
Net cash provided by (used in) financing activities	484,988			468,423		(4,789	)
Net change in cash, cash equivalents and restricted cash	(402,778		)	412,923		(17,551	)
Cash and cash equivalents, beginning of year	420,722			7,799		25,350
Cash, cash equivalents and restricted cash, end of year	$	17,944		420,722		7,799
Cash paid during the year for:
Interest	$	32,138		27,038		25,254
Income taxes	$	16,448		13,750		34,052
Supplemental disclosure of non-cash activities:
(Decrease) increase in accrued payables for construction costs capitalized	$	(516	)	340		2,700
Utility property installed by developers	$	3,077		1,747		3,723
Reconciliation to Consolidated Balance Sheets:
Cash and cash equivalents	$	12,944		420,722		7,799
Restricted cash	$	5,000		—		—
Cash, cash equivalents and restricted cash, end of year	$	17,944		420,722		7,799

See Accompanying Notes to Consolidated Financial Statements.

54

SJW GROUP AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Years ended December 31, 2019, 2018 and 2017

(Dollars in thousands, except share and per share data)

Note 1. Summary of Significant Accounting Policies

The accompanying consolidated financial statements include the accounts of SJW Group, its wholly owned subsidiaries, and two variable interest entities in which two SJW Group subsidiaries are the primary beneficiaries. All intercompany transactions and balances have been eliminated in consolidation. The accounting policies of SJW Group’s subsidiaries comply with the applicable uniform system of accounts prescribed by the respective regulators and conform to generally accepted accounting principles for rate-regulated public utilities.

SJW Group’s principal subsidiary, San Jose Water Company (“SJWC”), is a regulated California water utility providing water service to approximately 231,000 connections that serve approximately one million people in the greater metropolitan San Jose area. Approximately 91% of SJWC’s revenues are derived from the sale of water to residential and business customers.

Connecticut Water Service, Inc. (“CTWS”), headquartered in Connecticut, is a holding company for water utilities companies providing water service to approximately 137,000 connections that serve a population of approximately 480,000 people in 80 municipalities throughout Connecticut and Maine and more than 3,000 wastewater connections in Southbury, Connecticut. As part of the merger transaction between SJW Group and CTWS on October 9, 2019, CTWS became a wholly-owned subsidiary of SJWNE LLC which is a wholly-owned subsidiary of SJW Group (see, Note 12, “SJW Group and CTWS Merger”). The subsidiaries held by CTWS that provide utility water services are The Connecticut Water Company (“Connecticut Water”), The Heritage Village Water Company (“HVWC”), The Avon Water Company (“Avon Water”) and The Maine Water Company (“Maine Water”). The remaining two subsidiaries are Chester Realty, Inc., a real estate company in Connecticut, and New England Water Utility Services, Inc. (“NEWUS”), which provides contract water and sewer operations and other water related services.

SJWTX, Inc., a wholly owned subsidiary of SJW Group, is incorporated in the State of Texas and is doing business as Canyon Lake Water Service Company (“CLWSC”). CLWSC is a public utility in the business of providing water service to approximately 54,000 people. CLWSC’s service area comprises more than 246 square miles in the southern region of the Texas Hill Country in Blanco, Comal, Hays and Travis counties, the growing region between San Antonio and Austin, Texas. SJWTX, Inc. has a 25% interest in Acequia Water Supply Corporation. Acequia has been determined to be a variable interest entity within the scope of ASC Topic 810 with SJWTX, Inc. as the primary beneficiary. As a result, Acequia has been consolidated with SJWTX, Inc.

SJW Land Company owns a commercial property, an undeveloped real estate property, and a warehouse property in the state of Tennessee. In September 1999, SJW Land Company contributed real property for a 70% limited partnership interest in 444 West Santa Clara Street, L.P. A commercial building was constructed on the partnership property and was leased to an unrelated international real estate firm under a long-term lease. 444 West Santa Clara Street, L.P. was determined to be a variable interest entity within the scope of ASC Topic 810 with SJW Land Company as the primary beneficiary. As a result, 444 West Santa Clara Street L.P. has been consolidated with SJW Land Company. The consolidated financial statements of SJW Group at December 31, 2019 and 2018 include the operating results of 444 West Santa Clara Street, L.P. Intercompany balances and transactions have been eliminated. In 2017, the commercial building owned by the partnership was sold. Results of operations and balances of the non-controlling interest are not material to the consolidated financial statements (see below in Note 1, “Real Estate Investments”).

Texas Water Alliance Limited (“TWA”), formerly a wholly owned subsidiary of SJW Group, was undertaking activities that were necessary to develop a water supply project in Texas. On February 22, 2016, SJW Group entered into a Purchase and Sale Agreement with the Guadalupe-Blanco River Authority (“GBRA”) pursuant to which SJW Group agreed to sell all of its equity interests in TWA to GBRA for $31,000 in cash. The sales transaction closed on November 16, 2017. As provided in the sale agreement, GBRA held back $3,000 (“Holdback Amount“) from the payment of the purchase price at the closing, which amount will be paid to SJW Group on June 30, 2021, subject to reduction under certain conditions. The transaction resulted in a pre-tax gain on sale of utility property of $12,501, excluding the Holdback Amount.

Recently Adopted Accounting Principles

In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-02, “Leases (Topic 842),” as amended, which supersedes the lease requirements in “Leases (Topic 840).” This ASU generally requires lessees to recognize operating and financing lease liabilities and corresponding right-of-use assets on the Consolidated Balance Sheets and to provide enhanced disclosures surrounding the amount, timing and uncertainty of cash flows arising from leasing arrangements. ASU 2016-02 also makes some changes to lessor accounting and aligns with the new

55

revenue recognition guidance. SJW Group adopted the new standard effective January 1, 2019, on a modified retrospective basis and did not restate comparative periods. SJW Group also elected the package of practical expedients permitted under the transition guidance and combined lease and non-lease components. In addition, SJW Group kept leases with an initial term of 12 months or less off the Consolidated Balance Sheets and recognized the associated lease payments in the Consolidated Statements of Comprehensive Income on a straight-line basis over the lease term. The adoption of this standard did not have a material impact on SJW Group’s consolidated financial statements.

Use of Estimates

The preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the United States of America 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 date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Utility Plant

The cost of additions, replacements and betterments to utility plant is capitalized. The amount of interest capitalized in 2019, 2018 and 2017 was $4,323, $2,856 and $2,807, respectively. Construction in progress was $112,232 and $68,765 at December 31, 2019 and 2018, respectively.

The major components of depreciable plant and equipment as of December 31, 2019 and 2018 are as follows:

	2019		2018
Equipment	$	521,183	335,358
Transmission and distribution	2,207,051		1,375,821
Office buildings and other structures	260,220		121,872
Total depreciable plant and equipment	$	2,988,454	1,833,051

Depreciation is computed using the straight-line method over the estimated remaining service lives of groups of assets, ranging from 5 to 75 years. The estimated service lives of depreciable plant and equipment are as follows:

	Useful Lives
Equipment	5 to 35 years
Transmission and distribution plant	35 to 75 years
Office buildings and other structures	7 to 50 years

For the years 2019, 2018 and 2017, depreciation expense as a percent of the beginning of the year balance of depreciable plant was approximately 3.8%, 3.6% and 3.6%, respectively. A portion of depreciation expense was allocated to administrative and general expense. For the years 2019, 2018 and 2017, the amounts allocated to administrative and general expense were $2,869, $2,306 and $2,209, respectively. Depreciation expense for utility plant for the years ended December 31, 2019, 2018 and 2017 was $63,785, $53,031 and $46,456, respectively. The cost of utility plant retired, including retirement costs (less salvage), is charged to accumulated depreciation and no gain or loss is recognized.

Utility Plant Intangible Assets

All intangible assets are recorded at cost and are amortized using the straight-line method over the estimated useful life of the asset, ranging from 5 to 70 years (see Note 6, “Utility Plant Intangible Assets”).

Real Estate Investments

Real estate investments are recorded at cost and consist primarily of land and buildings. Net gains and losses from the sale of real estate investments are recorded as a component of other (expense) income in the Consolidated Statements of Comprehensive Income. Nonutility property in Water Utility Services is also classified in real estate investments and not separately disclosed on the balance sheet based on the immateriality of the amount. Nonutility property is property that is neither used nor useful in providing water utility services to customers and is excluded from the rate base for rate-setting purposes. SJWC recognizes gain/loss on disposition of nonutility property in accordance with California Public Utilities Commission (“CPUC”) Code Section 790, whereby the net proceeds are reinvested back into property that is useful in providing water utility services to customers. There is no depreciation associated with nonutility property as it is all land.

56

The major components of real estate investments as of December 31, 2019 and 2018 are as follows:

	2019		2018
Land	$	14,168	13,262
Buildings and improvements	43,531		43,074
Total real estate investment	$	57,699	56,336

Depreciation on buildings and improvements for real estate investments is computed using the straight-line method over the estimated useful lives of the assets, ranging from 7 to 39 years.

On December 19, 2019, Maine Water completed the second half of a previously announced land sale with the Coastal Mountains Land Trust, Maine nonprofit corporation. The second transaction was structured such that Maine Water sold a conservation easement valued at $1,200 for $600. Accordingly, Maine Water expects to claim a $600 charitable deduction for federal and state income tax purposes on the bargain sale. The MPUC has previously ruled that the net proceeds from the transaction will be shared equally between the customers of the Camden Rockland division and Maine Water. The transaction generated approximately $180 in pre-tax gain on sale of nonutility property at Maine Water. Additionally, Connecticut Water disposed of a small parcel of land generating an additional $4 in pre-tax gain on sale of nonutility property.

On April 6, 2017, 444 West Santa Clara Street, L.P. sold all of its interests in the commercial building and land the partnership owned and operated for $11,000. 444 West Santa Clara Street, L.P. recognized a pre-tax gain on sale of real estate investments of $6,323, after selling expenses of $1,157. SJW Land Company holds a 70% limited interest in 444 West Santa Clara Street, L.P. SJW Land Company and the noncontrolling interest recognized a pre-tax gain on sale of real estate investments of $4,427 and $1,896, respectively, on the transaction. In connection with this sale, the partnership was required to deposit $750 into an escrow account for estimated repairs to the creek next to the land the partnership sold. On April 22, 2019, all creek repairs were completed and a reimbursement of $745 was provided to the partnership. SJW Land Company and the noncontrolling interest recognized a pre-tax gain on the creek reimbursement of $521 and $224, respectively, on the transaction. In addition, SJW Land Company sold undeveloped land located in San Jose, California for $1,350 on April 6, 2017. SJW Land Company recognized a pre-tax gain on sale of real estate investments of $580 on the transaction, after selling expenses of $14.

Real estate investments include $56,839 and $56,090 as of December 31, 2019 and 2018, respectively, of assets that are leased or available for lease. The following schedule shows the future minimum rental payments to be received from third parties under operating leases that have remaining noncancelable lease terms in excess of one year as of December 31, 2019:

Year ending December 31:	Rental Revenue
2020	$	4,520
2021	3,208
2022	2,527
2023	2,564
2024	2,645
Thereafter	10,544

Business Combinations

SJW Group applies the provisions of ASC Topic 805—“Business Combinations” for the purchase accounting related to the merger with CTWS on October 9, 2019. Topic 805 requires SJW Group to recognize separately from goodwill the assets acquired and the liabilities assumed at the acquisition date fair values. Goodwill as of the acquisition date is measured as the excess of consideration transferred over the net of the acquisition date fair values of the assets acquired and the liabilities assumed. While SJW Group uses our best estimates and assumptions to accurately value assets acquired and liabilities assumed at the acquisition date, our estimates are inherently uncertain and subject to refinement. As a result, during the measurement period, which may be up to one year from the acquisition date, we record adjustments to the assets acquired and liabilities assumed with the corresponding offset to goodwill. Upon the conclusion of the measurement period or final determination of the values of assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recorded to our Consolidated Statements of Comprehensive Income. Accounting for business combinations requires SJW Group to make significant estimates and assumptions, especially at the acquisition date, including estimates for intangible assets, contractual obligations assumed and pre-acquisition contingencies. Although SJW Group believes that the assumptions and estimates we make are reasonable and appropriate, they are based in part on historical experience and information obtained from CTWS’s management and are inherently uncertain. Events and circumstances may occur that may affect the accuracy or validity of such assumptions, estimates or actual results. The purchase price allocation process requires management to make

57

significant estimates and assumptions with respect to intangible assets. Although SJW Group believes the assumptions and estimates made are reasonable, they are based in part on historical experience, market conditions and information obtained from management of the acquired companies and are inherently uncertain. Examples of critical estimates in valuing certain of the intangible assets we have acquired or may acquire in the future include, but are not limited to: future expected cash flows from services; historical and expected customer attrition rates and anticipated growth in revenue from acquired customers; the expected use of the acquired assets; and discount rates. As of December 31, 2019, management estimated the preliminary fair values of net tangible and intangible assets acquired, and the excess of the consideration transferred over the aggregate of such fair values was recorded as goodwill. The preliminary value of the acquired deferred tax assets and deferred tax liabilities are based on a preliminary analysis, and our estimates and assumptions are subject to change within the measurement period (up to one year from the acquisition date). In addition, management is still gathering information necessary to complete the recognition and measurement of the opening balance sheet (see Note 12, “SJW Group and CTWS Merger”).

Impairment of Long-Lived Assets and Goodwill

In accordance with the requirements of FASB ASC Topic 360—“Property, Plant and Equipment,” the long-lived assets of SJW Group are reviewed for impairment when changes in circumstances or events require adjustments to the carrying values of the assets. When such changes in circumstances or events occur, the company assesses recoverability by determining whether the carrying value of such assets will be recovered through the undiscounted expected future cash flows. To the extent an impairment exists, the asset is written down to its estimated fair value with a corresponding charge to operations in the period in which the impairment is identified. Long-lived assets consist primarily of utility plant in service, real estate investments, intangible assets, and regulatory assets. In addition, the company tests unamortized intangible assets, which primarily relate to water rights, at least annually or more frequently if events or changes in circumstances indicate that the asset may be impaired. SJW Group first performs a qualitative assessment to determine whether it is necessary to perform the quantitative impairment test. In assessing the qualitative factors, SJW Group considers the impact of these key factors: change in industry and competitive environment, financial performance, and other relevant Company-specific events. If SJW Group determines that as a result of the qualitative assessment it is more likely than not (> 50% likelihood) that the fair value is less than carrying amount, then a quantitative test is performed. No impairments occurred during 2019, 2018 or 2017.

Goodwill represents the excess of the purchase price paid over the estimated fair value of the assets acquired and liabilities assumed in the acquisition of a business. Goodwill is not amortized and must be allocated at the reporting unit level, which is defined as an operating segment or one level below, and tested for impairment at least annually, or more frequently if an event occurs or circumstances change that would more likely than not, reduce the fair value of a reporting unit below its carrying value. SJW Group’s goodwill is primarily associated with the recent merger with CTWS on October 9, 2019. As of December 31, 2019, SJW Group performed a qualitative assessment and found no indicators of impairment and therefore did not perform the quantitative impairment test.

Cash and Cash Equivalents, and Restricted Fund

Cash and cash equivalents primarily consist of cash on deposit with banks with maturities of three months or less from the date of purchase. Restricted funds consist of proceeds from a Maine state revolving fund bond issuance to Maine Water of $5,000 on December 19, 2019 for construction of a new water treatment plant. Proceeds are held by a trustee for the bond and as conditions are met, funds are released. On February 3, 2020, the trustee released proceeds of $4,114 from the bond.

Financial Instruments and Investments

The following instruments are not measured at fair value on the company’s consolidated balance sheets but, require disclosure of fair values: cash and cash equivalents, accounts receivable and accounts payable. The estimated fair value of such instruments approximates their carrying value as reported on the consolidated balance sheets. The fair value of such financial instruments are determined using the income approach based on the present value of estimated future cash flows. The fair value of these instruments would be categorized as Level 2 in the fair value hierarchy, with the exception of cash and cash equivalents, which would be categorized as Level 1. The fair value of long-term debt is discussed in Note 4, “Long-Term Debt” and pension plan assets in Note 9, “Benefit Plans”.

SJW Group has investments in company owned life insurance which are valued at cash surrender value of the policies as reported by the insurer. These contracts are based principally on a referenced pool of investment funds that actively redeem shares, are observable and measurable, and are presented in “Other investments” on SJW Group’s consolidated balance sheets. As of December 31, 2019, the value of the company owned life insurance was $7,086 of which $3,829 was related to assets to fund CTWS’ supplemental retirement plan agreements. See discussion on pension plans in Note 9, “Benefit Plans”.

SJW Group’s had an investment in California Water Service Group which was accounted for under FASB ASC Topic 320—“Investment—Debt and Equity Securities,” as an available-for-sale marketable security. The investment was recorded on the Consolidated Balance Sheet at its quoted market price with the change in unrealized gain or loss reported, net of tax, as a

58

component of other expense (income) with the adoption of ASU 2016-01 on January 1, 2018. Prior to adoption, the changes in unrealized gain or loss, net of tax, were reported as a component of other comprehensive income.

During the year ended December 31, 2018, SJW Group sold its remaining 100,000 shares of California Water Service Group for $4,112 before fees of $9. SJW Group recognized a gain on the sale of the stock of approximately $104 and tax expense of approximately $29 for a net gain of $75.

Regulatory Rate Filings

California Regulatory Affairs

SJWC’s rates, service and other matters affecting its business are subject to regulation by the CPUC.

Generally, there are three types of rate adjustments that affect SJWC’s revenue collection: general rate adjustments, cost of capital adjustments, and offset rate adjustments. General rate adjustments are authorized in general rate case decisions, which usually authorize an initial rate adjustment followed by two annual escalation adjustments. General rate applications are normally filed and processed during the last year covered by the most recent general rate case as required by the CPUC in order to avoid any gaps in regulatory decisions on general rate adjustments.

Cost of capital adjustments are rate adjustments resulting from the CPUC’s usual tri-annual establishment of a reasonable rate of return for SJWC’s capital investments.

The purpose of an offset rate adjustment is to compensate utilities for changes in specific pre-authorized offsettable capital investments or expenses, primarily for purchased water, groundwater extraction, purchased power and pensions. Pursuant to Section 792.5 of the California Public Utilities Code, a balancing account must be maintained for each expense item for which such revenue offsets have been authorized. Memorandum accounts track revenue impacts due to catastrophic events, certain unforeseen water quality expenses related to new federal and state water quality standards, energy efficiency, water conservation during periods of mandated water restrictions, water tariffs and other approved activities or as directed by the CPUC such as the memorandum account for the Tax Cuts and Jobs Act (H.R. 1) (the “Tax Act”). The purpose of a balancing and memorandum account is to track the under-collection or over-collection associated with such expense changes and activities.

On January 4, 2018, SJWC filed General Rate Case Application No. 18-01-004 (“GRC”) with the CPUC requesting authority for an increase of revenue of $34,288, or 9.76%, in 2019, $14,232, or 3.7%, in 2020 and $20,582, or 5.17%, in 2021. Among other things, the application also included requests to recover $20,725 from balancing and memorandum accounts, the establishment of a Water Revenue Adjustment Mechanism and Sales Reconciliation Mechanism (“WRAM/SRM”), and a shift to greater revenue collection in the service charge. On June 28, 2018, the CPUC issued an order in the case identifying the issues to be considered, including whether the proposed merger between SJW Group and CTWS will have any ratemaking impact on the customers of SJWC (see discussion on the merger with CTWS at Note 12). This consideration was subsequently removed from the GRC to be considered in an Order Instituting Investigation (“OII”) on the proposed merger issued on July 20, 2018, see below for further discussion. On August 10, 2018, SJWC and the Office of Ratepayer Advocates filed a joint motion for partial settlement (“Settlement”) of the GRC with the CPUC, resolving all issues in the GRC with the exception of authorization of a WRAM/SRM and the recovery of the balance in the Hydro Generation Research, Development and Demonstration Memorandum Account, such issues being subsequently contested in legal briefs. The Settlement also lowered authorized sales to a level that aligns more closely with current actual consumption.  In addition, it allowed for a shift in cost recovery allowing 40% of total revenue to be collected through the fixed charge. On October 16, 2018, the CPUC issued a Proposed Decision adopting the Settlement in part, without any impact on the proposed revenue requirement outlined in the Settlement, and delaying ruling on the contested issues in order to allow the Settlement rates to become effective January 1, 2019. On December 4, 2018, the CPUC issued Decision 18-11-025 authorizing new rates for 2019. Accordingly, SJWC filed Advice Letter No. 528/528A on December 7, 2018, requesting authorization to increase revenue requirement by $16,378 or 4.55% in 2019 and to implement surcharges to recover $27,045 of under-collections from memorandum and balancing accounts. This was approved on December 28, 2018, and new rates became effective January 1, 2019.

On July 20, 2018, the CPUC issued an Order Instituting Investigation (“OII”) No. 18-07-007 concerning SJW Group’s then proposed merger with CTWS. A Scoping Memorandum was issued on September 7, 2018, which identified the issues to be considered in the proceeding as to whether the proposed merger is subject to CPUC approval and to evaluate the merger’s likely impacts within California. On September 14, 2018, SJW Group and SJWC submitted joint comments in response to the issues identified in accordance with the Scoping Memorandum’s adopted schedule, and reply comments were submitted on October 19, 2018. A Public Participation Hearing was held on January 31, 2019. On March 4, 2019, the CPUC suspended this proceeding due to SJW Group’s announcement of its intention to file a new merger approval application with the Connecticut Public Utilities Regulatory Authority (“PURA”). On April 3, 2019, SJW Group and CTWS jointly filed a new merger

59

application with PURA. After securing the required approvals from both PURA and the MPUC, SJW Group announced the close of the merger on October 9, 2019, and notified the CPUC accordingly.

In January 2017, a SJWC customer inquired about the company’s billing practice as it related to the proration of service charges in billing cycles where a rate change occurred. On June 22, 2017, SJWC was served with Complaint 17-06-009 regarding its billing practice for service charge rate changes. The billing issue was made a part of SJWC’s GRC proceeding and a settlement agreement was reached with the Office of Ratepayer Advocates (now the Public Advocates Office) on May 23, 2018, limiting the duration from which to calculate customer refunds from June 1, 2011, through December 31, 2016. Accordingly, SJWC provided an additional reserve to cover the remaining period covered by the settlement. In accordance with Decision 18-11-025 for the GRC, SJWC filed Advice Letter No. 530 proposing total refunds of $2,020 for the period from June 1, 2011 through December 31, 2016. This advice letter became effective February 8, 2019, and refunds were completed by mid-May 2019. On April 22, 2019, the CPUC dismissed Complaint 17-07-009 citing the relief provided in Advice Letter No. 530 and the current OII on this matter (see below for further discussion). The Complainant filed an appeal with the CPUC to dispute the dismissal. This appeal was rejected and the Complaint was dismissed via CPUC Decision No. 19-09-040 on September 24, 2019.

On September 14, 2018, the CPUC issued OII No. 18-09-003 to which SJWC was named as Respondent. The OII will determine whether the company unlawfully overcharged customers over a 30-year period by failing to pro-rate service charges when increases occurred during a billing period, and whether the company double-billed service charges during one billing period when allegedly switching from billing such charges in advance to billing in arrears.  The OII resulted from a report by the CPUC’s Consumer Protection and Enforcement Division (“CPED”), dated August 16, 2018, recommending an investigation into SJWC’s billing practice.  CPED calculated a refund obligation of approximately $2,061 for the years 2014 to 2016 that had been the subject of SJWC’s Advice Letter No. 510.  CPED calculated a further refund obligation of approximately $1,990 for the years 1987 to 2013.  CPED also asserted that the company double-billed its customers during a billing period when it allegedly converted from billing in advance to billing in arrears, assumed that such double-billing occurred in January 2011, and calculated a refund obligation of approximately $4,935.  The OII notes these estimates and identifies the proper refund amount as an issue in the proceeding.  The OII also identifies the CPUC’s authority to consider imposing penalties on SJWC in amounts ranging from five hundred dollars to fifty thousand dollars per offense, per day. On July 24, 2019, SJWC and CPED jointly filed a motion for CPUC approval of a Settlement Agreement (“Agreement”) over SJWC’s past customer billing practices. The Agreement requires the company to pay approximately $2,100 in customer credits, consisting of $1,757 for refunds during the period from 1987 to 2011 and an additional $350 in customer credits to low income water customers, and invest $5,000 in utility plant that is not allowed an investment return or rate recovery. SJWC has recorded the $2,100 customer credit expense as an offset to revenues in the accompanying December 31, 2019, Consolidated Statements of Comprehensive Income. The $5,000 commitment to invest in utility plant will be recognized as plant in service on the company’s financial statements once invested. The Agreement is subject to final approval by the CPUC. A CPUC Presiding Officer’s Decision approved the Agreement in December 2019, but an appeal was filed in January 2020 by a group of SJWC customers. A final CPUC decision approving the Settlement and dismissing the appeal was approved on February 27, 2020.

On February 28, 2019, SJWC filed Advice Letter No. 531 with the CPUC requesting to adjust the Utilities Reimbursement Account User Fees as directed by CPUC Resolution M-4839. The reimbursement fee was reduced from 1.4% to 1.23%. This request was approved and the new fee became effective on April 1, 2019.

On March 29, 2019, SJWC filed Advice Letter No. 532 with the CPUC requesting authorization to recover its 2018 WCMA balance for the period of January 1, 2018, through December 31, 2018. On December 19, 2019, the CPUC denied the recovery via Resolution W-5210 citing the elimination of mandatory conservation requirements. SJWC recorded a reduction of balancing and memorandum accounts of $9,386 with an offset to revenues for the 2018 WCMA and reversed revenues of $639 recorded in the 2019 WCMA during the period ended December 31, 2019.

On June 19, 2019, the CPUC issued its final decision resolving the remaining issues in SJWC’s GRC. Decision 19-06-010 denied the establishment of a WRAM/SRM and authorized the recovery of the Hydro Generation Research, Development and Demonstration Memorandum Account balance of $1,243. SJWC filed Advice Letter No. 534 on August 1, 2019, to recover this amount via a surcharge over a three-year period. The CPUC rejected the advice letter on October 10, 2019, citing an error and recommended a correction and a new filing for recovery. SJWC has made a filing to correct the record and is awaiting the CPUC’s decision. A new advice letter for recovery is anticipated to be filed in the first quarter of 2020 pending the decision.

On August 30, 2019, SJWC filed Advice Letter No. 535 with the CPUC requesting authorization to increase the total 2019 authorized revenue requirements by $0.7 million or 0.17% for plant additions related to the Montevina Water Treatment Plant Upgrade Project in 2018. This advice letter became effective on September 29, 2019.

SJWC filed Advice Letter No. 537 with the CPUC requesting authorization to refund the balance in its 2018 Tax Accounting Memorandum Account as required by the GRC decision on October 18, 2019.  On December 3, 2019, Advice Letter 537-A was filed to refund the balance via a one-time surcredit. For a typical residential customer with a 3/4-inch meter, the one-time

60

refund will be $20.84.  This advice letter was approved effective January 1, 2020, and refunds to customers began on January 27, 2020.

SJWC filed Advice Letter No. 541 on November 20, 2019, with the CPUC requesting authorization to increase its revenue requirement by $8,600 or 2.28% in 2020 for the first escalation year authorized in our 2018 General Rate Case Decision 18-011-025 which established rates for 2019, 2020, and 2021. This advice letter was approved on December 26, 2019, and new rates became effective January 1, 2020.

On December 6, 2019, SJWC filed Application No. 19-12-002 with the CPUC requesting approval for cost recovery to deploy Advanced Metering Infrastructure throughout its service area.  The application seeks revenue increases of $2.3 million or 0.61% in 2021, $4.0 million or 1.04% in 2022, and $2.5 million or 0.65% in 2023, and $0.3 million or 0.09% in 2024 based on current rates in effect.  A decision from the CPUC is anticipated in the fourth quarter of 2020.

On January 22, 2020, SJWC, along with California-American Water Company, California Water Service Company, and Golden State Water Company, filed a joint request for a one-year deferment on the Cost of Capital filings which would otherwise be due on May 1, 2020. Postponing the filing one year would alleviate administrative processing costs on the utilities as well as the CPUC staff, and provide relief for both CPUC and utility resources already strained by numerous other proceedings. The request is conditioned on no changes to the current Water Cost of Capital Mechanism in place during the one-year deferment. A CPUC decision is expected in the first quarter of 2020.

Connecticut Regulatory Affairs

Connecticut Water, HVWC and Avon Water’s rates, service and other matters affecting its business are subject to regulation by the Public Utilities Regulatory Authority of Connecticut (“PURA”). The Connecticut regulated operations seek rate relief as necessary to enable it to achieve an authorized rate of return.

PURA generally establishes rates in Connecticut on a company-wide basis and allows the Connecticut regulated operations to add surcharges to customers’ bills in order to recover certain costs associated with approved eligible capital projects through the Water Infrastructure Conservation Adjustment (“WICA”) in between full rate cases, as well as approved surcharges for the Water Revenue Adjustment (“WRA”). Connecticut Water and HVWC mitigate the risk associated with changes in demand through a PURA approved WRA mechanism. The WRA is used to reconcile actual water demands with the demands projected in the most recent general rate case and allows companies to implement a surcharge or surcredit as necessary to recover the revenues approved in the general rate case. The WRA removes the financial disincentive for water utilities to develop and implement effective water conservation programs. The WRA allows water companies to defer on the balance sheet, as a regulatory asset or liability, for later collection from or crediting to customers the amount by which actual revenues deviate from the revenues allowed in the most recent general rate proceedings, including WICA proceedings. Projects eligible for WICA surcharges include certain types of aging utility plant, primarily water mains, meters, and service lines. Additionally, certain energy conservation projects, improvements required to comply with streamflow regulations, and improvements to acquired systems are eligible for WICA surcharges. Avon Water does not currently use the WRA mechanism.

As of December 31, 2019, WICA surcharges for Connecticut Water and Avon Water were 3.24% and 9.31%, respectively. HVWC does not currently have an approved WICA surcharge. On January 28, 2020, Connecticut Water filed a WICA application representing an additional 2.6% surcharge, for a cumulative WICA surcharge of 5.84%. Additionally, on February 7, 2020, Connecticut Water filed its annual WICA reconciliation which called for a 0.09% reduction of the WICA surcharge. If approved as filed, Connecticut Water will begin to charge customers a cumulative WICA surcharge of 5.75% on April 1, 2020.

Connecticut Water and HVWC’s allowed revenues, as approved by PURA during each company’s last general rate case and including subsequently approved WICA surcharges for Connecticut Water, were approximately $18,588 for the period from October 9, 2019, through December 31, 2019. Through the normal billing, for the period from October 9, 2019 through December 31, 2019, revenues received from water and wastewater customers would have been approximately $20,428. As a result of the utilization of the WRA mechanism, Connecticut Water and HVWC recorded an approximate $1,840 reduction in revenues for the period from October 9, 2019 through December 31, 2019.

Texas Regulatory Affairs

CLWSC’s rates are subject to the economic regulation of the Public Utilities Commission of Texas (“PUCT”). The PUCT authorize rate increases after the filing of an Application for a Rate/Tariff Change. Rate cases may be filed as they become necessary, provided there is no current rate case outstanding. Further, rate cases may not be filed more frequently than once every 12 months.

As required, CLWSC submitted on January 28, 2019, its Water Pass-Through Charge (“WPC”) true-up report for the Canyon Lake area systems 2018 purchased water costs to the PUCT reflecting a change from $1.13 to $1.05 per thousand gallons. The WPC is the annual filing to change that component of CLWSC’s water rates for the changes in purchased water costs since the

61

last annual true-up report. This change for 2019 became effective on water bills being prepared as of February 1, 2019. Two WPC true-up reports were filed to report the year 2019 costs. The changes in the purchased water costs for the Deer Creek Ranch water system resulted in a decrease in the usage charge from $2.19 to $2.02 per thousand gallons, and an increase in the monthly base charge of $3.04 per residential account. These Deer Creek Ranch rate changes became effective October 1, 2019. The 2019 WPC true-up report for the water systems located in the Canyon Lake area resulted in a reduction of the WPC usage rate from $1.05 to $0.95 per thousand gallons which became effective on February 1, 2020.

Maine Regulatory Affairs

Maine Water’s rates, service and other matters affecting its business are subject to regulation by the Maine Public Utilities Commission (“MPUC”). As with the Connecticut regulated operations, rate relief is sought as necessary to enable the company to achieve an authorized rate of return. MPUC approves Maine Water’s rates on a division-by-division basis.

In 2015, a WRA mechanism law in Maine became available to regulated water utilities. Maine’s rate-adjustment mechanism could provide revenue stabilization in divisions with declining water consumption and Maine Water expects to request usage of this mechanism in future rate filings when consumption trends support its use.

On December 20, 2019, Maine Water filed a general a rate increase for their Skowhegan Division seeking approximately $221, or 14.7%, in additional revenue with the MPUC. A final decision from the MPUC is expected in the second quarter of 2020. On January 20, 2020, Maine Water filed Water Infrastructure Surcharge (“WISC”) applications with the MPUC in four divisions requesting an increase between 1.76% and 3.00%, representing approximately $371 in additional revenues. The WISC application was approved on February 26, 2020 and the surcharges are effective March 1, 2020.

Balancing and Memorandum Accounts

In California, the CPUC has established a balancing account mechanism for the purpose of tracking the under-collection or over-collection associated with expense changes and the revenue authorized by the CPUC to offset those expense changes. SJWC also maintains memorandum accounts to track revenue impacts due to catastrophic events, certain unforeseen water quality expenses related to new federal and state water quality standards, energy efficiency, water conservation, water tariffs, and other approved activities or as directed by the CPUC.

Balancing and memorandum accounts are recognized by SJWC 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. In addition, in the case of special revenue programs such as the Water Conservation Memorandum Account (“WCMA”) and WRA, SJWC and CTWS follow the requirements of ASC Topic 980-605-25—“Alternative Revenue Programs” in determining revenue recognition, including the requirement that such revenues will be collected within 24 months of the year-end in which the revenue is recorded. A reserve is recorded for amounts SJW Group estimates will not be collected within the 24-month period. This reserve is based on an estimate of actual usage over the recovery period, offset by applicable drought surcharges. In assessing the probability criteria for balancing and memorandum accounts between general rate cases, SJWC considers evidence that may exist prior to CPUC authorization that would satisfy ASC Topic 980 subtopic 340-25 recognition criteria. Such evidence may include regulatory rules and decisions, past practices, and other facts and circumstances that would indicate that recovery or refund is probable. When such evidence provides sufficient support, the balances are recorded in SJW Group’s consolidated financial statements.

On December 19, 2019, the CPUC denied the recovery of the 2018 WCMA in Advice Letter No. 532 and no longer approved the tracking of WCMA balances. Due to the decision, SJWC believes it no longer meets the probability criteria under ASC Topic 980-605-25 for the 2018 WCMA and has recognized a reduction to regulatory assets of $9,386 for the year ended December 31, 2019. SJWC had previously recognized regulatory assets of $9,386 due to lost revenues accumulated in the 2018 WCMA account for the year ended December 31, 2018. As of December 31, 2018, there was no reserve recorded to offset the 2018 WCMA.

As a result of the current status of the CPUC filing for the 2018 WCMA above, SJW Group also eliminated the regulatory asset balance for its 2019 WCMA as of December 31, 2019. As of December 31, 2019, $639 in lost revenues had accumulated in the 2019 WCMA.

SJWC recognized regulatory assets of $1,182 due to lost revenues accumulated in the 2017 WCMA account which represented the relief of the prior year reserve of $1,169 and interest earned on the balance during the year ended December 31, 2018. The prior year reserve represented the estimated amount that may not be collected within the 24-month period defined in the guidance. These amounts have been recorded in the 2017 WCMA balance shown in the table below for the year ended December 31, 2018. As of December 31, 2018, there was no reserve balance netted from the balance below.

A cost of capital memorandum account was approved by the CPUC on March 14, 2018. The account tracks the difference between current water rates and the lower rates adopted in the cost of capital decision issued on March 22, 2018. SJWC

62

recorded a regulatory liability of $1,379 in the cost of capital memorandum account for the year ended December 31, 2018 with a corresponding reduction to revenue. The amount has been reflected in the 2018 cost of capital memorandum account balance shown in the table below.

The CPUC directed SJWC to establish a memorandum account to capture all of the impacts of the Tax Act including the benefit of the reduction in the federal statutory income tax rate from 35% to 21% on its regulated revenue requirement. The CPUC has indicated that the net benefit from implementing the new law should ultimately be passed on to ratepayers. The benefits associated with regulatory activities is expected to flow back to customers as directed by the CPUC, with no impact to net income.  Per Advice Letter 522A filed with the CPUC, the benefit of the reduction in the federal statutory income tax rate from 35% to 21% were reflected in the customer bills effective July 1, 2018.  As such, the tax memorandum account only includes the benefit of the reduction in the federal statutory income tax rate through June 30, 2018. The other impacts of the Tax Act were recorded in the tax memorandum account for the entire year. Accordingly, SJWC recorded a regulatory liability of $6,504 in the tax memorandum account for the for the year ended December 31, 2018 with a corresponding reduction to revenue. The amount has been reflected in the tax memorandum account balance shown in the table below. Refunds for the tax memorandum account began on January 27, 2020.

In 2018, SJWC re-evaluated the accounting for cost-recovery balancing and memorandum accounts under the new revenue recognition guidance, ASU 2014-09, “Revenue from Contracts with Customers.” Prior to adoption, SJWC recorded cost-recovery accounts as a component of revenue. Upon adoption of ASU 2014-09, SJWC began recording such balances as capitalized costs until recovery is approved by the CPUC. The change is reflected in the cost-recovery balancing and memorandum accounts as shown in the table below.

SJWC met the recognition requirements for certain of its balancing and memorandum accounts and certain amounts subject to balancing and memorandum accounts and recorded revenue and regulatory assets as follows:

	For the year ended December 31, 2019
	Beginning Balance			Regulatory Asset Increase (Decrease)		Refunds (Collections) Adjustments		Surcharge Offset and Other	Ending Balance
Revenue accounts:
2014 - 2017 WCMA	$	7,750		—		(7,042	)	—	708
2018 WCMA	9,386			(9,386	)	—		—	—
2012 General Rate Case true-up	11,328			96		(10,672	)	—	752
Cost of capital memorandum accounts	(1,523		)	(30	)	—		—	(1,553	)
Tax memorandum account	(6,504		)	(139	)	—		—	(6,643	)
All others	5,112			4,475		(4,791	)	—	4,796
Total revenue accounts	25,549			(4,984	)	(22,505	)	—	(1,940	)
Cost-recovery accounts:
Water supply costs	9,617			207		(5,496	)	—	4,328
Pension	(1,843		)	745		3,547		—	2,449
All others	1,090			10		(654	)	—	446
Total cost-recovery accounts	8,864			962		(2,603	)	—	7,223
Total	$	34,413		(4,022	)	(25,108	)	—	5,283

63

	For the year ended December 31, 2018
	Beginning Balance			Regulatory Asset Increase (Decrease)		Refunds (Collections) Adjustments		Surcharge Offset and Other	Ending Balance
Revenue accounts:
2014 - 2017 WCMA	$	6,680		1,066		4		—	7,750
2018 WCMA	—			9,386		—		—	9,386
2012 General Rate Case true-up	11,319			—		9		—	11,328
Cost of capital memorandum accounts	(144		)	(1,379	)	—		—	(1,523	)
Tax memorandum account	—			(6,504	)	—		—	(6,504	)
All others	3,850			1,258		4		—	5,112
Total revenue accounts	21,705			3,827		17		—	25,549
Cost-recovery accounts:
Water supply costs	8,679			939		(1	)	—	9,617
Pension	(2,459		)	614		2		—	(1,843	)
All others	—			1,090		—		—	1,090
Total cost-recovery accounts	6,220			2,643		1		—	8,864
Total	$	27,925		6,470		18		—	34,413

	For the year ended December 31, 2017
	Beginning Balance			Regulatory Asset Increase (Decrease)	Refunds (Collections) Adjustments		Surcharge Offset and Other		Ending Balance
Revenue accounts:
2014 - 2017 WCMA	$	1,589		17,288	(4,704	)	(7,493	)	6,680
2012 General Rate Case true-up	20,682			—	(9,363	)	—		11,319
Cost of capital memorandum accounts	(817		)	—	673		—		(144	)
Drought surcharges	(7,688		)	—	(765	)	8,453		—
Cost-recovery accounts	3,181			3,815	(776	)	—		6,220
All others	8,962			1,084	(6,271	)	75		3,850
Total	$	25,909		22,187	(21,206	)	1,035		27,925

As of December 31, 2019, the total balance in SJWC’s balancing and memorandum accounts combined, including interest, that has not been recorded into the financial statements was a net under-collection of $1,428.

On December 28, 2018, SJWC’s GRC with the CPUC was approved with new rates effective on January 1, 2019. As part of the GRC decision, $27,045 of balancing and memorandum accounts were also approved for recovery over a 12-month period at $0.5894 per centum cubic feet surcharge effective on January 1, 2019. For the year ended December 31, 2019, SJWC collected $25,108 in surcharges for the approved recovery.

All balancing accounts and memorandum-type accounts not included for recovery or refund in the current general rate case will be reviewed by the CPUC in SJWC’s next general rate case or at the time an individual account reaches a threshold of 2% of authorized revenue, whichever occurs first.

Regulatory Assets and Liabilities

Generally accepted accounting principles for water utilities include the recognition of regulatory assets and liabilities as permitted by ASC Topic 980. In accordance with ASC Topic 980, Water Utility Services, to the extent applicable, records deferred costs and credits on the balance sheet as regulatory assets and liabilities when it is probable that these costs and credits will be recognized in the ratemaking process in a period different from when the costs and credits are incurred. Accounting for such costs and credits is based on management’s judgment and prior historical ratemaking practices, and it occurs when management determines that it is probable that these costs and credits will be recognized in the future revenue of Water Utility Services through the ratemaking process. The regulatory assets and liabilities recorded by Water Utility Services primarily relate to the recognition of deferred income taxes for ratemaking versus tax accounting purposes, balancing and memorandum

64

accounts, debt premiums related to business combinations, postretirement pension benefits, medical costs, accrued benefits for vacation and asset retirement obligations that have not yet been passed through in rates. For Connecticut and Maine water utility services, regulatory assets and liabilities also include deferred revenues associated with the WRA regulatory mechanism (see discussion in Regulatory and Rates Regulation section above). The company adjusts the related asset and liabilities for these items through its regulatory asset and liability accounts at year-end, except for certain postretirement benefit costs and balancing and memorandum accounts which are adjusted monthly. The company expects to recover regulatory assets related to plant depreciation income tax temporary differences over the average lives of the plant assets of between 5 to 75 years.

Rate-regulated enterprises are required to charge a regulatory asset to earnings if and when that asset no longer meets the criteria for being recorded as a regulatory asset. SJW Group continually evaluates the recoverability of regulatory assets by assessing whether the amortization of the balance over the remaining life can be recovered through expected and undiscounted future cash flows.

Regulatory assets and liabilities are comprised of the following as of December 31:

	2019		2018
Regulatory assets:
Income tax temporary differences, net	$	2,433	—
Postretirement pensions and other medical benefits	73,525		66,233
Business combinations debt premium, net	25,020		—
Balancing and memorandum accounts, net	5,283		34,413
WRA	9,108		—
Other, net	5,048		2,979
Total regulatory assets, net in Consolidated Balance Sheets	120,417		103,625
Less: current regulatory asset, net	6,472		26,910
Total regulatory assets, net, less current portion	$	113,945	76,715
Regulatory liability:
Income tax temporary differences, net	$	—	59,149
Total regulatory liability in Consolidated Balance Sheets	$	—	59,149

Income Taxes

On December 22, 2017, the Tax Act was signed into law. Among other things, the Tax Act lowers the corporate tax rate to 21% from the maximum rate of 35%, effective for tax years including or commencing January 1, 2018. See also Note 5, “Income Taxes”.

Income taxes are accounted for using the asset and liability method. Deferred tax assets and liabilities are recognized for the effect of temporary differences between financial and tax reporting. Deferred tax assets and liabilities are measured using current tax rates in effect. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the period that includes the enactment date.

To the extent permitted by the regulators, investment tax credits resulting from utility plant additions are deferred and amortized over the estimated useful lives of the related property.

65

Advances for Construction and Contributions in Aid of Construction

In California, advances for construction received after 1981 are primarily refunded ratably over 40 years. In Connecticut and Maine, advances for construction are refunded as services are connected to the main, over periods not exceeding 15 years. Estimated refunds for the next five years and thereafter are shown below:

	Estimated Refunds
2020	$	2,890
2021	2,890
2022	2,890
2023	2,878
2024	2,799
Thereafter	49,631

As of December 31, 2019, advances for construction was $112,339 of which $21,463 was related to non-refundable advances for construction and $26,898 was related to advances which are refunded based on service connections made.

Contributions in aid of construction represent funds received from developers that are not refundable under applicable regulations. Depreciation applicable to utility plant constructed with these contributions is charged to contributions in aid of construction.

Customer advances and contributions in aid of construction received subsequent to 1986 and prior to June 12, 1996 generally must be included in federal taxable income, except for CTWS. Taxes paid relating to advances and contributions are recorded as deferred tax assets for financial reporting purposes and are amortized over 40 years for advances and over the tax depreciable life of the related asset for contributions. Receipts subsequent to June 12, 1996 are generally exempt from federal taxable income, unless specifically prescribed under treasury regulations, including CTWS.

Advances and contributions received subsequent to 1991 and prior to 1997 are included in state taxable income, except for CTWS.

Asset Retirement Obligation

SJW Group’s asset retirement obligation is recorded as a liability included in other non-current liabilities. It reflects principally the retirement costs of wells and other anticipated clean-up costs, which by law, must be remediated upon retirement. Retirement costs have historically been recovered through rates at the time of retirement. As a result, the liability is offset by a regulatory asset.

As of December 31, 2019 and 2018, the asset retirement obligation is as follows:

	2019			2018
Retirement obligation	$	4,803		4,803
Discount rate	6		%	6	%
Regulatory asset, present value, recorded as a liability	$	942		942

Revenue

SJW Group recognizes revenue in accordance with ASC Topic 606 - “Revenue from Contracts with Customers.” In accordance with Topic 606, management has determined that the company has principally four categories of revenues. The first category, revenue from contracts with customers, represents metered revenue of Water Utility Services which includes billings to customers based on meter readings plus an estimate of water used between the customers’ last meter reading and the end of the accounting period. SJW Group satisfies its performance obligation upon delivery of water to the customer at which time the customer consumes the benefits provided by the company. The customer is typically billed on a quarterly or bi-monthly basis after water delivery has occurred. The customer is charged both a service charge which is based upon meter size and covers a portion of the fixed costs of furnishing water to the customer and a consumption charge based on actual water usage. Unbilled revenue from the last meter reading date to the end of the accounting period is estimated based on the most recent usage patterns, production records and the effective tariff rates. As the company has the right to bill for services that it has provided, SJW Group estimates the dollar value of deliveries during the unbilled period and recognizes the associated revenue. Actual results could differ from those estimates, which may result in an adjustment to revenue when billed in a subsequent period. The second category, rental income, represents lease rental income from SJW Land Company and Chester Realty, Inc. tenants. The tenants pay monthly in accordance with lease agreements and SJW Group recognizes the income ratably over the lease term as this is the most representative of the pattern in which the benefit is expected to be derived from SJW Group’s underlying asset.

66

The third and fourth revenue categories are other balancing and memorandum accounts and alternative revenue programs. Both are scoped out of Topic 606 and are accounted for under FASB ASC Topic 980 - “Regulated Operations.” Balancing and memorandum accounts are recognized by SJWC 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. In addition, in the case of special revenue programs, SJWC, Connecticut Water, and HVWC follow the requirements of ASC Topic 980-605-25, “Alternative Revenue Programs” in determining revenue recognition, including the requirement that such revenues will be collected within 24 months of the year-end in which the revenue is recorded. A reserve is recorded for amounts SJW Group estimates will not be collected within the 24-month period. This reserve is based on an estimate of actual usage over the recovery period, offset by applicable drought surcharges. In assessing the probability criteria for balancing and memorandum accounts between general rate cases, SJWC considers evidence that may exist prior to CPUC authorization that would satisfy ASC Topic 980 subtopic 340-25 recognition criteria. Such evidence may include regulatory rules and decisions, past practices, and other facts and circumstances that would indicate that recovery or refund is probable. When such evidence provides sufficient support, the balances are recorded in SJW Group’s financial statements.

To encourage conservation, SJWC received approval from the CPUC to implement a Mandatory Conservation Revenue Adjustment Memorandum Account in 2014. This account was subsequently replaced with a WCMA. The WCMA allowed SJWC to track lost revenue, net of related water costs, associated with reduced sales due to water conservation and associated calls for water use reductions. SJWC recorded the lost revenue captured in the WCMA regulatory accounts once the revenue recognition requirements of FASB ASC Topic 980 - “Regulated Operations,” subtopic 605-25 were met. In December 2019, CPUC denied SJWC’s request in Advice Letter No. 532 to recover the 2018 balances of WCMA and was ordered to remove the WCMA accounts from the preliminary statement book. As a result of the decision, during the year ended December 31, 2019, SJWC wrote off a total balance of $9,386 related to 2018 lost revenue and $639 related to 2019 lost revenue that was recorded in the 2018 and 2019 WCMA accounts, respectively. For further discussion, please see “Balancing and Memorandum Accounts” in Note 1.

The major streams of revenue for SJW Group are as follows:

	2019			2018		2017
Revenue from contracts with customers	$	447,720		389,302		381,777
Alternative revenue programs, net	(18,232		)	10,456		12,584
Other balancing and memorandum accounts revenue, net (1)	(14,403		)	(7,541	)	(10,838	)
Rental income	5,397			5,482		5,702
	$	420,482		397,699		389,225

___________________________________

(1) For year ended December 31, 2019 and 2018, $962 and $2,643, respectively, of amounts related to cost-recovery balancing accounts which upon adoption of Topic 606 are recorded as capitalized costs rather than revenue until recovery is approved by the CPUC. Prior to adoption of Topic 606, these amounts were recorded as revenue. For further discussion, please see “Balancing and Memorandum Accounts” above.

Revenue also includes a surcharge collected from regulated customers that is paid to the CPUC. This surcharge is recorded both in operating revenues and administrative and general expenses. For the years ended December 31, 2019, 2018 and 2017, the surcharge was $4,955, $5,013 and $5,017, respectively.

Share-Based Compensation

SJW Group calculates the fair value of service-based and performance-based restricted stock awards based on the grant date fair market value of the company’s stock price reduced by the present value of the dividends expected to be declared on outstanding shares.

SJW Group utilizes the Monte Carlo valuation model, which requires the use of subjective assumptions, to compute the fair value of market-vesting restricted stock units.

The compensation cost for service-based restricted stock awards are charged to income on a straight-line basis over the requisite service period, which is the vesting period. For performance-based stock awards, compensation expense is charged to income on a straight-line basis over the requisite service period based on expected attainment of performance targets. Changes in the estimates of the expected attainment of performance targets will result in a change in the number of shares that are expected to vest which may cause a cumulative catch up for the amount of share-based compensation expense during each reporting period in which such estimates are altered. Forfeitures are accounted for as they occur.

Maintenance Expense

Planned major maintenance projects are charged to expense as incurred.

67

Earnings per Share

Basic earnings per share is calculated using income available to common stockholders, divided by the weighted average number of shares outstanding during the year. The two-class method in computing basic earnings per share is not used because the number of participating securities as defined in FASB ASC Topic 260—“Earnings Per Share” is not significant. The two-class method is an earnings allocation formula that determines earnings per share for each class of common stock and participating security. Diluted earnings per share is calculated using income available to common stockholders divided by the weighted average number of shares of common stock including both shares outstanding and shares potentially issuable in connection with deferred restricted common stock awards under SJW Group’s Long-Term Incentive Plan and shares potentially issuable under the Employee Stock Purchase Plans. Restricted common stock units of 27,082, 5,551 and 4,474 as of December 31, 2019, 2018 and 2017, respectively, were excluded from the dilutive earnings per share calculation as their effect would have been anti-dilutive.

Note 2. Capitalization

SJW Group was authorized to issue 36,000,000 shares of common stock of $0.001 par value per share. On April 24, 2019, SJW Group amended its certificate of incorporation to increase the authorized number of shares of common stock to 70,000,000 shares. At December 31, 2019 and 2018, 28,456,508 and 28,404,316, respectively, shares of common stock were issued and outstanding.

At December 31, 2019 and 2018, 1,000,000 shares of preferred stock of $0.001 par value per share were authorized for SJW Group. At December 31, 2019 and 2018, no shares of preferred stock were issued or outstanding.

On November 28, 2018, SJW Group entered into an underwriting agreement with J.P. Morgan Securities LLC, Barclays Capital Inc., RBC Capital Markets, LLC and UBS Securities LLC, as representatives of the several underwriters (the “Underwriters”), pursuant to which SJW Group sold to the Underwriters an aggregate of 6,750,000 shares of SJW Group’s common stock, par value $0.001 per share (the “Firm Shares”), in an underwritten public offering. Pursuant to the underwriting agreement, SJW Group granted the Underwriters a 30-day option to purchase up to an additional 1,012,500 shares of its common stock (the “Option Shares”), which was exercised in full on December 3, 2018. The offering of the Firm Shares closed on December 3, 2018 and the offering of the Option Shares on December 5, 2018.

SJW Group received net proceeds of approximately $358,256 from the sale of the Firm Shares and received additional net proceeds of approximately $53,738 from the sale of the Option Shares, in each case after deducting the underwriting discounts and commissions and estimated offering expenses payable by SJW Group. SJW Group used the net proceeds from the offering, together with the net offering proceeds from the new debt financing in 2019, to finance the merger of CTWS on October 9, 2019 and to pay related fees and expenses. See Note 12 for a discussion on the CTWS merger. Pending such use, the company had invested the net proceeds temporarily in a short-term money market fund.

Note 3. Lines of Credit

SJWC entered into a $125,000 credit agreement (the “Credit Agreement”) with JPMorgan Chase Bank, N.A., as the lender (the “Lender”) on June 1, 2016. The Credit Agreement provides an unsecured credit facility with a letter of credit sublimit of $10,000. Proceeds of borrowings under the Credit Agreement may be used to refinance existing debt, for working capital, and for general corporate purposes. The Credit Agreement has a maturity date of June 1, 2021.

The Credit Agreement contains customary representations, warranties and events of default, as well as certain restrictive covenants customary for facilities of this type, including restrictions on indebtedness, liens, acquisitions and investments, restricted payments, asset sales, and fundamental changes. The Credit Agreement also includes certain financial covenants that require the Company to maintain a maximum funded debt to capitalization ratio and a minimum interest coverage ratio.

SJW Group and SJW Land Company (collectively, the “Borrowers”), entered into a $15,000 credit agreement with the Lender (the “SJW Group Credit Agreement”) on June 1, 2016, which provides an unsecured credit facility to the Borrowers with a letter of credit sublimit of $5,000. The SJW Group Credit Agreement matures on June 1, 2021. Borrowings under the SJW Group Credit Agreement bear interest under the same terms and conditions as those in the Credit Agreement.

In addition, on June 1, 2016, SJW Group, as guarantor, and SJWTX, Inc. (the “Borrower”), entered into a $5,000 credit agreement with the Lender (the “SJWTX Credit Agreement”), which provides an unsecured credit facility to the Borrower with a letter of credit sublimit of $1,000. The SJWTX Credit Agreement matures on June 1, 2021.

CTWS maintains a $15,000 line of credit agreement with CoBank, ACB, which is currently scheduled to expire on July 1, 2020.  CTWS maintains an additional credit agreement of $95,000 with RBS Citizens, N.A., which will be reduced to $75,000 on March 1, 2020, with a final maturity on December 14, 2023.

68

As of December 31, 2019 and 2018, SJW Group had outstanding balances on the lines of credit of $117,209 and $100,000, respectively.

Cost of borrowing on the lines of credit averaged 3.73% and 2.94% as of December 31, 2019 and 2018, respectively.

The SJW Group and SJWTX, Inc. unsecured bank lines of credit have the following affirmative covenants calculated with the financial statements of SJW Group, on a consolidated basis: (1) the funded debt cannot exceed 66-2/3% of total capitalization, and (2) net income available for interest charges for the trailing 12-calendar-month period cannot be less than 175% of interest charges. As of December 31, 2019, SJW Group and SJWTX, Inc. were in compliance with all covenants.

SJWC’s unsecured bank lines of credit have the following affirmative covenants: (1) the funded debt cannot exceed 66-2/3% of total capitalization, and (2) net income available for interest charges for the trailing 12-calendar-month period cannot be less than 175% of interest charges. As of December 31, 2019, SJWC was in compliance with all covenants.

The CTWS unsecured bank lines of credit have the following affirmative covenants: (1) Connecticut Water’s earnings before interest and taxes to its interest expense shall be equal or greater to 3 to 1, (2) Maine Water’s debt to capitalization ratio shall not exceed 60%, (3) Connecticut Water’s debt to capitalization ratio shall not exceed 60%, and (4) CTWS’s debt to capitalization ratio shall not exceed 65%. As of December 31, 2019, CTWS was in compliance with all covenants.

69

Note 4. Long-Term Debt

Long-term debt as of December 31 was as follows:

Description	Rate	Maturity	2019		2018
SJW Group:
Senior notes	3.05% - 4.35%	2021 - 2039	$	560,000	50,000
SJWC:
Senior notes	4.29% - 9.45%	2020 - 2049	330,000		250,000
California Pollution Control Financing Authority Revenue Bonds	4.75%, 5.10%	2040, 2046	120,000		120,000
Total SJWC			450,000		370,000
CTWS bank term loans	4.09%, 4.15%	2027, 2037	23,935		—
Connecticut Water:
Connecticut Innovations Revenue Bonds, variable rate		2028 - 2029	22,050		—
Connecticut Innovations Revenue Bonds, fixed rate	5.00%	2021	22,506		—
Senior note	3.53%	2037	35,000		—
Bank term loans	3.16% - 4.75%	2020 - 2036	119,090		—
Total Connecticut Water			198,646		—
SJWTX, Inc. senior note	6.27%	2036	15,000		15,000
Maine Water:
State revolving fund loans	0.00% - 2.58%	2022 - 2048	16,032		—
Other First Mortgage Bonds	8.95%	2024	4,500		—
Bank term loans	4.18% - 5.51%	2024 - 2043	17,500		—
Total Maine Water			38,032		—
HVWC bank term loan	4.75%	2034	4,164		—
Avon Water mortgage loan	3.05%	2033	2,809		—
Total debt			1,292,586		435,000
Unamortized debt premium, net (a)			25,020		—
Less:
Unamortized debt issuance costs			11,737		3,576
Current portion			22,272		—
Total long-term debt, less current portion			$	1,283,597	431,424

___________________________________

(a) Consists of fair value adjustments recognized through purchase accounting for the completed merger with CTWS on October 9, 2019.

Senior notes held by institutional investors are unsecured obligations of SJW Group, SJWC, Connecticut Water, SJWTX, Inc. and Maine Water and require interest-only payments until maturity. To minimize issuance costs, the companies’ debt has primarily been placed privately.

The senior note agreements of SJW Group have terms and conditions that restrict SJW Group from issuing additional funded debt if: (1) the funded consolidated debt would exceed 66-2/3% of total capitalization, (2) the minimum net worth of SJW Group becomes less than $175,000 plus 30% of Water Utility Services cumulative net income, since June 30, 2011, and (3) net income available for interest charges for the trailing 12-calendar-month period would be less than 175% of interest charges. As of December 31, 2019, SJW Group was not restricted from issuing future indebtedness as a result of these terms and conditions.

On October 8, 2019, SJW Group entered into a note purchase agreement with the purchasers listed in the agreement, pursuant to which SJW Group sold an aggregate principal amount of $310,000 of its 3.05% Senior Notes, Series 2019A, due November 1, 2029, $75,000 of its 3.15% Senior Notes, Series 2019B, due November 1, 2031, and $125,000 of its 3.53% Senior Notes, Series 2019C, due November 1, 2039. The notes are unsecured obligations of the Company. Interest is payable semi-annually in arrears on May 1st and November 1st of each year. The note purchase agreement contains customary representations and warranties. Under the note purchase agreement, SJW Group is required to comply with certain customary affirmative and negative covenants for as long as the notes are outstanding. The notes are also subject to customary events of default, the

70

occurrence of which may result in all of the notes then outstanding becoming immediately due and payable. The closing occurred simultaneously with the signing of the note purchase agreement.

The senior note agreements of SJWC generally have terms and conditions that restrict the company from issuing additional funded debt if: (1) the funded debt would exceed 66-2/3% of total capitalization, and (2) net income available for interest charges for the trailing 12-calendar-month period would be less than 175% of interest charges. As of December 31, 2019, SJWC was not restricted from issuing future indebtedness as a result of these terms and conditions.

On March 28, 2019, SJWC entered into a note purchase agreement with certain affiliates of MetLife, Inc., Brighthouse Financial, Inc. and New York Life Insurance (collectively the “Purchasers”), pursuant to which the company sold an aggregate principal amount of $80,000 of its 4.29% Senior Notes, Series M (“Series M Notes”) to the Purchasers. The Series M Notes are unsecured obligations of SJWC and are due on April 1, 2049. Interest is payable semi-annually in arrears on April 1st and October 1st of each year. The note purchase agreement contains customary affirmative and negative covenants for as long as the Series M Notes are outstanding. The Series M Notes are also subject to customary events of default, the occurrence of which may result in all of the Series M Notes then outstanding becoming immediately due and payable. The closing occurred simultaneously with the signing of the note purchase agreement.

SJWC has obligations pursuant to loan agreements with the California Pollution Control Financing Activity (“CPCFA”) totaling $120,000 in aggregate principal amounts of CPCFA revenue bonds outstanding as of December 31, 2019. The loan agreements contain affirmative and negative covenants customary for loan agreements relating to revenue bonds, containing, among other things, certain disclosure obligations, the tax exempt status of the interest on the bonds and limitations, and prohibitions on the transfer of projects funded by the loan proceeds and assignment of the loan agreements. As of December 31, 2019, SJWC was in compliance with all such covenants.

CTWS has outstanding term loans with a commercial bank in an aggregate amount of $23,935 as of December 31, 2019. Under the master loan agreement, CTWS is required to comply with certain financial ratio and operational covenants. The most restrictive of these covenants is to maintain a consolidated (CTWS and its subsidiaries) debt to capitalization ratio of not more than 60%. As of December 31, 2019, CTWS was in compliance with all covenants under the master loan agreement.

Connecticut Water has outstanding term loans with a commercial bank in an aggregate amount of $119,090 as of December 31, 2019. Under its master loan agreement, Connecticut Water is required to comply with financial and operational covenants substantially identical to those found in CTWS’ master loan agreement. Connecticut Water is required to maintain a debt to capitalization ratio of not more than 60%. As of December 31, 2019, Connecticut Water was in compliance with all covenants under its master loan agreement.

Connecticut Water has outstanding $44,556 of tax exempt and taxable Water Facilities Revenue Bonds issued through Connecticut Innovations (formerly the Connecticut Development Authority). The bond indentures and loan agreements contain customary affirmative and negative covenants and require compliance with financial and operational covenants, and also provide for the acceleration of the Revenue Bonds upon the occurrence of stated events of default. As of December 31, 2019, Connecticut Water was in compliance with all covenants of the bond indentures and loan agreements.

Connecticut Water has a $35,000 unsecured senior note that has terms and conditions that restrict Connecticut Water from issuing additional debt or paying a dividend to CTWS if such debt or distribution would trigger an event of default. The senior note agreement also requires Connecticut Water to maintain a debt to capitalization ratio of not more than 60%. As of December 31, 2019, Connecticut Water was in compliance with all financial ratio and operational covenants under this agreement.

The senior note agreement of SJWTX, Inc. has terms and conditions that restrict SJWTX, Inc. from issuing additional funded debt if: (1) the funded debt would exceed 66-2/3% of total capitalization, and (2) net income available for interest charges for the trailing 12-calendar-month period would be less than 175% of interest charges. In addition, SJW Group is a guarantor of SJWTX, Inc.’s senior note which has terms and conditions that restrict SJW Group from issuing additional funded debt if: (1) the funded consolidated debt would exceed 66-2/3% of total capitalization, and (2) the minimum net worth of SJW Group becomes less than $125,000 plus 30% of Water Utility Services cumulative net income, since December 31, 2005. As of December 31, 2019, SJWTX, Inc. and SJW Group were not restricted from issuing future indebtedness as a result of these terms and conditions.

Maine Water has $16,032 of First Mortgage Bonds issued to the Maine Municipal Bond Bank through the State Safe Drinking Water Revolving Loan Fund and $4,500 of First Mortgage Bonds issued to One America. The associated bond indentures and loan agreements contain customary affirmative and negative covenants, including a prohibition on the issuance of indebtedness secured by assets or revenue of Maine Water where the lien is senior to the lien of the bond trustee under the above bonds except as permitted by the bond indentures and related loan and security agreements, a requirement to maintain a debt to capitalization ratio of not more than 65%, required compliance with various financial and operational covenants, and a

71

provision for maturity acceleration upon the occurrence of stated events of default. As of December 31, 2019, Maine Water was in compliance with all covenants in its bond indentures and related loan agreements.

On December 19, 2019, Maine Water issued $5,000 of Series S First Mortgage Bonds to the Maine Municipal Bond Bank through the State Safe Drinking Water Revolving Loan Fund. The Series S bonds mature on October 1, 2039 and carry 1% interest. The Series S First Mortgage Bond covenants are the same as all other First Mortgage Bonds. The proceeds of the Series S bond issuance are represented as restricted cash on the Consolidated Balance Sheets at December 31, 2019. The restricted cash will be used for pre-approved projects primarily related to preliminary engineering and design work of a water treatment plant in Maine’s Biddeford and Saco division.

Maine Water has outstanding term loans with a commercial bank in an aggregate amount of $17,500 as of December 31, 2019. Under its master loan agreement, Maine Water is required to comply with financial and operational covenants substantially identical to those found in CTWS and Connecticut Water’s master loan agreements. Maine is required to maintain a debt to capitalization ratio of not more than 60%. As of December 31, 2019, Maine Water was in compliance with all covenant under its master loan agreement. On February 3, 2020, the trustee released proceeds of $4,114 from the bond.

HVWC has a term loan with a commercial bank due in 2034. The loan bears interest at a rate of 4.75% with monthly payments of principal and interest of $31. The loan is secured by real property owned by HVWC. The loan agreement restricts HVWC’s ability to incur additional debt and requires compliance with a funded debt to capitalization covenant and other operational covenants. As of December 31, 2019, HVWC was in compliance with all covenants of the loan and $4,164 was outstanding.

Avon Water has a mortgage loan that is due in 2033. This loan amortizes over 20 years and carries a fixed interest rate of 3.05% with monthly principal and interest payments of $22. The loan agreement (1) generally restricts the ability of Avon Water to incur additional debt or make dividend payments other than in the ordinary course of business, and (2) requires submission of periodic financial reports as part of loan covenants. As of December 31, 2019, Avon Water was in compliance with all covenants of the loan and $2,809 was outstanding.

The following is a table of the consolidated company’s schedule of principal payments:

Year
2020	$	22,343
2021	76,943
2022	39,388
2023	4,583
2024	49,256
Thereafter	1,100,073

The estimated fair value of long-term debt as of December 31, 2019 and 2018 was approximately $1,396,205 and $490,148, respectively, and was determined using a discounted cash flow analysis, based on the current rates for similar financial instruments of the same duration and creditworthiness of the Company. The fair value of long-term debt would be categorized as Level 2 of the fair value hierarchy.

Note 5. Income Taxes

The components of income tax expense were:

	2019			2018		2017
Current:
Federal	$	7,577		14,485		29,377
State	2,126			5,066		6,452
Deferred:
Federal	(1,929		)	(7,702	)	(1,174	)
State	680			(1,784	)	738
	$	8,454		10,065		35,393

72

The following table reconciles income tax expense to the amount computed by applying the federal statutory rate to income before income taxes of $32,081, $48,832 and $96,493 in 2019, 2018 and 2017:

	2019			2018		2017
“Expected” federal income tax	$	6,737		10,255		33,773
Increase (decrease) in taxes attributable to:
State taxes, net of federal income tax benefit	2,251			3,420		4,986
Uncertain tax positions	323			24		12
Property flow-through	(2,054		)	(839	)	(1,027	)
Capitalized merger costs	5,350			—		—
Tax reform - rate change impact on deferred taxes	77			—		(2,357	)
Reversal of excess deferred taxes recognized in regulatory liability	(2,355		)	(1,383	)	—
Pension flow-through	(1,244		)	—		—
Stock-based compensation	(223		)	(1,602	)	(552	)
Other items, net	(408		)	190		558
	$	8,454		10,065		35,393

The components of the net deferred tax liability as of December 31 was as follows:

	2019			2018
Deferred tax assets:
Advances and contributions	$	19,547		14,592
Unamortized investment tax credit	649			418
Pensions and postretirement benefits	32,450			20,439
Debt premium, net	7,002			—
California franchise tax	456			981
Net operating loss	1,046			—
Merger related expenses	—			4,527
Tax related net regulatory liability	—			16,212
Other	7,211			3,336
Gross deferred tax assets	68,361			60,505
Valuation allowance	(1,924		)	—
Total deferred tax assets	66,437			60,505
Deferred tax liabilities:
Utility plant	211,079			114,731
Pension and postretirement benefits	22,263			18,534
Deferred gain and other-property related	5,872			5,753
Regulatory asset - business combinations debt premium, net	7,002			—
Intangibles	3,693			—
Deferred revenue	1,962			—
Regulatory asset - income tax temporary differences, net	295			—
Section 481(a) adjustments	5,721			—
Other	4,148			1,138
Total deferred tax liabilities	262,035			140,156
Net deferred tax liabilities	$	195,598		79,651

Management evaluates the realizability of deferred tax assets based on all available evidence, both positive and negative. The realization of deferred tax assets is dependent on our ability to generate sufficient future taxable income during periods in which the deferred tax assets are expected to reverse. Based on all available evidence, management believes it is more likely than not

73

that SJW Group will realize the benefits of these deferred tax assets. The valuation allowance as of December 31, 2019 relates to state net operating losses assumed from CTWS. Net operating loss carryforwards assumed from the CTWS merger expire beginning in 2029 and ending in 2038. Federal net operating loss carryforward generated after December 31, 2017 have no expiration. As of December 31, 2019, the estimated amount of CTWS net operating loss carryforwards available to offset future taxable income for Federal, Connecticut and Maine purposes are $9,213, $32,604 and $9,506, respectively. SJW Group also assumed from the CTWS merger estimated state tax credit carryforwards of $1,000 which will expire beginning in 2020 and ending in 2040. The valuation allowance, the net operating losses, and the state tax credit carryforwards are expected to be adjusted during the acquisition measurement period.

The change in the net deferred tax liabilities of $115,947 in 2019 included $109,435 from recording the acquisition of CTWS and other non-cash items primarily consisting of regulatory assets and liabilities relating to income tax temporary differences.

The total amount of unrecognized tax benefits, before the impact of deductions for state taxes, excluding interest and penalties was $4,037 and $1,411 as of December 31, 2019 and 2018, respectively. The amount of tax benefits, net of any federal benefits for state taxes and inclusive of interest that would impact the effective rate, if recognized, is approximately $27 and $70 as of December 31, 2019 and 2018, respectively.

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:

	2019			2018	2017
Balance at beginning of year	$	1,382		1,307	1,132
Increase related to tax positions taken during the current year, including interest	351			—	—
Increase related to tax positions taken during a prior year, including interest	3,483			75	185
Reductions related to tax positions taken in a prior year, including interest	(1,382		)	—	(10	)
Balance at end of year	$	3,834		1,382	1,307

The increase in gross unrecognized tax benefits in 2019 was primarily a result of the acquisition of CTWS.

SJW Group’s policy is to classify interest and penalties associated with unrecognized tax benefits, if any, in tax expense. Accrued interest expense, net of the benefit of tax deductions which would be available on the payment of such interest, is approximately $27 as of December 31, 2019. SJW Group has not accrued any penalties for unrecognized tax benefits. The amount of interest recognized in 2019 was a decrease to expense of $43.

SJW Group does not foresee material changes to its gross uncertain tax liability within the next 12 months following December 31, 2019.

On December 22, 2017 the Tax Act was signed into law. The Tax Act includes a number of changes in existing tax law impacting businesses including, among other things, a reduction in the corporate income tax rate from 35% to 21%. The rate reduction was effective on January 1, 2018.

In accordance with generally accepted accounting principles, SJW Group recorded the revaluation of deferred taxes and related impacts using the new corporate tax rate in its December 31, 2017 consolidated financial statements. The amounts recorded were based on information known and reasonable estimates used as of December 31, 2017. As such, SJW Group recorded this estimate as a provisional amount. SJW Group recorded a tax benefit of $2,357 related to the deferred taxes revaluation impacting non-regulated operations due to the tax rate reduction. However, for regulated operations governed by state public utility commissions, the lower tax rate benefits are expected to flow back to customers under current normalization rules and agreed-upon methods with the commissions. The revaluation of deferred tax assets and liabilities of the regulated operations resulted in a decrease in net deferred tax liabilities of $83,666 which was recorded as a regulatory liability in 2017.

SJW Group completed its accounting for the tax effects of tax reform in the fourth quarter of 2018. An additional tax expense of $67 and a reduction of $455 in regulatory liability was recorded.

The CPUC has directed SJWC to establish a memorandum account to capture all of the impacts of the Tax Act including the benefit of the reduction in the federal statutory income tax rate from 35% to 21% on its regulated revenue requirement. The PUCT has directed water utilities to record as a regulatory liability the difference between the revenues collected under existing rates and the revenue that would have been collected had the existing rates been set using the new federal statutory income tax rate. The benefits associated with regulatory activities is expected to flow back to customers as directed by the CPUC and PUCT, with no impact to net income. As per Advice Letter No. 522A filed with CPUC, the benefit of the reduction in the federal statutory income tax rate from 35% to 21% were reflected in the customer bills effective July 1, 2018. The tax

74

memorandum account only includes the benefit of the reduction in the federal statutory income tax rate through June 30, 2018.  The other impacts of the Tax Act were recorded in the tax memorandum account for the entire year.  Accordingly, SJWC recorded $6,504 liability in the tax memorandum account for the year ended December 31, 2018. For discussion on approved refunds, please see “Regulatory Rate Filings” in Note 1. CLWSC refunded the accrued amounts for the period January 25, 2018, through April 30, 2018, in the second quarter of 2018. The FTCC will continue to be reflected on customer bills every month starting from May 1, 2018 until the implementation of new rates resulting from the next rate case.

SJW Group expects the Internal Revenue Service to issue guidance in future periods that will determine the final disposition of the excess deferred taxes and other impacts of the Tax Act. At this time, the Company has applied a reasonable interpretation of the Tax Act. Future clarification of the Tax Act may change the amounts estimated.

SJW Group files U.S. federal income tax returns and income tax returns in various states. SJW Group is no longer subject to tax examination for fiscal years prior to 2016 for federal purposes and 2015 for state purposes. The open tax years for the jurisdictions in which SJW Group files are as follows:

Jurisdiction	Years Open
Federal	2016 - 2018
California	2015 - 2018
Arizona	2015 - 2016
Tennessee	2016 - 2018
Texas	2015 - 2018
Connecticut	2016 - 2018
Maine	2016 - 2018

Note 6. Utility Plant Intangible Assets

Intangible assets consist of a concession fee paid to the City of Cupertino of $6,800 for operating the City of Cupertino municipal water system, $13,400 related to the purchase premium for customer relationships and other intangibles of $13,224 as of December 31, 2019. Other intangibles primarily consist of $4,128 which was paid for service area and water rights related to CLWSC, $3,831 for infrastructure related to the Cupertino service concession arrangement, $1,400 for customer relationships and $1,040 incurred in conjunction with Valley Water water contracts related to the operation of SJWC. All intangible assets are recorded at cost and all are being amortized using the straight-line method over the legal or estimated economic life of the asset ranging from 5 to 70 years.

Amortization expense for the intangible assets was $745, $647 and $616 for the years ended December 31, 2019, 2018 and 2017, respectively. Amortization expense for 2020 through 2024 is anticipated to be $745 per year.

The costs of intangible assets as of December 31, 2019 and 2018 are as follows:

	2019		2018
Concession fees	$	6,800	6,800
Purchase premium customer relationships	13,400		—
Other intangibles	13,224		8,999
Intangible assets	33,424		15,799
Less: Accumulated amortization
Concession fees	6,052		5,780
Other intangibles	7,127		2,960
Net intangible assets	$	20,245	7,059

Note 7. Commitments

SJWC purchases water from Valley Water under terms of a master contract expiring in 2051. Delivery schedules for purchased water are based on a contract year beginning July 1, and are negotiated every three years under terms of the master contract with Valley Water. For the years ended December 31, 2019, 2018 and 2017, SJWC purchased from Valley Water 21,862 million gallons ($96,285), 21,345 million gallons ($87,702) and 20,857 million gallons ($78,703), respectively, of contract water. On June 13, 2017, the Valley Water Board of Directors approved treated water deliveries reflecting the contractual delivery schedule reduced by 10% through June 30, 2020. Based on current prices and estimated deliveries, SJWC

75

is committed to purchase from Valley Water a minimum of 90% of the reduced delivery schedule, or 19,794 million gallons ($89,539) of water at the current contract water rate of $4.5 per million gallons for the year ending December 31, 2020. Additionally, SJWC purchases non-contract water from Valley Water on an “as needed” basis if the water supply is available.

In 1997, SJWC entered into a 25-year contract agreement with the City of Cupertino to operate the City’s municipal water system. SJWC paid a one-time, upfront concession fee of $6,800 to the City of Cupertino which is amortized over the contract term. Under the terms of the contract agreement, SJWC assumed responsibility for maintenance and operating costs, while receiving all payments for water service. SJWC and the City of Cupertino signed an amendment to the lease agreement dated January 8, 2020. Under the terms of the amended lease agreement, SJWC agreed to an incremental up-front payment of $5,000 to be used by the City of Cupertino for capital improvements to the City’s municipal water system prior to the expiration of the lease in September 2022. Any unspent funds at lease termination remain the property of the City.

Connecticut Water has an agreement with the South Central Connecticut Regional Water Authority (“RWA”) to purchase water from RWA. The agreement was signed in April 2006 and became effective upon the receipt of all regulatory approvals in 2008 and will remain in effect for a minimum of fifty years upon becoming effective. Connecticut Water will pay RWA $75 per year as part of a capacity agreement, for a total of 14 years, starting on the effective date of the agreement. In addition, Connecticut Water is able, but under no obligation, to purchase up to one million gallons of water per day at the then current wholesale rates per the agreement, $2.621 per million gallons as of December 31, 2019. Connecticut Water has an agreement with The Metropolitan District (“MDC”) to purchase water from MDC to serve the Unionville system. The agreement became effective on October 6, 2000 and has a term of fifty years beginning May 19, 2003, the date the water supply facilities related to the agreement were placed in service. Connecticut Water agrees to purchase 283 million gallons of water annually from MDC. Rate charged by the MDC at December 31, 2019 were three dollars and fifty cents per hundred cubic feet.

CLWSC has long-term contracts with the GBRA. The terms of the agreements expire in 2037, 2040, 2044 and 2050. The agreements, which are take-or-pay contracts, provide CLWSC with 6,900 acre-feet per year of water supply from Canyon Lake. The water rate may be adjusted by GBRA at any time, provided they give CLWSC a 60-day written notice on the proposed adjustment. In 2018, CLWSC acquired raw water supply agreements with the Lower Colorado River Authority (“LCRA”) and West Travis Public Utility Agency (“WTPUA”) expiring in 2053 and 2046, respectively, for 250 acre-feet of water under each agreement per year from Lake Austin and the Colorado River, respectively, at prices that may be adjusted periodically by the agencies.

Maine Water has an agreement with the Kennebec Water District for potable water service. The agreement was extended and became effective on November 7, 2015 for a new term of 5 years. Maine Water guarantees a minimum consumption of 60 million gallons of water annually. Water sales to Maine Water are billed at a flat rate of $5 per year plus the monthly minimum tariff rate of $1.51 per hundred cubic feet for a 4-inch metered service as of December 31, 2019.

As of December 31, 2019, SJWC had 361 employees, of whom 136 were executive, administrative or supervisory personnel, and of whom 225 were members of unions. On November 12, 2019 and February 20, 2020, SJWC reached three-year bargaining agreements with the International Union of Operating Engineers, representing certain employees in the engineering department, and the Utility Workers of America, representing the majority of all nonadministrative employees at SJWC, respectively, covering January 1, 2020 through December 31, 2022. The agreements include a 3% wage increase in 2020, 3% in 2021 and 4% in 2022 for members of both unions.

Note 8. Contingencies

Class Action Suits Related to the merger with CTWS

On June 14, 2018, certain shareholders of CTWS (the “Plaintiffs”) filed two nearly identical class-action complaints in Connecticut state court against the CTWS board of directors, SJW Group, Eric W. Thornburg, Chairman, President and Chief Executive Officer of SJW Group, and CTWS (the “Defendants”). The complaints, as amended on September 18, 2018 and September 20, 2018, allege that the CTWS board breached its fiduciary duties in connection with the Merger, that CTWS’s preliminary proxy statement, filed with the SEC on August 20, 2018, omitted certain material information and that SJW Group and Mr. Thornburg aided and abetted the alleged breaches by the CTWS board of directors. Among other remedies, the actions sought to recover rescissory and other damages and attorney’s fees and costs. SJW Group believed the claims in these complaints were without merit and vigorously defended against such complaints. The parties to the lawsuits agreed in principle to settle the lawsuits in exchange for the issuance of additional disclosures by CTWS. Pursuant to the agreements to settle the lawsuits, the Plaintiffs reserved the right to seek a mootness fee from CTWS. The parties moved to stay proceedings, other than fee-related proceedings, until the closing of the merger with CTWS, and the court initially granted the parties’ motion to stay on November 14, 2018. The initial stay of proceedings had expired on February 28, 2019 and after multiple motions by the parties and granting of extensions, the stay of the proceedings continued until November 11, 2019. On November 20, 2018, the Plaintiffs filed an opening brief in support of their mootness fee demand of $1,500. The merger with CTWS closed on October

76

9, 2019, and pursuant to the agreement in principle to settle the litigation, the complaints would be dismissed after the closing. On November 12, 2019, the Defendants filed an opposition to the Plaintiffs’ fee demand.  On November 27, 2019, the Plaintiffs filed a reply brief in further support of their mootness fee demand. On January 8, 2020, the court entered an order dismissing Plaintiffs’ complaints. On January 10, 2020, the parties entered into an agreement pursuant to which the Defendants would pay a mootness fee amount of $325 in exchange for the release of all of the Plaintiffs’ claims.

Billing Practice OII with CPUC

On September 14, 2018, the CPUC issued OII No. 18-09-003 to which SJWC was named as Respondent. The OII will determine whether the company unlawfully overcharged customers over a 30-year period by failing to pro-rate service charges when increases occurred during a billing period, and whether the company double-billed service charges during one billing period when allegedly switching from billing such charges in advance to billing in arrears. By a decision adopted November 29, 2018, in SJWC’s then-pending GRC, the CPUC approved a settlement to resolve the alleged overcharging issue for the period since June 2011 by requiring customer credits to customers totaling $2,020. That amount was refunded to customers pursuant to SJWC’s Advice Letter No. 530, effective February 8, 2019. See discussion on the matter in Note 1, “Regulatory Rate Filings.” On July 24, 2019, SJWC and CPED jointly filed a motion for CPUC approval of a Settlement Agreement (“Agreement”) over SJWC’s past customer billing practices. The Agreement requires the company to pay approximately $2,100 in additional customer refunds, consisting of $1,757 for refunds during the period from 1987 to 2011 and $350 in customer credits to low income water customers, and invest $5,000 in utility plant that is not allowed an investment return or rate recovery. SJWC recorded the $2,100 customer credit expense as an offset to revenues during the second quarter of 2019. The $5,000 commitment to invest in utility plant will be recognized as plant in service on the company’s financial statements once invested. A CPUC Presiding Officer’s Decision approved the Agreement in December 2019, but an appeal was filed in January 2020 by a group of SJWC customers. On February 27, 2020, the CPUC adopted a modified version of the Agreement, which found the appeal to be without merit and approved the Agreement. The CPUC’s adopted decision is scheduled to become final on March 28, 2020.

SJW Group is subject to ordinary routine litigation incidental to its business. There are no pending legal proceedings to which SJW Group or any of its subsidiaries is a party, or to which any of its properties is the subject, that are expected to have a material effect on SJW Group’s business, financial position, results of operations or cash flows.

Note 9. Benefit Plans

Pension Plans

SJW Group maintains noncontributory defined benefit pension plans for its eligible employees. SJWC and CTWS employees hired before March 31, 2008 and January 1, 2009, respectively, are entitled to benefits under the pension plans based on the employee’s years of service and compensation. For SJWC employees hired on or after March 31, 2008, benefits are determined using a cash balance formula based upon compensation credits and interest credits for each employee. CTWS employees hired on or after January 1, 2009 are entitled to an additional 1.5% of eligible compensation to their company sponsored savings plan. SJW Group does not have multi-employer plans.

The pension plans are administered by their respective committees where the investment strategy of the investments of the various pension and post-retirement benefit plans are reviewed and approved to achieve the goals of income generation and long-term capital preservation. SJW Group engages third-party investment managers to assist with, among other things, asset allocation strategy, investment policy advice, performance monitoring, and investment manager due diligence. Individual investment decisions have been delegated by the pension plan committees to the investment managers who are also monitored by an investment consultant. Investment managers are not permitted to invest outside of the asset class or strategy under the pension plans’ investment guidelines. The committees ensure that the plans establish a target mix that is expected to achieve its investment objectives, by assuring a broad diversification of investment assets among investment types, while minimizing volatility of the target asset mix, unless market conditions make such a change appropriate to reduce risk. The pension plans require a minimum portion of plan assets to be allocated to fixed income securities and guidelines and restrictions on equity investments for the assets.

Plan assets are marked to market at each measurement date, resulting in unrealized actuarial gains or losses. Unrealized actuarial gains and losses on pension assets are amortized over the expected future working lifetime of participants for actuarial expense calculation purposes. For the SJWC retirement plans, market gains in 2018 decreased pension expense by approximately $2,520 in 2019 and market losses in 2017 increased pension expense by approximately $1,388 in 2018.

Generally, it is expected of the investment managers that the performance of the assets held in the pension plans, computed on a total annual rate of return basis, should meet or exceed specific performance standards over a three-to-five-year period and/or full market cycle. These standards include specific absolute and risk-adjusted performance standards over a three-to-five-year period and/or full market cycle. The expected long-term rate of return on the pension plan assets is between 7.00% and 7.25%.

77

SJW Group calculates the market-related value of defined benefit pension plan assets, which is defined under FASB ASC Topic 715—“Compensation—Retirement Benefits” as a balance used to calculate the expected return on plan assets, using fair value. The fair value is based on quoted prices in active markets for identical assets and significant observable inputs.

Senior management hired before March 31, 2008 for SJWC and January 1, 2009 for CTWS are eligible to receive additional retirement benefits under the supplemental executive retirement plans and retirement contracts (“SERP”). SJWC’s senior management hired on or after March 31, 2008 are eligible to receive additional retirement benefits under SJWC’s Cash Balance Executive Supplemental Retirement Plans. Both of the plans are non-qualified plans in which only senior management and other designated members of management may participate. The annual cost of the plans has been included in the determination of the net periodic benefit cost shown below. The SERP and Cash Balance Executive Supplemental Retirement Plan had a projected benefit obligation of $41,768 and $25,380 as of December 31, 2019 and 2018, respectively, and net periodic pension cost of $3,219, $2,905 and $2,186 for 2019, 2018 and 2017, respectively. SJWC’s plans are unfunded while CTWS’s SERP is funded through investments consisting primarily of life insurance contracts and assets in a Rabbi Trust. As of December 31, 2019, total investments made to fund CTWS’s SERP was $7,070 which is included in investments in SJW Group’s consolidated balance sheets. The life insurance contracts are valued at cash surrender value of the policies as reported by the insurer. As of December 31, 2019, the value of the life insurance contracts was $3,829.

The following tables summarize the fair values of the Rabbi Trust investment assets to fund CTWS’s SERP by major categories as of December 31, 2019:

			Fair Value Measurements at December 31, 2019
Asset Category	Total		Quoted Prices in Active Markets for Identical Assets (Level 1)	Significant Observable Inputs (Level 2)	Significant Unobservable Inputs (Level 3)
Money market funds	$	20	20	—	—
Mutual funds	834		834	—	—
Fixed income	2,329		2,329	—	—
Total	$	3,183	3,183	—	—

Other Postretirement Benefits

In addition to providing pension and savings benefits, the company also provides health care and life insurance benefits for eligible retired employees under the respective employer-sponsored post-retirement benefits other than pension plans. The benefits are paid by the company and not from plan assets due to limitations imposed by Internal Revenue Service.

Flexible Spending Plan

SJW Group sponsors flexible spending account plans for its employees for the purpose of providing eligible employees with the opportunity to choose from among the fringe benefits available under the plans. The flexible spending plan is intended to qualify as a cafeteria plan under the provisions of the Internal Revenue Code Section 125. The flexible spending plan allows employees to save pre-tax income in a Health Care Spending Account (“HCSA”) and/or a Dependent Care Spending Account (“DCSA”) to help defray the cost of out-of-pocket medical and dependent care expenses. The annual maximum limit under the HCSA and DCSA plans is $2.5 and $5, respectively.

Savings Plans for Employees

SJW Group also sponsors salary deferral plans which are defined contribution plans that allow employees to defer and contribute a portion of their earnings to the plan. Contributions, not to exceed set limits, are matched by the company. For CTWS’s employees hired on or after January 1, 2009 and ineligible to participate in the defined benefit pension plan, CTWS contributes an additional 1.5% of eligible contributions. SJW Group contributions were $2,046, $1,569 and $1,683 in 2019, 2018 and 2017, respectively. All of the company’s contributions are invested at the direction of the employees in funds offered under the plans.

Special Deferral Election Plans and Deferral Election Program

SJW Group maintains a special deferral election plan and a deferred compensation plan and agreements for senior management and a deferral election program for non-employee directors allowing for the deferral of a portion of their earnings each year and to realize an investment return on those funds during the deferral period. Senior management and non-employee directors have

78

to make an election on the deferral and distribution method of the deferrals before services are rendered. CTWS’s deferred compensation plan allows the company to make discretionary contributions. Senior management and non-employee directors had deferred $7,834, $4,244 and $4,528 under the plans as of December 31, 2019, 2018 and 2017, respectively. As of December 31, 2019, $3,801 of the total amount deferred is related to CTWS agreements that were assumed as part of the merger transaction on October 9, 2019.

Assumptions Utilized on Actuarial Calculations

Net periodic cost for the defined benefit plans and other postretirement benefits was calculated using the following weighted-average assumptions:

	Pension Benefits			Other Benefits
	2019	2018	2017	2019	2018	2017
	%	%	%	%	%	%
Discount rate	3.04% - 4.16%	3.52	4.04	2.52% - 4.09%	3.45	3.93
Expected return on plan assets	7.00%, 7.25%	7.00	7.00	4.00%, 7.00%	7.00	7.00
Rate of compensation increase	4.00	4.00	4.00	N/A	N/A	N/A

The expected rate of return on plan assets was determined based on a review of historical returns, for the pension plans and for medium- to large-sized defined benefit pension funds with similar asset allocations. This review generated separate expected returns for each asset class. These expected future returns were then blended based on the pension plans’ target asset allocations.

Benefit obligations for the defined benefit plans and other postretirement benefits were calculated using the following weighted-average assumptions as of December 31:

	Pension Benefits		Other Benefits
	2019	2018	2019	2018
	%	%	%	%
Discount rate	3.05% - 3.23%	4.16	2.59% - 3.18%	4.09
Rate of compensation increase	4.00	4.00	N/A	N/A

SJW Group utilized each plan’s projected benefit stream in conjunction with the FTSE Pension Discount Curve (formerly the Citigroup Pension Discount Curve) and the FTSE Above Median Double-A Curve for SJWC and CTWS, respectively, in determining the discount rate used in calculating the pension and other postretirement benefits liabilities at the measurement date.

In 2019 and 2018, SJW Group adopted the newly then issued MP-2019 and MP-2018, respectively, Mortality Improvement Scales to determine mortality assumptions. The tables and scales reflect increasing life expectancies of participants in the United States. See also “Reconciliation of Funded Status” below.

Net Periodic Pension Costs

Net periodic costs for the defined benefit plans and other postretirement benefits for the years ended December 31 was as follows:

	Pension Benefits							Other Benefits
	2019			2018		2017		2019			2018		2017
Components of net periodic benefit cost
Service cost	$	5,947		5,790		4,699		$	581		616		529
Interest cost	8,506			6,879		6,993		775			627		634
Expected return on assets	(10,118		)	(9,255	)	(7,888	)	(475		)	(450	)	(376	)
Amortization of prior service cost	48			51		94		197			197		198
Recognized actuarial loss	3,984			3,986		3,844		240			321		273
Net periodic benefit cost	$	8,367		7,451		7,742		$	1,318		1,311		1,258

79

Reconciliation of Funded Status

For the defined benefit plans and other postretirement benefits, the benefit obligation is the projected benefit obligation and the accumulated benefit obligation, respectively. The projected benefit obligations and the funded status of the defined benefit pension and other postretirement plans as of December 31 were as follows:

	Pension Benefits					Other Benefits
	2019			2018		2019			2018
Change in benefit obligation
Benefit obligation at beginning of year	$	187,877		196,207		$	17,489		18,003
Service cost	5,947			5,790		581			616
Interest cost	8,506			6,879		775			627
Business combinations	108,162			—		12,537			—
Actuarial (gain)/loss	35,502			(14,447	)	2,027			(988	)
Implicit rate subsidy	—			—		(217		)	(207	)
Plan participants contributions	—			—		85			—
Administrative expenses paid	(10		)	—		—			—
Benefits paid	(7,744		)	(6,552	)	(731		)	(562	)
Benefit obligation at end of year	$	338,240		187,877		$	32,546		17,489
Change in plan assets
Fair value of assets at beginning of year	$	127,610		133,360		$	5,849		6,804
Actual return on plan assets	34,807			(7,700	)	1,972			(262	)
Business combinations	79,382			—		9,314			—
Employer contributions	9,476			8,502		738			629
Plan participants contributions	—			—		85			—
Administrative expenses paid	(10		)	—		(55		)	—
Benefits paid	(7,744		)	(6,552	)	(677		)	(1,322	)
Fair value of plan assets at end of year	243,521			127,610		17,226			5,849
Funded status at end of year	$	(94,719	)	(60,267	)	$	(15,320	)	(11,640	)

The amounts recognized on the balance sheet as of December 31 were as follows:

	Pension Benefits			Other Benefits
	2019		2018	2019		2018
Current liabilities	$	1,899	1,323	$	96	94
Noncurrent liabilities	92,820		58,944	15,224		11,546
	$	94,719	60,267	$	15,320	11,640

SJW Group recorded a regulatory asset on the projected benefit obligation of the postretirement benefit plans as follows:

	2019			2018
Funded status of obligation	$	110,039		71,907
Accrued benefit cost	(36,514		)	(5,674	)
Regulatory asset, amount to be recovered in future rates	$	73,525		66,233

80

Plan Assets

Plan assets as of December 31 were as follows:

	Pension Benefits					Other Benefits
	2019			2018		2019			2018
Fair value of assets at end of year:
Debt securities	$	86,288		42,654		$	5,608		2,200
	36		%	33	%	33		%	38	%
Equity securities	146,210			77,053		10,840			3,416
	60		%	60	%	63		%	58	%
Cash and equivalents	11,023			7,903		778			233
	5		%	6	%	5		%	4	%
Total	$	243,521		127,610		$	17,226		5,849

The following tables summarize the fair values of plan assets by major categories as of December 31, 2019 and 2018:

			Fair Value Measurements at December 31, 2019
Asset Category	Total		Quoted Prices in Active Markets for Identical Assets (Level 1)	Significant Observable Inputs (Level 2)	Significant Unobservable Inputs (Level 3)
Cash and cash equivalents	$	11,801	11,801	—	—
Equity securities (a)	157,050		149,265	7,785	—
Fixed Income (b)	91,896		31,686	60,210	—
Total	$	260,747	192,752	67,995	—

___________________________________

(a) Actively managed portfolio of equity securities with the goal to exceed the benchmark performance.

(b) Actively managed portfolio of fixed income securities with the goal to exceed the benchmark performance

			Fair Value Measurements at December 31, 2018
Asset Category	Total		Quoted Prices in Active Markets for Identical Assets (Level 1)	Significant Observable Inputs (Level 2)	Significant Unobservable Inputs (Level 3)
Cash and cash equivalents	$	8,136	8,136	—	—
Equity securities (a)	80,468		74,541	5,927	—
Fixed Income (b)	44,855		—	44,855	—
Total	$	133,459	82,677	50,782	—

___________________________________

(a) Actively managed portfolio of equity securities with the goal to exceed the benchmark performance.

(b) Actively managed portfolio of fixed income securities with the goal to exceed the benchmark performance

In 2020, SJW Group expects to make required and discretionary cash contributions of up to $8,404 to the pension plans and other postretirement benefit plans.

81

Benefits expected to be paid in the next five years and in the aggregate for the five years thereafter are:

	Pension Plan		Other Postretirement Benefit Plan
2020	$	13,930	$	1,336
2021	14,358		1,447
2022	14,626		1,513
2023	15,187		1,600
2024	15,604		1,648
2025 - 2029	86,971		8,908

Note 10. Equity Plans

Common Stock

SJW Group has a Long-Term Stock Incentive Plan (the “Plan”), which has 1,800,000 shares of common stock reserved for issuance. The Plan was initially adopted by the Board of Directors on March 6, 2002. On January 30, 2013, the amended and restated Plan was adopted by the Board and became effective on April 24, 2013. The Plan was subsequently amended and the amended and restated Plan was adopted by the Board on July 29, 2015.

The Plan allows SJW Group to provide employees, non-employee Board members or the board of directors of any parent or subsidiary, consultants, and other independent advisors who provide services to the Company or any parent or subsidiary the opportunity to acquire an equity interest in SJW Group.

A participant in the Plan generally may not receive Plan awards covering an aggregate of more than 600,000 shares of common stock in any calendar year. Additionally, awards granted under the Plan may be conditioned upon the attainment of specified Company performance goals. The types of awards included in the Plan are restricted stock awards, restricted stock units, performance shares, or other share-based awards. In addition, shares are issued to employees under the Employee Stock Purchase Plan (“ESPP”) that was approved by SJW Group stockholders.

As of December 31, 2019, 2018 and 2017, 819,340, 793,811 and 628,546 shares have been issued pursuant to the Plan, and 174,764, 124,275 and 228,885 shares are issuable upon the exercise of outstanding restricted stock units and deferred restricted stock units for the years ended 2019, 2018 and 2017, respectively. The remaining shares available for issuance under the Plan are 805,896 as of December 31, 2019. The compensation costs charged to income is recognized on a straight-line basis over the requisite service period.

A summary of compensation costs charged to income and proceeds from the exercise of stock options and similar instruments, that are recorded to additional paid-in capital and common stock, by award type, are presented below for the years ended December 31:

	2019		2018	2017
Compensation costs charged to income:
ESPP	$	283	242	214
Restricted stock and deferred restricted stock	3,123		1,875	2,429
Total compensation costs charged to income	$	3,406	2,117	2,643
Proceeds from the exercise of stock options and similar instruments:
ESPP	1,603		1,371	1,215
Total proceeds from the exercise of stock options and similar instruments	$	1,603	1,371	1,215

Restricted Stock and Deferred Restricted Stock

Under SJW Group’s Amended and Restated Deferred Restricted Stock Program (the “Deferred Restricted Stock Program”), SJW Group granted deferred restricted stock units to non-employee Board members. This program was amended effective January 1, 2008. As a result of that amendment, no new awards of deferred restricted stock units will be made under the Deferred Restricted Stock Program with respect to Board service after December 31, 2007.

82

A summary of SJW Group’s restricted and deferred restricted stock awards under the Plan as of December 31, 2019, and changes during the year ended December 31, 2019, are presented below:

	Units		Weighted- Average Grant- Date Fair Value
Outstanding as of January 1, 2019	124,275		$	38.80
Issued	76,018		$	59.78
Exercised	(25,529	)	$	49.77
Forfeited or expired	—		$	—
Outstanding as of December 31, 2019	174,764		$	46.63
Shares vested as of December 31, 2019	81,611		$	31.12

A summary of the status of SJW Group’s nonvested restricted and deferred restricted stock awards under the Plan as of December 31, 2019, and changes during the year ended December 31, 2019, are presented below:

	Units		Weighted-  Average Grant- Date Fair Value
Nonvested as of January 1, 2019	55,098		$	54.42
Granted	76,018		$	59.78
Vested	(37,963	)	$	59.27
Forfeited	—		$	—
Nonvested as of December 31, 2019	93,153		$	39.57

In connection with the merger with CTWS, SJW Group assumed outstanding awards of restricted stock units and deferred share units under the following stock plans: CTWS 2014 Performance Stock Program, CTWS 2004 Performance Stock Program and CTWS 1994 Performance Stock Program (collectively, the “CTWS Plan”); as of October 9, 2019 a total of 156,022 shares of SJW common stock have been reserved for issuance under the assumed awards. These assumed awards generally retain all of the rights, terms and conditions of the respective plans and award agreements under which they were originally granted. During the period October 9, 2019 to December 31, 2019, the CTWS Plan issued, exercised and forfeited 105,233, 23 and 2,279 of shares respectively, of restricted stock based awards and deferred restricted stock. As of December 31, 2019, approximately 102,931 shares of restricted stock based awards and deferred restricted stock were outstanding under the CTWS Plan that were assumed by SJW Group on October 9, 2019.

Total grant date fair value of restricted stock awards for all plans that were vested for the years ended 2019, 2018 and 2017 were $2,420, $1,913 and $2,775, respectively. As of December 31, 2019, the total unrecognized compensation costs related to restricted and deferred restricted stock plans amounted to $3,915. This cost is expected to be recognized over a weighted-average period of 1.84 years.

For the the years ended December 31, 2019, 2018 and 2017, 6,120, 52,629 and 15,390, respectively, of performance-based and market-based restricted stock awards were issued upon the attainment of certain performance metrics and service-based vesting under the Plan. Based upon actual attainment relative to the target performance metric, the number of shares issuable can range between 0% to 150% of the target number of shares for performance-based restricted stock awards, or between 0% and 200% of the target number of shares for market-based restricted stock awards. As of December 31, 2019, 7,676 performance-based and market-based restricted stock awards vested and 42,700 remained outstanding.

Dividend Equivalent Rights

Under the Plan, certain holders of restricted stock and deferred restricted stock awards may have the right to receive dividend equivalent rights (“DERs”) each time a dividend is paid on common stock after the grant date. Stock compensation on DERs is recognized as a liability and recorded against retained earnings on the date dividends are issued.

The Deferred Restricted Stock and Deferral Election Programs for non-employee Board members were amended effective January 1, 2008, to allow the DERs’ with respect to the deferred shares to remain in effect only through December 31, 2017. Accordingly, the last DERs’ conversion into deferred restricted stock units under such programs occurred on the first business day in January 2018. Previously, no such time limitation was placed in the Deferred Restricted Stock and Deferral Election Program.

83

Certain CTWS restricted stock awards and deferred restricted stock assumed under the merger agreement retained rights to receive DERs that will convert on SJW Group’ quarterly dividend payment dates.

As of December 31, 2019, 2018 and 2017, a cumulative of 81,231, 79,478 and 77,034 dividend equivalent rights were converted, since inception, to deferred restricted stock awards, respectively. For the years ended December 31, 2019, 2018 and 2017, $93, $97 and $139, respectively, related to dividend equivalent rights were recorded against retained earnings and were accrued as a liability.

Employee Stock Purchase Plan

The ESPP allows eligible employees to purchase shares of SJW Group’s common stock at 85% of the fair value of shares on the purchase date. Under the ESPP, employees can designate up to a maximum of 10% of their base compensation for the purchase of shares of common stock, subject to certain restrictions. A total of 400,000 shares of SJW Group’s common stock have been reserved for issuance under the ESPP.

As of December 31, 2019, the ESPP had ten purchase intervals since its inception. For the year ended December 31, 2019, 2018 and 2017, a total of 30,255, 25,907 and 27,743 shares, respectively, were issued under the ESPP. The plan has no look-back provisions. For the years ended December 31, 2019, 2018 and 2017, cash received from employees towards the ESPP amounted to $1,682, $1,523 and $1,282, respectively.

For the years ended December 31, 2019, 2018 and 2017, SJW Group’s recorded expenses were $294, $265 and $229, respectively, related to the ESPP.

The total unrecognized compensation costs related to the semi-annual offering period that ended January 31, 2020 for the ESPP is approximately $206. This cost is expected to be recognized during the first quarter of 2020.

Note 11. Segment and Non-Tariffed Businesses Reporting

SJW Group is a holding company with four subsidiaries: (i) SJWC, a water utility operation with both regulated and non-tariffed businesses, (ii) SJWTX, Inc. which is doing business as CLWSC, a regulated water utility located in Canyon Lake, Texas, and its consolidated non-tariffed variable interest entity, Acequia Water Supply Corporation, (iii) SJW Land Company and its consolidated variable interest entity, 444 West Santa Clara Street, L.P., which operated commercial building rentals, and (iv) as of October 9, 2019, SJWNE LLC a holding company for CTWS and its subsidiaries, Connecticut Water, Maine Water, HVWC, Avon Water, NEWUS and Chester Realty, Inc. (see discussion on the merger at Note 12).  In November 2017, SJW Group sold its equity interest in its wholly-owned subsidiary TWA, a non-tariffed water utility operation that was undertaking activities to develop a water supply project in Texas. In accordance with FASB ASC Topic 280—“Segment Reporting,” SJW Group has determined that it has two reportable business segments. The first segment is that of providing water utility and utility-related services to its customers through SJW Group’s subsidiaries, SJWC, Connecticut Water, CLWSC, Maine Water, HVWC, Avon Water, NEWUS and, up to the date of the sale, TWA, together referred to as “Water Utility Services.” The second segment is property management and investment activity conducted by SJW Land Company and Chester Realty, Inc., referred to as “Real Estate Services.”

SJW Group’s reportable segments have been determined based on information used by the chief operating decision maker. SJW Group’s chief operating decision maker includes the Chairman, President and Chief Executive Officer, and his executive staff. The executive staff reviews financial information presented on a consolidated basis that is accompanied by disaggregated information about operating revenue, net income and total assets, by subsidiary.

The following tables set forth information relating to SJW Group’s reportable segments and distribution of regulated and non-tariffed business activities within the reportable segments. Certain allocated assets, revenue and expenses have been included in the reportable segment amounts. Other business activity of SJW Group not included in the reportable segments is included in the “All Other” category.

84

	For the year ended December 31, 2019
	Water Utility Services			Real Estate Services	All Other (1)		SJW Group
	Regulated (2)		Non- tariffed	Non- tariffed	Non- tariffed		Regulated	Non- tariffed		Total
Operating revenue	$	407,116	7,969	5,397	—		407,116	13,366		420,482
Operating expense	329,520		5,443	3,751	24,289		329,520	33,483		363,003
Operating income (loss)	77,596		2,526	1,646	(24,289	)	77,596	(20,117	)	57,479
Net income (loss)	42,691		2,019	1,623	(22,930	)	42,691	(19,288	)	23,403
Depreciation and amortization	63,775		420	1,196	201		63,775	1,817		65,592
Senior note and other interest expense	25,073		—	—	6,723		25,073	6,723		31,796
Income tax expense (benefit) in net income	8,382		708	486	(1,122	)	8,382	72		8,454
Assets	3,016,846		5,507	46,778	63,339		3,016,846	115,624		3,132,470

	For the year ended December 31, 2018
	Water Utility Services			Real Estate Services	All Other (1)		SJW Group
	Regulated		Non- tariffed	Non- tariffed	Non- tariffed		Regulated	Non- tariffed		Total
Operating revenue	$	384,639	7,578	5,482	—		384,639	13,060		397,699
Operating expense	294,536		5,012	3,539	21,172		294,536	29,723		324,259
Operating income (loss)	90,103		2,566	1,943	(21,172	)	90,103	(16,663	)	73,440
Net income (loss)	53,181		1,848	885	(17,147	)	53,181	(14,414	)	38,767
Depreciation and amortization	53,067		338	1,196	—		53,067	1,534		54,601
Senior note and other interest expense	22,157		—	—	2,175		22,157	2,175		24,332
Income tax expense (benefit) in net income	14,826		719	903	(6,383	)	14,826	(4,761	)	10,065
Assets	1,492,954		4,489	46,517	412,429		1,492,954	463,435		1,956,389

	For the year ended December 31, 2017
	Water Utility Services			Real Estate Services	All Other (1)		SJW Group
	Regulated		Non- tariffed	Non- tariffed	Non- tariffed		Regulated	Non- tariffed	Total
Operating revenue	$	376,104	7,419	5,702	—		376,104	13,121	389,225
Operating expense	276,061		4,855	3,688	2,770		276,061	11,313	287,374
Operating income (loss)	100,043		2,564	2,014	(2,770	)	100,043	1,808	101,851
Net income (loss)	47,736		1,137	6,193	4,138		47,736	11,468	59,204
Depreciation and amortization	46,500		572	1,220	—		46,500	1,792	48,292
Senior note and other interest expense	20,670		—	60	2,199		20,670	2,259	22,929
Income tax expense (benefit) in net income	30,127		993	644	3,629		30,127	5,266	35,393
Assets	1,406,221		4,471	47,668	(359	)	1,406,221	51,780	1,458,001

____________________

(1)    The “All Other” category for the year ended December 31, 2019, includes the accounts of SJW Group, SJWNE, LLC and CTWS, Inc. on a stand-alone basis. For the years ended December 31, 2018 and 2017, the “All Other” category includes the accounts of SJW Group on a stand-alone basis.

(2)    As of December 31, 2019, the Company has performed a preliminary allocation of goodwill associated with the acquisition of CTWS to two reporting units, Connecticut and Maine, which are both aggregated within the Regulated Water Utility Services reportable segment.

85

Note 12. SJW Group and CTWS Merger (the “Merger”)

On October 9, 2019, SJW Group completed its previously announced acquisition of CTWS pursuant to the terms of the Second Amended and Restated Agreement and Plan of Merger, dated as of August 5, 2018, by and among SJW Group, Hydro Sub, Inc., a Connecticut corporation and a wholly-owned subsidiary of SJW Group, and CTWS. CTWS provides water service to approximately 137,000 connections that serve a population of approximately 480,000 people in 80 municipalities throughout Connecticut and Maine and more than 3,000 wastewater connections in Southbury, Connecticut. In addition, CTWS has a real estate company in Connecticut which provides property management services. SJW Group has included the financial results of CTWS in the consolidated financial statements from the date of acquisition.

SJW Group acquired all of the outstanding stock of CTWS for $70.00 per share in cash (without interest and less any applicable withholding taxes). The total cash purchase price is approximately $838,475, less cash received of $3,011, and approximately $6,384 related to outstanding awards of restricted stock units and deferred share units assumed in connection with the merger with CTWS. SJW Group financed the acquisition with net proceeds from its December 2018 sale of 7,762,000 common equity shares of approximately $411,077, and the October 2019 issuance of $427,398 in new fixed rate term loans. SJW Group raised an additional $18,463 in the debt financing to partially finance transaction costs incurred in connection with the CTWS acquisition. Along with the acquisition debt financing, SJW Group raised $60,000 of new proceeds used to partially refinance certain CTWS short-term borrowings on its existing lines of credit after the CTWS acquisition closed.

Management estimated the preliminary fair values of net tangible and intangible assets acquired, and the excess of the consideration transferred over the aggregate of such fair values was recorded as goodwill. The preliminary value of the acquired deferred tax assets and deferred tax liabilities are based on a preliminary analysis, and our estimates and assumptions are subject to change within the measurement period (up to one year from the acquisition date). In addition, management is still gathering information necessary to complete the recognition and measurement of the opening balance sheet. The following table summarizes the estimated preliminary fair value of assets acquired and liabilities assumed as of the date of acquisition:

	Fair Value
Utility plant, net	$	750,703
Nonutility plant	848
Current assets	42,673
Investments	12,489
Regulatory assets and deferred charges, less current portion	83,132
Other intangible assets	17,181
Other assets	2,592
Goodwill	626,523
Total assets acquired	$	1,536,141
Long-term debt	281,009
Current liabilities, including maturities of long-term debt	125,772
Deferred income taxes	107,789
Post-retirement benefit plans	31,789
Contributions in aid of construction and construction advances	137,327
Other long-term liabilities	10,607
Total liabilities assumed	694,293
Assumed equity	$	841,848

Other intangible assets primarily consists of customer relationships.

The goodwill balance is primarily attributable to assembled workforce and diversification of markets both from a geographic and regulatory perspective. We do not expect the goodwill recognized to be deductible for income tax purposes.

The amounts of revenue and pretax loss of CTWS included in SJW Group’s Consolidated Statements of Comprehensive Income from the acquisition date in October 2019 through December 31, 2019 are as follows:

Total revenues	$	21,672
Pretax (loss)	(3,174		)

86

The following unaudited pro forma financial information summarizes the combined results of operations for SJW Group and CTWS, as though the companies were combined as of January 1, 2018.

	Fiscal Year Ended December 31,
	2019		2018
Total revenues	$	515,153	514,364
Pretax income (loss)	60,862		72,938
Net income (loss)	56,968		65,449
Basic earnings per share	2.00		2.31

The historical consolidated financial information has been adjusted in the pro forma combined financial statements to give effect to pro forma events that are: (1) directly attributable to the transaction, (2) factually supportable and (3) expected to have continuing impact on the combined results of SJW Group and CTWS. As such, the impact of non-recurring transaction related expenses is not included. The pro forma financial statements do not reflect all cost savings (or associated costs to achieve such savings) from operating efficiencies or synergies that could result from the transaction. In addition, the pro forma financial information is for informational purposes only and is not indicative of the results of operations that would have been achieved if the acquisition had taken place at January 1, 2018.

Note 13. Unaudited Quarterly Financial Data

Summarized quarterly financial data is as follows:

	2019 Quarter Ended
	March		June	September	December
Operating revenue	$	77,682	102,965	113,997	125,838
Operating income	12,408		21,971	17,084	6,016
SJW Group net income	5,873		13,538	9,478	(5,486	)
Comprehensive income	5,873		13,538	9,478	(5,360	)
Earnings per share:
—Basic	0.21		0.48	0.33	(0.20	)
—Diluted	0.21		0.47	0.33	(0.19	)
Market price range of stock:
—High	63.76		63.40	69.23	74.47
—Low	54.74		59.83	61.23	67.13
Dividend per share	0.30		0.30	0.30	0.30

	2018 Quarter Ended
	March		June	September	December
Operating revenue	$	75,042	99,086	124,853	98,718
Operating income	7,331		22,799	25,828	17,482
SJW Group net income	1,285		12,871	15,788	8,823
Comprehensive income	1,285		12,871	15,788	8,823
Earnings per share:
—Basic	0.06		0.63	0.77	0.38
—Diluted	0.06		0.62	0.76	0.38
Market price range of stock:
—High	63.47		68.15	67.29	65.31
—Low	51.96		51.68	56.12	52.63
Dividend per share	0.28		0.28	0.28	0.28

    

87

SJW Group and Subsidiaries

FINANCIAL STATEMENT SCHEDULE

Schedule II

VALUATION AND QUALIFYING ACCOUNTS AND RESERVES

Years ended December 31, 2019, 2018 and 2017

(in thousands)

Description	2019			2018		2017
Allowance for doubtful accounts:
Balance, beginning of period	$	272		190		200
Opening balance, SJWNE, LLC	1,283			—		—
Charged to expense	520			430		399
Accounts written off	(875		)	(650	)	(675	)
Recoveries of accounts written off	312			302		266
Balance, end of period	$	1,512		272		190
Reserve for litigation and claims:
Balance, beginning of period	$	2,181		1,892		2,105
Charged to expense	3,221			480		528
Revision to accrual, due to settlements	(135		)	1		(245	)
Payments	(2,369		)	(192	)	(496	)
Balance, end of period	$	2,898		2,181		1,892

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

None.

Item 9A. Controls and Procedures

Evaluation of Disclosure Control and Procedures

SJW Group’s management, with the participation of its Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of SJW Group’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended, the “Exchange Act”), as of the end of the period covered by this report. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that SJW Group’s disclosure controls and procedures as of the end of the period covered by this report have been designed and are functioning effectively to provide reasonable assurance that the information required to be disclosed by SJW Group in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. SJW Group believes that a control system, no matter how well designed and operated, cannot provide absolute assurance that the objectives of the control system are met, and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected.

Management’s Report on Internal Control over Financial Reporting

SJW Group’s management is responsible for establishing and maintaining an adequate internal control structure over financial reporting and for an assessment of the effectiveness of internal control over financial reporting, as such items are defined in Rule 13a-15(f) and 15d-15(f) under the Exchange Act.

Management has utilized the criteria established in “Internal Control-Integrated Framework (2013)” issued by the Committee of Sponsoring Organizations of the Treadway Commission to evaluate the effectiveness of internal control over financial reporting.

SJW Group’s management has performed an assessment of the effectiveness of internal control over financial reporting as of December 31, 2019. Based on this assessment, management has concluded SJW Group’s internal control over financial reporting as of December 31, 2019 was effective. SJW Group completed its merger with CTWS on October 9, 2019, and

88

management excluded from its assessment of the effectiveness of SJW Group’s internal control over financial reporting as of December 31, 2019, CTWS’s internal control over financial reporting associated with total assets of $970.0 million and total revenues of $21.7 million included in the consolidated financial statements of SJW Group as of and for the year ended December 31, 2019.

Our independent registered public accounting firm, KPMG LLP, has issued an auditors’ report on the effectiveness of our internal control over financial reporting, which is included in Item 8 of this report.

Changes in Internal Controls

There has been no change in internal control over financial reporting during the fourth fiscal quarter of 2019 that has materially affected, or is reasonably likely to materially affect, the internal controls over financial reporting of SJW Group.

Item 9B. Other Information

SJW Group intends to post information about the operating and financial performance of SJW Group and its subsidiaries on its website http://www.sjwgroup.com from time to time. The content of SJW Group’s website is not incorporated by reference to or part of this report.

PART III

Item 10. Directors, Executive Officers and Corporate Governance

The information required by this item is contained in part under the caption “Officers of the Registrant” in Part I, Item 1, of this report, and in SJW Group’s Proxy Statement for its 2020 Annual Meeting of Stockholders to be held on April 29, 2020 (the “2020 Proxy Statement”) under the captions “Proposal 1—Election of Directors” and “Section 16(a) Beneficial Ownership Reporting Compliance,” and is incorporated herein by reference.

Code of Ethics

SJW Group has adopted a code of ethics that applies to SJW Group’s Chief Executive Officer, Chief Financial Officer, Controller and all other officers. The text of the code of ethics is available, free of charge, at the Company’s website at http://www.sjwgroup.com. SJW Group intends to satisfy the disclosure requirements under Item 5.05 of Form 8-K regarding an amendment to, or a waiver from, a provision of its code of ethics by posting such information on its website.

Corporate Governance Policies and Board Committee Charters

The Corporate Governance Policies and the charters for the board committees—the Audit Committee, Executive Compensation Committee, Nominating & Governance Committee, Sustainability Committee, and Finance Committee—are available at the Company’s website at http://www.sjwgroup.com. Stockholders may also request a free hard copy of the Corporate Governance Policies and the charters from the following address and phone number:

SJW Group

110 West Taylor Street

San Jose, CA 95110

Attn: Corporate Secretary

Phone: 800-250-5147

Item 11. Executive Compensation

The information required by this item is contained in the 2020 Proxy Statement under the captions “Compensation of Directors,” “Executive Compensation and Related Information,” “Compensation Committee Interlocks and Insider Participation,” and “Committee Reports” and is incorporated herein by reference.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

The information required by this item is contained in the 2020 Proxy Statement under the captions “Security Ownership of Certain Beneficial Owners and Management” and “Securities Authorized for Issuance under Equity Compensation Plans” and is incorporated herein by reference.

Item 13. Certain Relationships and Related Transactions, and Director Independence

The information required by this item is contained in the 2020 Proxy Statement under the caption “Certain Relationships and Related Transactions” and “Director Independence” and is incorporated herein by reference.

89

Item 14. Principal Accountant Fees and Services

The information required by this item is contained in the 2020 Proxy Statement under the caption “Principal Independent Accountants’ Fees and Services” and is incorporated herein by reference.

90

PART IV

Item 15. Exhibits and Financial Statement Schedules

	Page
(a)(1)    Financial Statements
Report of Independent Registered Public Accounting Firm	48
Consolidated Balance Sheets as of December 31, 2019 and 2018	50
Consolidated Statements of Comprehensive Income for the Years ended December 31, 2019, 2018 and 2017	52
Consolidated Statements of Changes in Stockholders’ Equity for the Years ended December 31, 2019, 2018 and 2017	53
Consolidated Statements of Cash Flows for the Years ended December 31, 2019, 2018 and 2017	54
Notes to Consolidated Financial Statements	55
(a)(2)    Financial Statement Schedule
Valuation and Qualifying Accounts and Reserves, Years ended December 31, 2019, 2018 and 2017	88

All other schedules are omitted as the required information is inapplicable or the information is presented in the consolidated financial statements or related notes.

(a)(3)    Exhibits required to be filed by Item 601 of Regulation S-K.

See Exhibit Index located immediately following this Item 15.

The exhibits filed herewith are attached hereto (except as noted) and those indicated on the Exhibit Index, which are not filed herewith, were previously filed with the Securities and Exchange Commission as indicated.

91

EXHIBIT INDEX

Exhibit No.	Description
1.1	Underwriting Agreement, dated as of November 28, 2018. Incorporated by reference to Exhibit 1.1 to Form 8-K filed on December 3, 2018.
2.1	Agreement and Plan of Merger, dated as of March 14, 2018, by and among SJW Group, Hydro Sub, Inc. and Connecticut Water Service, Inc. Incorporated by reference as Exhibit 2.1 to Form 8-K filed on March 15, 2018.
2.2	Amended and Restated Agreement and Plan of Merger, dated as of May 30, 2018, by and among SJW Group, Hydro Sub, Inc. and Connecticut Water Service, Inc. Incorporated by reference as Exhibit 2.1 to Form 8-K filed on May 31, 2018.
2.3	Second Amended and Restated Agreement and Plan of Merger, dated as of August 5, 2018, by and among SJW Group, Hydro Sub, Inc. and Connecticut Water Service, Inc. Incorporated by reference as Exhibit 2.1 to Form 8-K filed on August 6, 2018. (3)
3.1	Certificate of Incorporation of SJW Group. Incorporated by reference to Exhibit 3.1 to Form 8-K filed on November 15, 2016.
3.2	Certificate of Amendment of the Certificate of Incorporation of SJW Group. Incorporated by reference to Exhibit 3.3 to Form 8-K filed on November 15, 2016.
3.3	Bylaws of SJW Group. Incorporated by reference to Exhibit 3.2 to Form 8-K filed on November 15, 2016.
3.4	Amended and Restated Bylaws of SJW Group effective as of January 25, 2017.  Incorporated by reference to Exhibit 3.1 to the Form 8-K filed on January 26, 2017.
3.5	Certificate of Amendment of Certificate of Incorporation of SJW Group dated April 24, 2019 . Incorporated by reference to Exhibit 3.1 to Form 8-K filed on April 25, 2019.
4.1	Instruments Defining the Rights of Security Holders, including Indentures: Except as listed below in Exhibit 4.5, no issue of the registrant’s long-term debt exceeds 10 percent of its total assets. SJW Group hereby agrees to furnish upon request to the Commission a copy of each such instrument defining the rights of holders of unregistered senior and subordinated debt of the Company.
4.2	Form of Common Stock Certificate of SJW Group. Incorporated by reference to Exhibit 4.1 to Form 8-K filed on November 15, 2016.
4.3	Indenture dated as of June 1, 2010 between San Jose Water Company and Wells Fargo Bank, National Association. Incorporated by reference to Exhibit 4.1 to Form 10-Q for the quarter ended June 30, 2010.
4.4	Indenture dated as of December 1, 2016, by and between California Pollution Control Financing Authority and The Bank of New York Mellon Trust Company, N.A. relating to the Bond. SJW Group agrees to furnish to the Commission upon request a copy of such agreement which it has elected not to file under the provisions of Regulation S-K 601(b)(4)(iii).
4.5	Form of 3.05% Senior Notes due November 1, 2029.  Incorporated by reference to Schedule 1(a) of the Note Purchase Agreement attached as Exhibit 10.1 to the Form 8-K filed on October 9, 2019.
4.6	Description of SJW Group’s capital stock registered under section 12 of the Securities Exchange Act of 1934. (1)
10.1	Water Supply Contract dated January 27, 1981, between San Jose Water Works and the Santa Clara Valley Water District, as amended. Incorporated by reference to Exhibit 10.1 to Form 10-K for the year ended December 31, 2001.

92

10.2	Limited Partnership Agreement of 444 West Santa Clara Street, L.P., entered into as of September 2, 1999, between SJW Land Company and Toeniskoetter & Breeding, Inc. Development. Incorporated by reference to Exhibit 10.18 to Form 10-Q for the quarter ended September 30, 1999.
10.3	Grantor Trust Agreement by and between San Jose Water Company and Wells Fargo Bank, National Association dated November 2, 2012. Incorporated by reference as Exhibit 10.4 to Form 10-K for the year ended December 31, 2012.
10.4	Credit Agreement, dated June 1, 2016, between San Jose Water Company and JPMorgan Chase Bank, N.A. Incorporated by reference to Exhibit 10.1 to Form 8-K filed on June 3, 2016.
10.5	First Amendment to Credit Agreement, dated January 12, 2018, between San Jose Water Company and JP Morgan Chase Bank, N.A. Incorporated by reference to Exhibit 10.7 to Form 10-Q for the quarter ended March 31, 2018.
10.6	Loan Agreement dated as of June 1, 2010 between the California Pollution Control Financing Authority and San Jose Water Company. Incorporated by reference to Exhibit 10.3 to Form 10-Q for the quarter ended June 30, 2010.
10.7	Loan Agreement dated as of December 1, 2016 between the California Pollution Control Financing Authority and San Jose Water Company. Incorporated by reference to Exhibit 10.7 to Form 10-K for the year ended December 31, 2016.
10.8	Bond Purchase Contract dated June 9, 2010 among Goldman, Sachs & Co., the Honorable Bill Lockyer, Treasurer of the State of California, the California Pollution Control Financing Authority and San Jose Water Company. Incorporated by reference to Exhibit 10.4 to Form 10-Q for the quarter ended June 30, 2010.
10.9	Bond Purchase Contract dated December 15, 2016 among Morgan Stanley & Co. LLC, RBC Capital Markets, LLC, the Honorable John Chiang, Treasurer of the State of California, the California Pollution Control Financing Authority and San Jose Water Company. Incorporated by reference to Exhibit 10.9 to Form 10-K for the year ended December 31, 2016.
10.10	Note Agreement between SJW Corp. and the Prudential Insurance Company of America, dated June 30, 2011. Incorporated by reference as Exhibit 10.3 to Form 8-K filed on July 7, 2011.
10.11	Note Agreement between San Jose Water Company and John Hancock Life Insurance Company (U.S.A.) and John Hancock Life Insurance Company of New York, dated January 24, 2014. Incorporated by reference as Exhibit 10.1 to Form 8-K filed on January 29, 2014.
10.12	Note Purchase Agreement among San Jose Water Company and certain affiliates of MetLife, Inc., Brighthouse Financial, Inc. and New York Life Insurance Company, dated March 28, 2019. Incorporated by reference to Exhibit 10.1 to Form 8-K filed on March 28, 2019.
10.13	Note Purchase Agreement among SJW Group and Purchases listed therein, dated October 8, 2019, along with the forms of senior notes.  Incorporated by reference to Exhibit 10.1 to the Form 8-K filed on October 9, 2019.
10.14	Master Loan Agreement between The Connecticut Water Company and CoBank, ACB, dated October 29, 2012. Incorporated by reference to Exhibit 10.1 to Connecticut Water Service, Inc.’s Form 8-K filed on November 2, 2012.
10.15	Letter Agreement between Connecticut Water Service, Inc. and Citizens Bank, N.A., dated December 14, 2018. Incorporated by reference to Exhibit 10.4 to Connecticut Water Service, Inc.’s Form 8-K filed on December 17, 2018.
10.16	First Modification of Revolving Credit Facility between Connecticut Water Service, Inc. and Citizens Bank, N.A., dated Sept. 4, 2019. Incorporated by reference as Exhibit 10.3 to Connecticut Water Service, Inc.’s Form 8-K filed on September 6, 2019.
10.17	Second Amended and Restated Promissory Note between Connecticut Water Service, Inc. and Citizens Bank, N.A., dated September 4, 2019. Incorporated by reference to Exhibit 10.4 to Connecticut Water Service, Inc.’s Form 8-K filed on September 6, 2019.

93

10.18	Form of Letter Amendment to SJW Corp. Director Pension Plan. Incorporated by reference as Exhibit 10.25 to Form 10-K for the year ended December 31, 2007. (2)
10.19	San Jose Water Company Executive Supplemental Retirement Plan, as Amended and Restated on January 25, 2012, effective January 1, 2012. Incorporated by reference as Exhibit 10.20 to Form 10-K for the year ended December 31, 2011. (2)
10.20	The First Amendment to the Executive Supplemental Retirement Plan effective November 15, 2016. Incorporated by reference to Exhibit 10.14 to the Form 10-K for the year ended December 31, 2016. (2)
10.21	The Second Amendment to the Executive Supplemental Retirement Plan effective October 9, 2019. Incorporated by reference to Exhibit 10.5 to the Form 8-K filed on October 9, 2019. (2)
10.22	San Jose Water Company Cash Balance Executive Supplemental Retirement Plan, as Amended and Restated on January 25, 2012, effective January 1, 2012. Incorporated by reference as Exhibit 10.23 to Form 10-K for the year ended December 31, 2011. (2)
10.23	First Amendment to the San Jose Water Company Cash Balance Executive Supplemental Retirement Plan effective as of October 30, 2013. Incorporated by reference as Exhibit 10.15 to Form 10-K for the year ended December 31, 2013. (2)
10.24	Second Amendment to the San Jose Water Company Cash Balance Executive Supplemental Retirement Plan effective as of January 31, 2014. Incorporated by reference as Exhibit 10.2 to Form 8-K filed on January 30, 2014. (2)
10.25	Third Amendment to the San Jose Water Company Cash Balance Executive Supplemental Retirement Plan effective November 15, 2016. Incorporated by reference to Exhibit 10.18 to Form 10-K for the year ended December 31, 2016. (2)
10.26	Fourth Amendment to the San Jose Water Company Cash Balance Executive Supplemental Retirement Plan effective November 6, 2017. Incorporated by reference to Exhibit 10.5 to the Form 10-Q for the quarter ended September 30, 2017. (2)
10.27	Fifth Amendment to the San Jose Water Company Cash Balance Executive Supplemental Retirement Plan effective October 24, 2018. Incorporated by reference as Exhibit 10.21 to Form 10-K for the year ended December 31, 2018. (2)
10.28	Sixth Amendment to the San Jose Water Company Cash Balance Executive Supplemental Retirement Plan effective October 9, 2019. Incorporated by reference as Exhibit 10.4 to Form 8-K filed on October 9, 2019. (2)
10.29	SJW Corp. Long-Term Incentive Plan, as amended and restated on January 30, 2013 effective as of April 24, 2013.  Incorporated by reference as Exhibit 10.2 to Form 10-Q filed for the quarter ended June 30, 2013. (2)
10.30	SJW Corp. Long-Term Incentive Plan, as amended and restated on July 29, 2015.  Incorporated by reference as Exhibit 10.1 to Form 10-Q filed for the quarter ended September 30, 2015. (2)
10.31	First Amendment to the SJW Group Long-Term Incentive Plan dated November 15, 2016. Incorporated by reference to Exhibit 10.21 to Form 10-K for the year ended December 31, 2016. (2)
10.32	Employment Agreement of Mr. Eric W. Thornburg dated September 26, 2017, together with Exhibit A (Form of Restricted Stock Unit Issuance Agreement - Initial Time-Based Grant), Exhibit B (Form of Restricted Stock Issuance Agreement - Special Time-Based Grant), and Exhibit C (Form of Confidential Settlement Agreement and Release). Incorporated by reference to Exhibit 10.3 to Form 10-Q for the quarter ended September 30, 2017. (2)
10.33	First Amendment dated December 31, 2019, to the Employment Agreement of Eric W. Thornburg dated September 26, 2017. Incorporated by reference to Exhibit 10.1 to the Form 8-K filed on January 7, 2020. (2)
10.34	Offer Letter to Mr. James P. Lynch dated September 22, 2010 and accepted September 27, 2010. Incorporated by reference to Exhibit 10.1 to Form 8-K filed on October 1, 2010. (2)

94

10.35	Standard Form of SJW Group Stock Option Agreement. Incorporated by reference to Exhibit 10.31 to Form 10-K for the year ended December 31, 2016. (2)
10.36	SJW Corp. Executive Officer Short-Term Incentive Plan, as amended and restated on January 30, 2013 effective as of April 24, 2013. Incorporated by reference as Exhibit 10.1 to Form 10-Q for the quarter ended June 30, 2013. (2)
10.37	First Amendment to the Executive Officer Short-Term Incentive Plan dated November 15, 2016. Incorporated by reference as Exhibit 10.33 to Form 10-K for the year ended December 31, 2016. (2)
10.38	SJW Corp. Executive Severance Plan, as amended and restated, effective January 1, 2010 and amended effective October 26, 2010. Incorporated by reference as Exhibit 10.23 to Form 10-K for the year ended December 31, 2010. (2)
10.39	First Amendment to the Executive Severance Plan dated November 15, 2016. Incorporated by reference as Exhibit 10.35 to Form 10-K for the year ended December 31, 2016. (2)
10.40	Second Amendment to the Executive Severance Plan dated July 26, 2017. Incorporated by reference as Exhibit 10.1 to Form 10-Q for the quarter ended September 30, 2017. (2)
10.41	Third Amendment to the Executive Severance Plan effective November 6, 2017. Incorporated by reference as Exhibit 10.2 to Form 10-Q for the quarter ended September 30, 2017. (2)
10.42	Fourth Amendment to the Executive Severance Plan effective October 9, 2019. Incorporated by reference as Exhibit 10.3 to Form 8-K filed on October 9, 2019. (2)
10.43	San Jose Water Company Special Deferral Election Plan, as amended and restated, effective January 1, 2013. Incorporated by reference as Exhibit 10.36 to Form 10-K for the year ended December 31, 2012. (2)
10.44	First Amendment to the Special Deferral Election Plan effective November 15, 2016. Incorporated by reference as Exhibit 10.37 to Form 10-K for the year ended December 31, 2016. (2)
10.45	SJW Corp. Amended and Restated Deferred Restricted Stock Program, effective January 1, 2008. Incorporated by reference as Exhibit 10.1 to Form 10-Q for the quarter ended March 31, 2008. (2)
10.46	First Amendment to the Amended and Restated Deferred Restricted Stock Program dated November 15, 2016. Incorporated by reference as Exhibit 10.39 to Form 10-K for the year ended December 31, 2016. (2)
10.47	SJW Corp. Deferral Election Program for Non-Employee Board Members, as amended and restated effective October 30, 2013. Incorporated by reference as Exhibit 10.32 to Form 10-K for the year ended December 31, 2013. (2)
10.48	First Amendment to the Deferral Election Program for Non-Employee Board Members dated November 15, 2016. Incorporated by reference as Exhibit 10.41 to Form 10-K for the year ended December 31, 2016. (2)
10.49	Form of SJW Group Restricted Stock Unit Award Agreement for Non-Employee Board Members. Incorporated by reference as Exhibit 10.1 to Form 10-Q for the quarter ended June 30, 2017. (2)
10.50	Formulaic Equity Award Program for Non-Employee Board Members. Incorporated by reference as Exhibit 10.34 to Form 10-K for the year ended December 31, 2013. (2)
10.51	First Amendment to the Formulaic Equity Award Program for Non-Employee Board Members dated October 26, 2016. Incorporated by reference as Exhibit 10.44 to Form 10-K for the year ended December 31, 2016. (2)
10.52	Second Amendment to the Formulaic Equity Award Program for Non-Employee Board Members dated November 15, 2016. Incorporated by reference as Exhibit 10.45 to Form 10-K for the year ended December 31, 2016. (2)
10.53	Third Amendment to the Formulaic Equity Award Program for Non-employee Board members dated October 24, 2018. Incorporated by reference as Exhibit 10.48 to Form 10-K for the year ended December 31, 2018. (2)

95

10.54	SJW Group Director Compensation and Expense Reimbursement Policies effective as of January 31, 2018. Incorporated by reference to Exhibit 10.53 to Form 10-K for the year ended December 31, 2017. (2)
10.55	SJW Group Amended and Restated Director Compensation and Expense Reimbursement Policies effective as January 1, 2019. Incorporated by reference as Exhibit 10.50 to Form 10-K for the year ended December 31, 2018. (2)
10.56	SJW Group Amended and Restated Director Compensation and Expense Reimbursement Policies effective as of October 9, 2019. Incorporated by reference to Exhibit 10.2 to Form 8-K filed on October 9, 2019. (2)
10.57	Deferred Restricted Stock Award Agreement, amended and restated, as of October 22, 2008 for Non-Employee Board Members. Incorporated by reference as Exhibit 10.21 to Form 10-K for the year ended December 31, 2008. (2)
10.58	Form of Chief Executive Officer SJW Group Restricted Stock Unit Issuance Agreement (TSR Goals). Incorporated by reference to Exhibit 10.55 to Form 10-K for the year ended December 31, 2017. (2)
10.59	Form of SJW Group Restricted Stock Unit Issuance Agreement. Incorporated by reference as Exhibit 10.52 to Form 10-K for the year ended December 31, 2016. (2)
10.60	Form of SJW Group Restricted Stock Unit Issuance Agreement (1-year ROE Goal). Incorporated by reference as Exhibit 10.54 to Form 10-K for the year ended December 31, 2016. (2)
10.61	Form of SJW Group Restricted Stock Unit Issuance Agreement (EPS Goal). Incorporated by reference as Exhibit 10.55 to Form 10-K for the year ended December 31, 2016. (2)
10.62	Form of Director and Officer Indemnification Agreement between SJW Group and its officers and Board members. Incorporated by reference to Exhibit 10.1 to Form 8-K filed on November 15, 2016. (2)
10.63	Trust Agreement for The Connecticut Water Company Welfare Benefits Plan (VEBA) dated January 1, 1989. Incorporated by reference to Exhibit 10.21 to Connecticut Water Service, Inc.’s Form 10-K for the year ended December 31, 1989.
10.64	Connecticut Water Service, Inc. 1994 Performance Stock Program. Incorporated by reference as Exhibit 99.3 to Form S-8 filed on October 9, 2019. (2)
10.65	Connecticut Water Service, Inc. 2004 Performance Stock Program, proposed to be effective as of April 23, 2004. Incorporated by reference as Exhibit 99.2 to Form S-8 filed on October 9, 2019. (2)
10.66	First Amendment to The Connecticut Water Service, Inc. 2004 Performance Stock Program, dated January 7, 2004. Incorporated by reference to Exhibit 10.23f to Connecticut Water Service, Inc.’s Form 10-K for the year ended December 31, 2005. (2)
10.67	Second Amendment to The Connecticut Water Service, Inc. 2004 Performance Stock Program, dated January 1, 2008. Incorporated by reference to Exhibit 10.6 to Connecticut Water Service, Inc.’s Form 8-K filed on January 31, 2008. (2)
10.68	Connecticut Water Service, Inc. 2014 Performance Stock Program. Incorporated by reference as Exhibit 99.1 to Form S-8 filed on October 9, 2019. (2)
10.69	First Amendment effective October 9, 2019 to The Connecticut Water Service, Inc. 2014 Performance Stock Program. (1)(2)
10.70	Form of Restricted Share Award Agreement for non-employee Directors under the Connecticut Water Service, Inc. 2014 Performance Stock Program. Incorporate by reference to Exhibit 10.1 to Connecticut Water Service, Inc.’s Form 8-K filed on May 11, 2015. (2)
10.71	Form of Performance Unit Award Agreement (short-term vesting form) under Connecticut Water Service, Inc.’s 2014 Performance Stock Program. Incorporated by reference to Exhibit 10.9 to Connecticut Water Service, Inc.’s Form 10-K for the year ended December 31, 2016. (2)

96

10.72	Form of Performance Unit Award Agreement (long-term vesting form) under Connecticut Water Service, Inc.’s 2014 Performance Stock Program. Incorporated by reference to Exhibit 10.10 to Connecticut Water Service, Inc.’s Form 10-K for the year ended December 31, 2016. (2)
10.73	Form of Assumption Agreement for Incentive Awards under the Connecticut Water Service, Inc. 1994 Performance Stock Program, 2004 Performance Stock Program, and 2014 Performance Stock Program. (1)(2)
10.74	Amended and Restated Supplemental Executive Retirement Agreement dated November 15, 2017 between The Connecticut Water Company and Maureen P. Westbrook. (1)(2)
10.75	Amended and Restated Supplemental Executive Retirement Agreement dated November 15, 2017 between The Connecticut Water Company and Kristen A. Johnson. (1)(2)
10.76	Amended and Restated Supplemental Executive Retirement Agreement dated November 15, 2017 between The Connecticut Water Company and David C. Benoit. (1)(2)
10.77	Amendment to the Amended and Restated Supplemental Executive Retirement Agreement effective as of November 1, 2019 between Kristen A. Johnson and The Connecticut Water Company. (1)(2)
10.78	Grantor Trust Agreement dated May 1, 2017, between Connecticut Water Service, Inc. and Matrix Trust Company. (1)(2)
10.79	Amended and Restated Deferred Compensation Agreement, effective January 1, 2011, between The Connecticut Water Company and Maureen P. Westbrook. (1)(2)
10.80	Amended and Restated Deferred Compensation Agreement, effective January 1, 2011, between The Connecticut Water Company and Kristen A. Johnson. (1)(2)
10.81	Amended and Restated Deferred Compensation Agreement, effective January 1, 2011, between The Connecticut Water Company and David C. Benoit. (1)(2)
10.82	First Amendment to the Amended and Restated Deferred Compensation Agreement, dated as of December 1, 2011, among Kristen A. Johnson and The Connecticut Water Company. (1)(2)
10.83	First Amendment to the Amended and Restated Deferred Compensation Agreement, dated as of December 8, 2011, among Maureen P. Westbrook and The Connecticut Water Company. (1)(2)
10.84	First Amendment to the Amended and Restated Deferred Compensation Agreement, dated as of December 9, 2011, among David C. Benoit and the Connecticut Water Company. (1)(2)
10.85	Second Amendment to the Amended and Restated Deferred Compensation Agreement, dated as of December 21, 2016, between the Connecticut Water Company and Maureen P. Westbrook. (1)(2)
10.86	Second Amendment to the Amended and Restated Deferred Compensation Agreement, dated as of December 20, 2016, between the Connecticut Water Company and Kristen A. Johnson. (1)(2)
10.87	Second Amendment to the Amended and Restated Deferred Compensation Agreement, dated as of December 19, 2016, between the Connecticut Water Company and David C. Benoit. (1)(2)
10.88	Connecticut Water Company Deferred Compensation Plan, effective January 1, 2017. Incorporated by reference to Exhibit 10.1 to Connecticut Water Service, Inc.’s Form 8-K filed on December 16, 2016. (2)
10.89	First Amendment, effective October 9, 2019, to the Connecticut Water Company Deferred Compensation Plan, dated January 1, 2017. (1)(2)
10.90	Second Amendment, effective October 9, 2019, 2019, to the Connecticut Water Company Deferred Compensation Plan, dated January 1, 2017. (1)(2)
10.91	Amended and Restated Employment Agreement, dated December 23, 2008, among The Connecticut Water Company, Connecticut Water Service, Inc., and Maureen P. Westbrook. (1)(2)

97

10.92		First Amendment to Amended and Restated Employment Agreement, dated April 1, 2014, among The Connecticut Water Company, Connecticut Water Service, Inc. and Maureen P. Westbrook. (1)(2)
10.93		Amended and Restated Employment Agreement, dated October 9, 2019, among The Connecticut Water Company, Connecticut Water Service, Inc., and Maureen Westbrook. (1)(2)
10.94		Amended and Restated Employment Agreement, dated December 30, 2008, among The Connecticut Water Company, Connecticut Water Service, Inc., and Kristen A. Johnson. (1)(2)
10.95		First Amendment to Amended and Restated Employment Agreement, dated March 8, 2013, among The Connecticut Water Company, Connecticut Water Service, Inc. and Kristen A. Johnson. Incorporated by reference to Exhibit 10.17 to Connecticut Water Service, Inc.’s Form 10-K for the year ended December 31, 2012. (2)
10.96		Form of Second Amendment to Employment Agreement, dated April 2014, among The Connecticut Water Company, Connecticut Water Service, Inc. and Kristen A. Johnson. Incorporated by reference to Exhibit 10.2 to Connecticut Water Service, Inc.'s Form 8-K filed on April 3, 2014. (2)
10.97		Third Amendment to the Amended and Restated Employment Agreement, effective as of November 1, 2019, among The Connecticut Water Company, Connecticut Water Service, Inc. and Kristen A. Johnson. (1)(2)
10.98		Amended and Restated Employment Agreement of The Connecticut Water Company, Connecticut Water Service, Inc., with David C. Benoit dated December 23, 2008. (1)(2)
10.99		First Amendment to Amended and Restated Employment Agreement, dated April 1, 2014, among The Connecticut Water Company, Connecticut Water Service, Inc. and David C. Benoit. (1)(2)
21.1		Subsidiaries of SJW Group. (1)
23.1		Consent of Independent Registered Public Accounting Firm. (1)
31.1		Certification Pursuant to Rule 13a-14(a)/15d-14(a) by President and Chief Executive Officer. (1)
31.2		Certification Pursuant to Rule 13a-14(a)/15d-14(a) by Chief Financial Officer and Treasurer. (1)
32.1		Certification Pursuant to 18 U.S.C. Section 1350 by President and Chief Executive Officer, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. (1)
32.2		Certification Pursuant to 18 U.S.C. Section 1350 by Chief Financial Officer and Treasurer, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. (1)
101.INS		XBRL Instance Document - the instance document does not appear in the interactive data file because its XBRL tags are embedded within the inline XBRL document
101.SCH		XBRL Taxonomy Extension Schema Document
101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF		XBRL Taxonomy Extension Definition Linkbase Document
101.LAB		XBRL Taxonomy Extension Label Linkbase Document
101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document
104		Cover Page Interactive Data File - the cover page XBRL tags are embedded within the Inline XBRL document
	(1) Filed currently herewith.
	(2) Management contract or compensatory plan or agreement.

98

(3) Pursuant to Item 601(b)(2) of Regulation S-K, certain exhibits and schedules have been omitted. The registrant hereby agrees to furnish supplementally a copy of any omitted exhibit or schedule to the SEC upon request.

99

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

		SJW Group
Date:	March 2, 2020	By	/s/ Eric W. Thornburg
			ERIC W. THORNBURG, President, Chief Executive Officer and Chairman of the Board (Principal executive officer)

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Date:	March 2, 2020	By	/s/ Eric W. Thornburg
			ERIC W. THORNBURG, President, Chief Executive Officer and Chairman of the Board (Principal executive officer)
Date:	March 2, 2020	By	/s/ James P. Lynch
			JAMES P. LYNCH, Chief Financial Officer and Treasurer (Principal financial officer)
Date:	March 2, 2020	By	/s/ Wendy Avila-Walker
			WENDY AVILA-WALKER, Vice President of Finance, Controller and Assistant Treasurer (Principal accounting officer)

100

Date:	March 2, 2020	By	/s/ Katharine Armstrong
			KATHARINE ARMSTRONG, Member, Board of Directors
Date:	March 2, 2020	By	/s/ Walter J. Bishop
			WALTER J. BISHOP, Member, Board of Directors
Date:	March 2, 2020	By	/s/ Mary Ann Hanley
			MARY ANN HANLEY, Member, Board of Directors
Date:	March 2, 2020	By	/s/ Heather Hunt
			HEATHER HUNT, Member, Board of Directors
Date:	March 2, 2020	By	/s/ Douglas R. King
			DOUGLAS R. KING, Member, Board of Directors
Date:	March 2, 2020	By	/s/ Gregory P. Landis
			GREGORY P. LANDIS, Member, Board of Directors
Date:	March 2, 2020	By	/s/ Debra C. Man
			DEBRA C. MAN, Member, Board of Directors
Date:	March 2, 2020	By	/s/ Daniel B. More
			DANIEL B. MORE, Member, Board of Directors
Date:	March 2, 2020	By	/s/ Robert A. Van Valer
			ROBERT A. VAN VALER, Member, Board of Directors
Date:	March 2, 2020	By	/s/ Carol P. Wallace
			CAROL P. WALLACE, Member, Board of Directors

101

EX-4.6

EXHIBIT 4.6

DESCRIPTION OF SJW GROUP’S CAPITAL STOCK

REGISTERED UNDER SECTION 12 OF THE

SECURITIES EXCHANGE ACT OF 1934

General

The following summary description of our capital stock is based on the provisions of the Delaware General Corporation Law (the “DGCL”), our certificate of incorporation, as amended, and our bylaws, as amended. This description does not purport to be complete and is qualified in its entirety by reference to the full text of the DGCL, as it may be amended from time to time, and to the terms of our certificate of incorporation and bylaws, as each may be amended from time to time, which are incorporated by reference as exhibits to the Annual Report on Form 10-K of which this Exhibit 4.6 is a part. As used in this “Description of Capital Stock,” the terms “SJW,” the “Company,” “we,” “our” and “us” refer to SJW Group, a Delaware corporation, and do not, unless otherwise specified, include our subsidiaries.

Our authorized capital stock consists of 70,000,000 shares of common stock, par value $0.001 per share, and 1,000,000 shares of preferred stock, par value $0.001 per share.

Common Stock

Each holder of record of our common stock is entitled to one vote for each share held on every matter properly submitted to our stockholders for their vote. Holders of our common stock do not have cumulative voting rights. After satisfaction of any dividend rights of holders of any outstanding preferred stock, holders of common stock are entitled ratably to any dividend declared by our board of directors out of funds legally available for this purpose.

Upon our liquidation, dissolution or winding up, the holders of our common stock are entitled to receive ratably our net assets available, if any, after the payment of all debts and other liabilities and subject to the prior rights of any outstanding preferred stock.

Our common stock is not subject to further calls or assessments by SJW, and holders of our common stock have no preemptive, subscription, redemption, conversion or exchange rights and no sinking fund provisions.

The rights, preferences and privileges of holders of common stock are subject to, and may be adversely affected by, the rights of the holders of shares of any series of preferred stock that we may designate and issue in the future.

All outstanding shares of our common stock are fully paid and non-assessable.

Preferred Stock

Our certificate of incorporation permits us to issue up to 1,000,000 shares of preferred stock, par value $0.001 per share, in one or more series, subject to limitations prescribed by law, with such designations, powers, preferences and rights, and the qualifications, limitations or restrictions thereof, of any wholly unissued series of preferred stock as our board of directors may determine, including without limitation, the dividend rights, dividend rate, conversion rights, voting rights, rights and terms of redemption (including sinking fund provisions), redemption price or prices, and liquidation preferences of any such series, and the number of shares constituting any such series and the designation thereof, or any of the foregoing.

Our board of directors is further authorized to increase (but not above the total number of authorized shares of the class) or decrease (but not below the number of shares of any such series then outstanding) the number of shares of any series, the number of which was fixed by it, subsequent to the issuance of shares of such series then outstanding, subject to the powers, preferences and rights, and the qualifications, limitations and restrictions thereof stated in our certificate of incorporation or the resolution of our board of directors originally fixing the number of shares of such series. If the number of shares of any series is so decreased, then the shares constituting such decrease shall resume the status which they had prior to the adoption of the resolution originally fixing the number of shares of such series.

Our common stock is subject to the express terms of any preferred stock. Our board of directors may issue preferred stock with voting, dividend, liquidation and other rights that could adversely affect the relative rights of the holders of our common stock.

Anti-Takeover Effects of Provisions of the Certificate of Incorporation, Bylaws and Other Agreements

Some provisions of Delaware law and our certificate of incorporation and bylaws may have an anti-takeover effect and may delay, defer or prevent a tender offer, proxy contest or other takeover attempt that a stockholder might consider in its best interest, including those attempts that might result in a premium over the market price for the shares held by stockholders. In particular, these provisions may frustrate or prevent any attempts by stockholders of SJW to replace or remove our current management by making it more difficult for stockholders to replace members of our board of directors, which is responsible for appointing the members of management.

A description of these provisions is set forth below.

Blank Check Preferred

As described above, our board of directors is authorized to create and issue from time to time, without stockholder approval, up to an aggregate of 1,000,000 shares of preferred stock in one or more series and to establish the number of shares of any series of preferred stock and to fix the designations, powers, preferences and rights of the shares of each series and any qualifications, limitations or restrictions of the shares of each series. The authority to designate preferred stock may be used to issue series of preferred stock, or rights to acquire preferred stock, that could dilute the interest of, or impair the voting power of, holders of our common stock or could also be used as a method of determining, delaying or preventing a change of control.

Meetings and Elections of Directors

Special Meetings of Stockholders. Our certificate of incorporation and bylaws limit the ability of stockholders to call a special meeting of stockholders to only stockholders holding not less than 20% of outstanding voting power. In particular, our certificate of incorporation and bylaws provide that special meetings of the stockholders may be called at any time by the chairman of the board, by the president, by resolution of our board of directors adopted by a majority of the total number of authorized directors (regardless of any vacancy), or by stockholders holding 20% or more of our voting power.

Stockholder Action by Written Consent. Our certificate of incorporation and bylaws provide that any action which may be taken at any annual or special meeting of stockholders may be taken without a meeting and without prior notice, if a consent in writing, setting forth the action so taken, shall be signed by the holders of outstanding shares having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted. However, directors may not be elected by written consent except by unanimous written consent of all shares entitled to vote for the election of directors.

Vacancies. Our certificate of incorporation and bylaws provide that vacancies occurring on our board of directors for any reason and newly created directorships resulting from an increase in the authorized number of directors may be filled only by vote of a majority of the remaining members of our board of directors, although less than a quorum, or by a sole remaining director, at any meeting of our board of directors. A person so elected by our board of directors to fill a vacancy or newly created directorship shall hold office until the next succeeding annual meeting of stockholders and until his or her successor shall be duly elected and qualified or until his or her earlier resignation or removal.

No Cumulative Voting

Our certificate of incorporation prohibits cumulative voting in the election of directors.

Interested Stockholder Transaction and Business Combination

The provisions of Section 203 of the DGCL govern SJW. Section 203 of DGCL prohibits, subject to certain exceptions, a Delaware corporation from engaging in a business combination with an interested stockholder (i.e., a stockholder acquiring 15% or more of the outstanding voting stock) for three years following the date that such stockholder becomes an interested stockholder without approval of our board of directors. Section 203 makes certain types of unfriendly or hostile corporate takeovers, or other non-board approved transactions involving a corporation and one or more of its significant stockholders, more difficult by prohibiting large stockholders, in particular those owning 15% or more of our outstanding voting stock, from merging or combining with us for a certain period of time without the consent of our board of directors. Delaware companies may opt out of Section 203 if the original certificate of incorporation expressly elects not to be governed by Section 203. Our certificate of incorporation and bylaws do not “opt out” of Section 203.

Exclusive Delaware Forum

Our certificate of incorporation provides that unless SJW consents in writing to the selection of an alternative forum, the sole and exclusive forum for (i) any derivative action or proceeding brought on behalf of SJW, (ii) any action asserting a claim of breach of a fiduciary duty owed by any director, officer or other employee of SJW to SJW or SJW’s stockholders, (iii) any action asserting a claim arising pursuant to any provision of the DGCL, or (iv) any action asserting a claim governed by the internal affairs doctrine shall be a state or federal court located within the State of Delaware, in all cases subject to the court’s having personal jurisdiction over the indispensable parties named as defendants.

Advance Notice Bylaws

Our bylaws contain an advance notice procedure for stockholder proposals to be brought before an annual meeting of stockholders, including proposed nominations of persons for election to our board of directors. Stockholders at an annual meeting will only be able to consider proposals or nominations specified in the notice of meeting or brought before the meeting by or at the direction of our board of directors or by a stockholder who was a stockholder of record on the record date for the meeting, who is entitled to vote at the meeting and who has given SJW’s corporate secretary timely written notice, in proper form, of the stockholder’s intention to bring that business before the annual meeting. Our bylaws may have the effect of precluding the conduct of certain business at a meeting if the proper procedures are not followed or may discourage or deter a potential acquiror from conducting a solicitation of proxies to elect its own slate of directors or otherwise attempting to obtain control of SJW.

Listing

Our common stock is listed on the New York Stock Exchange under the symbol “SJW.”

Transfer Agent and Registrar

The transfer agent and registrar for our common stock is American Stock Transfer & Trust Company.

EX-10.69

EXHIBIT 10.69

FIRST AMENDMENT

TO THE

CONNECTICUT WATER SERVICE, INC.

2014 PERFORMANCE STOCK PROGRAM

WHEREAS, Connecticut Water Service, Inc., a Connecticut corporation (the “Company”) established the Connecticut Water Service, Inc. 2014 Performance Stock Program (the “Plan”), effective as of March 12, 2014;

WHEREAS, Section 12(c) of the Plan reserves to the Company’s Board of Directors (the “Board”) the right to amend the Plan at any time;

WHEREAS, the Plan provides that the Board’s Compensation Committee shall administer the Plan;

WHEREAS, pursuant to the Action by Unanimous Written Consent dated October 9, 2019, the Board authorized the Plan to be amended to reflect that the Board shall have the authority and responsibility to administer the Plan;

NOW, THEREFORE, the Plan is amended effective as of October 9, 2019 as set forth below:

1. Section 2.1(i) (“Committee”) is hereby deleted in its entirety and all subsequent subsections and cross-references are revised accordingly.

2. Each use of the term “Committee” or a variation thereof (such as “Committee’s”) throughout the Plan document is hereby replaced with the term “Board” (or a variation thereof, as dictated by context).

**SIGNATURE PAGE FOLLOWS**

10127403v1

DB2/ 37773166.1

IN WITNESS WHEREOF, the Company has caused this First Amendment to be executed by its duly authorized representative as of this 12 day of November, 2019.

CONNECTICUT WATER SERVICE, INC.
By:	Kristen A. Johnson
	SVP. Administration

2

10127403v1

DB2/ 37773166.1

EX-10.73

EXHIBIT 10.73

EXECUTION

SJW GROUP

ASSUMPTION AGREEMENT

This ASSUMPTION AGREEMENT is made as of the 7th day of November 2019, by and between SJW Group, a corporation formed under the laws of Delaware (“SJW”), and [ ] (“Participant”).

WHEREAS, Participant holds one or more outstanding incentive awards granted by Connecticut Water Service, Inc., a Connecticut corporation (“CTWS”), under one or more of the following incentive compensation plans of CTWS (collectively, the “CTWS Plans”):

-    CTWS 2014 Performance Stock Program;

-    CTWS 2004 Performance Stock Program; and

-    CTWS 1994 Performance Stock Program.

WHEREAS, Participant’s incentive awards are comprised of one or more of the following types of awards (collectively, the “CTWS Awards”), each evidenced by a Performance Unit Award Agreement and related participant election form, or a Restricted Stock Unit Agreement, (each, an “Award Agreement”):

- Performance Share Units (each, a “PSU Award”);

-     Performance Cash Units (each, a “PCU Award”);

-    Incentive Deferrals (each, an “Incentive Deferral Award”); and

-    Cash-settled Restricted Stock Units (each, an “RSU Award”).

WHEREAS, SJW acquired CTWS pursuant to the Second Amended and Restated Agreement and Plan of Merger (the “Merger Agreement”), dated as of August 5, 2018, by and among SJW, CTWS and Hydro Merger Sub, Inc., a Connecticut corporation and wholly-owned subsidiary of SJW (“Merger Sub”), whereby Merger Sub merged with and into CTWS (the “Merger”), and the shares of CTWS common stock were converted into the right to receive $70.00 per share in cash.

WHEREAS, the provisions of the Merger Agreement required SJW to assume the obligations of CTWS under certain of the outstanding CTWS Awards as described below and to issue to the holder of each such outstanding CTWS Award an agreement evidencing the assumption of such award by SJW:

• PSU Awards

◦ Each PSU Award, including both a short-term and a long-term award, granted on January 17, 2019 (the “2019 PSU Award”) was assumed by SJW at target-level performance (determined as described below) without regard to actual performance

and converted into a time-based vesting award subject to continued employment and covering restricted stock units of SJW based on the Conversion Ratio (as defined below). Any award amount in excess of target-level performance was forfeited on a prioritization basis (as described below).

◦ Each PSU Award granted on January 18, 2018 (the “2018 PSU Award”) that, at the Effective Time (as defined in the Merger Agreement), was subject to only time-based vesting based on continued employment was assumed by SJW as a time-based vesting award subject to continued employment and covering restricted stock units of SJW based on the Conversion Ratio.

◦ Each PSU Award granted on January 19, 2017 (the “2017 PSU Award”) that, at the Effective Time, was subject to only time-based vesting based on continued employment was assumed by SJW as a time-based vesting award subject to continued employment and covering restricted stock units of SJW based on the Conversion Ratio.

◦ Each PSU Award granted prior to January 19, 2017 (the “Vested PSU Award”), that at the Effective Time was fully vested but with respect to which Participant has elected to defer the payment of the underlying shares, was assumed by SJW and converted into an award of fully vested restricted stock units of SJW based on the Conversion Ratio.

• PCU Awards

◦ Each PCU Award, including both a short-term and a long-term award, granted on January 17, 2019 (the “2019 PCU Award”) was assumed by SJW at target-level performance (determined as described below) without regard to actual performance and converted into a time-based vesting cash award subject to continued employment. Any award amount in excess of target-level performance was forfeited on a prioritization basis (as described below).

◦ Each PCU Award granted prior to January 17, 2019 (the “Pre-2019 PCU Award”) that at the Effective Time was still unvested and outstanding, was accelerated and paid in full to Participant shortly following the closing of the Merger and was not assumed by SJW.

• Incentive Deferral Awards

◦ Each Incentive Deferral Award, including both a short-term and a long-term award, granted on January 17, 2019 (the “2019 Incentive Deferral Award”) was assumed by SJW at target-level performance (determined as described below) without regard to actual performance and converted into a time-based vesting cash award subject to continued employment. Any award amount in excess of target-level performance was forfeited on a prioritization basis (as described below).

2

◦ Each Incentive Deferral Award granted on January 18, 2018 (the “2018 Incentive Deferral Award”) that, at the Effective Time, was subject to only time-based vesting based on continued employment was assumed by SJW as a time-based vesting cash award subject to continued employment.

◦ Each Incentive Deferral Award granted on January 19, 2017 (the “2017 Incentive Deferral Award”) that, at the Effective Time, was subject to only time-based vesting based on continued employment was assumed by SJW as a time-based vesting cash award subject to continued employment.

• RSU Awards

◦ Each RSU Award granted on December 8, 2017 or March 7, 2018 that, at the Effective Time, was subject to time-based vesting based on continued employment was assumed by SJW and converted into a time-based vesting award subject to continued employment and covering restricted stock units of SJW based on the Conversion Ratio.

WHEREAS, the applicable conversion ratio (the “Conversion Ratio”) in effect for the assumption of the outstanding stock-settled CTWS Awards under the CTWS Plans, as determined in accordance with the formula provisions of the Merger Agreement, is 1.016 ($70.00 per share of CTWS Stock (as defined below) divided by $68.87, the average per share closing price of SJW Stock (as defined below) for the five consecutive trading days immediately preceding the Effective Time).

WHEREAS, for purposes of calculating the forfeiture of amounts in excess of target-level performance with respect to the 2019 CTWS Awards, CTWS determined target-level performance on an aggregate performance award basis for Participant’s 2019 CTWS Awards and then allocated such target-level performance to the form of awards elected as set forth on Participant’s Award Agreement on a prioritized basis consistent with CTWS’s past practice depending on the type of award Participant elected to receive (instead of a pro-rata allocation across each of Participant’s elected awards). The general order of priority is Incentive Deferral Awards, PSU Awards and PCU Awards.

WHEREAS, SJW’s assumption of Participant’s outstanding CTWS Awards under the CTWS Plans became effective immediately upon the Effective Time, and the purpose of this Assumption Agreement is to reflect certain adjustments to Participant’s outstanding CTWS Awards which became necessary by reason of such assumption.

NOW, THEREFORE, it is hereby agreed as follows:

1.PSU Awards. The number of shares of CTWS common stock (“CTWS Stock”) subject to each PSU Award, if any, held by Participant immediately prior to the Effective Time are set forth on the Schedule A attached hereto. For this purpose, the number of shares of CTWS Stock subject to the 2019 PSU Award immediately prior to the Effective Time is the target number of shares subject to the award. SJW hereby assumes, as of the Effective Time, all the duties

3

and obligations of CTWS under each of the PSU Awards identified in attached Schedule A (the “Assumed PSU Awards”), and each such Assumed PSU Award is hereby converted into the right to receive shares of SJW common stock (“SJW Stock”) in accordance with the terms of that award, as adjusted pursuant to the provisions of this Agreement. In connection with such assumption, the number of shares of SJW Stock subject to each Assumed PSU Award shall be equal to the number of shares of CTWS Stock subject to the award (as set forth on Schedule A), multiplied by the Conversion Ratio, rounded down to the nearest whole share. Accordingly, the number of shares of SJW Stock subject to each Assumed PSU Award shall be as specified for that award on the attached Schedule A.

2.2019 PCU Awards. The target dollar amount subject to the 2019 PCU Award, if any, held by Participant immediately prior to the Effective Time is set forth on the attached Schedule A. SJW hereby assumes, as of the Effective Time, all the duties and obligations of CTWS under such 2019 PCU Award with respect to the dollar amount set forth on Schedule A in accordance with the terms of that award, as adjusted pursuant to the provisions of this Agreement. For the avoidance of doubt, each Pre-2019 PCU Award, that at the Effective Time was still unvested and outstanding, was accelerated and paid in full following the closing of the Merger and SJW did not assume any Pre-2019 PCU Award and there are no amounts underlying any Pre-2019 PCU Award owed to Participant. As a result, there are no Pre-2019 PCU Awards set forth on Schedule A.

3.Incentive Deferral Awards. The dollar amount subject to each Incentive Deferral Award, if any, held by Participant immediately prior to the Effective Time is set forth on the attached Schedule A. For this purpose, the dollar amount subject to the 2019 Incentive Deferral Award immediately prior to the Effective Time is the target dollar amount subject to the award. SJW hereby assumes, as of the Effective Time, all the duties and obligations of CTWS under each of the Incentive Deferral Awards identified on Schedule A attached hereto (the “Assumed Incentive Deferral Awards”) and each Assumed Incentive Deferral Award is hereby converted into the right to receive a dollar amount set forth on Schedule A in accordance with the terms of that award, as adjusted pursuant to the provisions of this Agreement.

4.RSU Awards. The number of shares of CTWS Stock subject to the RSU Awards, if any, held by Participant immediately prior to the Effective Time are set forth on Schedule A attached hereto. SJW hereby assumes, as of the Effective Time, all the duties and obligations of CTWS under each of the RSU Awards identified on Schedule A (the “Assumed RSU Awards”), and each Assumed RSU Award is hereby converted into the right to receive a cash amount based on the fair market value of shares of SJW Stock in accordance with the terms of that award, as adjusted pursuant to the provisions of this Agreement.

5.Provisions Governing Assumed Awards. Except as otherwise set forth in Section 9 below, the following provisions shall govern each CTWS Award hereby assumed by SJW:

(a)Unless the context otherwise requires, all references in each Award Agreement and, if applicable, in the applicable CTWS Plan: (i) to the “Company” shall mean SJW, (ii) to “Common Stock” shall mean SJW Stock, (iii) to the “Board” shall mean the Board of Directors of SJW, and (iv) to the “Committee”

4

or the “Compensation Committee” shall mean the Executive Compensation Committee of the SJW Board of Directors.

(b)The Grant Date (as such term is defined in the applicable Award Agreement) of each assumed CTWS Award and all other provisions which govern either the issuance or the forfeiture of the assumed CTWS Award shall remain the same as set forth in the Award Agreement applicable to that award, and the provisions of the Award Agreement shall accordingly govern and control Participant’s rights under this Agreement to be issued SJW Stock or cash; provided, that each CTWS Award subject to performance conditions and granted after January 1, 2019, shall no longer be subject to performance conditions and was assumed at target-level performance.

(c)Pursuant to the terms of the Merger Agreement, each CTWS Award assumed by SJW shall continue to vest based on Participant’s continued employment with CTWS in accordance with the same time-based vesting schedule in effect under the applicable Award Agreement immediately prior to the Effective Time, and each such assumed CTWS Award that vests in accordance with such schedule shall be paid in accordance with the applicable Award Agreement, including, if applicable, Participant’s payment election. The vesting dates of each unvested CTWS Award assumed by SJW are set forth on Schedule A attached hereto. In accordance with the terms of the Merger Agreement, each such CTWS Award shall vest in full upon a termination of Participant’s employment by SJW without Cause within one (1) year following the closing of the Merger. For purposes of this subsection (c), “Cause” shall mean a termination following the occurrence of any of the following events: (i) Participant’s commission of any felony or any crime involving fraud, dishonesty or moral turpitude; (ii) Participant’s attempted commission of, or participation in, a fraud or act of dishonesty against CTWS, Connecticut Water Company, Maine Water Company or their affiliates (including SJW) or any client of CTWS, Connecticut Water Company, Maine Water Company or their affiliates (including SJW); (iii) Participant’s intentional, material violation of any material contract or agreement between Participant and CTWS, Connecticut Water Company, Maine Water Company, or their affiliates (including SJW); or (iv) Participant’s disqualification or bar by any governmental or self-regulatory authority from serving in the capacity required by his or her job description or Participant’s loss of any governmental or self-regulatory license that is reasonably necessary for Participant to perform his or her duties or responsibilities.

(d)Each PSU Award assumed by SJW shall, following the closing of the Merger, continue to accrue dividend equivalent rights in accordance with the terms of the applicable Award Agreement based on dividends paid with respect to SJW Stock.

(e)For purposes of applying any and all provisions of the Award Agreement and/or the CTWS Plan relating to Participant’s employment with CTWS,

5

Participant shall be deemed to remain in such employment for so long as Participant remains in continuous employment with SJW or any present or future majority-owned SJW subsidiary. Accordingly, the provisions of the Award Agreement governing the cessation of vesting and forfeiture of the assumed CTWS Awards upon Participant’s cessation of employment shall hereafter be applied on the basis of Participant’s cessation of employment as an employee with SJW and its majority-owned subsidiaries, and each assumed CTWS Award shall accordingly terminate and be forfeited upon such cessation of employment with SJW and its majority-owned subsidiaries.

(f)The issuance of SJW Stock and cash under each assumed CTWS Award shall be subject to (i) Participant’s execution and delivery of this Assumption Agreement to SJW and (ii) the collection of all applicable income and employment taxes pursuant to Section 6 below.

6.Taxes.

(a)Notwithstanding anything to the contrary in the applicable CTWS Plan, any taxes required to be withheld with respect to the shares of SJW Stock which vest and become issuable hereunder shall be collected through an automatic share withholding procedure pursuant to which SJW will withhold, at the time of such issuance, a portion of the shares with a Fair Market Value (measured as of the applicable issuance date in accordance with the applicable CTWS Plan) equal to the amount of those taxes; provided, however, that the amount of any shares so withheld shall not exceed the amount necessary to satisfy the required tax withholding obligations using the minimum statutory withholding rates for federal and state tax purposes that are applicable to supplemental taxable income. Any taxes required to be withheld with respect to amounts payable in cash pursuant to a CTWS Award assumed by SJW shall be deducted from such cash payment before the payment is paid to Participant.

(b)Notwithstanding the foregoing provisions, the employee portion of the federal, state and local employment taxes required to be withheld in connection with the vesting of the shares of SJW Stock or any other amounts hereunder (the “Employment Taxes”) shall in all events be collected from Participant no later than the last business day of the calendar year in which the shares or other amounts vest hereunder. Accordingly, to the extent the payment date for one or more vested shares or cash amounts is to occur in a year subsequent to the calendar year in which those shares or other cash amounts vest, Participant shall, on or before the last business day of the calendar year in which the shares or other amounts vest, deliver to SJW a check payable to its order in the dollar amount equal to the Employment Taxes required to be withheld with respect to those shares or other amounts. The provisions of this Paragraph 6(b) shall be applicable only to the extent necessary to comply with the applicable tax withholding requirements of Internal Revenue Code Section 3121(v).

7.Electronic Delivery. The Company may, in its sole discretion, deliver this Assumption Agreement, and any documentation or communication relating to the CTWS Awards

6

assumed by SJW, by electronic means. The Participant hereby consents to receive such documents by electronic delivery and, if requested, agrees to execute such documents electronically, including through an on-line or electronic system established and maintained by the Company or another third-party designated by the Company.

8.Terms and Conditions. Except to the extent specifically modified by this Assumption Agreement, all of the terms and conditions of each Award Agreement as in effect immediately prior to the Merger shall continue in full force and effect and shall not in any way be amended, revised or otherwise affected by this Assumption Agreement.

9.Employment Agreement. No terms contained in this Assumption Agreement shall supersede any more favorable terms or provisions with respect to Participant’s CTWS Awards assumed pursuant to this Assumption Agreement, including with respect to accelerated vesting, contained in any employment agreement between CTWS and/or its subsidiaries and the Participant in effect as of the Effective Time, as amended.

10.Prospectus. Participant hereby acknowledges receipt of a copy of the prospectus in the form attached hereto as Exhibit A describing the assumed CTWS Awards.

Please sign and return this Assumption Agreement to [ ]

7

Schedule A

8

EX-10.74

EXHIBIT 10.74

AMENDED AND RESTATEDSUPPLEMENTAL EXECUTIVE RETIREMENT AGREEMENT

This Agreement, made this 15^th day of November 2017 by and between THE CONNECTICUT WATER COMPANY (hereinafter referred to as the “Employer”) and Maureen P. Westbrook (hereinafter referred to as the “Employee”).

WITNESSETH THAT:

WHEREAS, the Employee has and is expected to continue to render valuable services to the Employer, and

WHEREAS, the Employer desires to ensure that it will have the benefit of the Employee’s services until she reaches retirement, and

WHEREAS, the Employer wishes to assist the Employee in providing for the financial requirements of the Employee in the event of her retirement, disability or death; and

WHEREAS, the Employer and the Employee entered into an amended and restated Supplemental Executive Retirement Agreement dated January 24, 2008; and

WHEREAS, the parties amended and restated the Supplemental Retirement Agreement to comply with Section 409A of the Internal Revenue Code of 1986, as amended, and regulations issued thereunder (collectively “Section 409A”) effective January 1, 2009; and

WHEREAS, the parties agree to further amend and restate the Supplemental Retirement Agreement to provide for certain benefits on an involuntary termination of employment;

NOW, THEREFORE, in consideration of the premises and of the mutual covenants and agreements herein contained, the parties hereto agree to enter into this Amended and Restated Supplemental Executive Retirement Agreement, effective November 15, 2017, as follows:

1.SUPPLEMENTAL RETIREMENT BENEFIT.

a.Normal or Deferred Retirement. If, upon or after the Employee’s attainment of age 65, the Employee shall separate from service and she shall be eligible to receive a benefit under The Connecticut Water Company Employees’ Retirement Plan (hereinafter referred to as the “Retirement Plan”), the Employee shall be entitled to receive pursuant to this Agreement a benefit having a value equal to an annual benefit for her life of (a) 60% of the Employee’s Average Earnings reduced by (b) the annual benefit payable to the Employee under the Retirement Plan in the form of a single life annuity for the life of the Employee (whether or not the benefit under the Retirement Plan is actually paid in such form), commencing at the same time as of which benefits commence hereunder (whether or not the benefit under the Retirement Plan commences at such time). Such benefit will be payable in accordance with Section 2 below. The date as of which benefits commence hereunder is the first day of the month following the Employee’s separation from service, even though actual payment may be delayed in accordance with Section 2 hereof.

EXHIBIT 10.74

b.Early Retirement. If, upon or after the Employee’s attainment of age 55 and prior to attainment of age 65, the Employee shall separate from service and she shall be eligible to receive a benefit under the Retirement Plan, the Employee shall be entitled to receive pursuant to this Agreement a benefit having a value equal to an annual benefit for her life of (a) 60% of the Employee’s Average Earnings reduced by (b) the annual benefit payable to the Employee under the Retirement Plan in the form of a single life annuity for the life of the Employee (whether or not the benefit under the Retirement Plan is actually paid in such form) commencing at age 65 (whether or not the benefit under the Retirement Plan commences at such time). If such benefit shall commence to be paid prior to the Employee’s attainment of age 62, such benefit shall be reduced by 4% for each complete year by which the date of benefit commencement precedes her attainment of age 62. Such benefit shall be paid in accordance with Section 2 below.

c.For purposes of a. and b. above, “Average Earnings” shall have the meaning set forth in the Retirement Plan, except that in determining Average Earnings, Annual Earnings (as defined in the Retirement Plan) shall not be limited to the OBRA ‘93 annual compensation limit, the annual compensation limit imposed under the Economic Growth and Tax Relief Reconciliation Act of 2001 (“EGTRRA”), or any similar limit on annual compensation under Section 401(a)(17) of the Internal Revenue Code of 1986, as amended (the “Code”), imposed by any future legislation.

In determining Average Earnings, if the Employee retires under this Agreement on or after attainment of age 62, Annual Earnings shall also include the value of all of the following: (1) Cash Units, (2) Restricted Stock, and (3) Performance Shares awarded to a Participant under the Connecticut Water Service, Inc. Performance Stock Program (the “Program”) for any year in which such awards are made. Notwithstanding the foregoing, in no event shall awards which are long-term awards or PARSAs under the Program be taken into account in determining Average Earnings. The value of such awards (other than long-term awards or PARSAs) shall be included within Annual Earnings in the year in which such amounts are finally determined and actually awarded. Such amounts, if credited to a Performance Share Account, shall not be counted a second time when payment is made from such Account.

The calculation of the benefit set forth in a. and b. above, and of all other benefits payable under this Agreement, shall be performed by the Compensation Committee under the Retirement Plan, and the calculations and interpretations of such Committee shall be final and binding on the parties hereto.

The Employee will not be deemed to have retired unless she has experienced a separation from service as defined in Section 409A of the Code.

d.Disability Benefit. If the Employee shall incur a separation from service due to a disability, the Employee shall be entitled to receive pursuant to this Agreement a benefit having a value equal to an annual benefit for her life calculated in the manner set forth in b. above; provided, however, that the reduction factor pursuant to b. above shall be 0.72 if the Employee’s benefit commencement date precedes age 62 by more than 7 complete years. The Employee will not be deemed to have terminated employment unless she has experienced a separation from service as defined in Section 409A of the Code. Such benefit shall be paid in accordance with

2

EXHIBIT 10.74

Section 2 below. Notwithstanding the foregoing in this Section 1.d, “disability” shall be determined by the Compensation Committee, and the Employee will be considered to be disabled if the Employee is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than twelve months.

e.Termination of Employment without Cause or due to Disability. If the Employee shall incur a separation from service by the Employer without Cause (as defined in the employment agreement between the Employee and the Employer) or due to Employee’s disability at any time before the attainment of age 62, (a) the Employee will be entitled to receive a benefit pursuant to this Agreement calculated in accordance with Section 1.b (and Section 1.d in the case of disability), but which benefit shall not be reduced regardless of the fact the Employee has not yet attained age 62 (i.e., there shall be no benefit reduction of 4% for each complete year by which the date the benefit commences precedes the attainment of age 62) and (b) in determining Average Earnings, Annual Earnings shall be determined consistent with the second paragraph of Section 1.c above.

f.Absence of Other Benefits. No benefits shall be paid to the Employee pursuant to this Agreement other than as provided in a. through e. above.

2.TERMS AND CONDITIONS OF BENEFIT. The annual lifetime benefit calculated in accordance with Section 1 hereof shall be paid in monthly installments on the first day of each month. Such installments paid pursuant to 1.a, 1.b or 1.d shall be calculated as if they were to commence to be paid on the first day of the first month following the Employee’s separation from service. However, if the Employee is a “specified employee” as that term is defined under Section 409A, at the time of separation from service, actual payment will commence on the first day of the seventh (7^th) month following the date of the Employee’s separation from service, and the first payment shall include all payments that would have been made had payments commenced on the first day of the month following the Employee’s separation from service, so that the first installment made pursuant to 1.a., 1.b. or 1.d, if the Employee is a specified employee, shall be equal to seven (7^th) such installments. If the Employee is not a “specified employee” at the time of separation from service, payment of monthly installments shall commence on the first day of the first month following the Employee’s separation from service.

If the Employee is a specified employee at the time of separation and should die after separation, but prior to the first day of the seventh (7^th) month following separation from service, a lump sum equal to the amount the Employee would have received had she commenced receiving benefits immediately upon the first day of the month following separation from service and ending on the date of death shall be paid to the Employee’s estate; and the Employee’s surviving spouse, if any, shall receive any 50% survivor annuity payments for the period from the Employee’s date of death to the first day of the seventh (7^th) month following separation from service. Any payments made pursuant to the preceding sentence shall be made on the first day of the seventh (7^th) month following separation from service.

3

EXHIBIT 10.74

The form in which the benefit hereunder shall be paid is, if the Employee is unmarried at the time of separation from service, an annuity for the life of the Employee only and, if the Employee is married at the time of separation from service, an annuity for the life of the Employee with the provision that after the Employee’s death, 50% of the annual benefit that was payable to the Employee shall be continued to the Employee’s surviving spouse for life (a “Joint and Survivor Annuity”). The benefit payable as a Joint and Survivor Annuity shall be calculated by applying to the benefit calculated in accordance with Section 1.a., 1.b., or 1.d. hereof, as appropriate, the factors for the 50% contingent annuity option set forth in the Retirement Plan. The Joint and Survivor Annuity shall be actuarially equivalent to the life annuity form of payment.

Monthly installments of benefits shall be paid on the first day of the month and shall cease to be paid as of the first day of the month following the date of the Employee’s death, unless a Joint and Survivor Annuity is then in effect, in which event the installments shall continue to be paid on the first day of the month and shall cease as of the first day of the month following the death of the Employee’s surviving spouse. A Joint and Survivor Annuity shall be deemed to be in effect if the Employee is married at the time of separation from service, regardless of whether the Employee dies prior to actual commencement of benefits.

3.DEATH BENEFIT. If the Employee has attained age 55 while in service with the Employer and dies thereafter, while in the service of the Employer, and if the Employee’s spouse or other beneficiary is entitled to a death benefit under the Retirement Plan, said spouse or other beneficiary shall be entitled to receive a death benefit pursuant to this Plan. However, if the Employee is survived by her spouse, such spouse shall be deemed to be entitled to receive a spousal pre-retirement death benefit under the Retirement Plan even if a waiver of such spousal pre-retirement death benefit is in effect under such Plan. The amount of said death benefit shall be determined as if the Employee had been terminated without Cause on the day prior to her death (with benefits provided in accordance with Section 1.e above) with either a Joint and Survivor Annuity in effect, if her spouse survives her, or a five years certain and life annuity (as described in the Retirement Plan) in effect, if she has no spouse or her spouse does not survive her. However, rather than being paid in the form of a survivor annuity or in installments for the five-year period, payment of the present value of the death benefit shall be made in a lump sum on the first day of the first month following the Employee’s death. The actuarial assumptions to be utilized in computing the present value thereof shall be the interest rate and mortality assumptions then being utilized under the Retirement Plan in computing lump sum payments.

No other death benefits shall be payable in the event of the Employee’s death while in the service of the Employer.

4.LIMITATION OF BENEFIT. If the Employee’s employment shall be terminated for cause involving fraud, dishonesty, moral turpitude, gross misconduct, gross failure to perform her duties, or disclosure of secret or other confidential information of the Employer to any competitor or to any person not authorized to receive such information, neither the Employee, her spouse, her beneficiary nor her estate shall be entitled to receive any benefit under this Agreement.

4

EXHIBIT 10.74

5.ABSENCE OF FUNDING. Benefits payable pursuant to this Agreement shall not be funded, and the Employer shall not be required to segregate or earmark any of its assets for the benefit of the Employee, her spouse, her beneficiary or her estate. Such benefits shall not be subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, attachment or garnishment by creditors of the Employee, her spouse, her beneficiary or her estate, and any attempt to anticipate, alienate, transfer, assign or attach these benefits shall be void. The Employee, her spouse, her beneficiary or her estate shall have only a contractual right against the Employer for the benefits hereunder and shall have the status of general unsecured creditors. Notwithstanding the foregoing, in order to pay benefits pursuant to this Agreement, the Employer may establish a grantor trust (hereinafter the “Trust”) within the meaning of Section 671 of the Internal Revenue Code of 1986, as amended. Some or all of the assets of the Trust may be dedicated to providing benefits to the Employee, her spouse, her beneficiary or her estate pursuant to this Agreement, but, nevertheless, all assets of the Trust shall at all times remain subject to the claims of the Employer’s general creditors in the event of the Employer’s bankruptcy or insolvency.

6.MISCELLANEOUS.

a.This Agreement may be amended at any time by mutual written agreement of the parties hereto, but no amendment shall operate to give the Employee, her spouse, her estate or any other beneficiary, either directly or indirectly, any interest whatsoever in any funds or assets of the Employer, except the right to receive the payments herein provided and the right to receive such payments from assets held in the Trust.

b.This Agreement shall not supersede any other contract of employment, whether oral or in writing, between the Employer and the Employee, nor shall it affect or impair the rights and obligations of the Employer and the Employee, respectively, thereunder. Nothing contained herein shall impose any obligation on the Employer to continue the employment of the Employee.

c.This Agreement shall be construed in all respects under the laws of the State of Connecticut.

d.This Agreement has been prepared with reference to Section 409A of the Internal Revenue Code and should be interpreted and administered in a manner consistent with Section 409A.

e.This Amendment and Restatement is effective as of November 15, 2017.

5

EXHIBIT 10.74

IN WITNESS WHEREOF, the Employer and the Employee have executed this Agreement on the day and year above written.

	THE CONNECTICUT WATER COMPANY
11.21.17	By	/s/ Kristen A. Johnson
Date		Kristen A. Johnson
		Vice President Human Resources & Corporate Secretary
11/21/17	By	/s/ Maureen P. Westbrook
Date		Maureen P. Westbrook

6

EX-10.75

EXHIBIT 10.75

AMENDED AND RESTATEDSUPPLEMENTAL EXECUTIVE RETIREMENT AGREEMENT

This Agreement, made this 15^th day of November 2017 by and between THE CONNECTICUT WATER COMPANY (hereinafter referred to as the “Employer”) and Kristen A. Johnson (hereinafter referred to as the “Employee”).

WITNESSETH THAT:

WHEREAS, the Employee has and is expected to continue to render valuable services to the Employer, and

WHEREAS, the Employer desires to ensure that it will have the benefit of the Employee’s services until she reaches retirement, and

WHEREAS, the Employer wishes to assist the Employee in providing for the financial requirements of the Employee in the event of her retirement, disability or death; and

WHEREAS, the Employer and the Employee entered into an amended and restated Supplemental Executive Retirement Agreement dated January 24, 2008; and

WHEREAS, the parties amended and restated the Supplemental Retirement Agreement to comply with Section 409A of the Internal Revenue Code of 1986, as amended, and regulations issued thereunder (collectively “Section 409A”) effective January 1, 2009; and

WHEREAS, the parties agree to further amend and restate the Supplemental Retirement Agreement to provide for certain benefits on an involuntary termination of employment;

NOW, THEREFORE, in consideration of the premises and of the mutual covenants and agreements herein contained, the parties hereto agree to enter into this Amended and Restated Supplemental Executive Retirement Agreement, effective November 15, 2017, as follows:

1.SUPPLEMENTAL RETIREMENT BENEFIT

a.Normal or Deferred Retirement. If, upon or after the Employee’s attainment of age 65, the Employee shall separate from service and she shall be eligible to receive a benefit under The Connecticut Water Company Employees’ Retirement Plan (hereinafter referred to as the “Retirement Plan”), the Employee shall be entitled to receive pursuant to this Agreement a benefit having a value equal to an annual benefit for her life of (a) 60% of the Employee’s Average Earnings reduced by (b) the annual benefit payable to the Employee under the Retirement Plan in the form of a single life annuity for the life of the Employee (whether or not the benefit under the Retirement Plan is actually paid in such form), commencing at the same time as of which benefits commence hereunder (whether or not the benefit under the Retirement Plan commences at such time), and further reduced by the annual benefit payable to Employee under any qualified defined benefit plan maintained by Rockville Bank/United Bancorp in the form of a single life annuity on the life the Employee (whether or not the benefit under such plan is actually paid in such form) commencing at the same time as of which benefits commence hereunder (whether or not the benefit under such

EXHIBIT 10.75

plan commences at such time). Such benefit will be payable in accordance with Section 2 below. The date as of which benefits commence hereunder is the first day of the month following the Employee’s separation from service, even though actual payment may be delayed in accordance with Section 2 hereof.

b.Early Retirement. If, upon or after the Employee’s attainment of age 55 and prior to attainment of age 65, the Employee shall separate from service and she shall be eligible to receive a benefit under the Retirement Plan, the Employee shall be entitled to receive pursuant to this Agreement a benefit having a value equal to an annual benefit for her life of (a) 60% of the Employee’s Average Earnings reduced by (b) the annual benefit payable to the Employee under the Retirement Plan in the form of a single life annuity for the life of the Employee (whether or not the benefit under the Retirement Plan is actually paid in such form) commencing at age 65 (whether or not the benefit under the Retirement Plan commences at such time) and further reduced by (c) the annual benefit payable to Employee under any qualified defined benefit plan maintained by Rockville Bank/United Bancorp in the form of a single life annuity for the life of the Employee (whether or not the benefit payable under such plan is actually payable in such form) commencing at age 65 (whether or not the benefit under such plan commences at such time). If such benefit shall commence to be paid prior to the Employee’s attainment of age 62, such benefit shall be reduced by 4% for each complete year by which the date of benefit commencement precedes her attainment of age 62. Such benefit shall be paid in accordance with Section 2 below.

c.For purposes of a. and b. above, “Average Earnings” shall have the meaning set forth in the Retirement Plan, except that in determining Average Earnings, Annual Earnings (as defined in the Retirement Plan) shall not be limited to the OBRA ‘93 annual compensation limit, the annual compensation limit imposed under the Economic Growth and Tax Relief Reconciliation Act of 2001 (“EGTRRA”), or any similar limit on annual compensation under Section 401(a)(17) of the Internal Revenue Code of 1986, as amended (the “Code”), imposed by any future legislation.

In determining Average Earnings, if the Employee retires under this Agreement on or after attainment of age 62, Annual Earnings shall also include the value of all of the following: (1) Cash Units, (2) Restricted Stock, and (3) Performance Shares awarded to a Participant under the Connecticut Water Service, Inc. Performance Stock Program (the “Program”) for any year in which such awards are made. Notwithstanding the foregoing, in no event shall awards which are long-term awards or PARSAs under the Program be taken into account in determining Average Earnings. The value of such awards (other than long-term awards or PARSAs) shall be included within Annual Earnings in the year in which such amounts are finally determined and actually awarded. Such amounts, if credited to a Performance Share Account, shall not be counted a second time when payment is made from such Account.

The calculation of the benefit set forth in a. and b. above, and of all other benefits payable under this Agreement, shall be performed by the Compensation Committee under the Retirement Plan, and the calculations and interpretations of such Committee shall be final and binding on the parties hereto.

The Employee will not be deemed to have retired unless she has experienced a separation from service as defined in Section 409A of the Code.

2

EXHIBIT 10.75

d.Disability Benefit. If the Employee shall incur a separation from service due to a disability, the Employee shall be entitled to receive pursuant to this Agreement a benefit having a value equal to an annual benefit for her life calculated in the manner set forth in b. above; provided, however, that the reduction factor pursuant to b. above shall be 0.72 if the Employee’s benefit commencement date precedes age 62 by more than 7 complete years. The Employee will not be deemed to have terminated employment unless she has experienced a separation from service as defined in Section 409A of the Code. Such benefit shall be paid in accordance with Section 2 below. Notwithstanding the foregoing in this Section 1.d, “disability” shall be determined by the Compensation Committee, and the Employee will be considered to be disabled if the Employee is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than twelve months.

e.Termination of Employment without Cause or due to Disability. If the Employee shall incur a separation from service by the Employer without Cause (as defined in the employment agreement between the Employee and the Employer) or due to Employee’s disability at any time before the attainment of age 62, (a) the Employee will be entitled to receive a benefit pursuant to this Agreement calculated in accordance with Section 1.b (and Section 1.d in the case of disability), but which benefit shall not be reduced regardless of the fact the Employee has not yet attained age 62 (i.e.,there shall be no benefit reduction of 4% for each complete year by which the date the benefit commences precedes the attainment of age 62) and (b) in determining Average Earnings, Annual Earnings shall be determined consistent with the second paragraph of Section 1.c above.

f.Absence of Other Benefits. No benefits shall be paid to the Employee pursuant to this Agreement other than as provided in a. through e. above.

2.TERMS AND CONDITIONS OF BENEFIT. The annual lifetime benefit calculated in accordance with Section 1 hereof shall be paid in monthly installments on the first day of each month. Such installments paid pursuant to 1.a, 1.b or 1.d shall be calculated as if they were to commence to be paid on the first day of the first month following the Employee’s separation from service. However, if the Employee is a “specified employee” as that term is defined under Section 409A, at the time of separation from service, actual payment will commence on the first day of the seventh (7^th) month following the date of the Employee’s separation from service, and the first payment shall include all payments that would have been made had payments commenced on the first day of the month following the Employee’s separation from service, so that the first installment made pursuant to 1.a., 1.b. or 1.d, if the Employee is a specified employee, shall be equal to seven (7^th) such installments. If the Employee is not a “specified employee” at the time of separation from service, payment of monthly installments shall commence on the first day of the first month following the Employee’s separation from service.

If the Employee is a specified employee at the time of separation and should die after separation, but prior to the first day of the seventh (7^th) month following separation from service, a lump sum equal to the amount the Employee would have received had she commenced receiving benefits immediately upon the first day of the month following separation from service and ending on the date of death shall be paid to the Employee’s estate; and the Employee’s

3

EXHIBIT 10.75

surviving spouse, if any, shall receive any 50% survivor annuity payments for the period from the Employee’s date of death to the first day of the seventh (7^th) month following separation from service. Any payments made pursuant to the preceding sentence shall be made on the first day of the seventh (7^th) month following separation from service.

The form in which the benefit hereunder shall be paid is, if the Employee is unmarried at the time of separation from service, an annuity for the life of the Employee only and, if the Employee is married at the time of separation from service, an annuity for the life of the Employee with the provision that after the Employee’s death, 50% of the annual benefit that was payable to the Employee shall be continued to the Employee’s surviving spouse for life (a “Joint and Survivor Annuity”). The benefit payable as a Joint and Survivor Annuity shall be calculated by applying to the benefit calculated in accordance with Section 1.a., 1.b., or 1.d. hereof, as appropriate, the factors for the 50% contingent annuity option set forth in the Retirement Plan. The Joint and Survivor Annuity shall be actuarially equivalent to the life annuity form of payment.

Monthly installments of benefits shall be paid on the first day of the month and shall cease to be paid as of the first day of the month following the date of the Employee’s death, unless a Joint and Survivor Annuity is then in effect, in which event the installments shall continue to be paid on the first day of the month and shall cease as of the first day of the month following the death of the Employee’s surviving spouse. A Joint and Survivor Annuity shall be deemed to be in effect if the Employee is married at the time of separation from service, regardless of whether the Employee dies prior to actual commencement of benefits.

3.DEATH BENEFIT. If the Employee has attained age 55 while in service with the Employer and dies thereafter, while in the service of the Employer, and if the Employee’s spouse or other beneficiary is entitled to a death benefit under the Retirement Plan, said spouse or other beneficiary shall be entitled to receive a death benefit pursuant to this Plan. However, if the Employee is survived by her spouse, such spouse shall be deemed to be entitled to receive a spousal pre-retirement death benefit under the Retirement Plan even if a waiver of such spousal pre-retirement death benefit is in effect under such Plan. The amount of said death benefit shall be determined as if the Employee had been terminated without Cause on the day prior to her death (with benefits provided in accordance with Section 1.e above) with either a Joint and Survivor Annuity in effect, if her spouse survives her, or a five years certain and life annuity (as described in the Retirement Plan) in effect, if she has no spouse or her spouse does not survive her. However, rather than being paid in the form of a survivor annuity or in installments for the five-year period, payment of the present value of the death benefit shall be made in a lump sum on the first day of the first month following the Employee’s death. The actuarial assumptions to be utilized in computing the present value thereof shall be the interest rate and mortality assumptions then being utilized under the Retirement Plan in computing lump sum payments.

No other death benefits shall be payable in the event of the Employee’s death while in the service of the Employer.

4.LIMITATION OF BENEFIT. If the Employee’s employment shall be terminated for cause involving fraud, dishonesty, moral turpitude, gross misconduct, gross failure to perform

4

EXHIBIT 10.75

her duties, or disclosure of secret Or other confidential information of the Employer to any competitor or to any person not authorized to receive such information, neither the Employee, her spouse, her beneficiary nor her estate shall be entitled to receive any benefit under this Agreement.

5.ABSENCE OF FUNDING. Benefits payable pursuant to this Agreement shall not be funded, and the Employer shall not be required to segregate or earmark any of its assets for the benefit of the Employee, her spouse, her beneficiary or her estate. Such benefits shall not be subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, attachment or garnishment by creditors of the Employee, her spouse, her beneficiary or her estate, and any attempt to anticipate, alienate, transfer, assign or attach these benefits shall be void. The Employee, her spouse, her beneficiary or her estate shall have only a contractual right against the Employer for the benefits hereunder and shall have the status of general unsecured creditors. Notwithstanding the foregoing, in order to pay benefits pursuant to this Agreement, the Employer may establish a grantor trust (hereinafter the “Trust”) within the meaning of Section 671 of the Internal Revenue Code of 1986, as amended. Some or all of the assets of the Trust may be dedicated to providing benefits to the Employee, her spouse, her beneficiary or her estate pursuant to this Agreement, but, nevertheless, all assets of the Trust shall at all times remain subject to the claims of the Employer’s general creditors in the event of the Employer’s bankruptcy or insolvency.

6.MISCELLANEOUS.

a.This Agreement may be amended at any time by mutual written agreement of the parties hereto, but no amendment shall operate to give the Employee, her spouse, her estate or any other beneficiary, either directly or indirectly, any interest whatsoever in any funds or assets of the Employer, except the right to receive the payments herein provided and the right to receive such payments from assets held in the Trust.

b.This Agreement shall not supersede any other contract of employment, whether oral or in writing, between the Employer and the Employee, nor shall it affect or impair the rights and obligations of the Employer and the Employee, respectively, thereunder. Nothing contained herein shall impose any obligation on the Employer to continue the employment of the Employee.

c.This Agreement shall be construed in all respects under the laws of the State of Connecticut.

d.This Agreement has been prepared with reference to Section 409A of the Internal Revenue Code and should be interpreted and administered in a manner consistent with Section 409A.

e.This Amendment and Restatement is effective as of November 15, 2017.

5

EXHIBIT 10.75

IN WITNESS WHEREOF, the Employer and the Employee have executed this Agreement on the day and year above written.

	THE CONNECTICUT WATER COMPANY
11/21/17	By	/s/ David C. Benoit
Date		David C. Benoit
		Interim President & CEO
11.21.17	By	/s/ Kristen A. Johnson
Date		Kristen A. Johnson

6

EX-10.76

EXHIBIT 10.76

AMENDED AND RESTATEDSUPPLEMENTAL EXECUTIVE RETIREMENT AGREEMENT

This Agreement, made this 15^th day of November 2017 by and between THE CONNECTICUT WATER COMPANY (hereinafter referred to as the “Employer”) and David C. Benoit (hereinafter referred to as the “Employee”).

WITNESSETH THAT:

WHEREAS, the Employee has and is expected to continue to render valuable services to the Employer, and

WHEREAS, the Employer desires to ensure that it will have the benefit of the Employee’s services until he reaches retirement, and

WHEREAS, the Employer wishes to assist the Employee in providing for the financial requirements of the Employee in the event of his retirement, disability or death; and

WHEREAS, the Employer and the Employee entered into an amended and restated Supplemental Executive Retirement Agreement dated January 24, 2008; and

WHEREAS, the parties amended and restated the Supplemental Retirement Agreement to comply with Section 409A of the Internal Revenue Code of 1986, as amended, and regulations issued thereunder (collectively “Section 409A”) effective January 1, 2009; and

WHEREAS, the parties agree to further amend and restate the Supplemental Retirement Agreement to provide for certain benefits on an involuntary termination of employment;

NOW, THEREFORE, in consideration of the premises and of the mutual covenants and agreements herein contained, the parties hereto agree to enter into this Amended and Restated Supplemental Executive Retirement Agreement, effective November 15, 2017, as follows:

1.SUPPLEMENTAL RETIREMENT BENEFIT

a.Normal or Deferred Retirement. If, upon or after the Employee’s attainment of age 65, the Employee shall separate from service and he shall be eligible to receive a benefit under The Connecticut Water Company Employees’ Retirement Plan (hereinafter referred to as the “Retirement Plan”), the Employee shall be entitled to receive pursuant to this Agreement a benefit having a value equal to an annual benefit for his life of (a) 60% of the Employee’s Average Earnings reduced by (b) the annual benefit payable to the Employee under the Retirement Plan in the form of a single life annuity for the life of the Employee (whether or not the benefit under the Retirement Plan is actually paid in such form), commencing at the same time as of which benefits commence hereunder (whether or not the benefit under the Retirement Plan commences at such time), and further reduced by the annual benefit payable to Employee under any qualified defined benefit plan maintained by Yankee Gas/Eversource in the form of a single life annuity on the life the Employee (whether or not the benefit under such plan is actually paid in such form) commencing at the same time as of which benefits commence

hereunder (whether or not the benefit under such plan commences at such time). Such benefit will be payable in accordance with Section 2 below. The date as of which benefits commence hereunder is the first day of the month following the Employee’s separation from service, even though actual payment may be delayed in accordance with Section 2 hereof

b.Early Retirement. If, upon or after the Employee’s attainment of age 55 and prior to attainment of age 65, the Employee shall separate from service and he shall be eligible to receive a benefit under the Retirement Plan, the Employee shall be entitled to receive pursuant to this Agreement a benefit having a value equal to an annual benefit for his life of (a) 60% of the Employee’s Average Earnings reduced by (b) the annual benefit payable to the Employee under the Retirement Plan in the form of a single life annuity for the life of the Employee (whether or not the benefit under the Retirement Plan is actually paid in such form) commencing at age 65 (whether or not the benefit under the Retirement Plan commences at such time) and further reduced by (c) the annual benefit payable to Employee under any qualified defined benefit plan maintained by Yankee Gas/Eversource in the form of a single life annuity for the life of the Employee (whether or not the benefit payable under such plan is actually payable in such form) commencing at age 65 (whether or not the benefit under such plan commences at such time). If such benefit shall commence to be paid prior to the Employee’s attainment of age 62, such benefit shall be reduced by 4% for each complete year by which the date of benefit commencement precedes his attainment of age 62. Such benefit shall be paid in accordance with Section 2 below.

c.For purposes of a. and b. above, “Average Earnings” shall have the meaning set forth in the Retirement Plan, except that in determining Average Earnings, Annual Earnings (as defined in the Retirement Plan) shall not be limited to the OBRA ‘93 annual compensation limit, the annual compensation limit imposed under the Economic Growth and Tax Relief Reconciliation Act of 2001 (“EGTRRA”), or any similar limit on annual compensation under Section 401(a)(17) of the Internal Revenue Code of 1986, as amended (the “Code”), imposed by any future legislation.

In determining Average Earnings, if the Employee retires under this Agreement on or after attainment of age 62, Annual Earnings shall also include the value of all of the following: (1) Cash Units, (2) Restricted Stock, and (3) Performance Shares awarded to a Participant under the Connecticut Water Service, Inc. Performance Stock Program (the “Program”) for any year in which such awards are made. Notwithstanding the foregoing, in no event shall awards which are long-term awards or PARSAs under the Program be taken into account in determining Average Earnings. The value of such awards (other than long-term awards or PARSAs) shall be included within Annual Earnings in the year in which such amounts are finally determined and actually awarded. Such amounts, if credited to a Performance Share Account, shall not be counted a second time when payment is made from such Account.

The calculation of the benefit set forth in a. and b. above, and of all other benefits payable under this Agreement, shall be performed by the Compensation Committee under the Retirement Plan, and the calculations and interpretations of such Committee shall be final and binding on the parties hereto.

2

The Employee will not be deemed to have retired unless he has experienced a separation from service as defined in Section 409A of the Code.

d.Disability Benefit. If the Employee shall incur a separation from service due to a disability, the Employee shall be entitled to receive pursuant to this Agreement a benefit having a value equal to an annual benefit for his life calculated in the manner set forth in b. above; provided, however, that the reduction factor pursuant to b. above shall be 0.72 if the Employee’s benefit commencement date precedes age 62 by more than 7 complete years. The Employee will not be deemed to have terminated employment unless he has experienced a separation from service as defined in Section 409A of the Code. Such benefit shall be paid in accordance with Section 2 below. Notwithstanding the foregoing in this Section 1.d, “disability” shall be determined by the Compensation Committee, and the Employee will be considered to be disabled if the Employee is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than twelve months.

e.Termination of Employment without Cause or due to Disability. If the Employee shall incur a separation from service by the Employer without Cause (as defined in the employment agreement between the Employee and the Employer) or due to Employee’s disability at any time before the attainment of age 62, (a) the Employee will be entitled to receive a benefit pursuant to this Agreement calculated in accordance with Section 1.b (and Section 1.d in the case of disability), but which benefit shall not be reduced regardless of the fact the Employee has not yet attained age 62 (i.e.,there shall be no benefit reduction of 4% for each complete year by which the date the benefit commences precedes the attainment of age 62) and (b) in determining Average Earnings, Annual Earnings shall be determined consistent with the second paragraph of Section 1.c above.

f.Absence of Other Benefits. No benefits shall be paid to the Employee pursuant to this Agreement other than as provided in a. through e. above.

2.TERMS AND CONDITIONS OF BENEFIT. The annual lifetime benefit calculated in accordance with Section 1 hereof shall be paid in monthly installments on the first day of each month. Such installments paid pursuant to 1.a, 1.b or 1.d shall be calculated as if they were to commence to be paid on the first day of the first month following the Employee’s separation from service. However, if the Employee is a “specified employee” as that term is defined under Section 409A, at the time of separation from service, actual payment will commence on the first day of the seventh (7^th) month following the date of the Employee’s separation from service, and the first payment shall include all payments that would have been made had payments commenced on the first day of the month following the Employee’s separation from service, so that the first installment made pursuant to 1.a., 1.b. or 1.d, if the Employee is a specified employee, shall be equal to seven (7^th) such installments. If the Employee is not a “specified employee” at the time of separation from service, payment of monthly installments shall commence on the first day of the first month following the Employee’s separation from service.

3

If the Employee is a specified employee at the time of separation and should die after separation, but prior to the first day of the seventh (7^th) month following separation from service, a lump sum equal to the amount the Employee would have received had he commenced receiving benefits immediately upon the first day of the month following separation from service and ending on the date of death shall be paid to the Employee’s estate; and the Employee’s surviving spouse, if any, shall receive any 50% survivor annuity payments for the period from the Employee’s date of death to the first day of the seventh (7^th) month following separation from service. Any payments made pursuant to the preceding sentence shall be made on the first day of the seventh (7^th) month following separation from service.

The form in which the benefit hereunder shall be paid is, if the Employee is unmarried at the time of separation from service, an annuity for the life of the Employee only and, if the Employee is married at the time of separation from service, an annuity for the life of the Employee with the provision that after the Employee’s death, 50% of the annual benefit that was payable to the Employee shall be continued to the Employee’s surviving spouse for life (a “Joint and Survivor Annuity”). The benefit payable as a Joint and Survivor Annuity shall be calculated by applying to the benefit calculated in accordance with Section 1.a., 1.b., or 1.d. hereof, as appropriate, the factors for the 50% contingent annuity option set forth in the Retirement Plan. The Joint and Survivor Annuity shall be actuarially equivalent to the life annuity form of payment.

Monthly installments of benefits shall be paid on the first day of the month and shall cease to be paid as of the first day of the month following the date of the Employee’s death, unless a Joint and Survivor Annuity is then in effect, in which event the installments shall continue to be paid on the first day of the month and shall cease as of the first day of the month following the death of the Employee’s surviving spouse. A Joint and Survivor Annuity shall be deemed to be in effect if the Employee is married at the time of separation from service, regardless of whether the Employee dies prior to actual commencement of benefits.

3.DEATH BENEFIT. If the Employee has attained age 55 while in service with the Employer and dies thereafter, while in the service of the Employer, and if the Employee’s spouse or other beneficiary is entitled to a death benefit under the Retirement Plan, said spouse or other beneficiary shall be entitled to receive a death benefit pursuant to this Plan. However, if the Employee is survived by his spouse, such spouse shall be deemed to be entitled to receive a spousal pre-retirement death benefit under the Retirement Plan even if a waiver of such spousal pre-retirement death benefit is in effect under such Plan. The amount of said death benefit shall be determined as if the Employee had been terminated without Cause on the day prior to his death (with benefits provided in accordance with Section 1.e above) with either a Joint and Survivor Annuity in effect, if his spouse survives his, or a five years certain and life annuity (as described in the Retirement Plan) in effect, if he has no spouse or his spouse does not survive him. However, rather than being paid in the form of a survivor annuity or in installments for the five-year period, payment of the present value of the death benefit shall be made in a lump sum on the first day of the first month following the Employee’s death. The actuarial assumptions to be utilized in computing the present value thereof shall be the interest rate and mortality assumptions then being utilized under the Retirement Plan in computing lump sum payments.

4

No other death benefits shall be payable in the event of the Employee’s death while in the service of the Employer.

4.LIMITATION OF BENEFIT. If the Employee’s employment shall be terminated for cause involving fraud, dishonesty, moral turpitude, gross misconduct, gross failure to perform his duties, or disclosure of secret or other confidential information of the Employer to any competitor or to any person not authorized to receive such information, neither the Employee, his spouse, [his] [her] beneficiary nor his estate shall be entitled to receive any benefit under this Agreement.

5.ABSENCE OF FUNDING. Benefits payable pursuant to this Agreement shall not be funded, and the Employer shall not be required to segregate or earmark any of its assets for the benefit of the Employee, his spouse, his beneficiary or his estate. Such benefits shall not be subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, attachment or garnishment by creditors of the Employee, his spouse, his beneficiary or his estate, and any attempt to anticipate, alienate, transfer, assign or attach these benefits shall be void. The Employee, his spouse, his beneficiary or his estate shall have only a contractual right against the Employer for the benefits hereunder and shall have the status of general unsecured creditors. Notwithstanding the foregoing, in order to pay benefits pursuant to this Agreement, the Employer may establish a grantor trust (hereinafter the “Trust”) within the meaning of Section 671 of the Internal Revenue Code of 1986, as amended. Some or all of the assets of the Trust may be dedicated to providing benefits to the Employee, his spouse, his beneficiary or his estate pursuant to this Agreement, but, nevertheless, all assets of the Trust shall at all times remain subject to the claims of the Employer’s general creditors in the event of the Employer’s bankruptcy or insolvency.

6.MISCELLANEOUS.

a.This Agreement may be amended at any time by mutual written agreement of the parties hereto, but no amendment shall operate to give the Employee, his spouse, his estate or any other beneficiary, either directly or indirectly, any interest whatsoever in any funds or assets of the Employer, except the right to receive the payments herein provided and the right to receive such payments from assets held in the Trust.

b.This Agreement shall not supersede any other contract of employment, whether oral or in writing, between the Employer and the Employee, nor shall it affect or impair the rights and obligations of the Employer and the Employee, respectively, thereunder. Nothing contained herein shall impose any obligation on the Employer to continue the employment of the Employee.

c.This Agreement shall be construed in all respects under the laws of the State of Connecticut.

d.This Agreement has been prepared with reference to Section 409A of the Internal Revenue Code and should be interpreted and administered in a manner consistent with Section 409A.

5

e.This Amendment and Restatement is effective as of November 15, 2017.

6

IN WITNESS WHEREOF, the Employer and the Employee have executed this Agreement on the day and year above written.

	THE CONNECTICUT WATER COMPANY
11.21.17	By	/s/ Kristen A. Johnson
Date		Kristen A. Johnson
		Vice President Human Resources & Corporate Secretary
11/21/17	By	/s/ David C. Benoit
Date		David C. Benoit

7

EX-10.77

EXHIBIT 10.77

AMENDMENT TO

AMENDED AND RESTATED

SUPPLEMENTAL EXECUTIVE RETIREMENT AGREEMENT

This Amendment (the “Amendment”) to the Amended and Restated Supplemental Executive Retirement Agreement is entered into and is effective as of November 1, 2019 (the “Effective Date”), by and between Kristen A. Johnson, an individual (“Executive”), and The Connecticut Water Company, a Connecticut corporation (the “Employer”). The Executive and the Employer are each a “party” and are together “parties” to this Amendment.

The Executive and the Employer entered into that certain Amended and Restated Supplemental Executive Retirement Agreement, dated November 15, 2017 (the “SERP Agreement”). The Executive and the Employer now mutually desire to amend the SERP Agreement and, in connection therewith, to provide for the continued services and employment of the Executive by the Employer on the terms and conditions hereinafter set forth.

In consideration of the employment compensation to be paid to the Executive, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged by the parties, the parties, intending to be legally bound, hereby agree to amend the SERP Agreement as set forth below.

1.Amendment.

(a)The phrase “the Employee’s attainment of age 55 and prior to attainment of 65” in the first sentence of Section 1(b) of the SERP Agreement shall be and hereby is amended by replacing such phrase with “November 1, 2019”.

(b)The first sentence of Section 3 of the SERP Agreement shall be and hereby is amended by replacing such entire first sentence with the following:

If Employee is providing services to Employer on November 1, 2019 and dies thereafter, while in the service of the Employer, and if the Employee’s spouse or other beneficiary is entitled to a death benefit under the Retirement Plan, said spouse or other beneficiary shall be entitled to receive a death benefit pursuant to this Plan.

(c)Section 1(e) shall be and hereby is amended by replacing the entire Section 1(e) with the following:

Termination of Employment due to Involuntary Termination or Disability. If the Employee shall incur a separation from service due to an Involuntary Termination (which shall be defined as a termination of the Employee’s employment by the Employer without Cause or a resignation by the Employee for Good Reason, with Cause and Good Reason each as defined in the employment agreement then in effect between the Employee and the Employer (or an affiliate of the Employer)), or due to Employee’s disability, in each case at any time before Employee’s attainment of age 62, (a) the Employee will be entitled to receive a benefit pursuant

1

to this Agreement calculated in accordance with Section 1.b (and Section 1.d in the case of disability), but which benefit shall not be reduced regardless of the fact the Employee has not yet attained age 62 (i.e., there shall be no benefit reduction of 4% for each complete year by which the date the benefit commencement precedes the attainment of age 62) and (b) in determining Average Earnings, Annual Earnings shall be determined consistent with the second paragraph of Section 1.c above.

2.Entire Agreement. This Amendment constitutes the entire agreement between the Employer and the Executive relating to the Sections or parts of Sections of the SERP Agreement set forth above and supersedes and replaces any prior verbal or written agreements or understandings between the parties as to the subject matter of such Sections or parts of Sections.

3.SERP Agreement Remains in Effect. Except as expressly modified by this Amendment, the SERP Agreement remains in full force and effect, and this Amendment may be amended or altered only in an agreement in writing signed by the parties.

4.Execution in Counterparts. For the convenience of the parties, this Amendment may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. A signed copy of this Amendment delivered by facsimile, e-mail or other means of electronic transmission shall be deemed to have the same legal effect as delivery of an original signed copy of this Agreement.

5.Effectiveness. Upon the execution and delivery of this Amendment by each of the parties, this Amendment shall become effective as of the Effective Date.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK; SIGNATURE PAGES FOLLOW]

2

IN WITNESS WHEREOF, the Executive and the Employer have executed this Amendment effective as of November 1, 2019.

EXECUTIVE:
/s/ Kristen A. Johnson
Kristen A. Johnson
THE CONNECTICUT WATER COMPANY
/s/ Eric W. Thornburg
By:	Eric W. Thornburg
Title:	Chairman

3

EX-10.78

EXHIBIT 10.78

MATRIX TRUST COMPANY

GRANTOR TRUST AGREEMENT

DB2/ 38197208.1        Matrix CT Water Grantor Trust – CO 041917

TABLE OF CONTENTS

(continued)

Page

Page
COMPANY AND PLAN INFORMATION			1
COMPANY NAME (PLAN SPONSOR):			1
BACKGROUND			1
AGREEMENT			1
Section 1. Definitions			1
	(a)	Agreement	1
	(b)	Beneficiary	2
	(c)	Board	2
	(d)	Change in Control	2
	(e)	Chief Executive Officer	4
	(f)	Code	4
	(g)	Company	4
	(h)	Designated Representative	4
	(i)	ERISA	4
	(j)	Force Majeure	4
	(k)	Insolvent or Insolvency	4
	(l)	Instruction (s)	4
	(m)	Investment Manager	4
	(n)	Participant	4
	(o)	Payment Schedule	4
	(p)	Person	5
	(q)	Plan	5
	(r)	Trust	5
	(s)	Trust Fund	5
	(t)	Trustee	5
Section 2. Trust			5
	(a)	Establishment	5
	(b)	Grantor Trust	5
	(c)	Trust Assets	5
	(d)	Non-assignment	6
	(e)	Additional Deposits	6
Section 3. Receipt of Assets			6
	(a)	Receipt of Assets; Directed Trustee	6
	(b)	Custody of Assets	6
	(c)	Location of Evidence of Ownership	6

DB2/ 38197208.1        Matrix CT Water Grantor Trust – CO 041917

TABLE OF CONTENTS

(continued)

Page

	(d)	Unidentified Assets	7
Section 4. Disbursements; Taxes			7
	(a)	Payments to Participants and Beneficiaries	7
	(b)	Taxes	7
Section 5. Payments to the Company			8
	(a)	In General	8
	(b)	Return of Amounts to the Company	8
Section 6. Investments			8
	(a)	Investment Authority	8
	(b)	Investment Control	9
	(c)	Investment Restrictions	9
	(d)	Nondiscretionary Investment Authority	9
	(e)	Valuation of Assets	10
	(f)	Processing Transactions	11
	(g)	Legitimate Delay	11
	(h)	Performance Standards	11
	(i)	Other Limitations	11
	(j)	Plan Assets Not Held in Trustee's Trust	12
Section 7. Disposition of Income			12
Section 8. Trustee Services			12
	(a)	Accounting by the Trustee	12
	(b)	Inspection and Audit	12
Section 9. Directions			13
	(a)	Company Direction to the Trustee	13
	(b)	Designation of Representatives	13
Section 10. Compensation and Expenses of Administration			14
	(a)	Generally	15
	(b)	Disclosure	15
	(c)	Indemnified Expenses	15
Section 11. Indemnification			15
	(a)	Indemnification of the Trustee	15
	(b)	Acts of Prior Trustees	16
Section 12. Company Insolvency			16
	(a)	Trustee Responsibility Regarding Payments to Participants and Beneficiaries	16
	(b)	Notice to Trustee; Instructions	17
	(c)	Court Appointment of New Trustee	17
	(d)	Dissolution of the Company	17

DB2/ 38197208.1        Matrix CT Water Grantor Trust – CO 041917

TABLE OF CONTENTS

(continued)

Page

	(e)	Fees	18
Section 13. Resignation or Removal of the Trustee; Successor Trustee			18
	(a)	Resignation; Removal of the Trustee	18
	(b)	Appointment of Successor Trustee	18
	(c)	Transfer of Assets to Successor Trustee	18
	(d)	Terminating Trustee's Accounting	18
	(e)	Changes in Organization of Trustee	19
Section 14. Amendment or Termination			19
Section 15. Arbitration			19
Section 16. USA Patriot Act Notification			20
Section 17. Taxes; Other Matters			20
Section 18. Data			21
Section 19. Confidentiality			21
	(a)	Definitions	21
	(b)	Obligations	21
	(c)	Disclosure Generally	21
	(d)	Compelled Disclosure	22
	(e)	Exceptions	22
	(f)	Return of Destroy	22
Section 20. Non-public Personal Information			23
	(a)	Obligations	23
	(b)	Security Measures	23
	(c)	Security Breaches	23
Section 21. Equitable Relief			23
Section 22. Administrative Provisions			23
	(a)	Notices	23
	(b)	Proxies	24
	(c)	Securities Laws	24
	(d)	Compliance	24
	(e)	Record Retention	24
	(f)	Waiver of Jury Trial	24
	(g)	Limitation of Claims	24
	(h)	Evidence	24
Section 23. Miscellaneous Provisions			24
	(a)	Performance by Trustee, its Agents or Affiliates	24
	(b)	Entire Agreement	25
	(c)	Waiver	25

DB2/ 38197208.1        Matrix CT Water Grantor Trust – CO 041917

TABLE OF CONTENTS

(continued)

Page

	(d)	Counterparts	25
	(e)	Successors and Assigns	25
	(f)	Severability	25
Section 24. Governing Law			25
Section 25. Effective Date			25
APPENDIX A ADDITIONAL PLAN(S)			27

DB2/ 38197208.1        Matrix CT Water Grantor Trust – CO 041917

BACKGROUND

A.Connecticut Water Service Inc. (the “Company”) has adopted the Plan(s) listed in Appendix A.

B.The Company has incurred or expects to incur liability under the terms of such Plan(s) with respect to the individuals participating therein.

C.The Company wishes to establish a trust (hereinafter called the “Trust”) and to contribute to the Trust assets that shall be held therein, subject to the claims of the Company’s creditors in the event of the Company’s Insolvency, as herein defined, until paid to Participants and Beneficiaries in such manner and at such times as specified in the Plan(s).

D.The parties intend that this Trust shall constitute an unfunded arrangement that will not affect the status of a Plan as an unfunded plan maintained for the purpose of providing deferred compensation for a select group of management or highly compensated employees for purposes of Title I of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”).

E.The Company intends to make contributions to the Trust to provide itself with a source of funds to assist it In the meeting of its liabilities under the Plan(s).

AGREEMENT

This Grantor Trust Agreement (the “Agreement”) is made and entered into this 1st day of May, 2017 by and between the Company and Matrix Trust Company (“Matrix Trust”) (the “Trustee”).

The Trust hereby established in Section 2 below shall [select one of the following]:

❑    be revocable by the Company.

X    be irrevocable.

❑    become irrevocable upon approval by the Board of Directors.

If no election is made, the Trust will be irrevocable.

Section 1.     Definitions.

For purposes of this Agreement, the following terms shall have the meanings respectively indicated unless the context clearly requires otherwise:

(a)Agreement. “Agreement” means this Matrix Trust Company Grantor Trust Agreement between the Company, the Designated Representative(s), if any, and the Trustee, as reflected herein, provided that if this instrument, pursuant to its terms, be

DB2/ 38197208.1    1 Matrix CT Water Grantor Trust – CO 041917

amended, “Agreement” as of that particular date, shall mean this instrument, as amended and in force on such date.

(b)Beneficiary. “Beneficiary” means any Person or entity entitled to receive benefits which are payable upon or after a Participant’s death pursuant to the Plan.

(c)Board. “Board” means the Board of Directors of the Company, as from time to time constituted, or such other persons or group of persons as shall be designated by the Company. Any formal action herein permitted or required to be taken by a Company shall be deemed authoritative if taken:

(1)If and when the Company is a partnership, by written instrument executed by one or more of its general partners or by written instrument executed by a person or group of persons who has been authorized by written instrument executed by one or more general partners as having authority to take such action;

(2)If and when the Company is a proprietorship, by written instrument executed by the proprietor or by written instrument executed by a person or group of persons who has been authorized by written instrument executed by the proprietor as having authority to take such action; or

(3)If and when the Company, by resolution of its board of directors or other governing board, or by written instrument executed by a person or group of persons who has been authorized by resolution of its board of directors or other governing board as having authority to take such action;

(4)If and when the Company is a joint venture, by written instrument executed by one of the joint venturers or by written instrument executed by a person or group of persons who has been authorized by written instrument executed by one of the joint venturers as having authority to take such action.

(5)If and when the Company, by written instrument executed by one or more of its managers or by written instrument executed by a person or group of persons who has been authorized by written instrument executed by one or more managers as having authority to take such action.

(d)Change in Control. “Change in Control” shall be deemed to have occurred if any of the following occurs: (i) a public announcement shall be made or a report on Schedule 13D shall be filed with the Securities and Exchange Commission pursuant to Section 13(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) disclosing that any Person (as defined below), other than Company or a Subsidiary or any employee benefit plan sponsored by Company or a Subsidiary, is the beneficial owner (as the term is defined in Rule 13d-3 under the Exchange Act) directly or indirectly, of twenty percent (20%) or more of the total voting power represented by Company’s then outstanding voting common stock (calculated as provided in paragraph (d) of Rule 13d-3 under the Exchange Act in the case of rights to acquire voting common stock); or (ii) any

DB2/ 38197208.1    2 Matrix CT Water Grantor Trust – CO 041917

Person, other than Company or a subsidiary or any employee benefit plan sponsored by Company or a subsidiary, shall purchase shares pursuant to a tender offer or exchange offer to acquire any voting common stock of Company (or securities convertible into such voting common stock) for cash, securities or any other consideration, provided that after consummation of the offer, the Person in question is the beneficial owner directly or indirectly, of twenty percent (20%) or more of the total voting power represented by Company’s then outstanding voting common stock (all as calculated under clause (i) above); or (iii) the consummation of a consolidation or merger of Company in which Company is not the continuing or surviving corporation (other than a consolidation or merger of Company in which holders of the outstanding capital stock of Company immediately prior to the consolidation or merger have the same proportionate ownership of the outstanding capital stock of the surviving corporation immediately after the consolidation or merger as immediately before), or pursuant to which the outstanding capital stock of Company would be converted into cash, securities or other property; or (iv) the complete liquidation or dissolution of the Company; (v) the consummation of any sale, lease, exchange or other transfer (in one transaction or a series of related transactions) of all or substantially all the assets of Company; or (vi) the Incumbent Directors (as defined below) cease for any reason to constitute at least a majority of the Board; or (vii) the Board of Directors of Company, by a vote of a majority of all the Directors, adopts a resolution to the effect that a “Change in Control” has occurred for purposes of the Plan. The Board of Directors of Company as constituted immediately prior to the consummation of a Change in Control and the Chief Executive Officer of Company shall have the duty to inform Trustee in writing of the occurrence of a Change in Control. Trustee may rely exclusively on this writing and shall have no duty to inquire whether a Change in Control has taken place or to make any determination as to whether a Change in Control has occurred. For purposes of the definition of “Change in Control” only but for no other purposes of this Agreement, the following terms have the meaning set forth below: (x) “Person” means any individual, corporation, partnership, company or other entity, and for the purposes of the definition of a “Change in Control” shall include a “group” within the meaning of Section 13(d)(3) of the Exchange Act; and (y) “Incumbent Directors” means those individuals who, on the Effective Date, constitute the Board, provided that any individual becoming a director subsequent to the Effective Date whose election or nomination for election to the Board was approved by a vote of at least two-thirds (2/3rds) of the Incumbent Directors then on the Board (either by a specific vote or by approval of the proxy statement of the Company in which such person is named as a nominee for director without objection to such nomination) shall be an Incumbent Director. No individual initially elected or nominated as a director of the Company as a result of an actual or threatened election contest with respect to Directors or as a result of any other actual or threatened solicitation of proxies by or on behalf of any person other than the Board shall be an Incumbent Director. For purposes of this Section 1(d): (A) “Director” means a member of the Board of Directors; (B) “Effective Date” means the Effective Date defined in the Connecticut Water Service, Inc. 2014 Performance Stock Program; and (C) “Subsidiary” means any corporation or other entity, 50% or more of whose outstanding voting stock or general voting power is beneficially owned directly or indirectly by the Company.

DB2/ 38197208.1    3 Matrix CT Water Grantor Trust – CO 041917

(e)Chief Executive Officer. “Chief Executive Officer” means the highest-ranking Company officer, member, partner, manager, administrator, executive, or executive officer, as applicable, who is in charge of total management of the Company.

(f)Code. “Code” means the Internal Revenue Code of 1986, as amended from time to time. References to any section of the Code shall include any successor provision thereto.

(g)Company. “Company” means the sponsor of the Plan(s) and related Trust(s), as designated above and in Appendix A.

(h)Designated Representative. “Designated Representative” means the Person(s) designated in writing from time to time to the Trustee by the Company who is authorized by the terms of this Agreement to give directions to the Trustee or to act on behalf of the Company hereunder and who may also be referred to as an “Authorized Person”.

(i)ERISA. “ERISA” means the Employee Retirement Income Security Act of 1974, as amended from time to time.

(j)Force Majeure. “Force Majeure” means a cause or event outside the reasonable control of the parties or that could not be avoided by the exercise of due care, such as an act of God or any mechanical, electronic or communications failure.

(k)Insolvent or Insolvency. “Insolvent” or “Insolvency” means that the Company (i) is unable to pay its debts as they become due, or (ii) is subject to a pending proceeding as a debtor under the state law or the United States Bankruptcy Code.

(l)Instruction(s). “Instruction(s)” means any oral, written, or electronic direction given to the Trustee in a form and manner required or accepted by the Trustee. The Trustee may require that any Instruction be in writing or in an electronic format, and may recognize standing requests, directions, or requisitions as Instructions.

(m)Investment Manager. “Investment Manager” means any person who has been appointed by the Company or a Designated Representative to manage the investment of all or any specified portion of the Trust.

(n)Participant. “Participant” means an employee or director who participates in the Plan, as provided in the Plan, and shall include the Beneficiary(ies) with respect to the account of any deceased Participant until such benefit has been fully distributed or forfeited per the terms of the Plan.

(o)Payment Schedule. “Payment Schedule” shall mean the schedule delivered by the Company to the Trustee that indicates the amounts payable in respect of each Participant and his or her Beneficiary(ies) that provides a formula or other Instructions acceptable to the Trustee for determining the amount so payable, the form in which such

DB2/ 38197208.1    4 Matrix CT Water Grantor Trust – CO 041917

amount is to be paid (as provided for or available under the Plan), and the time of commencement for payment of such amounts.

(p)Person. “Person” means an individual, committee of individuals, partnership, limited liability partnership, joint venture, corporation, limited liability company, mutual company, joint-stock company, nonprofit or not-for-profit organization, trust, estate, unincorporated organization, association or employee organization.

(q)Plan. “Plan” or “Plan(s)” means the nonqualified deferred compensation plan(s) maintained by the Company for directors and/or a select group of management or non-highly compensated employees the Employer, as specified in Section 201, 301, and 401 of ERISA, as designated in Appendix A.

(r)Trust. “Trust” means the legal entity resulting from the Agreement between the Company and the Trustee that receives the contributions, and holds, invests and disburses funds to and for the benefit of Participants and their Beneficiaries, and each separate trust, if any, existing hereunder at the time in question. If the Plan existed prior to the effective date of this Agreement, the Trust shall constitute a continuation by means of an amendment and restatement of each of the prior trusts.

(s)Trust Fund. “Trust Fund” means all assets of whatsoever kind or nature from time to time held by the Trustee pursuant to this Agreement, without distinction as to income and principal.

(t)Trustee. “Trustee” means Matrix Trust Company and any duly appointed additional or successor Trustee or Trustees acting hereunder.

Section 2.Trust.

(a)Establishment. The Company hereby establishes the Trust and deposits with the Trustee in trust assets which shall become the principal of the Trust to be held, administered and disposed of by the Trustee as provided in this Agreement.

(b)Grantor Trust. The Trust is intended to be a grantor trust, of which the Company is the grantor, within the meaning of subpart E, part I, subchapter J, chapter 1, subtitle A of the Internal Revenue Code of 1986, as amended (the “Code”), and shall be construed accordingly.

(c)Trust Assets. The principal of the Trust, and any earnings thereon, shall be held separate and apart from other funds of the Company and shall be used exclusively for the uses and purposes of Participants and general creditors as herein set forth. Participants and their Beneficiaries shall have no preferred claim on, or any beneficial ownership interest in, any assets of the Trust. Any rights created under the Plan(s) and this Agreement shall be mere unsecured contractual rights of Participants and their Beneficiaries against the Company. Any assets held by the Trust will be subject to the

DB2/ 38197208.1    5 Matrix CT Water Grantor Trust – CO 041917

claims of the Company’s general creditors under federal and state law in the event of Insolvency.

(d)Non-assignment. Benefits payable to Participants and Beneficiaries under this Agreement may not be anticipated, assigned (either at law or in equity), alienated, pledged, encumbered or subjected to attachment, garnishment, levy, execution or other legal or equitable process.

(e)Additional Deposits. The Company, in its sole discretion, may at any time, or from time to time, make additional deposits of cash or other property in trust with the Trustee to augment the principal to be held, administered and disposed of by the Trustee as provided in this Agreement. Neither the Trustee nor any Participant or Beneficiary shall have any right to compel such additional deposits.

Section 3.Receipt of Assets.

(a)Receipt of Assets; Directed Trustee. Subject to restrictions placed by the Company on the acceptable categories of assets, the Trustee will receive and accept for the Trust all money, securities and other property transferred, assigned and delivered to it from any source by or at the Instruction of the Company or a Designated Representative. The Trustee has no duty or authority to inquire into the source of any assets transferred to it or the authority or right of the transferor of such assets to transfer them to the Trustee. The Trustee shall take, hold, invest, and distribute all of the assets of the Trust in accordance with the terms of this Agreement. The Trustee will serve as a non-discretionary, directed trustee of the Trust. The Trustee is responsible for maintaining custody of the assets held in the Trust, and for investing those assets as directed by the Company or a Designated Representative. Nothing in this Agreement shall be interpreted as causing the Trustee to be responsible for the administration or investment of the Trust other than as directed by the Company hereunder. The Trustee may refuse to exercise any power that it believes, in its sole judgment, will cause it to become a “fiduciary” or “plan administrator” as defined under ERISA, or cause it to be exercising trust powers in contravention of any state or federal law to which it may be subject.

(b)Custody of Assets. The Trustee will maintain safe custody of such money, securities and other property as it actually receives for the Trust. The Trustee has no duty or authority to compute any amount to be contributed or transferred under the Plan to the Trustee or determine whether amounts received by the Trustee comply with applicable law. The Trustee will not be responsible for any transferred asset until it receives such asset.

(c)Location of Evidence of Ownership. Except as permitted by the Company, ERISA, if applicable, and the Code, the Trustee will not maintain the indicia of ownership of any assets of the Trust outside the jurisdiction of the district courts of the United States.

DB2/ 38197208.1    6 Matrix CT Water Grantor Trust – CO 041917

(d)Unidentified Assets. If the Trustee receives any money, securities or other property from a source other than the Company and has not received appropriate notification that such assets are to be accepted for the Trust, the Trustee is authorized to return such assets to the person from whom they were received. The Trustee will not be liable for any assets returned in such circumstances.

Section 4.Disbursements; Taxes.

(a)Payments to Participants and Beneficiaries. The Company shall deliver to the Trustee a Payment Schedule and, except as otherwise provided herein, the Trustee shall make payments to Participants and Beneficiaries in accordance with such Payment Schedule. The entitlement of a Participant or Beneficiary to benefits under the Plan shall be determined by the Company and any claim for such benefits shall be considered and reviewed under the procedures set out in the Plan(s). The Company may make benefit payments directly to Participants and Beneficiaries as they become due under the terms of the Plan(s). The Company shall notify the Trustee of its decision to make payment of benefits directly prior to the time amounts are payable to Participants or Beneficiaries. The Company may request reimbursement from the Trustee for any amounts paid directly to Participants or Beneficiaries by providing a certification of the amounts paid and satisfactory evidence of such payments to the Trustee. Trustee may rely on such certification and evidence and shall have no obligation for otherwise verifying payment. If the principal of the Trust, and any earnings thereon, are not sufficient to make payments of benefits in accordance with the terms of the Plan(s), the Company shall make the balance of each such payment as it falls due. The Trustee shall notify the Company where principal and earnings are not sufficient.

(b)Taxes. The Company or its Designated Representative shall calculate all taxes and withholding and shall provide the Trustee all information necessary for the Trustee to carry out such withholding in a timely fashion, and to file all required returns, reports, or other documents with the applicable taxing authorities with respect to distributions by the Trustee to Participants and Beneficiaries and amounts withheld thereon. If such information is not so provided to the Trustee, the Designated Representative and the Company shall hold the Trustee harmless from and indemnify it for any liability and related expenses that arise in connection with improper withholding or reporting.

The Trustee shall make provision for the withholding, reporting and remitting of any federal, state or local taxes that may be required to be withheld with respect to the payment of benefits pursuant to the terms of the Plan and this Agreement, and shall pay amounts withheld to the appropriate taxing authorities. The Trustee may execute, as Trustee, any declarations or certificates pertaining to the Trust that may be required under any tax law(s) or governmental regulation(s) now or hereafter without prior approval of the Company.

The Trustee shall notify the Company or Designated Representative of any tax levied upon or assessed against the Trust Fund of which the Trustee has knowledge. If the Trustee receives no Instructions from the Company or Designated Representative, the Trustee may pay the tax from the Trust Fund. If the Company wishes to contest the tax

DB2/ 38197208.1    7 Matrix CT Water Grantor Trust – CO 041917

assessment, it shall give appropriate and timely Instructions to the Trustee, and Trustee will reasonably cooperate with Company’s efforts upon such terms as agreed upon in writing by the parties hereto. The Trustee shall not be required to bring any legal actions or proceedings to contest the validity of any tax assessments unless the Trustee has been indemnified to its satisfaction against loss or expense related to such actions or proceedings, including reasonable attorney’s fees.

The Trustee shall have no liability for making any distribution or transfer pursuant to the Payment Schedule or other Instruction of the Company or its Designated Representative (including amounts withheld pursuant to this Section), and shall be under no duty to make inquiry as to whether any distribution or transfer directed by the Company or its Designated Representative is made pursuant to the provisions of the Plan or any applicable law, or as to the effect of any Payment Schedule or Instruction for tax purposes or otherwise.

Section 5.Payments to the Company.

(a)In General. If the Trust is irrevocable, except as may be provided under Section 12 and Section 4(a), the Company shall have no right or power to direct the Trustee to return to the Company or to divert to others any of the Trust assets before all payment of benefits have been made to Participants and Beneficiaries pursuant to the terms of the Plan(s). Notwithstanding the foregoing, upon the Company’s request, Trustee shall return to the Company all or a portion of Trustee assets exceeding 125% of the present value of Plan liabilities (including vested and unvested amounts). The Trustee is entitled to rely upon liability data provided by the Company or the Plan’s recordkeeper in determining the amount available for payment to the Company under this provision.

(b)Return of Amounts to the Company. Except as provided in Section 5(a) above, the Trustee will return contributions to the Company if the Company or a Designated Representative provides an Instruction to the Trustee to do so. The Company is solely responsible for ensuring that any Instruction to return any amount to the Company meets all applicable legal requirements, including those of ERISA, if applicable. The Trustee has no duty or responsibility to question, and may conclusively rely upon, any such Instruction.

Section 6.Investments.

(a)Investment Authority. The Trustee shall have no responsibility for the selection of investments except as provided herein. The Company or the Designated Representative shall direct the Trustee as to what investments the Trust shall be invested in. The Trustee may invest in publicly traded securities, including publicly traded stock or rights to acquire stock, or obligations Issued by the Company, insurance policies, contracts, variable annuities or similar instruments. All rights associated with assets of the Trust shall be exercised by the Trustee pursuant to Instructions received by the Trustee, the Company or the Designated Representative, and shall in no event be exercisable by or rest with Participants. The Company shall have the right at any time, and from time to time in its

DB2/ 38197208.1    8 Matrix CT Water Grantor Trust – CO 041917

sole discretion, to substitute assets of equal fair market value for any asset held by the Trust. This right is exercisable by the Company in a nonfiduciary capacity without the approval or consent of any person in a fiduciary capacity.

(b)Investment Control.

(1)The Company’s Duties. The Company will control and manage the investment of the Trust except insofar as the Company delegates investment authority over part or all of the Trust assets to one or more Investment Managers, or delegates investment authority over part or all of the Trust assets to one or more other Designated Representatives. If the Company, Designated Representative or Investment Manager directs to the Trustee to invest Trust assets in an insurance policy, contract, variable annuity or similar instrument, the Company, Designated Representative or Investment Manager is solely responsible for selecting and monitoring the insurer.

(2)Investment Instructions. All investment Instructions must be delivered to the Trustee in such manner as the Trustee may reasonably require.

(c)Investment Restrictions. The Trustee will hold only those categories of assets mutually agreed to between the Company and the Trustee. The Company may add or remove types, categories, or classes of assets or investments with reasonable notice to the Trustee, subject to the Operational Guidelines as set forth in Appendix B as the same may be revised from time to time by Trustee and provided to Company.

(d)Nondiscretionary Investment Authority.

(1)The Company hereby authorizes and directs the Trustee, in accordance with the provisions of this Agreement, to pay for securities and receive payment from securities or other investment transactions arising out of the instruction of the Company or a Designated Representative.

(2)The Company understands that it is solely the Company’s responsibility to direct the Designated Representative to execute trades or other investments for the Trust, and all Instructions and/or confirmations received from the Designated Representative shall be deemed to have been authorized by the Company.

(3)The Trustee may invest any cash balances of the Trust in a demand account. The Trustee shall not be obligated to invest such funds in any interest-bearing account. The Trustee or its affiliate will retain any earnings credited on any funds in the Trust (A) pending investment Instruction and (B) pending distribution, as part of its compensation for services provided.

(4)The Company or Designated Representative shall direct the Trustee to purchase or sell only securities that comply with the Trustee’s and/or its affiliate’s policies and procedures relating to acceptable securities, and comply with all applicable rules, regulations, customs and uses of any exchange, market, clearinghouse or self-

DB2/ 38197208.1    9 Matrix CT Water Grantor Trust – CO 041917

regulatory organization and applicable state and federal laws and regulations. Nothing in this Section 6(d)(4) shall be construed to impose investment discretion on the Trustee or its affiliates.

(5)The assets of the Trust shall be held separate from the other funds or properties of the Trustee.

(6)The Company grants to the Trustee all powers reasonably necessary to carry out its investments and other duties under this Agreement.

(7)The Company shall furnish the Trustee with such information and Instructions as may be necessary to carry out the provisions of this Agreement and to enable the Trustee to fulfill all legal and regulatory reporting requirements.

(8)The Trustee shall have no obligation to place orders for the purchase of securities if there are insufficient funds in the Trust. The Company authorizes the Trustee to charge the Trust for the cost of all securities purchased or received against a payment and to credit the Trust with the proceeds received from the securities sold or delivered against payment. In the event of any trades not settled within two days of placement, the Trustee will have the right to sell securities from the Trust sufficient to recover any funds advanced.

(9)The Company agrees that the Trustee shall not advise or make recommendations to the Company with respect to the purchase, sale or other disposition of any assets of the Trust.

(10)The Company authorizes and instructs the Trustee to register all assets of the Trust in the name of the Trustee or of a nominee. Unless otherwise agreed in writing by the parties, registered securities shall be held in the name of:

Matrix Trust Company, TrusteeFBO: Connecticut Water Company Grantor Trust

(11)To the extent permitted by law, the Company grants the Trustee a security interest in any and all assets held in the Trust as security for any obligation or liability that arises under this Agreement.

(e)Valuation of Assets. The assets of the Trust will be valued at the most recent fair market value.

(1)Assets Managed by Investment Manager. With respect to the portion of the Trust that is invested by an Investment Manager, the Investment Manager will certify the value of any securities or other property in that portion of the Trust. Such certification will be regarded as an Instruction with respect to the fair market value of such assets, and the Trustee will be entitled to rely conclusively upon such valuation for all purposes under this Trust.

DB2/ 38197208.1    10 Matrix CT Water Grantor Trust – CO 041917

(2)Other Assets. With respect to the assets in any portion of the Trust that are not managed by an Investment Manager, or any assets for which an Investment Manager refuses or fails to provide a certification, if the fair market value can be determined by reference to readily available sources then the Trustee will be responsible for determining the fair market value of those assets. For those assets whose value cannot be determined by reference to a readily available source, the Trustee will identify those assets for the Company and the Company will provide Instructions to the Trustee as to the fair market value of those assets. Should the Company in its sole discretion determine that an independent appraisal of some or all of such assets is necessary, the Company will be responsible for hiring a qualified independent appraiser, providing all necessary information to the appraiser, reviewing the report of the appraiser, and reporting the appraised value to the Trustee.

(f)Processing Transactions. No investment transaction for the Trust that is to be processed by the Trustee at the Instruction of the Company or a Designated Representative will be processed until the Trustee receives the Instruction in proper form. Investment transactions will be processed either as soon as administratively practicable thereafter or, if later, on the scheduled date for processing.

The Trustee may rely conclusively on any investment Instructions communicated to the Trustee by the Company or a Designated Representative and will have no responsibility to see that the investment Instructions comply with the terms of the Plan. However, if the Trustee receives any Instruction from the Company or a Designated Representative that appears to the Trustee in its sole judgment to be incomplete or unclear, the Trustee will not be required to act on such Instructions and may hold uninvested any asset without liability until proper Instructions are received from the Company or a Designated Representative. If investment Instructions are incomplete or unclear, the Trustee must notify the Company or a Designated Representative within a reasonable period of time. In the absence of proper investment Instructions, the Trustee will not be liable for interest, market gains or losses on any cash balances maintained in the Trust.

(g)Legitimate Delay. The Trustee may delay the processing of any investment transaction for any legitimate business reason (including, but not limited to, failure of systems or computer programs, failure of the means of the transmission of data, Force Majeure, the failure of a service provider to provide timely values or prices or to correct for any errors or omissions).

(h)Performance Standards. The Trustee will use reasonable efforts to process investment transactions on their scheduled processing dates, but the Trustee is not a guarantor of timely processing with respect to the Company or any Designated Representative, the Plan, or any Participant or Beneficiary.

(i)Other Limitations. The Trustee will invest the Trust as directed by the Company or a Designated Representative, and the Trustee will neither have discretionary control over, nor any other discretion regarding, the investment or reinvestment of any asset of the Trust. The Trustee has no duty or authority to provide investment advice with

DB2/ 38197208.1    11 Matrix CT Water Grantor Trust – CO 041917

respect to the assets of the Trust, monitor investment performance or the diversification of assets, question any Investment Instruction the Trustee receives in proper form, or inquire into the authority or right of the Company or a Designated Representative to make any Investment Instruction which the Trustee receives in proper form. The Trustee will not be liable for any loss of any kind which may result from any action taken by it in accordance with an Investment Instruction it receives in proper form or from any action omitted because no such Instruction is received.

(j)Plan Assets Not Held in Trustee’s Trust. If, as provided in the Plan, other trustees of separate trusts under the Plan may be appointed, the Trustee under this Agreement shall have no duties or responsibilities for assets not held in the Trust by the Trustee, except as required by applicable law.

Section 7.Disposition of Income.

The Trustee is authorized to collect all Trust investment earnings of any nature, including interest, dividends, proceeds of the sale and other monies due and collectable, that arise from the investment of the assets of the Trust (collectively, “Trust Income”), and to credit such Trust Income to the Trust,

Section 8.Trustee Services.

(a)Accounting by the Trustee. The Trustee shall keep accurate and detailed records of all investments, receipts, disbursements, and all other transactions required to be made, including such specific records as shall be agreed upon in writing between the Company and the Trustee, Within sixty (60) days following the close of each calendar year and within sixty (60) days after the removal or resignation of the Trustee, the Trustee shall deliver to the Company a written account of its administration of the Trust during such year or during the period from the close of the last preceding year to the date of such removal or resignation, setting forth all investments, receipts, disbursements and other transactions effected by it, including a description of all securities and investments purchased and sold with the cost or net proceeds of such purchases or sales (accrued interest paid or receivable being shown separately), and showing all cash, securities and other property held in the Trust at the end of such year or as of the date of such removal or resignation, as the case may be. An accounting will be deemed to have been approved by the Company unless the Company or Designated Representative objects to the contents of an accounting within sixty (60) days of its mailing or electronic transmission by the Trustee. Any objections must set forth the specific grounds on which they are based. The Trustee’s accounting will be at the Trust level rather than the Participant level, and the Trustee will not be responsible for Participant-level reporting including, but not limited to, allocating contributions or gains or losses to recordkeeping accounts of Participants, or preparing or providing benefit statements to Participants, unless it agrees to do so in a separate written agreement with the Company or a Designated Representative.

(b)Inspection and Audit. All accounts, books, and records relating thereto shall be open to inspection and may be audited from time to time by any person designated

DB2/ 38197208.1    12 Matrix CT Water Grantor Trust – CO 041917

by the Company during the Trustee’s regular business hours, as mutually agreed to in writing by the parties.

(c)Notwithstanding any powers granted to the Trustee pursuant to this Agreement or to applicable law, the Trustee shall not have any power that could give this Trust the objective of carrying on a business and dividing the gains therefrom, within the meaning of section 301.7701-2 of the Procedure and Administrative Regulations promulgated pursuant to the Code.

(d)Trustee shall have, without exclusion, all powers conferred on trustees by applicable law, unless expressly provided otherwise herein, provided, however, that if an insurance policy is held as an asset of the Trust, Trustee shall have no power to name a beneficiary of the policy other than the Trust, to assign the policy (as distinct from conversion of the policy to a different form) other than to a successor Trustee, or to loan to any person the proceeds of any borrowing against such policy.

Section 9.Directions.

(a)Company Direction to the Trustee. Except as provided herein, the Company shall provide direction to the Trustee in the form of Instructions. The Trustee shall have no duty to take any action other than as specified in this Agreement unless the Company provides the Trustee with Instructions in the form and manner required by the Trustee. The Trustee may require that any Instruction be in writing or in an electronic format, and may recognize standing Instructions. However, each Instruction is contingent upon the determination by the Trustee that the Instruction can be administered by the Trustee.

The Trustee may conclusively rely upon and be protected in acting in good faith upon any written Instruction or order from the Company, or any other notice, request, consent, certificate, or other instrument or paper believed by the Trustee to be genuine and properly executed, or any instrument or paper if the Trustee believes the signature thereon to be genuine.

The Trustee may, but is not required to, rely on an Instruction given by the Company that addressed a particular topic for a single instance in any subsequent and similar instance, unless the prior Instruction expressly stated to the contrary.

(b)Designation of Representatives. The Company hereby designates and authorizes its Designated Representative(s) to place orders for the purchase and sale of securities, and authorizes the Trustee to disburse funds from the Trust on behalf of the Company upon instruction from such Designated Representative. Designation of a Designated Representative is subject to the following provisions:

(1)The Company agrees that the Trustee may rely on Instructions from the Designated Representative, and the Company agrees that the Trustee shall be

DB2/ 38197208.1    13 Matrix CT Water Grantor Trust – CO 041917

under no duty to make an investigation with respect to any Instructions received from the Designated Representative;

(2)The Company is solely responsible for managing the investment of the Trust and for supervision of the Designated Representative. All Instructions and/or confirmations received by the Trustee from a Designated Representative shall be deemed to have been authorized by the Company;

(3)The Company agrees that a Designated Representative is not an agent of the Trustee;

(4)The Company may remove a Designated Representative and designate a new representative at any time by written notice to the Trustee or in any other form satisfactory to the Trustee. The Company will give the Trustee prompt written notice of any change in the identity or authority of any Designated Representative. Removal of a Designated Representative will not have the effect of canceling any Instruction that has been received by the Trustee from the Designated Representative prior to the date that notice of removal is received by the Trustee. Until written notice of such change is received, the Trustee may conclusively rely upon and be protected in acting as entitled to rely on the latest identification provided to it without further inquiry or verification;

(5)The Trustee may rely on all written (including electronic) Instructions and upon the non-written Instructions, given by the Designated Representative which the Trustee believes to be genuine. The Trustee’s records of a transaction will be conclusive as the content of any Instructions. If instructed in writing by the Company to Trustee, Instructions may be taken solely from the Designated Representative and not the Company. Upon application by the Company, on a form acceptable to the Trustee and upon approval by the Trustee, the Trustee may accept non-written Instructions from the Company or Designated Representative subject to immediate confirmation of such Instructions by email or in writing by the Designated Representative.

(6)The Trustee may, but is not required to, rely on an Instruction given by the Designated Representative that addressed a particular topic for a single instance in any subsequent and similar instance, unless the prior Instruction expressly stated to the contrary.

(7)The Company waives any and all claims of any nature it now has or may have against the Trustee and its affiliates, and their respective directors, managers, officers, employees, agents and other representatives, which arise, directly or indirectly, from any action that it takes in good faith in accordance with any certificate, notice, confirmation, instruction or other written or oral communication from the Designated Representative.

Section 10.Compensation and Expenses of Administration.

DB2/ 38197208.1    14 Matrix CT Water Grantor Trust – CO 041917

(a)Generally. The Trustee will be entitled to receive compensation for its services provided hereunder as may be agreed upon in writing with the Company. The Trustee or its affiliate will retain any earnings credited on any funds in the Trust pending investment direction and pending distribution as part of its compensation for services provided pursuant to Section 6(d)(3) hereof. The Trustee will also be entitled to reimbursement for all reasonable and necessary costs, expenses, and disbursements incurred by it in the performance of such services, including, without limitation, attorneys’ fees. Such compensation and reimbursements shall be a charge against and may be withdrawn by the Trustee from the Trust Fund within a reasonable time, as specified by the Trustee; provided, however, that such amounts may be paid by the Company or a Designated Representative on behalf of the Company, as outlined in a separate written agreement between said parties. In addition, the Company shall also be bound by and authorizes the Trustee to pay fees and expenses pursuant to written schedules of fees entered Into from time to time by the Company and/or the Designated Representative and the Trustee. The Company also authorizes the Trustee to debit such fees and expenses from the Trust from time to time without further authorization from the Company. The schedule of fees may be changed from time to time upon agreement between the Company and the Trustee.

(b)Disclosure. The Trustee or Designated Representative shall disclose any compensation, reimbursements, fees and/or expenses payable from the Trust pursuant to this Agreement, and any changes to such amounts, to the Company.

(c)Indemnified Expenses. Expenses incurred by the Trustee that it believes to be subject to indemnification under Section 11(a) of this Agreement shall be paid by the Company upon the Trustee’s request, provided that the Company may delay payment of any amount in dispute until such dispute is resolved according to the provisions of Section 14 hereof. Such resolution may include the award of interest on unpaid amounts determined to be payable to the Trustee under this Section.

Section 11.Indemnification.

(a)Indemnification of the Trustee. The Company hereby agrees to indemnify, defend and hold the Trustee and its affiliates, and their respective directors, manager, officers, employees, agents and other representatives (the “Indemnified Parties”) harmless from any and all losses, costs, excise taxes, expenses, fees, liabilities, damages, claims of any nature whatsoever, including but not limited to legal expenses, court costs, legal fees, costs of or associated with enforcement actions, investigations, suits, and regulatory or other actions and appeals thereof resulting from their reliance upon any certificate, notice, confirmation, or Instruction, purporting to have been delivered by an Investment Manager or a Designated Representative hereunder (“Plan Representative(s)”). The Company waives any and all claims of any nature it now has or may have against the Indemnified Parties, which arise, directly or indirectly, from any action that the Trustee takes in good faith in accordance with any certificate, notice, confirmation, or Instruction from a Plan Representative. The Company also hereby agrees to indemnify,

DB2/ 38197208.1    15 Matrix CT Water Grantor Trust – CO 041917

defend and hold harmless the Indemnified Parties from and against any and all losses, costs, excise taxes, expenses, fees, liabilities, damages, claims of any nature whatsoever, including but not limited to legal expenses, court costs, legal fees, costs of or associated with enforcement actions, investigations, suits, and regulatory or other actions and appeals thereof, arising, directly or indirectly, out of any loss or diminution of the Trust Fund resulting from changes in the market value of the Trust Fund assets; reliance, or action taken in reliance, on Instructions from Company or one or more Plan Representatives; any exercise of investment Instructions provided by the Company or by a Plan Representative or, in the absence of Instructions, failure to exercise investment powers; the Trustee’s refusal on advice of counsel to act in accordance with any investment Instruction provided by Company or a Plan Representative; any other act or failure to act by Company or a Plan Representative; or any other act that the Trustee takes in good faith hereunder that arises under this Agreement or the administration of the Trust Fund.

The Trustee shall not be liable to Company for any act, omission, or determination made in connection with this Agreement except to the extent such liability may arise from Trustee’s gross negligence or willful misconduct. Without limiting the generality of the foregoing, the Trustee shall not be liable for any losses arising from its compliance with Instructions from the Company or a Plan Representative; or executing, failing to execute, failing to timely execute or for any mistake in the execution of any Instructions, unless such action or inaction is by reason of the gross negligence or willful misconduct of the Trustee.

The provisions of this Section 11(a) shall survive the termination, amendment or expiration of this Agreement.

(b)Acts of Prior Trustees. The assets of the Trust Fund or evidence of ownership shall be held by the Trustee under the terms of the Plan and this Agreement. If the assets represent amounts transferred from another trustee, the Trustee named hereunder shall not be responsible for any actions or inactions of prior fiduciaries, including the review of the propriety of any investment under the former trust; said review to be the responsibility of prior fiduciaries The Trustee named hereunder shall not be required to examine or question in any way the administration of the Trust prior to its appointment.

Section 12.Company Insolvency.

(a)Trustee Responsibility Regarding Payments to Participants and Beneficiaries.

(1)The Trustee shall cease payment of benefits to Participants and Beneficiaries if the Company is Insolvent.

(2)At all times during the continuance of this Trust, hereof, the principal and income of the Trust shall be subject to claims of general creditors of the Company under federal and state law as set forth below.

DB2/ 38197208.1    16 Matrix CT Water Grantor Trust – CO 041917

(i)The Board and the Chief Executive Officer of the Company shall have the duty to inform the Trustee in writing of the Company’s Insolvency. If a person claiming to be a creditor of the Company alleges in writing to the Trustee that the Company has become Insolvent, the Trustee shall determine whether the Company is Insolvent and, pending such determination, the Trustee shall discontinue payment of benefits to Participants or Beneficiaries.

(ii)Unless the Trustee has actual knowledge of the Company’s Insolvency or has received notice from the Company or a person claiming to be a creditor alleging that the Company is Insolvent, the Trustee shall have no duty to inquire whether the Company is Insolvent. The Trustee may in all events rely on such evidence concerning the Company’s solvency as may be furnished to the Trustee and that provides the Trustee with a reasonable basis for making a determination concerning the Company’s solvency.

(iii)If at any time the Trustee has determined that the Company is Insolvent, the Trustee shall discontinue payments to Participants or Beneficiaries and shall hold the assets of the Trust for the benefit of the Company’s general creditors. Nothing in this Agreement shall in any way diminish any rights of Participants or Beneficiaries to pursue their right as general creditors of the Company with respect to benefits due under the Plan(s) or otherwise.

(iv)The Trustee shall resume the payment of benefits to Participants or Beneficiaries in accordance with Section 4 of this Agreement only after the Trustee has determined that the Company is not Insolvent (or is no longer Insolvent).

(3)Provided that there are sufficient assets, if the Trustee discontinues the payment of benefits from the Trust pursuant to Section 4(a) hereof and subsequently resumes such payments, the first payment following such discontinuance shall include the aggregate amount of all payments due to Participants or Beneficiaries under the terms of the Plan(s) for the period of such discontinuance, less the aggregate amount of any payments made to Participants or Beneficiaries by the Company in lieu of the payments provided for hereunder during any such period of discontinuance.

(b)Notice to Trustee; Instructions. If the Company becomes Insolvent, the Company will notify the Trustee in writing as soon as possible. The notification will include confirmation of the individual(s) who will provide Instructions to the Trustee.

(c)Court Appointment of New Trustee. Notwithstanding any provision hereof to the contrary, in the case of Insolvency, the Trustee will have the right to petition a court of competent jurisdiction to appoint a new Trustee, the costs of such action being payable from the Trust Fund.

(d)Dissolution of the Company. In the case of dissolution of the Company, the Trustee may apply to any court of competent jurisdiction for instruction. Before the Trustee may make such application, however, the Trustee will send to the last known

DB2/ 38197208.1    17 Matrix CT Water Grantor Trust – CO 041917

address of the Company, and the individuals who last had authority for providing direction to the Trustee, via certified mail, a written notice of the Trustee’s intent to begin such action. The Trustee will then wait at least thirty (30) days before beginning such action.

(e)Fees. If the Trustee receives notice of the Company’s Insolvency, any fees and other expenses relating to the provision of services under this Agreement (whether current or overdue) may be immediately deducted from the Trust Fund if permitted by application law.

Section 13.Resignation or Removal of the Trustee; Successor Trustee.

(a)Resignation; Removal of the Trustee. The Trustee may resign at any time by giving at least thirty (30) days’ prior notice of such resignation to the Company. The Company may remove the Trustee, with or without cause, upon giving at least thirty (30) days’ prior notice to the Trustee.

(b)Appointment of Successor Trustee. The Company shall appoint a successor Trustee or additional Trustees to fill the vacancy occurring as the result of the resignation or removal of the Trustee. The Company shall designate the successor Trustee by an instrument, delivered to the Trustee so removed and to the successor Trustee. The successor Trustee shall have all of the rights, powers, privileges, liabilities, and duties of a Trustee as set forth in this Agreement.

If no appointment of a successor is made by the Company within thirty (30) days after the resignation or removal of the Trustee, after notice to the other party, the Trustee or the Company may apply to any court of competent jurisdiction for appointment of a successor or for instructions. The Trustee shall be furnished with notice from the Company or the court, as the case may be, of the appointment of the successor, and shall also be furnished with evidence of the successor’s acceptance of trusteeship.

(c)Transfer of Assets to Successor Trustee. Upon acceptance of such appointment by a successor Trustee, the Trustee shall assign, transfer, pay over and deliver the assets then constituting the Trust Fund to the successor Trustee. To the extent practicable, such actions shall be completed by Trustee within 30 days unless the Company extends the time limit. Each, successor Trustee shall succeed to the title of all Securities or Other Property then held in the Trust Fund and vested in its predecessor without the signing or filing of any further instrument, but any resigning or removed Trustee shall execute all documents and do all acts necessary to vest such title of record in any successor Trustee. The terminating Trustee shall transfer all property of the Trust Fund then held by it to such successor Trustee, provided that it may reserve such amounts as necessary for any outstanding unpaid fees and expenses properly incurred hereunder and in the event that the Trust Fund is not sufficient to pay such amounts or the Trustee does not reserve such amounts, the Company and the successor trustee shall remain liable therefor.

(d)Terminating Trustee’s Accounting. Within thirty (30) days after the transfer to the successor Trustee, the terminating Trustee shall provide the Company with

DB2/ 38197208.1    18 Matrix CT Water Grantor Trust – CO 041917

an account in the form and manner prescribed for the annual account by Section 8 hereof. Unless the Company files written objections with the Trustee within sixty (60) days after such account has been mailed or otherwise delivered, the account shall be deemed to have been approved by the Company.

(e)Changes in Organization of Trustee. Any corporation, banking association or trust company into which a corporate Trustee may be merged, converted or with which it may be consolidated, or any corporation, banking association, or trust company, resulting from any merger, reorganization or consolidation to which a corporate Trustee may be a party, or any corporation, banking association or trust company to which all or substantially all of the trust business of a corporate Trustee may be transferred shall be the successor of the corporate Trustee hereunder without the execution or filing of any instrument or the performance of any other act and with the same powers and duties as conferred upon the Trustee hereunder. In any such event, the Trustee or any successor Trustee shall provide written notice thereof to the Company.

Section 14.Amendment or Termination.

(a)This Agreement may be amended by a written instrument executed by the Trustee and the Company. Notwithstanding the foregoing, no such amendment shall conflict with the terms of the Plan(s) or shall make the Trust revocable after it has become irrevocable.

(b)The Trust shall not terminate until the date on which Participants and Beneficiaries are no longer entitled to benefits pursuant to the terms of the Plan(s) (unless the Trust is revocable, and is sooner revoked). Upon termination of the Trust, any assets remaining in the Trust shall be returned to the Company.

(c)Following a Change in Control, Company may amend this Trust Agreement only with the written consent of a majority of the executive officers of the Company. Company, and not the Trustee, shall be responsible to obtain such consent and shall certify to Trustee its compliance with this restriction.

Section 15.Arbitration.

The parties acknowledge that this Agreement evidences a transaction involving interstate commerce. The parties agree that any misunderstandings, controversies or disputes arising from this Agreement shall be decided by binding arbitration which shall be conducted, upon request by either party, in Denver, Colorado, before three (3) arbitrators designated by the American Arbitration Association (the “AAA”), in accordance with the terms of the Commercial Arbitration Rules of the AAA, and, to the maximum extent applicable, the United States Arbitration Act (Title 9 of the United States Code). The decision of the majority of the arbitrators shall be binding and conclusive upon the parties. Notwithstanding anything herein to the contrary, either party may proceed to a court of competent jurisdiction to obtain equitable relief at any time, other than to stay arbitration. Further, any such court proceeding shall only be brought in the federal district court in

DB2/ 38197208.1    19 Matrix CT Water Grantor Trust – CO 041917

Denver, Colorado. The arbitration panel shall have no authority to award special, indirect, consequential, punitive or other damages not measured by the prevailing party’s actual damages. To the maximum extent practicable, an arbitration proceeding under this Agreement shall be concluded within one hundred eighty (180) days of the filing of the dispute with the AAA. The provisions of this arbitration clause shall survive any termination, amendment or expiration of the Agreement and if any term, covenant, condition or provision of this arbitration clause is found to be unlawful or invalid or unenforceable, the remaining parts of the arbitration clause shall not be affected thereby and shall remain fully enforceable. Judgment on any award rendered by the arbitration panel may be entered in any court having competent jurisdiction. The parties shall each pay one-half of the forum and arbitrators’ fees. The prevailing party in the arbitration, or any court proceeding, shall be entitled to its reasonable attorney’s fees and expenses from the non-prevailing party.

Section 16.USA Patriot Act Notification.

The following notification is provided to the Company pursuant to Section 326 of the USA Patriot Act of 2001, 31 U.S.C. Section 5318:

IMPORTANT INFORMATION ABOUT PROCEDURES FOR OPENING A NEW ACCOUNT. To help the government fight the funding of terrorism and money-laundering activities, Federal law requires all financial institutions to obtain, verify, and record information that identifies each person or entity that opens an account, including any deposit account, treasury management account, loan, other extension of credit, or other financial services product. What this means for the Company: When the Company opens an account, if the Company is an individual, the Trustee will ask for Company’s name, taxpayer identification number, residential address, date of birth, and other information that will allow the Trustee to identify Company and, if the Company is not an individual, the Trustee will ask for the Company’s name, taxpayer identification number, business address, and other information that will allow the Trustee to identify Company. The Trustee may also ask, if the Company is an individual, to see Company’s driver’s license or other identifying documents, and, if Company is not an individual, to see the Company’s legal organizational documents or other identifying documents,

Section 17.Taxes; Other Matters.

The Trustee shall have no duty or responsibility not expressly set forth in this Trust Agreement. By way of example, but without limiting the matters subject to the foregoing sentence, Trustee shall have no responsibility with respect to the administration or interpretation of the Plan, payment of Plan benefits other than from the assets of the Trust, the calculation of tax to be withheld, reported and/or paid to taxing authorities and (if applicable pursuant to the fee schedule) withholding, remitting, or reporting to taxing authorities of taxes other than from payments made with Trust assets to Plan participants and other than as directed by Company, maintaining participant records with respect to the Plan, or making or handling any tax payments or preparing or making any tax filings except those required by applicable law to be made by the Trustee as a result of its service hereunder.

DB2/ 38197208.1    20 Matrix CT Water Grantor Trust – CO 041917

Section 18.Data.

Notwithstanding anything in this Agreement to the contrary, aggregated and/or statistical data shall not be considered Company Information hereunder provided that any such data does not specifically identify any of the Company’s confidential information. The Company hereby authorizes Trustee to share the Company’s data, Personal Information and confidential information among Trustee’s related companies solely for the purpose of performing services under this Agreement, so long as the same protective provisions are followed by every entity to which disclosure is made.

Section 19.Confidentiality.

(a)Definitions. In connection with this Agreement, information will be exchanged between Trustee and the Company. Trustee shall provide information that may include, without limitation, confidential information relating to the Trustee’s products, trade secrets, strategic information, information about systems and procedures, confidential reports, the Company information, vendor and other third party information, financial information including cost and pricing, sales strategies, computer software and tapes, programs, source and object codes, and other information that is provided under circumstances reasonably indicating it is confidential (collectively, the “Trustee Information”), and the Company shall provide information required for the Company to use the services received or to be received, including the Company information, which may include Personal Information (defined below), to be processed in connection with the services, and other information that is provided under circumstances reasonably indicating it is confidential (the “Company Information”) (the Trustee Information and the Company Information collectively referred to herein as the “Information”). Personal Information that is exchanged shall also be deemed Information hereunder. “Personal Information” means personal information about an identifiable individual including, without limitation, name, address, contact information, age, gender, income, marital status, finances, health, employment, social security number and trading activity or history. Personal Information shall not include the name, title or business address or business telephone number of an employee of an organization in relation to such individual’s capacity as an employee of an organization. The Information of each party shall remain the exclusive property of such party.

(b)Obligations. The receiver of Information (the “Receiver”) shall keep any Information provided by the other party (the “Provider”) strictly confidential and shall not, without the Provider’s prior written consent, disclose such Information in any manner whatsoever, in whole or in part, and shall not duplicate, copy or reproduce such Information, including, without limitation, by means of photocopying or transcribing of voice recording, except in accordance with the terms of this Agreement. The Receiver shall only use the Information as reasonably required to carry out the purposes of this Agreement.

(c)Disclosure Generally. Trustee and the Company agree that the Information shall be disclosed by the Receiver only to: (i) the employees, agents and consultants of the Company and the Designated Representative in connection with

DB2/ 38197208.1    21 Matrix CT Water Grantor Trust – CO 041917

Receiver’s performance or use of the services, as applicable, and (ii) auditors, counsel, and other representatives of the Company and Designated Representative for the purpose of providing assistance to the Receiver in the ordinary course of Receiver’s performance or use of the services, as applicable. Each party will take reasonable steps to prevent a breach of its obligations by any employee or third party.

(d)Compelled Disclosure. If the Receiver or anyone to whom the Receiver transmits the Information pursuant to this Agreement becomes legally compelled to disclose any of the Information, then the Receiver will provide the Provider with prompt notice before such Information is disclosed (or, in the case of a disclosure by someone to whom the Receiver transmitted the Information, as soon as the Receiver becomes aware of the compelled disclosure), if not legally prohibited from doing so, so that the Provider may seek a protective order or other appropriate remedy and/or waive compliance with the provisions of this Agreement. If such protective order or other remedy is not obtained, then the Receiver will furnish only that portion of the Information which the Receiver is advised by reasonable written opinion of counsel is legally required and will exercise its reasonable efforts to assist the Provider in obtaining a protective order or other reliable assurance that confidential treatment will be accorded to the Information that is disclosed.

(e)Exceptions. Except with respect to Personal Information, nothing contained herein shall in any way restrict or impair either party’s right to use, disclose or otherwise deal with:

(1)Information which at the time of its disclosure is publicly available, by publication or otherwise, or which the Provider publicly discloses either prior to or subsequent to its disclosure to the Receiver;

(2)Information which the Receiver can show was in the possession of the Receiver, or its parent, subsidiary or affiliated company, at the time of disclosure and which was not acquired, directly or indirectly, under any obligation of confidentiality to the Provider; or

(3)Information which is independently acquired or developed by the Receiver without violation of its obligations hereunder.

In addition, each employee of the Receiver shall be free to use for any purpose, upon completion of the services rendered under this Agreement, any general knowledge, skill or expertise that (i) is acquired by such employee in performance of those services, (ii) remains part of the general knowledge of such employee after access to the tangible embodiment of the Provider’s Information, (iii) does not contain or include any such Information, and (iv) is not otherwise specific to the Provider.

(f)Return or Destroy. Upon the termination of this Agreement for any reason and following the complete transfer of assets and records to any successor Trustee or to the Company, and subject to the record retention provision of Section 22(e), the parties shall return to each other, or destroy, any and all copies of Information of the other

DB2/ 38197208.1    22 Matrix CT Water Grantor Trust – CO 041917

that are in their possession relating to the terminated Agreement, except for any copies reasonably required to maintain such party’s customary archives or computer back-up procedures, and as otherwise required by applicable law, rule or regulation. Notwithstanding the foregoing, Trustee shall have the right to keep one copy of this Agreement as may be reasonably required to evidence the fact that it has provided the services to the Company. In the event that Company requires Trustee to return any Plan Information, Company shall pay Trustee (at the rates set forth in the applicable Schedule, or, if no such rates are set forth, at Trustee’s then current charges) for Trustee’s actual time spent and incidental expenses actually incurred in connection with such return if such time and expenses are extraordinary.

Section 20.Nonpublic Personal Information.

(a)Obligations. Trustee shall not disclose or use any nonpublic Personal Information of the Company’s employees except to the extent reasonably required to carry out its obligations under this Agreement or as otherwise directed by the Company. In connection with each party’s use or provision of the rendered services, as applicable, each party shall comply with any applicable law, rule or regulation of any jurisdiction applicable to such party relating to the disclosure or use of Personal Information (including, without limitation, with respect to the Company and its Affiliates and their employees, Title V of the Gramm-Leach-Bliley Act of 1999 or any successor federal statute, and the rules and regulations thereunder, as the same may be amended or supplemented from time to time).

(b)Security Measures. Trustee shall (i) implement and maintain commercially reasonable measures to protect the security, confidentiality and integrity of nonpublic Personal Information of the Company’s employees against anticipated threats, unauthorized disclosure or use, and improper disposal, and (ii) provide the Company with information regarding such security measures upon the reasonable request of the Company.

(c)Security Breaches. Each party shall promptly provide the other party with notice of (i) any disclosure, access to or use of any Personal Information in breach of this Agreement and (ii) any unauthorized intrusion into systems containing the Company’s Personal Information,

Section 21.Equitable Relief. A breach of any provision of this Agreement may cause the parties irreparable injury and damage and therefore may be enjoined through injunctive proceedings, in addition to any other rights or remedies which may be available to such party, at law or in equity. Any proceeding to seek relief shall be brought in a federal or state court of competent jurisdiction in Denver, Colorado.

Section 22.Administrative Provisions.

(a)Notices. The address of the Company shall be as set forth in this Agreement, but may be changed by providing written notice to the Trustee sent by certified

DB2/ 38197208.1    23 Matrix CT Water Grantor Trust – CO 041917

mail, return receipt requested. Any notice required under this Trust may be waived in writing by the person or party entitled to the notice.

(b)Proxies. Proxy voting rights with respect to Trust assets will be exercised by the Company.

(c)Securities Laws. The Company acknowledges that it is solely responsible for ensuring compliance with any and all applicable federal and state securities laws and covenants that it has made all filings required under any and all applicable federal and state securities laws.

(d)Compliance. The Company agrees that the Trustee may execute, as trustee, any declarations or certificates pertaining to the Trust that may be required under any tax law(s) or governmental regulation(s) now or hereafter without prior approval of the Company.

(e)Record Retention. The Trustee will retain its records relating to the Trust as long as necessary for the proper administration of the Plan and Trust and at least for any period required by applicable law. Writing, photostatting, photographing, micro-filming, magnetic media, mechanical or electrical recording, or other forms of data retention will be acceptable means of record retention.

(f)Waiver of Jury Trial. The parties voluntarily, knowingly and irrevocably waive any right to have a jury participate in resolving any dispute between the Company and the Trustee arising out of or in any way related to this Agreement.

(g)Limitation on Claims. No claim may be made by either party for any lost profits or any special, indirect or consequential damages in respect of any breach or wrongful conduct in any way related to this Agreement.

(h)Evidence. Evidence required of anyone under the Trust may be by certificate, affidavit, document, facsimile, E-mail or other form which the person acting in reliance thereon considers to be pertinent and reliable, and to be signed, made, or presented by the proper party.

Section 23.    Miscellaneous Provisions.

(a)Performance by Trustee, its Agents or Affiliates. The Company acknowledges and authorizes that the services to be provided under this Agreement shall be provided by the Trustee, its agents or affiliates, and that certain of such services may be provided pursuant to one or more other contractual agreements or relationships, provided Trustee shall be responsible for compliance of such agents and affiliates with the privacy, confidentiality and security provisions of this Agreement.

DB2/ 38197208.1    24 Matrix CT Water Grantor Trust – CO 041917

(b)Entire Agreement. This Agreement, together with the Appendices attached hereto, which are incorporated by reference herein, contains all of the terms agreed upon between the parties with respect to the subject matter hereof.

(c)Waiver. No waiver by either party of any failure or refusal to comply with an obligation hereunder shall be deemed a waiver of any other obligation hereunder or subsequent failure or refusal to comply with any other obligation hereunder.

(d)Counterparts. This Agreement shall be executed in any number of counterparts, each one of which shall be deemed to be the original although the others shall not be produced.

(e)Successors and Assigns. The stipulations in this Agreement shall inure to the benefit of, and shall bind, the successors and assigns of the respective parties.

(f)Severability. Any provision of this Agreement prohibited by law shall be ineffective to the extent of any such prohibition, without invalidating the remaining provisions hereof.

Section 24.Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Colorado.

Section 25.    Effective Date. The effective date of this Agreement shall be the date first set forth above on Page 1.

DB2/ 38197208.1    25 Matrix CT Water Grantor Trust – CO 041917

IN WITNESS WHEREOF, the Company and Trustee have executed this Agreement, as of the date first written above.

Agreed to By:

TRUSTEE:
MATRIX TRUST COMPANY
BY:	/s/ Stefanie Armijo
NAME:	Stefanie Armijo
TITLE:	VP
COMPANY:
CONNECTICUT WATER SERVICE, INC.
BY:	/s/ Kristen A. Johnson
NAME:	Kristen A. Johnson
TITLE:	VP, Human Resources and Corporate Secretary

DB2/ 38197208.1    26 Matrix CT Water Grantor Trust – CO 041917

APPENDIX APLAN(S)

List all Plans adopted and maintained by the Company for which assets are held in this Trust:

2017 Connecticut Water Company Deferred Compensation Plan

DB2/ 38197208.1    27 Matrix CT Water Grantor Trust – CO 041917

APPENDIX BOperational Guidelines

Capitalized terms used but not otherwise defined have the meanings given to such terms in the Agreement.

INSTRUCTIONS

The Trustee must receive instructions from an Instructing Party, as defined below, for each purchase, sale acquisition and disposition. The Trustee reserves the right not to effect any transaction unless given sufficient time and information to review and process the transaction. All purchases, sales, acquisitions and dispositions of assets must be made in accordance with terms of the Agreement, the Plan and Applicable Law.

LIQUIDITY

Sufficient liquidity must be maintained in accounts to meet foreseeable obligations of the Trust. The Trustee specifically reserves the right (a) not to follow any instruction that it reasonably believes would result in insufficient liquidity (b) not to make any disbursement unless the Investment Manager, Plan Administrator or other Authorized Person (the “Instructing Party”) has provided instruction as to the assets to be converted to cash for the purposes of making such payment, and (c) to sell securities from the Trust to recover any funds advanced for any trades not settled immediately upon placement.

TRUST ASSETS

Acceptable Assets

Assets are considered to be acceptable assets depending upon the Trustee’s ability to support and administer the asset, the Trustee’s proposed responsibilities with respect to such assets, the type of account, the availability of the asset to be acquired through the Trustee or an affiliate (approved for this purpose by the Trustee) and other factors. The Instructing Party should consult with the Trustee prior to the acquisition of any asset to determine acceptability of such asset. The following types of assets are generally acceptable:

(1) Cash.

(2) Publicly traded stock listed on a U.S. stock exchange or regularly quoted over-the-counter.

(3) Publicly traded bonds listed on a U.S. bond exchange or regularly quoted over-the-counter.

(4) Mutual funds that are NSCC and DCC&S eligible.

(5) Registered limited partnership interests, REITs and similar investments listed on a U.S. stock exchange or regularly quoted over-the-counter.

(6) Commercial paper, bankers’ acceptances eligible for rediscounting at the Federal Reserve, repurchase and reverse repurchase agreements and other “money market” instruments for which trading and custodial facilities are readily available.

(7) U.S. Government and U.S. Government Agency issues.

DB2/ 38197208.1    28 Matrix CT Water Grantor Trust – CO 041917

(8) Municipal securities whose bid and ask values are readily available.

(9) Federally insured savings accounts, certificates of deposit and bank investment contracts. The Instructing Party is responsible for determining federal insurance coverage and limits and for diversifying account assets in accordance with those limits.

(10) American Depository Receipts, Eurobonds, and similar instruments listed on a U.S. exchange or regularly quoted domestically over-the-counter for which trading and custodial facilities are readily available.

(11) Life insurance, annuities, and guaranteed investment contracts issued by insurance companies licensed to do business in one or more states in the U.S. The Instructing Party is responsible for determining the safety of such investments and the economic viability of the underwriter and for diversifying account assets accordingly.

In certain circumstances a particular asset which otherwise may be considered an acceptable asset may be determined by the Trustee to be unacceptable or conditionally acceptable.

Unacceptable Assets

Trustee generally cannot acquire or hold the following assets:

(1) Tangible personal property (e.g., precious metals, gems, works of art, coins, furniture and other household items, motor vehicles, etc.).

(2) Foreign currency and bank accounts.

(3) Short sales.

(4) Commodity futures and forward contracts.

(5) Oil, gas and mineral interests.

(6) Intangible personal property (e.g., patents and rights).

(7) Unsecured loans.

(8) Interests in real property.

(9) Loans secured by first deeds of trust.

(10) Other secured loans.

Conditionally Acceptable Assets

The Trustee may, but shall not be obligated, to acquire or continue to hold any of the assets listed below:

(1) General partnerships.

(2) Unregistered limited partnerships.

(3) Other unregistered securities, closely held stock and other securities for which there is no readily available market, except for qualifying Employer securities.

(4) The securities of the broker/dealer’s corporate entity or its affiliates and subsidiaries. These securities may be subject to legal and regulatory

DB2/ 38197208.1    29 Matrix CT Water Grantor Trust – CO 041917

prohibitions or restrictions. In any event, no Trust may acquire and hold securities of the broker/dealer’s corporate entity unless specifically authorized by the underlying Trust agreement.

(5) Foreign securities for which trading and custodial facilities are readily available.

(6) Options.

(7) Securities of the Employer.

(8) Any other asset not listed under “Acceptable Assets” or “Unacceptable Assets” above.

The acquisition and continued retention of the foregoing assets is subject to providing the Trustee with the cost basis, if any, of any such assets and with a valuation of the assets on at least an annual basis. The Trustee, in its sole discretion, may impose other conditions to acquire or hold such assets, including imposing additional fees.

PROXIES AND OTHER SHAREHOLDER ACTION

Calls, Conversions, Expirations, Tenders, etc.

The Instructing Party must monitor and determine the existence of and initiate all actions necessary or appropriate in connection with calls, conversions, tenders, and similar events or transactions relating to Trust assets. The Trustee will pass on to the Instructing Party any information it receives regarding such actions.

Proxies

The Instructing Party is responsible for voting proxies and exercising other shareholder rights with respect to securities under the Instructing Party’s investment authority, and the Trustee shall not vote proxies and exercise other shareholder rights with respect to any securities held by the Trust, Including Employer Securities, unless the Trustee agrees to undertake such responsibility under a separate written agreement or as otherwise explicitly provided for in the Trust Agreement. The Instructing Party shall provide the Trustee with instructions as to where to deliver any proxies it receives and the Trustee will use commercially reasonable efforts to deliver proxies in a timely manner to such party. The Trustee is not responsible for ascertaining whether, or how, the proxies were subsequently voted or disposed of and shall bear no liability for the actions or inactions relating to voting of proxies by the Plan Administrator, Employer, “named fiduciary” of the Plan, or an Investment Manager. The Plan Administrator is exclusively responsible for reviewing whether the provisions of the Trust Agreement and these Operational Guidelines for the voting of securities and the exercise of other shareholder rights are consistent with the requirements of the Plan documents and Applicable Law.

Employer Securities

If the Trust consists of Employer Securities that are not traded on a recognizable market, or the information necessary to ascertain the fair market value is not readily available, the Plan Administrator shall provide to the Trustee the value of such securities for all purposes under the Plan and the Agreement, and the Trustee shall be entitled to rely upon the value

DB2/ 38197208.1    30 Matrix CT Water Grantor Trust – CO 041917

of such Employer Securities provided by the Plan Administrator. If the Plan Administrator fails or refuses to instruct the Trustee on the value of such Employer Securities, the Trustee, in its sole discretion, may engage an independent appraiser to determine the fair market value of such Employer Security and shall be entitled to rely upon the value placed upon such Employer Security by the independent appraiser. Any expenses with respect to such appraisal shall be a charge against the Trust and may be paid from the Trust as provided in the Agreement.

The Plan Administrator is responsible for providing specific instructions to the Trustee regarding any acquisition limits applicable to Employer Securities as required by the Plan or Applicable Law.

Employer Securities may be accepted only if the Employer and Plan Administrator provide the Trustee with all instructions, representations, and assurances and other information that the Trustee may in its sole discretion require from time to time for the proper administration of Employer Securities in the Trust. The Plan Administrator is responsible for providing specific instructions to the Trustee regarding any acquisition limits applicable to Employer Securities as required by the Plan or Applicable Law. The Employer and Plan Administrator, and not the Trustee, shall be responsible to insure that the Employer Securities are acquired and held under the Plan solely in accordance with all applicable federal and state securities laws and regulations thereunder and law and regulation governing the acquisition and holding of employer securities by plans under ERISA, as applicable.

Charges

Certain securities may impose charges and penalties on the sale and/or redemption of such security, including, without limitation, sales load, redemption, exchange, account, distribution, administrative and other charges. The Trustee is not responsible for notifying the Employer, any Instructing Party or any other party of the existence, potential or imposition of any such charges or penalties or to negotiate or attempt to negotiate the reduction, waiver, rebate or reimbursement of any such charges or penalties; nor shall the Trustee have any liability or responsibility for any such charges or penalties of any kind or nature, whether current, deferred or contingent, that are charged or imposed pursuant to the terms of any securities purchased, held, sold or redeemed in the Trust, and all such charges and penalties shall bp borne by the Trust unless otherwise provided for.

UNITIZATIONS

In General

The Trustee may provide unitization services for Employer Securities or for other assets, if agreed by the Trustee in a separate written agreement with the Plan Administrator. Unitization services are not an investment product, but rather an administrative recordkeeping service that the Trustee provides for the convenience of the Plan and participants on request, and no person (including the Employer or Plan Administrator) may hold out, market or otherwise indicate that the unitization service is an investment product whose shares may be offered to retirement plans and their participants. The Plan

DB2/ 38197208.1    31 Matrix CT Water Grantor Trust – CO 041917

Administrator shall provide the Trustee for approval a copy of any materials to be used by or on behalf of a Plan which refer to the unitization services before their distribution or use.

Unitization services are available only if the account to be unitized consists of assets eligible for daily valuation under the Trustee’s procedures, as determined by the Trustee. In order for the Plan to receive unitization services, the Plan Administrator is required to provide the Trustee with all instructions, representations, and assurances and other information that the Trustee may in its sole discretion require from time to time for the proper administration of Employer Securities in the Trustee. Such instructions shall include without limitation, instructions with respect to maintaining a cash component adequate to address anticipated distribution activity, the investment of the cash component, instructions for placing and settling transactions for the unitized account, valuation instructions, and accrual of fees and expenses.

Pricing

The Trustee will obtain pricing information from sources believed to be reliable, but the Trustee shall not be responsible or liable for the accuracy, completeness, timeliness or correct sequencing of any pricing information received or for any decision made or action taken in reliance upon such information. The Trustee makes no warranty of merchantability, warranty of fitness for a particular purpose, or other warranty of any kind, express or implied, regarding the pricing information received or transmitted by the Trustee. If the Plan Administrator does not, within ninety (90) days of receiving a unitization statement, notify the Trustee of any objection to the valuation, the unitization shall be deemed final and the Trustee will have no obligation to correct or reimburse the net asset value (NAV).

NAV Correction Procedures

The Trustee will apply its customary standards and procedures for NAV corrections, a copy of which may be provided upon request.

Expenses

Plan expenses can be charged directly to the unitized account. The Plan Administrator must instruct the Trustee as to any specific fees and expenses to be accrued in the unitized account and the rates at which such fees and expenses should be accrued. The Trustee requires five (5) business days advance notice of any adjustment or termination to fee accruals. The Plan Administrator is responsible for notifying the Trustee when money comes in or out of the unitized account and if, as a result of any such money movement, the fee accruals should be adjusted. From time to time, fee accruals may go negative. On a periodic basis, Trustee will provide to the Plan Administrator a written account of the fee accrual(s) for review. The Plan Administrator or Instructing Party is responsible for reviewing such account and for promptly advising Trustee of any necessary adjustments.

DB2/ 38197208.1    32 Matrix CT Water Grantor Trust – CO 041917

EX-10.79

EXHIBIT 10.79

AMENDED AND RESTATED

DEFERRED COMPENSATION AGREEMENT

THIS AGREEMENT (the “Deferred Compensation Agreement”) is made this 2 day of February, 2011 and between The Connecticut Water Company (together with any affiliated companies hereinafter collectively referred to as the "Employer") and Maureen P. Westbrook(hereinafter referred to as the "Employee").

WITNESSETH:

WHEREAS, the Employee is among a select group of management or highly compensated employees of the Employer; and

WHEREAS, the Employer and the Employee entered into an Amended and Restated Deferred Compensation Agreement dated January 24, 2008; and

WHEREAS, the Employer and the Employee reserved the right to amend said Agreement; and

WHEREAS, the Employer and the Employee wish to enter into this Amended and Restated Deferred Compensation Agreement (the "Agreement") on the terms herein set forth, effective as of January 1, 2011;

NOW, THEREFORE, in consideration of the premises and the mutual and dependent promises herein, the parties hereto agree as follows:

1.DEFERRED COMPENSATION. The Employee may file a written election with the Employer in the form attached to this Agreement or such other form as may be approved by the Employer to defer up to 12 percent (12%) of the Employee's salary. Such amount shall be credited to a Deferred Compensation Account as provided in Section 2 hereof. This election to defer the receipt of salary must be made before the beginning of the calendar year for which the salary is earned and shall remain in effect, unless terminated or changed, or until the date the Employee ceases to be an employee of the Employer. Any election termination or change of a deferral election must be made on a form provided by the Employer for such purpose and may only be made with respect to salary which will be earned on and after the January 1 following the Employer's receipt of such form provided that such form is received at least seven (7) days prior to the applicable January 1.

2.DEFERRED COMPENSATION ACCOUNT. The Employer shall maintain on its books and records a Deferred Compensation Account to record its liability for future payments of deferred compensation and interest thereon required to be paid to the Employee or her beneficiary pursuant to this Agreement. However, the Employer shall not be required to segregate or earmark any of its assets for the benefit of the Employee or her beneficiary. The amount reflected in said Deferred Compensation Account shall be available for the Employer's general corporate purposes and shall be available to the Employer's general creditors. The amount reflected in said Deferred Compensation Account shall not be subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance,

-2-

attachment or garnishment by creditors of the Employee or her beneficiary, and any attempt to anticipate, alienate, transfer, assign or attach the same shall be void. Neither the Employee nor her beneficiary may assert any right or claim against any specific assets of the Employer. The Employee or her beneficiary shall have only a contractual right against the Employer for the amount reflected in said Deferred Compensation Account and shall have the status of general unsecured creditors. Notwithstanding the foregoing, in order to pay amounts which may become due under this Agreement, the Employer may establish a grantor trust (hereinafter the "Trust") within the meaning of Section 671 of the Internal Revenue Code of 1986, as amended. The assets in such Trust shall at all times be subject to the claims of the general creditors of the Employer in the event of the Employer's bankruptcy or insolvency, and neither the Employee nor any beneficiary shall have any preferred claim or right, or any beneficial ownership interest in, any such assets of the Trust prior to the time such assets are paid to an Employee or beneficiary pursuant to this Agreement.

The Employer shall credit to said Deferred Compensation Account the amount of any salary to which the Employee becomes entitled and which is deferred pursuant to Section 1 hereof, such amount to be credited as of the first business day of each month. The Employer shall also credit to said Deferred Compensation Account an Interest Equivalent in the amount and manner set forth in Section 3 hereof.

3.    PAYMENT OF DEFERRED COMPENSATION

(a)    Separation from Service On or After Attainment of Age 55. If the Employee should separate from service on or after her attainment of age fifty-five (55) for any reason other than death or an account of “Cause” as defined in subsection (c) below, she shall be entitled to receive payment of the entire amount of her Deferred Compensation Account including an Interest Equivalent, as described below, in the form of an actuarially equivalent life annuity providing for equal annual payments for the life of the Employee. Such actuarially equivalent life annuity shall be computed on the basis of a mortality table that assumes a life expectancy of age eighty (80) and uses the Interest Factor described below (payment shall continue for the life of the Employee, even if the Employee continues to live past eighty (80)). If the Employee is a “specified employee” as that term is defined under Section 409A at the time of separation from service, the first annual annuity payment under this subsection shall be paid on the first day of the seventh month following the date of the Employee’s separation from service, and subsequent payments shall be made on anniversaries of that date. If the Employee is not a “specified employee” at the time of separation from service, the first annual payment under this subsection shall be paid on the first day of the month following the date of the Employee’s separation from service, and subsequent payments shall be made on anniversaries of that date.

There shall be credited to the Employee's Deferred Compensation Account as of each January 1 and July 1, commencing with July 1, 1996 until payment of such account begins, as additional deferred compensation, an Interest Equivalent equal to fiftypercent (50%) of the product of (i) the AAA Corporate Bond Yield Averages published by Moody's Bond Survey for the Friday ending on or immediately preceding the applicable January 1 and July 1 plus 3percentage points (the "Interest Factor"), multiplied by (ii) the balance of the Employee's

-3-

Deferred Compensation Account, including the amount of Interest Equivalent previously credited to such Employee's account, as of the preceding day (i.e., December 31 or June 30). The Interest Factor used to compute the annuity payable upon the Employee's separation from service on or after her attainment of age fifty-five (55) shall be calculated based upon the Interest Factor as of the January 1 or July 1 immediately preceding the date of the Employee's separation from service, whichever shall fall nearer to the date of the Employee^'s separation from service.

(b)Separation from Service Prior to Attainment of Age 55. If the Employee should separate from service prior to her attainment of age fifty-five (55) for any reason other than death or on account of "Cause" as defined in subsection (c) below, the Employee shall be entitled to receive payment in a lump sum of the entire amount of her Deferred Compensation Account, including the same Interest Equivalent as described in subsection (a) above. If the Employee is a “specified employee” as that term is defined under Section 409A at the time of separation from service, payment under this subsection shall be made on the date which is six (6) months following the date payment would otherwise be made pursuant to the following sentence. If the Employee is not a “specified employee” at the time of separation from service, payment under this subsection shall be made on the third (3^rd) day following separation from service.

(c)Separation from Service for Cause.

(i)    If the employment of the Employee is terminated by the Employer for Cause, the Employee shall be entitled only to a return of amounts deferred pursuant to Section 1 hereof.

(ii)    If the Employee is so terminated on or after age 55, payment shall be made in accordance with the terms of Section 3(a) above. However, the Employee shall not be entitled to the Interest Equivalent for any years prior to such termination, and such Interest Equivalent shall not be included in determining Employee’s benefit hereunder. An Interest Factor shall be utilized in calculating the amount of the annuity payable in accordance with the last sentence of subsection (a) above.

(iii)    If the Employee is so terminated prior to attainment of age 55, payment of the return of amounts deferred (excluding any Interest Equivalent) shall be made in a lump sum. If the Employee is a “specified employee” as that term is defined under Section 409A at the time of separation from service, payment under this subsection shall be made on the date which is six (6) months following the date payment would otherwise be made pursuant to the following sentence. If the Employee is not a “specified employee” at the time of separation from service, payment under this subsection shall be made on the third (3^rd) day following separation from service.

(iv)    As used in this Agreement, the term "Cause" shall mean:

-4-

(A) the Employee's rendering, while employed by the Employer, of any services, assistance or advice, either directly or indirectly, to any person, firm or organization competing with, or in opposition to, the Employer;

(B) the Employee's allowing, while employed by the Employer, any use of her name by any person, firm or organization competing with, or in opposition to, the Employer; or

(C) willful misconduct by the Employee, including, but not limited to, the commission by the Employee of a felony or the perpetration by the Employee of a common law fraud upon the Employer.

(d)Death While Employed. Notwithstanding anything to the contrary contained in the foregoing, if the Employee should die while employed by the Employer, her beneficiary, designated pursuant to Section 4 hereof, shall receive in a lump sum, in lieu of the amount(s) otherwise payable to the Employee under this Agreement, a death benefit equal to the greater of (i) the Hypothetical Death Benefit, as defined in subsection (f) hereof, and (ii) the entire amount of her Deferred Compensation Account at the date of her death, assuming that an Interest Equivalent were credited to such account as of each January 1 and July 1, occurring after the first deferral hereunder until the date of death at the rate set forth in subsection (a) hereof. Such beneficiary shall receive such death benefit on the thirtieth (30^th) day following the death of the Employee.

(e)Death After Separation from Service.

(i)    If the Employee should die after her separation from service, whether prior to or on or after attainment of age 55, and prior to the date on which payment of her Deferred Compensation Account has commenced in the form of an annuity in accordance with subsection (a) or has been paid in the form of a lump sum as provided in subsection (b), her beneficiary, designated pursuant to Section 4 hereof, shall receive in a lump sum, in lieu of the amount(s) otherwise payable to the Employee under this Agreement, a death benefit equal to the entire amount of the Employee's Deferred Compensation Account, including the same Interest Equivalent as described in subsection (a) above, at the date of her death, provided that the Employee's employment shall not have terminated on account of "Cause" as defined in subsection (c) hereof. In the event that the Employee should die after the termination of her employment for “Cause,” whether prior to or on or after attainment of age 55, and in either case prior to the date upon which payment of her Deferred Compensation Account has been made or has commenced, her beneficiary, designated pursuant to Section 4 hereof, shall receive a return of the amounts deferred (excluding any Interest Equivalent). No Interest Equivalent shall be credited to the Employee^'s Deferred Compensation Account in the event of the Employee's death after her termination on account of "Cause" as provided in subsection (c) hereof. In either case, the Employee's beneficiary shall receive such death benefit on the thirtieth (30^th) day following the death of the Employee.

-5-

(ii)    If the Employee should die after her separation from service with the Employer on or after attainment of age 55 (not on account of “Cause”) and after the date on which payment of her Deferred Compensation Account and the Interest Equivalent set forth in subsection (a) hereof has commenced in the form of an annuity as provided in subsection (a), no additional benefits shall be payable under this Agreement after the Employee's death except to the extent that the Employee did not receive prior to her death benefits in an amount equal to or greater than the Employee’s Deferred Compensation Account plus any Interest Equivalent credited thereto, as of the date of the Employee’s death. If the Employee dies prior to receiving benefits equal to or greater than the Employee’s Deferred Compensation Account plus any Interest Equivalent credited thereto as of the date of the Employee’s death, her beneficiary shall be entitled to a lump sum payment, thirty (30) days following Employee’s death, equal to the difference between benefits paid to the Employee hereunder and the Employee’s Deferred Compensation account, plus any Interest Equivalent credited thereto, as of the date of the Employee’s death.

(iii)    If the Employee should die after her separation from service with the Employer on or after attainment of age 55 on account of “Cause” and after the date payments have commenced to her in the form of an annuity as provided in subsection (c), no additional benefits shall be payable under this Agreement after the Employee’s death except to the extent the Employee did not receive prior to her death benefits in an amount equal to or greater than the amounts deferred (excluding any Interest Equivalent earned while employed). In such event, her beneficiary shall be entitled to a lump sum payment, thirty (30) days following Employee’s death, equal to the difference between benefits paid to the Employee hereunder and the amounts deferred (excluding any Interest Equivalent earned while employed).

(iv)    If the Employee should die after her separation from service with the Employer and after the date on which payment has been paid to her in the form of a lump sum pursuant to subsection (b) or (c), no additional benefits shall be payable upon the Employee's death.

(f)Hypothetical Death Benefit. For purposes of this Agreement, the term "Hypothetical Death Benefit” shall mean a lump sum benefit equal to the proceeds of any policy of key-man life insurance on the life of the Employee, of which the Employer is owner and beneficiary, and which policy is designated by the Employer as subject to the provisions hereof, reduced by (i) the amount of any tax imposed on the Employer with respect to such proceeds and (ii) the cost to the Employer of any tax deductions postponed as a result of salary deferrals pursuant to Section 1 hereof and increased by (iii) the tax deduction to the Employer which would result from payment of the Hypothetical Death Benefit to a beneficiary of the Employee. For purposes of (ii) above, an opportunity cost factor of six (6) percent pre-tax interest will be applied during the period of postponed deductions under (ii). The calculation of the Hypothetical Death Benefit shall be done by the Employer, whose calculation shall be final and binding on the Employee and her beneficiary. Anything herein to the contrary notwithstanding, the Employer

-6-

shall not be required to purchase a policy of key-man life insurance on the life of any Employee, and any such policy purchased by the Employer, and all proceeds thereof, shall remain at all times available to the Employer's general creditors.

(g)Termination of Employment. In order for the Employee to be considered to have terminated employment with the Employer, the Employee must have incurred a separation from service from the Employer (and all related companies) within the meaning of Section 409A, and the term termination of employment shall be construed and interpreted in a manner consistent with the term separation from service.

4.    BENEFICIARY. The Employee has notified or will in the future notify the Employer of the person or persons entitled to receive payments on the death of the Employee. For the purposes of this Agreement, such person or persons are herein referred to collectively as the "beneficiary." The person whom an Employee designates as her beneficiary for this purpose must be one of the following: the Employee^'s spouse; father, mother, sister, brother, son or daughter. The beneficiary may also be a legal ward living with and dependent on the Employee at the time of her death. If the Employee dies and has not designated a beneficiary, her beneficiary shall be her spouse, if living; otherwise, her beneficiary shall be deemed to be her estate. An Employee's beneficiary designation may be changed at any time by the Employee giving written notice to the Employer of such change. The rights of any beneficiary presently or hereafter designated are subject to any changes made in this Agreement by the Employee and the Employer.

5.WITHHOLDING. The Employer shall be permitted to withhold from any payment to the Employee or her beneficiary hereunder all federal, state or other taxes which may be required with respect to such payment.

6.ARBITRATION. In the event that a dispute shall arise with respect to any of the provisions of this Agreement, either the Employer or the Employee or her beneficiary, as the case may be, may give written notice to the other stating the claims that said party desires to arbitrate, and naming an arbitrator. Within ten (10) days after the receipt of such notice, the party receiving same shall appoint a second arbitrator by written notice to be sent to the party who requested arbitration. Within ten (10) days after receipt of such notice of appointment of the second arbitrator, the two (2) arbitrators so appointed shall meet to select a third arbitrator and shall give written notice of such selection to the Employer and the Employee or her beneficiary. The decision of a majority of the arbitrators shall be conclusive and binding upon the Employer and the Employee or her beneficiary. All notices hereunder shall be by registered mail addressed to the last known address of the party entitled to receive notice. The Employer and the Employee shall each pay their own costs incurred in the arbitration proceeding.

-7-

7.    MISCELLANEOUS.

(a)This Agreement shall be binding upon the parties hereto, their heirs, executors, administrators, successors and assigns. The Employer agrees that it will not be a party to any merger, consolidation or reorganization unless and until its obligations hereunder shall be expressly assumed by its successor or successors.

(b)This Agreement may be amended at any time by mutual written agreement of the parties hereto, but no amendment shall operate to give the Employee, or any beneficiary designated by her, either directly or indirectly, any interest whatsoever in any funds or assets of the Employer, except the right to receive the payments herein provided.

(c)Deferrals under this Agreement may be suspended by the Employer effective as of any January 1, following the time that tax or other laws are enacted or interpreted which result or will result in costs to the Employer significantly in excess of those contemplated at the time of the execution hereof. In the event of such suspension, the Employer^'s sole obligation shall be to pay to the Employee in accordance with Section 3 above. In no event may deferrals be ceased during a calendar year by action of either the Employer or the Employee, or both.

(d)This Agreement shall not supersede any contract of employment, whether oral or written, between the Employer and the Employee, nor shall it affect or impair the rights and obligations of the Employer and the Employee, respectively, thereunder. Nothing contained herein shall impose any obligation on the Employer to continue the employment of the Employee.

(e)If Moody's Bond Survey shall cease to publish the Corporate Bond Yield Averages referred to in Section 3 hereof, a similar average selected by the Board of Directors of the Employer, in its sole discretion, shall be used.

(f)This Agreement shall be executed in duplicate, and each executed copy of this Agreement shall be deemed an original.

(g)This Agreement shall be construed in all respects under the laws of the State of Connecticut, subject to applicable federal law.

(h)This Agreement has been prepared with reference to Section 409A and should be interpreted and administered in a manner consistent with Section 409A.

(i)This Amendment and Restatement is effective as of January 1, 2011.

-8-

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed, as of the day and year first above written.

	THE CONNECTICUT WATER COMPANY
2.1.11	By	/s/ Kristen A. Johnson
Date		Kristen A. Johnson
2/1/11	/s/ Maureen P. Westbrook
Date	Maureen P. Westbrook

-9-

EX-10.80

EXHIBIT 10.80

AMENDED AND RESTATED

DEFERRED COMPENSATION AGREEMENT

THIS AGREEMENT (the “Deferred Compensation Agreement”) is made this 2 day of February, 2011 and between The Connecticut Water Company (together with any affiliated companies hereinafter collectively referred to as the "Employer") and

Kristen A. Johnson(hereinafter referred to as the "Employee").

WITNESSETH:

WHEREAS, the Employee is among a select group of management or highly compensated employees of the Employer; and

WHEREAS, the Employer and the Employee entered into a Deferred Compensation Agreement dated January 24, 2008; and

WHEREAS, the Employer and the Employee reserved the right to amend said Agreement; and

WHEREAS, the Employer and the Employee wish to enter into this Amended and Restated Deferred Compensation Agreement (the "Agreement") on the terms herein set forth, effective as of January 1, 2011;

NOW, THEREFORE, in consideration of the premises and the mutual and dependent promises herein, the parties hereto agree as follows:

1.DEFERRED COMPENSATION. The Employee may file a written election with the Employer in the form attached to this Agreement or such other form as may be approved by the Employer to defer up to 12 percent (12%) of the Employee's salary. Such amount shall be credited to a Deferred Compensation Account as provided in Section 2 hereof. This election to defer the receipt of salary must be made before the beginning of the calendar year for which the salary is earned and shall remain in effect, unless terminated or changed, or until the date the Employee ceases to be an employee of the Employer. Any election termination or change of a deferral election must be made on a form provided by the Employer for such purpose and may only be made with respect to salary which will be earned on and after the January 1 following the Employer's receipt of such form provided that such form is received at least seven (7) days prior to the applicable January 1.

2.DEFERRED COMPENSATION ACCOUNT. The Employer shall maintain on its books and records a Deferred Compensation Account to record its liability for future payments of deferred compensation and interest thereon required to be paid to the Employee or her beneficiary pursuant to this Agreement. However, the Employer shall not be required to segregate or earmark any of its assets for the benefit of the Employee or her beneficiary. The amount reflected in said Deferred Compensation Account shall be available for the Employer's general corporate purposes and shall be available to the Employer's general creditors. The amount reflected in said Deferred Compensation Account shall not be subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance,

-2-

attachment or garnishment by creditors of the Employee or her beneficiary, and any attempt to anticipate, alienate, transfer, assign or attach the same shall be void. Neither the Employee nor her beneficiary may assert any right or claim against any specific assets of the Employer. The Employee or her beneficiary shall have only a contractual right against the Employer for the amount reflected in said Deferred Compensation Account and shall have the status of general unsecured creditors. Notwithstanding the foregoing, in order to pay amounts which may become due under this Agreement, the Employer may establish a grantor trust (hereinafter the "Trust") within the meaning of Section 671 of the Internal Revenue Code of 1986, as amended. The assets in such Trust shall at all times be subject to the claims of the general creditors of the Employer in the event of the Employer's bankruptcy or insolvency, and neither the Employee nor any beneficiary shall have any preferred claim or right, or any beneficial ownership interest in, any such assets of the Trust prior to the time such assets are paid to an Employee or beneficiary pursuant to this Agreement.

The Employer shall credit to said Deferred Compensation Account the amount of any salary to which the Employee becomes entitled and which is deferred pursuant to Section 1 hereof, such amount to be credited as of the first business day of each month. The Employer shall also credit to said Deferred Compensation Account an Interest Equivalent in the amount and manner set forth in Section 3 hereof.

3.    PAYMENT OF DEFERRED COMPENSATION

(a)    Separation from Service On or After Attainment of Age 55. If the Employee should separate from service on or after her attainment of age fifty-five (55) for any reason other than death or an account of “Cause” as defined in subsection (c) below, she shall be entitled to receive payment of the entire amount of her Deferred Compensation Account including an Interest Equivalent, as described below, in the form of an actuarially equivalent life annuity providing for equal annual payments for the life of the Employee. Such actuarially equivalent life annuity shall be computed on the basis of a mortality table that assumes a life expectancy of age eighty (80) and uses the Interest Factor described below (payment shall continue for the life of the Employee, even if the Employee continues to live past eighty (80)). If the Employee is a “specified employee” as that term is defined under Section 409A at the time of separation from service, the first annual annuity payment under this subsection shall be paid on the first day of the seventh month following the date of the Employee’s separation from service, and subsequent payments shall be made on anniversaries of that date. If the Employee is not a “specified employee” at the time of separation from service, the first annual payment under this subsection shall be paid on the first day of the month following the date of the Employee’s separation from service, and subsequent payments shall be made on anniversaries of that date.

There shall be credited to the Employee's Deferred Compensation Account as of each January 1 and July 1, commencing with January 1, 2008 until payment of such account begins, as additional deferred compensation, an Interest Equivalent equal to fiftypercent (50%) of the product of (i) the AAA Corporate Bond Yield Averages published by Moody's Bond Survey for the Friday ending on or immediately preceding the applicable January 1 and July 1 plus 3percentage points (the "Interest Factor"), multiplied by (ii) the balance of the Employee's

-3-

Deferred Compensation Account, including the amount of Interest Equivalent previously credited to such Employee's account, as of the preceding day (i.e., December 31 or June 30). The Interest Factor used to compute the annuity payable upon the Employee's separation from service on or after her attainment of age fifty-five (55) shall be calculated based upon the Interest Factor as of the January 1 or July 1 immediately preceding the date of the Employee's separation from service, whichever shall fall nearer to the date of the Employee^'s separation from service.

(b)Separation from Service Prior to Attainment of Age 55. If the Employee should separate from service prior to her attainment of age fifty-five (55) for any reason other than death or on account of "Cause" as defined in subsection (c) below, the Employee shall be entitled to receive payment in a lump sum of the entire amount of her Deferred Compensation Account, including the same Interest Equivalent as described in subsection (a) above. If the Employee is a “specified employee” as that term is defined under Section 409A at the time of separation from service, payment under this subsection shall be made on the date which is six (6) months following the date payment would otherwise be made pursuant to the following sentence. If the Employee is not a “specified employee” at the time of separation from service, payment under this subsection shall be made on the third (3^rd) day following separation from service.

(c)Separation from Service for Cause.

(i)    If the employment of the Employee is terminated by the Employer for Cause, the Employee shall be entitled only to a return of amounts deferred pursuant to Section 1 hereof.

(ii)    If the Employee is so terminated on or after age 55, payment shall be made in accordance with the terms of Section 3(a) above. However, the Employee shall not be entitled to the Interest Equivalent for any years prior to such termination, and such Interest Equivalent shall not be included in determining Employee’s benefit hereunder. An Interest Factor shall be utilized in calculating the amount of the annuity payable in accordance with the last sentence of subsection (a) above.

(iii)    If the Employee is so terminated prior to attainment of age 55, payment of the return of amounts deferred (excluding any Interest Equivalent) shall be made in a lump sum. If the Employee is a “specified employee” as that term is defined under Section 409A at the time of separation from service, payment under this subsection shall be made on the date which is six (6) months following the date payment would otherwise be made pursuant to the following sentence. If the Employee is not a “specified employee” at the time of separation from service, payment under this subsection shall be made on the third (3^rd) day following separation from service.

(iv)    As used in this Agreement, the term "Cause" shall mean:

-4-

(A) the Employee's rendering, while employed by the Employer, of any services, assistance or advice, either directly or indirectly, to any person, firm or organization competing with, or in opposition to, the Employer;

(B) the Employee's allowing, while employed by the Employer, any use of her name by any person, firm or organization competing with, or in opposition to, the Employer; or

(C) willful misconduct by the Employee, including, but not limited to, the commission by the Employee of a felony or the perpetration by the Employee of a common law fraud upon the Employer.

(d)Death While Employed. Notwithstanding anything to the contrary contained in the foregoing, if the Employee should die while employed by the Employer, her beneficiary, designated pursuant to Section 4 hereof, shall receive in a lump sum, in lieu of the amount(s) otherwise payable to the Employee under this Agreement, a death benefit equal to the greater of (i) the Hypothetical Death Benefit, as defined in subsection (f) hereof, and (ii) the entire amount of her Deferred Compensation Account at the date of her death, assuming that an Interest Equivalent were credited to such account as of each January 1 and July 1, occurring after the first deferral hereunder until the date of death at the rate set forth in subsection (a) hereof. Such beneficiary shall receive such death benefit on the thirtieth (30^th) day following the death of the Employee.

(e)Death After Separation from Service.

(i)    If the Employee should die after her separation from service, whether prior to or on or after attainment of age 55, and prior to the date on which payment of her Deferred Compensation Account has commenced in the form of an annuity in accordance with subsection (a) or has been paid in the form of a lump sum as provided in subsection (b), her beneficiary, designated pursuant to Section 4 hereof, shall receive in a lump sum, in lieu of the amount(s) otherwise payable to the Employee under this Agreement, a death benefit equal to the entire amount of the Employee's Deferred Compensation Account, including the same Interest Equivalent as described in subsection (a) above, at the date of her death, provided that the Employee's employment shall not have terminated on account of "Cause" as defined in subsection (c) hereof. In the event that the Employee should die after the termination of her employment for “Cause,” whether prior to or on or after attainment of age 55, and in either case prior to the date upon which payment of her Deferred Compensation Account has been made or has commenced, her beneficiary, designated pursuant to Section 4 hereof, shall receive a return of the amounts deferred (excluding any Interest Equivalent). No Interest Equivalent shall be credited to the Employee^'s Deferred Compensation Account in the event of the Employee's death after her termination on account of "Cause" as provided in subsection (c) hereof. In either case, the Employee's beneficiary shall receive such death benefit on the thirtieth (30^th) day following the death of the Employee.

-5-

(ii)    If the Employee should die after her separation from service with the Employer on or after attainment of age 55 (not on account of “Cause”) and after the date on which payment of her Deferred Compensation Account and the Interest Equivalent set forth in subsection (a) hereof has commenced in the form of an annuity as provided in subsection (a), no additional benefits shall be payable under this Agreement after the Employee's death except to the extent that the Employee did not receive prior to her death benefits in an amount equal to or greater than the Employee’s Deferred Compensation Account plus any Interest Equivalent credited thereto, as of the date of the Employee’s death. If the Employee dies prior to receiving benefits equal to or greater than the Employee’s Deferred Compensation Account plus any Interest Equivalent credited thereto as of the date of the Employee’s death, her beneficiary shall be entitled to a lump sum payment, thirty (30) days following Employee’s death, equal to the difference between benefits paid to the Employee hereunder and the Employee’s Deferred Compensation account, plus any Interest Equivalent credited thereto, as of the date of the Employee’s death.

(iii)    If the Employee should die after her separation from service with the Employer on or after attainment of age 55 on account of “Cause” and after the date payments have commenced to her in the form of an annuity as provided in subsection (c), no additional benefits shall be payable under this Agreement after the Employee’s death except to the extent the Employee did not receive prior to her death benefits in an amount equal to or greater than the amounts deferred (excluding any Interest Equivalent earned while employed). In such event, her beneficiary shall be entitled to a lump sum payment, thirty (30) days following Employee’s death, equal to the difference between benefits paid to the Employee hereunder and the amounts deferred (excluding any Interest Equivalent earned while employed).

(iv)    If the Employee should die after her separation from service with the Employer and after the date on which payment has been paid to her in the form of a lump sum pursuant to subsection (b) or (c), no additional benefits shall be payable upon the Employee's death.

(f)Hypothetical Death Benefit. For purposes of this Agreement, the term "Hypothetical Death Benefit” shall mean a lump sum benefit equal to the proceeds of any policy of key-man life insurance on the life of the Employee, of which the Employer is owner and beneficiary, and which policy is designated by the Employer as subject to the provisions hereof, reduced by (i) the amount of any tax imposed on the Employer with respect to such proceeds and (ii) the cost to the Employer of any tax deductions postponed as a result of salary deferrals pursuant to Section 1 hereof and increased by (iii) the tax deduction to the Employer which would result from payment of the Hypothetical Death Benefit to a beneficiary of the Employee. For purposes of (ii) above, an opportunity cost factor of six (6) percent pre-tax interest will be applied during the period of postponed deductions under (ii). The calculation of the Hypothetical Death Benefit shall be done by the Employer, whose calculation shall be final and binding on the Employee and her beneficiary. Anything herein to the contrary notwithstanding, the Employer

-6-

shall not be required to purchase a policy of key-man life insurance on the life of any Employee, and any such policy purchased by the Employer, and all proceeds thereof, shall remain at all times available to the Employer's general creditors.

(g)Termination of Employment. In order for the Employee to be considered to have terminated employment with the Employer, the Employee must have incurred a separation from service from the Employer (and all related companies) within the meaning of Section 409A, and the term termination of employment shall be construed and interpreted in a manner consistent with the term separation from service.

4.    BENEFICIARY. The Employee has notified or will in the future notify the Employer of the person or persons entitled to receive payments on the death of the Employee. For the purposes of this Agreement, such person or persons are herein referred to collectively as the "beneficiary." The person whom an Employee designates as her beneficiary for this purpose must be one of the following: the Employee^'s spouse; father, mother, sister, brother, son or daughter. The beneficiary may also be a legal ward living with and dependent on the Employee at the time of her death. If the Employee dies and has not designated a beneficiary, her beneficiary shall be her spouse, if living; otherwise, her beneficiary shall be deemed to be her estate. An Employee's beneficiary designation may be changed at any time by the Employee giving written notice to the Employer of such change. The rights of any beneficiary presently or hereafter designated are subject to any changes made in this Agreement by the Employee and the Employer.

5.WITHHOLDING. The Employer shall be permitted to withhold from any payment to the Employee or her beneficiary hereunder all federal, state or other taxes which may be required with respect to such payment.

6.ARBITRATION. In the event that a dispute shall arise with respect to any of the provisions of this Agreement, either the Employer or the Employee or her beneficiary, as the case may be, may give written notice to the other stating the claims that said party desires to arbitrate, and naming an arbitrator. Within ten (10) days after the receipt of such notice, the party receiving same shall appoint a second arbitrator by written notice to be sent to the party who requested arbitration. Within ten (10) days after receipt of such notice of appointment of the second arbitrator, the two (2) arbitrators so appointed shall meet to select a third arbitrator and shall give written notice of such selection to the Employer and the Employee or her beneficiary. The decision of a majority of the arbitrators shall be conclusive and binding upon the Employer and the Employee or her beneficiary. All notices hereunder shall be by registered mail addressed to the last known address of the party entitled to receive notice. The Employer and the Employee shall each pay their own costs incurred in the arbitration proceeding.

-7-

7.    MISCELLANEOUS.

(a)This Agreement shall be binding upon the parties hereto, their heirs, executors, administrators, successors and assigns. The Employer agrees that it will not be a party to any merger, consolidation or reorganization unless and until its obligations hereunder shall be expressly assumed by its successor or successors.

(b)This Agreement may be amended at any time by mutual written agreement of the parties hereto, but no amendment shall operate to give the Employee, or any beneficiary designated by her, either directly or indirectly, any interest whatsoever in any funds or assets of the Employer, except the right to receive the payments herein provided.

(c)Deferrals under this Agreement may be suspended by the Employer effective as of any January 1, following the time that tax or other laws are enacted or interpreted which result or will result in costs to the Employer significantly in excess of those contemplated at the time of the execution hereof. In the event of such suspension, the Employer^'s sole obligation shall be to pay to the Employee in accordance with Section 3 above. In no event may deferrals be ceased during a calendar year by action of either the Employer or the Employee, or both.

(d)This Agreement shall not supersede any contract of employment, whether oral or written, between the Employer and the Employee, nor shall it affect or impair the rights and obligations of the Employer and the Employee, respectively, thereunder. Nothing contained herein shall impose any obligation on the Employer to continue the employment of the Employee.

(e)If Moody's Bond Survey shall cease to publish the Corporate Bond Yield Averages referred to in Section 3 hereof, a similar average selected by the Board of Directors of the Employer, in its sole discretion, shall be used.

(f)This Agreement shall be executed in duplicate, and each executed copy of this Agreement shall be deemed an original.

(g)This Agreement shall be construed in all respects under the laws of the State of Connecticut, subject to applicable federal law.

(h)This Agreement has been prepared with reference to Section 409A and should be interpreted and administered in a manner consistent with Section 409A.

(i)This Amendment and Restatement is effective as of January 1, 2011.

-8-

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed, as of the day and year first above written.

	THE CONNECTICUT WATER COMPANY
2/1/11	By	/s/ David C. Benoit
Date		David C. Benoit
2.1.11	/s/ Kristen A. Johnson
Date	Kristen A. Johnson

-9-

EX-10.81

AMENDED AND RESTATED

DEFERRED COMPENSATION AGREEMENT

THIS AGREEMENT (the “Deferred Compensation Agreement”) is made this 2 day of February, 2011 and between The Connecticut Water Company (together with any affiliated companies hereinafter collectively referred to as the "Employer") and David C. Benoit(hereinafter referred to as the "Employee").

WITNESSETH:

WHEREAS, the Employee is among a select group of management or highly compensated employees of the Employer; and

WHEREAS, the Employer and the Employee entered into an Amended and Restated Deferred Compensation Agreement dated January 24, 2008; and

WHEREAS, the Employer and the Employee reserved the right to amend said Agreement; and

WHEREAS, the Employer and the Employee wish to enter into this Amended and Restated Deferred Compensation Agreement (the "Agreement") on the terms herein set forth, effective as of January 1, 2011;

NOW, THEREFORE, in consideration of the premises and the mutual and dependent promises herein, the parties hereto agree as follows:

1.DEFERRED COMPENSATION. The Employee may file a written election with the Employer in the form attached to this Agreement or such other form as may be approved by the Employer to defer up to 12 percent (12%) of the Employee's salary. Such amount shall be credited to a Deferred Compensation Account as provided in Section 2 hereof. This election to defer the receipt of salary must be made before the beginning of the calendar year for which the salary is earned and shall remain in effect, unless terminated or changed, or until the date the Employee ceases to be an employee of the Employer. Any election termination or change of a deferral election must be made on a form provided by the Employer for such purpose and may only be made with respect to salary which will be earned on and after the January 1 following the Employer's receipt of such form provided that such form is received at least seven (7) days prior to the applicable January 1.

2.DEFERRED COMPENSATION ACCOUNT. The Employer shall maintain on its books and records a Deferred Compensation Account to record its liability for future payments of deferred compensation and interest thereon required to be paid to the Employee or his beneficiary pursuant to this Agreement. However, the Employer shall not be required to segregate or earmark any of its assets for the benefit of the Employee or his beneficiary. The amount reflected in said Deferred Compensation Account shall be available for the Employer's general corporate purposes and shall be available to the Employer's general

Benoit Amended & Restated Deferred Com. Agmt.DOC

creditors. The amount reflected in said Deferred Compensation Account shall not be subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, attachment or garnishment by creditors of the Employee or his beneficiary, and any attempt to anticipate, alienate, transfer, assign or attach the same shall be void. Neither the Employee nor his beneficiary may assert any right or claim against any specific assets of the Employer. The Employee or his beneficiary shall have only a contractual right against the Employer for the amount reflected in said Deferred Compensation Account and shall have the status of general unsecured creditors. Notwithstanding the foregoing, in order to pay amounts which may become due under this Agreement, the Employer may establish a grantor trust (hereinafter the "Trust") within the meaning of Section 671 of the Internal Revenue Code of 1986, as amended. The assets in such Trust shall at all times be subject to the claims of the general creditors of the Employer in the event of the Employer's bankruptcy or insolvency, and neither the Employee nor any beneficiary shall have any preferred claim or right, or any beneficial ownership interest in, any such assets of the Trust prior to the time such assets are paid to an Employee or beneficiary pursuant to this Agreement.

The Employer shall credit to said Deferred Compensation Account the amount of any salary to which the Employee becomes entitled and which is deferred pursuant to Section 1 hereof, such amount to be credited as of the first business day of each month. The Employer shall also credit to said Deferred Compensation Account an Interest Equivalent in the amount and manner set forth in Section 3 hereof.

3.    PAYMENT OF DEFERRED COMPENSATION

(a)Separation from Service On or After Attainment of Age 55. If the Employee should separate from service on or after his attainment of age fifty-five (55) for any reason other than death or an account of “Cause” as defined in subsection (c) below, he shall be entitled to receive payment of the entire amount of his Deferred Compensation Account including an Interest Equivalent, as described below, in the form of an actuarially equivalent life annuity providing for equal annual payments for the life of the Employee. Such actuarially equivalent life annuity shall be computed on the basis of a mortality table that assumes a life expectancy of age eighty (80) and uses the Interest Factor described below (payment shall continue for the life of the Employee, even if the Employee continues to live past eighty (80)). If the Employee is a “specified employee” as that term is defined under Section 409A at the time of separation from service, the first annual annuity payment under this subsection shall be paid on the first day of the seventh month following the date of the Employee’s separation from service, and subsequent payments shall be made on anniversaries of that date. If the Employee is not a “specified employee” at the time of separation from service, the first annual payment under this subsection shall be paid on the first day of the month following the date of the Employee’s separation from service, and subsequent payments shall be made on anniversaries of that date.

There shall be credited to the Employee's Deferred Compensation Account as of each January 1 and July 1, commencing with July 1, 1996 until payment of such account begins, as additional deferred compensation, an Interest Equivalent equal to fiftypercent (50%) of the product of (i) the AAA Corporate Bond Yield Averages published by Moody's Bond Survey for

-2-

the Friday ending on or immediately preceding the applicable January 1 and July 1 plus 3 percentage points (the "Interest Factor"), multiplied by (ii) the balance of the Employee's Deferred Compensation Account, including the amount of Interest Equivalent previously credited to such Employee's account, as of the preceding day (i.e., December 31 or June 30). The Interest Factor used to compute the annuity payable upon the Employee's separation from service on or after his attainment of age fifty-five (55) shall be calculated based upon the Interest Factor as of the January 1 or July 1 immediately preceding the date of the Employee's separation from service, whichever shall fall nearer to the date of the Employee^'s separation from service.

(b)Separation from Service Prior to Attainment of Age 55. If the Employee should separate from service prior to his attainment of age fifty-five (55) for any reason other than death or on account of "Cause" as defined in subsection (c) below, the Employee shall be entitled to receive payment in a lump sum of the entire amount of his Deferred Compensation Account, including the same Interest Equivalent as described in subsection (a) above. If the Employee is a “specified employee” as that term is defined under Section 409A at the time of separation from service, payment under this subsection shall be made on the date which is six (6) months following the date payment would otherwise be made pursuant to the following sentence. If the Employee is not a “specified employee” at the time of separation from service, payment under this subsection shall be made on the third (3^rd) day following separation from service.

(c)Separation from Service for Cause.

(i)If the employment of the Employee is terminated by the Employer for Cause, the Employee shall be entitled only to a return of amounts deferred pursuant to Section 1 hereof.

(ii)If the Employee is so terminated on or after age 55, payment shall be made in accordance with the terms of Section 3(a) above. However, the Employee shall not be entitled to the Interest Equivalent for any years prior to such termination, and such Interest Equivalent shall not be included in determining Employee’s benefit hereunder. An Interest Factor shall be utilized in calculating the amount of the annuity payable in accordance with the last sentence of subsection (a) above.

(iii)If the Employee is so terminated prior to attainment of age 55, payment of the return of amounts deferred (excluding any Interest Equivalent) shall be made in a lump sum. If the Employee is a “specified employee” as that term is defined under Section 409A at the time of separation from service, payment under this subsection shall be made on the date which is six (6) months following the date payment would otherwise be made pursuant to the following sentence. If the Employee is not a “specified employee” at the time of separation from service, payment under this subsection shall be made on the third (3^rd) day following separation from service.

(iv)As used in this Agreement, the term "Cause" shall mean:

-3-

(A) the Employee's rendering, while employed by the Employer, of any services, assistance or advice, either directly or indirectly, to any person, firm or organization competing with, or in opposition to, the Employer;

(B) the Employee's allowing, while employed by the Employer, any use of his name by any person, firm or organization competing with, or in opposition to, the Employer; or

(C) willful misconduct by the Employee, including, but not limited to, the commission by the Employee of a felony or the perpetration by the Employee of a common law fraud upon the Employer.

(d)Death While Employed. Notwithstanding anything to the contrary contained in the foregoing, if the Employee should die while employed by the Employer, his beneficiary, designated pursuant to Section 4 hereof, shall receive in a lump sum, in lieu of the amount(s) otherwise payable to the Employee under this Agreement, a death benefit equal to the greater of (i) the Hypothetical Death Benefit, as defined in subsection (f) hereof, and (ii) the entire amount of his Deferred Compensation Account at the date of his death, assuming that an Interest Equivalent were credited to such account as of each January 1 and July 1, occurring after the first deferral hereunder until the date of death at the rate set forth in subsection (a) hereof. Such beneficiary shall receive such death benefit on the thirtieth (30^th) day following the death of the Employee.

(e)Death After Separation from Service.

(i)If the Employee should die after his separation from service, whether prior to or on or after attainment of age 55, and prior to the date on which payment of his Deferred Compensation Account has commenced in the form of an annuity in accordance with subsection (a) or has been paid in the form of a lump sum as provided in subsection (b), his beneficiary, designated pursuant to Section 4 hereof, shall receive in a lump sum, in lieu of the amount(s) otherwise payable to the Employee under this Agreement, a death benefit equal to the entire amount of the Employee's Deferred Compensation Account, including the same Interest Equivalent as described in subsection (a) above, at the date of his death, provided that the Employee's employment shall not have terminated on account of "Cause" as defined in subsection (c) hereof. In the event that the Employee should die after the termination of his employment for “Cause,” whether prior to or on or after attainment of age 55, and in either case prior to the date upon which payment of his Deferred Compensation Account has been made or has commenced, his beneficiary, designated pursuant to Section 4 hereof, shall receive a return of the amounts deferred (excluding any Interest Equivalent). No Interest Equivalent shall be credited to the Employee^'s Deferred Compensation Account in the event of the Employee's death after his termination on account of "Cause" as provided in subsection (c) hereof. In either case, the

-4-

Employee's beneficiary shall receive such death benefit on the thirtieth (30^th) day following the death of the Employee.

(ii)If the Employee should die after his separation from service with the Employer on or after attainment of age 55 (not on account of “Cause”) and after the date on which payment of his Deferred Compensation Account and the Interest Equivalent set forth in subsection (a) hereof has commenced in the form of an annuity as provided in subsection (a), no additional benefits shall be payable under this Agreement after the Employee's death except to the extent that the Employee did not receive prior to his death benefits in an amount equal to or greater than the Employee’s Deferred Compensation Account plus any Interest Equivalent credited thereto, as of the date of the Employee’s death. If the Employee dies prior to receiving benefits equal to or greater than the Employee’s Deferred Compensation Account plus any Interest Equivalent credited thereto as of the date of the Employee’s death, his beneficiary shall be entitled to a lump sum payment, thirty (30) days following Employee’s death, equal to the difference between benefits paid to the Employee hereunder and the Employee’s Deferred Compensation account, plus any Interest Equivalent credited thereto, as of the date of the Employee’s death.

(iii)If the Employee should die after his separation from service with the Employer on or after attainment of age 55 on account of “Cause” and after the date payments have commenced to him in the form of an annuity as provided in subsection (c), no additional benefits shall be payable under this Agreement after the Employee’s death except to the extent the Employee did not receive prior to his death benefits in an amount equal to or greater than the amounts deferred (excluding any Interest Equivalent earned while employed). In such event, his beneficiary shall be entitled to a lump sum payment, thirty (30) days following Employee’s death, equal to the difference between benefits paid to the Employee hereunder and the amounts deferred (excluding any Interest Equivalent earned while employed).

(iv)If the Employee should die after his separation from service with the Employer and after the date on which payment has been paid to him in the form of a lump sum pursuant to subsection (b) or (c), no additional benefits shall be payable upon the Employee's death.

(f)Hypothetical Death Benefit. For purposes of this Agreement, the term "Hypothetical Death Benefit” shall mean a lump sum benefit equal to the proceeds of any policy of key-man life insurance on the life of the Employee, of which the Employer is owner and beneficiary, and which policy is designated by the Employer as subject to the provisions hereof, reduced by (i) the amount of any tax imposed on the Employer with respect to such proceeds and (ii) the cost to the Employer of any tax deductions postponed as a result of salary deferrals pursuant to Section 1 hereof and increased by (iii) the tax deduction to the Employer which would result from payment of the Hypothetical Death Benefit to a beneficiary of the Employee. For purposes of (ii) above, an opportunity cost factor of six (6) percent pre-tax interest will be applied during the period of postponed deductions under (ii). The calculation of the Hypothetical

-5-

Death Benefit shall be done by the Employer, whose calculation shall be final and binding on the Employee and his beneficiary. Anything herein to the contrary notwithstanding, the Employer shall not be required to purchase a policy of key-man life insurance on the life of any Employee, and any such policy purchased by the Employer, and all proceeds thereof, shall remain at all times available to the Employer's general creditors.

(g)Termination of Employment. In order for the Employee to be considered to have terminated employment with the Employer, the Employee must have incurred a separation from service from the Employer (and all related companies) within the meaning of Section 409A, and the term termination of employment shall be construed and interpreted in a manner consistent with the term separation from service.

4.BENEFICIARY. The Employee has notified or will in the future notify the Employer of the person or persons entitled to receive payments on the death of the Employee. For the purposes of this Agreement, such person or persons are herein referred to collectively as the "beneficiary." The person whom an Employee designates as his beneficiary for this purpose must be one of the following: the Employee^'s spouse; father, mother, sister, brother, son or daughter. The beneficiary may also be a legal ward living with and dependent on the Employee at the time of his death. If the Employee dies and has not designated a beneficiary, his beneficiary shall be his spouse, if living; otherwise, his beneficiary shall be deemed to be his estate. An Employee's beneficiary designation may be changed at any time by the Employee giving written notice to the Employer of such change. The rights of any beneficiary presently or hereafter designated are subject to any changes made in this Agreement by the Employee and the Employer.

5.WITHHOLDING. The Employer shall be permitted to withhold from any payment to the Employee or his beneficiary hereunder all federal, state or other taxes which may be required with respect to such payment.

6.ARBITRATION. In the event that a dispute shall arise with respect to any of the provisions of this Agreement, either the Employer or the Employee or his beneficiary, as the case may be, may give written notice to the other stating the claims that said party desires to arbitrate, and naming an arbitrator. Within ten (10) days after the receipt of such notice, the party receiving same shall appoint a second arbitrator by written notice to be sent to the party who requested arbitration. Within ten (10) days after receipt of such notice of appointment of the second arbitrator, the two (2) arbitrators so appointed shall meet to select a third arbitrator and shall give written notice of such selection to the Employer and the Employee or his beneficiary. The decision of a majority of the arbitrators shall be conclusive and binding upon the Employer and the Employee or his beneficiary. All notices hereunder shall be by registered mail addressed to the last known address of the party entitled to receive notice. The Employer and the Employee shall each pay their own costs incurred in the arbitration proceeding.

-6-

7.MISCELLANEOUS.

(a)This Agreement shall be binding upon the parties hereto, their heirs, executors, administrators, successors and assigns. The Employer agrees that it will not be a party to any merger, consolidation or reorganization unless and until its obligations hereunder shall be expressly assumed by its successor or successors.

(b)This Agreement may be amended at any time by mutual written agreement of the parties hereto, but no amendment shall operate to give the Employee, or any beneficiary designated by him, either directly or indirectly, any interest whatsoever in any funds or assets of the Employer, except the right to receive the payments herein provided.

(c)Deferrals under this Agreement may be suspended by the Employer effective as of any January 1, following the time that tax or other laws are enacted or interpreted which result or will result in costs to the Employer significantly in excess of those contemplated at the time of the execution hereof. In the event of such suspension, the Employer^'s sole obligation shall be to pay to the Employee in accordance with Section 3 above. In no event may deferrals be ceased during a calendar year by action of either the Employer or the Employee, or both.

(d)This Agreement shall not supersede any contract of employment, whether oral or written, between the Employer and the Employee, nor shall it affect or impair the rights and obligations of the Employer and the Employee, respectively, thereunder. Nothing contained herein shall impose any obligation on the Employer to continue the employment of the Employee.

(e)If Moody's Bond Survey shall cease to publish the Corporate Bond Yield Averages referred to in Section 3 hereof, a similar average selected by the Board of Directors of the Employer, in its sole discretion, shall be used.

(f)This Agreement shall be executed in duplicate, and each executed copy of this Agreement shall be deemed an original.

(g)This Agreement shall be construed in all respects under the laws of the State of Connecticut, subject to applicable federal law.

(h)This Agreement has been prepared with reference to Section 409A and should be interpreted and administered in a manner consistent with Section 409A.

(i)This Amendment and Restatement is effective as of January 1, 2011.

-7-

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed, as of the day and year first above written.

	THE CONNECTICUT WATER COMPANY
2.1.11	By	/s/ Kristen A. Johnson
Date	Kristen A. Johnson
2/1/11	/s/ David C. Benoit
Date	David C. Benoit

-8-

EX-10.82

EXHIBIT 10.82

FIRST AMENDMENT TO
AMENDED AND RESTATED
DEFERRED COMPENSATION AGREEMENT

THIS AMENDMENT is made this 7 day of December, 2011 by and between The Connecticut Water Company (together with any affiliated companies hereinafter collectively referred to as the “Employer”), and Kristen A. Johnson (hereinafter referred to as the “Employee”).

WITNESSETH:

WHEREAS, the Employer and the Employee entered into an Amended and Restated Deferred Compensation Agreement (the “Agreement”) dated February 1, 2011; and

WHEREAS, the Employer and the Employee reserved the right to amend said Agreement; and

WHEREAS, the Employer and the Employee wish to amend the Agreement in the particular set forth below;

NOW, THEREFORE, the parties hereto agree as follows:

1. The following two sentences are added to subsection (a) of Section 3 at the end thereof:

“Effective January 1, 2012, the phrase “3 percentage points” in the first sentence of the second unnumbered paragraph of this subsection (a) of this Section 3 shall be replaced by the phrase “4 percentage points.” This change shall not impact the crediting of interest for periods prior to January 1, 2012.”

2. Except as herein above modified and amended, the Agreement shall remain in full force and effect.

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed.

	THE CONNECTICUT WATER COMPANY
12/9/11	By:	/s/ David C. Benoit
Date
12.7.11	/s/ Kristen A. Johnson
Date	Kristen A. Johnson

DB2/ 38218581.1

The Connecticut Water Company Deferred Compensation Agreement
Change in Election and/or Beneficiary Designation Form
Pg. 3

Received on behalf of the Employer.
12/9/11	/s/ David C. Benoit
Date	Signature
	David C. Benoit
	Print Name

DB2/ 38218581.1

FORM B-1

The Connecticut Water Company Deferred Compensation Agreement
Notice of Change in Election and/or Beneficiary Designation

1. Change of Deferral

ü Check here to make a change in deferrals. If this is not checked, I understand that my prior election remains in effect.

Pursuant to the terms of the Deferred Compensation Agreement (the “Agreement”) by and between the undersigned and The Connecticut Water Company (together with any affiliated companies collectively referred to as the “Employer”), I hereby elect to change the amount of my deferral to the following amount of my salary from the Employer payable in connection with the performance of my services as an employee of the Employer:

____ terminate deferrals

____ percent of my salary

$500 of each bi-weekly salary payment

Other: ____________________________________

Note: deferral cannot exceed twelve percent (12%) of salary.

This election shall be effective for calendar years beginning after the date hereof. I understand that to be effective, this form must be delivered to the Employer at least seven (7) days before the beginning of the calendar year in which the salary is earned.

I understand that this election to defer shall be continued as to the salary which is earned for each calendar year for which this election to defer is effective, and shall also apply to increases in salary. I also understand that I may change the amount deferred (including terminating deferrals) with respect to salary earned for calendar years commencing after my delivery to the Employer of a written notice of change, provided such form is delivered to the Employer at least seven (7) days before the beginning of the calendar year in which the salary is earned. Further, I understand that if I terminate deferrals, I may make a new election to again defer my salary pursuant to the Agreement and that any new election to defer payment of my salary must be made and delivered to the Employer at least seven (7) days before the beginning of the calendar year for which the salary is earned.

DB2/ 38218581.1

DB2/ 38218581.1

EX-10.83

EXHIBIT 10.83

FIRST AMENDMENT TO
AMENDED AND RESTATED
DEFERRED COMPENSATION AGREEMENT

THIS AMENDMENT is made this 8th day of December, 2011 by and between The Connecticut Water Company (together with any affiliated companies hereinafter collectively referred to as the “Employer”), and Maureen P. Westbrook (hereinafter referred to as the “Employee”).

WITNESSETH:

WHEREAS, the Employer and the Employee entered into an Amended and Restated Deferred Compensation Agreement (the “Agreement”) dated February 1, 2011; and

WHEREAS, the Employer and the Employee reserved the right to amend said Agreement; and

WHEREAS, the Employer and the Employee wish to amend the Agreement in the particular set forth below;

NOW, THEREFORE, the parties hereto agree as follows:

1.The following two sentences are added to subsection (a) of Section 3 at the end thereof:

2.“Effective January 1, 2012, the phrase “3 percentage points” in the first sentence of the second unnumbered paragraph of this subsection (a) of this Section 3 shall be replaced by the phrase “4 percentage points.” This change shall not impact the crediting of interest for periods prior to January 1, 2012.”

3.Except as hereinabove modified and amended, the Agreement shall remain in full force and effect.

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed.

	THE CONNECTICUT WATER COMPANY
12.22.11	By:	/s/ Kristen A. Johnson
Date
Dec 8, 2011		/s/ Maureen P. Westbrook
Date		Maureen P. Westbrook

DB2/ 38218571.1

EX-10.84

EXHIBIT 10.84

FIRST AMENDMENT TO
AMENDED AND RESTATED
DEFERRED COMPENSATION AGREEMENT

THIS AMENDMENT is made this 9^th day of December, 2011 by and between The Connecticut Water Company (together with any affiliated companies hereinafter collectively referred to as the “Employer”), and David C. Benoit (hereinafter referred to as the “Employee”).

WITNESSETH:

WHEREAS, the Employer and the Employee entered into an Amended and Restated Deferred Compensation Agreement (the “Agreement”) dated February 1, 2011; and

WHEREAS, the Employer and the Employee reserved the right to amend said Agreement; and

WHEREAS, the Employer and the Employee wish to amend the Agreement in the particular set forth below;

NOW, THEREFORE, the parties hereto agree as follows:

1.The following two sentences are added to subsection (a) of Section 3 at the end thereof:

“Effective January 1, 2012, the phrase “3 percentage points” in the first sentence of the second unnumbered paragraph of this subsection (a) of this Section 3 shall be replaced by the phrase “4 percentage points.” This change shall not impact the crediting of interest for periods prior to January 1, 2012.”

2.Except as hereinabove modified and amended, the Agreement shall remain in full force and effect.

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed.

	THE CONNECTICUT WATER COMPANY
12.22.11	By:	/s/ Kristen A. Johnson
Date
12/9/11	/s/ David C. Benoit
Date	David C. Benoit

113227029v1

EX-10.85

EXHIBIT 10.85

MURTHA DRAFT 12/14/2016

SECOND AMENDMENT TO AMENDED AND RESTATEDDEFERRED COMPENSATION AGREEMENT

THIS AMENDMENT is made this 21st day of December, 2016 by and between The Connecticut Water Company (together with any affiliated companies hereinafter collectively referred to as the “Employer”), and Maureen P. Westbrook (hereinafter referred to as the “Employee”).

WITNESSETH:

WHEREAS, the Employer and the Employee entered into an Amended and Restated Deferred Compensation Agreement (the “Agreement”) dated February 2, 2011; and

WHEREAS, the Employer and the Employee reserved the right to amend said Agreement; and

WHEREAS, the Employer and the Employee wish to amend the Agreement to suspend deferrals under the Agreement after 2016;

NOW, THEREFORE, the parties hereto agree as follows, effective as of January 1, 2017:

1.No elections may be made under this Agreement to defer salary earned after 2016. Any elections made prior to this Amendment to defer salary earned in 2017 or later shall be void.

2.Any amounts payable under the Agreement prior to this Amendment will remain subject to the terms of the Agreement, including but not limited to the time and form of payment specified in the Agreement.

3.The following new sentence is added to the end of Section 1 of the Agreement: “Effective January 1, 2017, no elections may be made under this Agreement to defer salary earned after 2016.

4.Except as hereinabove modified and amended, the Agreement shall remain in full force and effect.

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed.

EMPLOYEE		THE CONNECTICUT WATER COMPANY
/s/ Maureen P. Westbrook		By:	/s/ Kristen A. Johnson
Date:	12/21/16	Date:	12.21.16

EX-10.86

EXHIBIT 10.86

MURTHA DRAFT 12/14/2016

SECOND AMENDMENT TO AMENDED AND RESTATEDDEFERRED COMPENSATION AGREEMENT

THIS AMENDMENT is made this 20th day of December, 2016 by and between The Connecticut Water Company (together with any affiliated companies hereinafter collectively referred to as the “Employer”), and Kristen A. Johnson (hereinafter referred to as the “Employee”).

WITNESSETH:

WHEREAS, the Employer and the Employee entered into an Amended and Restated Deferred Compensation Agreement (the “Agreement”) dated February 2, 2011; and

WHEREAS, the Employer and the Employee reserved the right to amend said Agreement; and

WHEREAS, the Employer and the Employee wish to amend the Agreement to suspend deferrals under the Agreement after 2016;

NOW, THEREFORE, the parties hereto agree as follows, effective as of January 1, 2017:

1.No elections may be made under this Agreement to defer salary earned after 2016. Any elections made prior to this Amendment to defer salary earned in 2017 or later shall be void.

2.Any amounts payable under the Agreement prior to this Amendment will remain subject to the terms of the Agreement, including but not limited to the time and form of payment specified in the Agreement.

3.The following new sentence is added to the end of Section 1 of the Agreement: “Effective January 1, 2017, no elections may be made under this Agreement to defer salary earned after 2016.

4.Except as hereinabove modified and amended, the Agreement shall remain in full force and effect.

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed.

EMPLOYEE		THE CONNECTICUT WATER COMPANY
/s/ Kristen A. Johnson		By:	/s/ Eric W. Thornburg
Date:	12.20.16	Date:	01.09.17

EX-10.87

EXHIBIT 10.87

MURTHA DRAFT 12/14/2016

SECOND AMENDMENT TOAMENDED AND RESTATEDDEFERRED COMPENSATION AGREEMENT

THIS AMENDMENT is made this 19 day of December, 2016 by and between The Connecticut Water Company (together with any affiliated companies hereinafter collectively referred to as the “Employer”), and David C. Benoit (hereinafter referred to as the “Employee”).

WITNESSETH:

WHEREAS, the Employer and the Employee entered into an Amended and Restated Deferred Compensation Agreement (the “Agreement”) dated February 2, 2011; and

WHEREAS, the Employer and the Employee reserved the right to amend said Agreement; and

WHEREAS, the Employer and the Employee wish to amend the Agreement to suspend deferrals under the Agreement after 2016;

NOW, THEREFORE, the parties hereto agree as follows, effective as of January 1, 2017:

1.No elections may be made under this Agreement to defer salary earned after 2016. Any elections made prior to this Amendment to defer salary earned in 2017 or later shall be void.

2.Any amounts payable under the Agreement prior to this Amendment will remain subject to the terms of the Agreement, including but not limited to the time and form of payment specified in the Agreement.

3.The following new sentence is added to the end of Section 1 of the Agreement: “Effective January 1, 2017, no elections may be made under this Agreement to defer salary earned after 2016.

4.Except as hereinabove modified and amended, the Agreement shall remain in full force and effect.

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed.

EMPLOYEE		THE CONNECTICUT WATER COMPANY
/s/ David C. Benoit		By:	/s/ Kristen A. Johnson
Date:	12/19/16	Date:	12.21.16

EX-10.89

EXHIBIT 10.89

FIRST AMENDMENTTO THE2017 CONNECTICUT WATER COMPANY DEFERRED COMPENSATION PLAN

WHEREAS, Connecticut Water Service, Inc., a Connecticut corporation (the “Company”) established the 2017 Connecticut Water Company Deferred Compensation Plan (the “Plan”), effective as of January 1, 2017; and

WHEREAS, Section 12.1 of the Plan reserves to the Company the right to amend the Plan at any time by resolution of the Board; and

WHEREAS, the Company desires to amend the Plan to clarify the definition of “Affiliate” in Section 3.3 of the Plan.

NOW, THEREFORE, the Plan is amended effective as of the Merger Closing as set forth below:

1.    Section 3.3 (“Affiliate”) is hereby deleted and replaced with the following:

“3.3    “Affiliate” means:

(a) Any corporation, trade or business which is treated as a single employer with the Company under Code Sections 414(b) or 414(c) and designated by the Committee as an “Affiliate” for purposes of the Plan; and

(b) Any other entity designated by the Committee as an “Affiliate” for purposes of the Plan.”

IN WITNESS WHEREOF, the Company has caused this First Amendment to be executed by its duly authorized representative as of this 14 day of August, 2019.

CONNECTICUT WATER SERVICE, INC.

By:    /s/ Kristen A. JohnsonKristen A. JohnsonTitle: Vice President, Human Resources andCorporate Secretary

DB2/ 38204556.1

EX-10.90

EXHIBIT 10.90

SECOND AMENDMENT

TO THE

2017 CONNECTICUT WATER COMPANY DEFERRED COMPENSATION PLAN

______________________________________________________________________

WHEREAS, Connecticut Water Service, Inc., a Connecticut corporation (the “Company”) established the 2017 Connecticut Water Company Deferred Compensation Plan (the “Plan”), effective as of January 1, 2017; and

WHEREAS, Section 12.1 of the Plan reserves to the Company the right to amend the Plan at any time by resolution of the Company’s Board of Directors (the “Board”); and

WHEREAS, Section 11 of the Plan provides that the Plan shall be administered by a Committee, defined at Section 3.11 of the Plan to mean a committee of the Board; and

WHEREAS, pursuant to the Action by Unanimous Written Consent dated October 9, 2019, the Board authorized the Plan to be amended to reflect that the Board shall have the authority and responsibility to administer the Plan, except with respect to the Investment Options made available under certain Corporate Owned Life Insurance policies under the Plan; and

WHEREAS, pursuant to the Action by Unanimous Written Consent dated October 9, 2019, the Board authorized the Plan to be amended to provide that the Connecticut Water Company Benefit Plan Administration Committee, and not the Board, shall be responsible for overseeing the Investment Options available under certain Corporate Owned Life Insurance policies owned by the Plan.

NOW, THEREFORE, the Plan is amended effective as of October 9, 2019 as set forth below:

1. Section 3.11 (“Committee”) is hereby deleted in its entirety and all subsequent subsections and cross-references are renumbered and revised accordingly.

2. Each use of the term “Committee” or a variation thereof (such as “Committee’s”) throughout the Plan document is hereby replaced with the term “Board” (or a variation thereof, as dictated by context).

3. Section 3.28 (formerly Section 3.29) (“Investment Option”) is hereby amended in its entirety as shown below (deletions in bold and strikethrough, additions in bold and italics):

“Investment Option” means an investment fund, index or vehicle selected by the Committee and made available to Participants for the deemed investment of their Accounts.

4. Section 6.2 (“Investment Options”) is hereby amended in its entirety as shown below (deletions in bold and strikethrough, additions in bold and italics):

Investment Options.

10127403v1

DB2/ 37773158.2

(a)Except as provided in (b), below, tThe CommitteeBoard shall select the Investment Options to be made available to Participants for the deemed investment of their Accounts under the Plan. The CommitteeBoard may change, discontinue, or add to the Investment Options made available under the Plan at any time in its sole discretion. A Participant must select the Investment Options for his or her Accounts in the Participant’s Election Form and may make changes to his or her selections in accordance with procedures established by the CommitteeBoard. If the Participant fails to select Investment Options for his or her Accounts, the CommitteeBoard may apply a default Investment Option to the Participant’s Accounts (including no Investment Option), in its sole discretion.

(b)Notwithstanding the foregoing, the Connecticut Water Company Benefit Plan Administration Committee shall select the Investment Options to be made available under Corporate Owned Life Insurance policies held by the Plan. The Connecticut Water Company Benefit Plan Administration Committee may change, discontinue, or add to these Investment Options at any time in its sole discretion.

**SIGNATURE PAGE FOLLOWS**

DB2/ 37773158.2    2

IN WITNESS WHEREOF, the Company has caused this Second Amendment to be executed by its duly authorized representative as of this 12 day of November, 2019.

CONNECTICUT WATER SERVICE, INC.
By:	/s/ Kristen A. Johnson
	SVP, Administration

DB2/ 37773158.2    3

EX-10.91

EXHIBIT 10.91

AMENDED AND RESTATEDEMPLOYMENT AGREEMENT

THIS AGREEMENT, dated this 23 day of December, 2008, is made by and between The Connecticut Water Company, a Connecticut corporation having its principal place of business in Clinton, Connecticut, (“Company”), Connecticut Water Service, Inc., a Connecticut corporation and holder of all of the outstanding capital stock of Company (“Parent”) and Maureen P. Westbrook, a resident of Westbrook, Connecticut (“Employee”).

WITNESSETH:

WHEREAS, Company and Parent desire to reward Employee for Employee’s valuable, dedicated service to Company and Parent should Employee’s service be terminated under circumstances hereinafter described; and

WHEREAS, Employee, Company and Parent entered into an amended and restated Employment Agreement dated January 24, 2008; and

WHEREAS, the parties wish to amend the Agreement to comply with Section 409A of the Internal Revenue Code of 1986, as amended and regulations issued thereunder (collectively the “Code”); and

WHEREAS, Employee, Company and Parent are willing to enter into this Amended and Restated Employment Agreement (“Agreement”) on the terms herein set forth;

NOW, THEREFORE, to assure Company and Parent of Employee’s continued dedication and the availability of Employee’s advice and counsel in the event of any such proposal, to induce Employee to remain in the employ of Company and Parent and to reward Employee for Employee’s valuable dedicated service to Company and Parent should Employee’s service be terminated under circumstances hereinafter described, and for other good and valuable consideration, the receipt and adequacy of which each party acknowledges, effective January 1, 2009, Company, Parent and Employee agree as follows:

1.Definitions. For purposes of this Agreement, the following terms shall have the following meanings:

(a)“Cause” shall mean Employee’s serious, willful misconduct in respect of Employee’s duties under this Agreement, including conviction for a felony or perpetration by Employee of a common law fraud upon Company or Parent which has resulted or is likely to result in material economic damage to Company or Parent, as determined by a vote of at least seventy-five percent (75%) of all of the Directors (excluding Employee) of each of Company’s and Parent’s Board of Directors;

(b)“Change-in-Control” shall be deemed to have occurred if after the date hereof (i) a public announcement shall be made or a report on Schedule 13D shall be filed with the Securities and Exchange Commission pursuant to Section 13(d) of the Securities Exchange

DB2/ 38218719.1

Act of 1934 (the “Act”) disclosing that any Person (as defined below), other than Company or Parent or any employee benefit plan sponsored by Company or Parent, is the beneficial owner (as the term is defined in Rule 13d-3 under the Act) directly or indirectly, of twenty percent (20%) or more of the total voting power represented by Company’s or Parent’s then outstanding voting common stock (calculated as provided in paragraph (d) of Rule 13d-3 under the Act in the case of rights to acquire voting common stock); or (ii) any Person, other than Company or Parent or any employee benefit plan sponsored by Company or Parent, shall purchase shares pursuant to a tender offer or exchange offer to acquire any voting common stock of Company or Parent (or securities convertible into such voting common stock) for cash, securities or any other consideration, provided that after consummation of the offer, the Person in question is the beneficial owner directly or indirectly, of twenty percent (20%) or more of the total voting power represented by Company’s or Parent’s then outstanding voting common stock (all as calculated under clause (i)); or (iii) the stockholders of Company or Parent shall approve (A) any consolidation or merger of Company or Parent in which Company or Parent is not the continuing or surviving corporation (other than a merger of Company or Parent in which holders of the outstanding capital stock of Company or Parent immediately prior to the merger have the same proportionate ownership of the outstanding capital stock of the surviving corporation immediately after the merger as immediately before), or pursuant to which the outstanding capital stock of Company or Parent would be converted into cash, securities or other property, or (B) any sale, lease, exchange or other transfer (in one transaction or a series of related transactions) of all or substantially all the assets of Company or Parent; or (iv) there shall have been a change in the composition of the Board of Directors of Company or Parent at any time during any consecutive twenty-four (24) month period such that “continuing directors” cease for any reason to constitute at least a majority of the Board unless the election, or the nomination for election of each new Director was approved by a vote of at least two-thirds (2/3) of the Directors then still in office who were Directors at the beginning of such period; or (v) the Board of Directors of Company or Parent, by a vote of a majority of all the Directors (excluding Employee) adopts a resolution to the effect that a “Change-in-Control” has occurred for purposes of this Agreement.

(c)“Disability” shall mean the incapacity of Employee by illness or any other cause as determined under the long-term disability insurance plan of Company in effect at the time in question, or if no such plan is in effect, then such incapacity of Employee as prevents Employee from performing the essential functions of Employee’s position with or without reasonable accommodation for a period in excess of two hundred forty (240) days (whether or not consecutive), or one hundred eighty (180) days consecutively, as the case may be, during any twelve (12) month period.

(d)“Effective Date” shall be the date on which a Change-in-Control occurs. Anything in this Agreement to the contrary notwithstanding, if Employee’s employment is terminated prior to the date on which a Change-in-Control occurs, and it is reasonably demonstrated that such termination (i) was at the request of a third party who has taken steps reasonably calculated to effect a Change-in-Control or (ii) otherwise arose in connection with or anticipation of a Change-in-Control, then for all purposes of this Agreement the “Effective Date” shall mean the date immediately prior to the date of such termination.

DB2/ 38218719.1    - 2 -

(e)“Good Reason” shall mean the occurrence of any action which (i) removes or changes Employee’s title or reduces Employee’s job responsibilities or base salary; (ii) results in a significant worsening of Employee’s work conditions; or (iii) moves Employee’s place of employment to a location that increases Employee’s commute by more than thirty (30) miles over the length of Employee’s commute from Employee’s place of principal residence at the time the move is requested. For purposes of this subparagraph (e), any good faith determination by Employee that any such action has occurred shall be conclusive. Notwithstanding the foregoing, at any time during the period commencing on the Effective Date and ending on the 306 day after the first anniversary of the Effective Date, except for purposes of Paragraph 5(g), “Good Reason” shall mean any reason or no reason.

(f)“Person” shall mean any individual, corporation, partnership, company or other entity, and shall include a “group” as defined in Section 13(d)(3) of the Securities ¬Exchange Act of 1934.

2.Employment.

(a)As of the Effective Date, Company hereby agrees to continue to employ Employee and Employee agrees to remain in the employ of Company for the Term of this Agreement upon the terms and conditions hereinafter set forth. Subject to the provisions of subparagraph (b) of this Paragraph 2, and to the provisions of Paragraph 6 below, “Term” shall mean a continuously renewing period of three (3) years commencing on the Effective Date.

(b)At any time during the Term, the Board of Directors of Company and Parent may, by written notice to Employee, advise Employee of their desire to modify or amend any of the terms or provisions of this Agreement or to delete or add any terms or provisions. Any such notice (“Notice”) shall describe the proposed modifications in reasonable detail. In the event a Notice shall be given to Employee, then Company, Parent and Employee agree to discuss the proposed modification(s) and to attempt in good faith to reach agreement with respect thereto and to reduce such agreement to writing in an amendment to be executed by all the parties (“Amendment”). If a Notice is given hereunder and an Amendment shall not have been executed on or before the sixtieth (60th) day following the date on which Notice is given, then the Term shall thereupon be automatically converted to a fixed period ending three (3) years after the expiration of such sixty (60) days.

3.Duties of Employment.

(a)During the Term, Employee’s position (including status, offices, titles and reporting requirements), authority, duties and responsibilities shall be at least commensurate in all material respects with the most significant of those held, exercised and assigned at any time during the ninety (90)-day period immediately preceding the Effective Date and Employee’s services shall be performed at such location as Employee shall determine.

(b)During the Term, Employee will serve Company faithfully, diligently and competently and will devote full-time to Employee’s employment and will hold, in addition to the offices held on the Effective Date, such other Employee offices of Company or Parent, or

DB2/ 38218719.1    - 3 -

their respective subsidiaries and affiliates, to which Employee may be elected, appointed or assigned by the Boards of Directors of Company or Parent from time to time and will discharge such Employee duties in connection therewith. Nothing in this Agreement shall preclude Employee, with the prior approval of the Board of Directors of Company, from devoting reasonable periods of time required for (i) serving as a director or member of a committee of any organization involving no conflict of interest with Company or Parent, or (ii) engaging in charitable, religious and community activities, provided, that such directorships, memberships or activities do not materially interfere with the performance of Employee’s duties hereunder.

4.Compensation. During the Term, Company shall pay to Employee as compensation for the services to be rendered by Employee hereunder the following:

(a)A base salary at a rate equal to the highest base salary paid or payable to Employee by Company during the twelve (12)-month period immediately preceding the month in which the Effective Date occurs, or such larger sum as the Company may from time to time determine in connection with regular periodic performance reviews pursuant to Company’s policies and practices. Such compensation shall be payable in accordance with the normal payroll practices of Company. Employee shall receive an annual increase in base salary at each normal pay adjustment date during the Term, but no later than one (1) year after the date of Employee’s last increase and annually thereafter during the Term, of not less than the percentage increase in the cost-of-living since Employee’s last pay adjustment, as measured by the Consumer Price Index-All Urban Consumers of the U.S. Bureau of Labor Statistics.

(b)In addition, Company shall pay to Employee an annual award under the Company’s Performance Stock Program (or other bonus program in effect at the time the Effective Date occurs) payable in cash or other form of compensation, for which he would have been eligible in accordance with the Company’s practice or plan in effect at that time for annual bonuses for said employee for the year preceding the fiscal year in which the Effective Date occurs.

5.Benefits. During the Term, Employee shall be entitled to the following benefits:

(a)Incentive, Savings and Retirement Plans. In addition to base salary and bonus payable as hereinabove provided, Employee shall be entitled to participate during the Term in all savings and retirement plans, practices, policies and programs applicable to employees of Company as may be in effect from time to time. Such plans, practices, policies and programs, in the aggregate, shall provide Employee with compensation, benefits and reward opportunities at least as favorable as the most favorable of such compensation, benefits and reward opportunities provided by Company for Employee under such plans, practices, policies and programs as in effect at any time during the ninety (90)-day period immediately preceding the Effective Date or, if more favorable to Employee, as provided at any time thereafter with respect to other key employees of Company or Parent.

(b)Welfare Benefit Plans. During the Term, Employee and/or Employee’s family, as the case may be, shall be eligible for participation in and shall receive all benefits under welfare benefit plans, practices, policies and programs applicable to employees of

DB2/ 38218719.1    - 4 -

Company (including, without limitation, medical, prescription, dental, disability, salary continuance, employee life, group life,) at least as favorable as the most favorable of such plans, practices, policies and programs in effect at any time during the ninety (90)-day period immediately preceding the Effective Date or, if more favorable to Employee and/or Employee’s family, as in effect at any time thereafter with respect to other key employees of Company or Parent.

(c)Expenses. During the Term, Employee shall be entitled to receive prompt reimbursement for all reasonable expenses incurred by Employee in accordance with the most favorable policies, practices and procedures of Company in effect at any time during the ninety (90)-day period immediately preceding the Effective Date or, if more favorable to Employee, as in effect at any time thereafter with respect to other key employees of Company or Parent.

(d)Fringe Benefits. During the Term, Employee shall be entitled to fringe benefits, including use of an automobile and payment of related expenses or payment of an allowance for automobile related expenses, in accordance with the most favorable plans, practices, programs and policies of Company in effect at any time during the ninety (90)-day period immediately preceding the Effective Date or, if more favorable to Employee, as in effect at any time thereafter with respect to other key employees of Company or Parent.

(e)Office and Support Staff. During the Term, Employee shall be entitled to an office or offices of a size and with furnishings and other appointments, and to secretarial and other assistance, at least equal to the most favorable of the foregoing provided to Employee by Company at any time during the ninety (90)-day period immediately preceding the Effective Date or, if more favorable to Employee, as provided at any time thereafter with respect to other key employees of Company or Parent.

(f)Vacation. During the Term, Employee shall be entitled to paid vacation in accordance with the most favorable plans, policies, programs and practices of Company as in effect at any time during the ninety (90)-day period immediately preceding the Effective Date or, if more favorable to Employee, as in effect at any time thereafter with respect to other key employees of Company or Parent.

(g)Stay-on Bonus: (i) If Employee is employed on a date on which the Board of Directors of Company or Parent approves a transaction described in clause (iii) of Paragraph 1(b) and the shareholders of Company or Parent, as applicable subsequently approve such transaction, provided that such transaction qualifies as a “Change in Control” within the meaning of Section 409A of the Code and regulations issued thereunder, Employee shall receive a lump sum equal to the base salary of Employee, at the rate in effect immediately prior to such date, plus an amount equal to the target percentage of the midpoint of Employee’s salary grade under the Company’s Officers Incentive Program for the year in which such date occurs; provided Employee is employed on the fifth (5^th) day following the closing of such transaction. Payment hereunder shall be made on the fifth (5^th) business day following the closing of such a transaction. (ii) If the Employee separates from service from the Company following such approval by the applicable Board of Directors of a transaction described in subparagraph (i) of this Paragraph (g) (provided that such transaction qualifies as a “Change in Control” within the

DB2/ 38218719.1    - 5 -

meaning of Section 409A of the Code and regulations issued thereunder), and prior to the fifth (5^th) day following the closing of such transaction for any reason other than for Cause, or Employee’s death, or Employee’s attainment of age sixty-five (65), or if Employee’s employment is terminated during such period by reason of Employee’s Disability, or if Employee shall voluntarily terminate Employee’s employment during such period for Good Reason, then, in addition to the amounts payable to Employee pursuant to Section 7, Employee shall be paid a lump sum equal to the base salary of Employee, at the rate in effect immediately prior to the date of termination, plus an amount equal to the target percentage of the midpoint of Employee’s salary grade under the Company’s Officers Incentive Program for the year in which termination occurs. If the Employee is a “specified employee,” as that term is defined under Section 409A of the Code at the time she incurs a separation from service, prior to payment under (ii), payment under (ii) shall be made on the later of the first day of the seventh (7^th) month following the Employee’s termination of Employment, or on the fifth (5^th) business day following the closing of such transaction. If the Employee is not a specified employee, payment under (ii) shall be made on the fifth (5^th) business day following the closing of such transaction.

6.End of Term and Notice of Termination.

(a)End of Term. The Term shall end upon the occurrence of any of the following events:

(i) Termination of Employee’s employment by Company for Cause.

(ii) The voluntary termination of Employee’s employment by Employee other than for Good Reason.

(iii) The death of Employee.

(iv) Employee’s attainment of age sixty-five (65).

(v) Full compliance by Company with the provisions of Paragraph 7(e) below, if Employee’s employment shall have been terminated by Company during the Term for any reason other than Cause, or if Employee’s employment shall have been terminated by reason of Employee’s Disability, or if Employee shall have voluntarily terminated Employee’s employment during the Term for Good Reason.

(b)Notice of Termination. Any termination by Company for Cause or by Employee for Good Reason or on account of Employee’s Disability shall be communicated by notice to the other party hereto given in accordance with Section 15 of this Agreement. For purposes of this Agreement, a “notice” means a written notice which (i) indicates the specific termination provision in this Agreement relied upon, (ii) sets forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of Employee’s employment under the provision so indicated and (iii) if the date of termination (as defined below) is other than the

DB2/ 38218719.1    - 6 -

date of receipt of such notice, specifies the termination date (which date shall be not more than fifteen (15) days after the giving of such notice).

(c)Date of Termination. The date of termination means the date of receipt of the notice of termination or any later date specified therein, as the case may be; provided, however, that (i) if Employee’s employment is terminated by Company other than for Cause or on account of Employee’s Disability, the date of termination shall be the date on which Company notifies Employee of such termination and (ii) if Employee’s employment is terminated by reason of death, the date of termination shall be the date of death of Employee.

(d)Termination of Employment. In order for the Employee to be considered to have terminated employment with the Company, the Employee must have incurred a separation from service from the Company (and all related companies) within the meaning of Section 409A of the Code, and regulations promulgated thereunder, and the term termination of employment and the like as used in this Agreement shall be construed to mean separation from service as so defined under Section 409A of the Code.

7.Payment Upon Termination.

(a)If Employee’s employment is terminated by Company for Cause, as defined in Paragraph 1(a), the obligations of Company under this Agreement shall cease and Employee shall forfeit all right to receive any compensation or other benefits under this Agreement except only compensation or benefits accrued or earned and vested (if applicable) by Employee as of the date of termination, including base salary through the date of termination, benefits payable under the terms of any qualified or nonqualified retirement plans or deferred compensation plans maintained by Company, any accrued vacation pay as of the date of termination not yet paid by Company and any benefits required to be paid by law such as continued health care coverage pursuant to the Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”) (collectively, the “Accrued Obligations”).

(b)If Employee shall voluntarily terminate Employee’s employment during the Term, other than for Good Reason, as defined in Paragraph 1(e), the obligations of Company under this Agreement shall cease and Employee shall forfeit all right to receive any compensation or other benefits under this Agreement except only the Accrued Obligations.

(c)In the event of the death of Employee during the Term, then, in addition to the Accrued Obligations and any other benefits which may be payable by Company in respect of the death of Employee, the base salary then payable hereunder shall continue to be paid at the then current rate for a period of six (6) months after such death to such beneficiary as shall have been designated in writing by Employee, or if no effective designation exists, then to the estate of Employee. Such payment shall be made on the first (1^st) and fifteenth (15^th) of each month, beginning on the first day of the first month following Employee’s death.

(d)If Employee’s employment is terminated by reason of Employee’s attainment of age sixty-five (65), the obligations of Company under this Agreement shall cease

DB2/ 38218719.1    - 7 -

and Employee shall forfeit all right to receive any compensation or other benefits under this Agreement except the Accrued Obligations.

(e)If Employee’s employment is terminated by Company during the Term for any reason other than for Cause, or Employee’s death, or Employee’s attainment of age sixty-five (65), or if Employee’s employment is terminated during the Term by reason of Employee’s Disability, or if Employee shall voluntarily terminate Employee’s employment during the Term for Good Reason, Employee shall be entitled to receive, and Company shall be obligated to pay and provide Employee, the following amounts:

(i)An amount in consideration of the covenants by Executive set forth in Paragraphs 8 and 9 below to be determined by a nationally recognized independent certified public accounting firm selected and retained by Company to be the reasonable value of said covenants as of the date of termination of Employee’s employment, but in no event shall such amount be greater than the aggregate value of the benefits provided in subparagraphs (e)(ii), (iii), (iv), (v) and (viii) hereinbelow. The benefits otherwise payable to Executive pursuant to said subparagraphs shall be offset by the amount, if any, payable to Executive in respect of the covenants by Employee set forth in Paragraphs 8 and 9 below. Said amount paid in consideration of the covenants by Executive set forth in Paragraphs 8 and 9 below shall be paid in accordance with subparagraphs (e)(ii), (iii), (iv), (v) and (viii) below, and this subparagraph (i) shall not alter the time or form of payment of such amounts.

(ii)An amount equal to three (3) times the base salary of Employee, at the rate in effect immediately prior to the date of termination, plus an amount equal to three (3) times the target percentage of the midpoint of Employee’s salary grade under the Company’s Officers Incentive Program for the year in which termination occurs if the employee is a participant in such plan at the time of the Change-in-Control. Such amount so determined shall be divided into thirty-six (36) equal amounts. If the Employee is not a “specified employee” as defined under Section 409A of the Code at the time of termination, payment of such equal amounts shall be made on the first day of each month, commencing with the first day of the first month following termination. If the Employee is a “specified employee” as that term is defined under Section 409A of the Code on the date of termination, seven (7) such equal amounts shall be paid to the Employee on the date which is the first day of the seventh (7^th) month following the date of termination of employment, and the twenty-nine (29) remaining equal amounts shall be payable on the first day of each month subsequent to the date of the first payment (one payment per month) until the payments are completed. Payments shall be treated as supplemental wage payments under applicable Treasury Regulations subject to federal tax withholding at the flat percentage rate applicable thereto.

(iii)An amount equal to the aggregate amounts that Company would have contributed on behalf of Employee under Company’s qualified defined contribution retirement plan(s), if any such plan(s) shall be in effect (other than amounts attributable to Employee’s before-tax contributions to such plan(s)) plus estimated earnings thereon had Employee continued in the employ of Company for the three (3)-year period commencing on the date of termination and made contributions under said plan(s) equal to the maximum amount that

DB2/ 38218719.1    - 8 -

the Employee could have contributed under the terms of such plan(s) for the plan year immediately preceding Employee’s termination, to be payable in a lump sum to Employee on the second anniversary of the Employee’s termination of employment, provided that Employee shall not have breached said non-competition provisions.

(iv)An amount equal to the additional Interest Equivalent which would have been earned under any deferred compensation agreement between Company and Employee, if any such agreement shall be in effect, had Employee continued in the employ of Company for the three (3)-year period commencing on the date of termination, received compensation at least equal to that specified in Paragraph 4 of this Agreement during such time, and deferred pursuant to said deferred compensation agreement the amount of compensation specified therein; such amount to be payable in a lump sum to Employee on the second anniversary of the Employee’s termination of employment, provided that Employee shall not have breached said non-competition provisions.

(v)Additional retirement benefits equal to the additional annual pension benefits that would have been payable to Employee under Company’s qualified defined benefit retirement plan (the “Plan”) and under any nonqualified supplemental Employee retirement plan covering Employee (the “Supplemental Plan”), if any such Plan or Supplemental Plan shall be in effect, if Employee had been continued in the employ of Company for the three (3)-year period commencing on the date of termination and had received compensation at least equal to that specified in Paragraph 4(a) of this Agreement during such time and had been fully vested in the benefits payable under any such Plan and Supplemental Plan. The discounted present value of such additional benefits, shall be payable to Employee in a lump sum, as calculated by the independent actuary for the Plan using the assumptions specified in the Plan, on the second anniversary of the Employee’s termination of employment, provided that Employee shall not have breached said non-competition provisions.

(vi)At the date of termination of Employee’s employment, Employee shall be fully vested in any form of compensation previously granted to Employee (other than benefits payable under a qualified retirement plan), such as, by way of example only, restricted stock, stock options, and performance share awards.

(vii)If Employee’s employment is terminated by reason of Employee’s Disability, Employee shall be entitled to receive, in addition to the other benefits provided under this Paragraph 7(e), disability benefits payable in accordance with any bona fide disability plan maintained by Company or Parent, to the extent Employee qualifies for benefits under the terms of such bona fide disability plan.

(viii)A lump sum cash payment equal to three (3) times the sum of the average of the annual contributions, payments, credits or allocations made by the Company on behalf of the Employee for coverage under all life, health, disability and similar welfare benefit plans and programs and other perquisites maintained by the Company during the three (3) calendar year period preceding his termination of employment. Such payment shall be made on the first day of the seventh (7^th) month following the Employee’s termination of employment, if the Employee is a “specified employee” as defined under Section 409A of the Code on the date

DB2/ 38218719.1    - 9 -

of termination. If the Employee is not a specified employee on the date of termination, payment shall be made on the first day of the month following the Employee’s termination of employment.

(ix)Company shall reimburse Employee for the amount of any reasonable legal or accounting fees and expenses incurred by Employee to obtain or enforce any right or benefit provided to Employee by Company hereunder or as confirmed or acknowledged hereunder, provided that no such reimbursement shall be made earlier than seven (7) months following the Employee’s termination, if the Employee is a “specified employee” as that term is defined under Section 409A of the Code on the date of termination, and in no event shall any reimbursement be made any later than December 31 of the calendar year following the year in which the expense is incurred by the Employee.

(x)Company shall provide the Employee with reasonable outplacement services from a firm selected by the Company for a period of one (1) year commencing on the date of termination, or until Employee accepts other employment, if earlier.

8.Confidential Information. Employee understands that in the course of Employee’s employment by Company, Employee will receive or have access to confidential information concerning the business or purposes of Company and Parent, and which Company and Parent desire to protect. Such confidential information shall be deemed to include, but not be limited to, Company’s customer lists and information, and employee lists, including, if known, personnel information and data. Employee agrees that Employee will not, at any time during the period ending two (2) years after the date of termination of Employee’s employment, reveal to anyone outside Company or Parent or use for Employee’s own benefit any such information without specific written authorization by Company or Parent. Employee further agrees not to use any such confidential information or trade secrets in competing with Company or Parent at any time during or in the two (2) year period immediately following the date of termination of Employee’s employment with Company.

9.Covenants by Employee Not to Compete With Company or Parent.

(a)Upon the date of termination of Employee’s employment with Company for any reason, Employee covenants and agrees that Employee will not at any time during the period of two (2) years from and after such date of termination directly or indirectly in any manner or under any circumstances or conditions whatsoever be or become interested, as an individual, partner, principal, agent, clerk, employee, stockholder, officer, director, trustee, or in any other capacity whatsoever, except as a nominal owner of stock of a public corporation, in any other business which, at the date of Employee’s termination, is a Competitor (as defined herein), either directly or indirectly, with Company or Parent, or engage or participate in, directly or indirectly (whether as an officer, director, employee, partner, consultant, holder of an equity or debt investment, lender or in any other manner or capacity), or lend Employee’s name (or any part or variant thereof) to, any business which, at the date of Employee’s termination, is a Competitor, either directly or indirectly, with Company or Parent, or as a result of Employee’s engagement or participation would become, a Competitor, either directly or indirectly, with any aspect of the business of Company or Parent as it exists at the time of Employee’s termination, or

DB2/ 38218719.1    - 10 -

solicit any officer, director, employee or agent of Company or Parent or any subsidiary or affiliate of Company or Parent to become an officer, director, employee or agent of Employee, Employee’s respective affiliates or anyone else. Ownership, in the aggregate, of less than one percent (1%) of the outstanding shares of capital stock of any corporation with one or more classes of its capital stock listed on a national securities exchange or publicly traded in the over-the-counter market shall not constitute a violation of the foregoing provision. For the purposes of this Agreement, a Competitor is any business which is similar to the business of Company or Parent or in any way in competition with the business of Company or Parent within any of the then-existing water utility service areas of Company.

(b)Employee hereby acknowledges that Employee’s services are unique and extraordinary, and are not readily replaceable, and hereby expressly agrees that Company and Parent, in enforcing the covenants contained in Paragraphs 8 and 9 herein, in addition to any other remedies provided for herein or otherwise available at law, shall be entitled in any court of equity having jurisdiction to an injunction restraining Employee in the event of a breach, actual or threatened, of the agreements and covenants contained in these Paragraphs.

(c)The parties hereto believe that the restrictive covenants of these Paragraphs are reasonable. However, if at any time it shall be determined by any court of competent jurisdiction that these Paragraphs or any portion of them as written, are unenforceable because the restrictions are unreasonable, the parties hereto agree that such portions as shall have been determined to be unreasonably restrictive shall thereupon be deemed so amended as to make such restrictions reasonable in the determination of such court, and the said covenants, as so modified, shall be enforceable between the parties to the same extent as if such amendments had been made prior to the date of any alleged breach of said covenants.

10.No Obligation to Mitigate. So long as Employee shall not be in breach of any provision of Paragraph 8 or 9, Employee shall have no duty to mitigate damages in the event of a termination and if Employee voluntarily obtains other employment (including self-employment), any compensation or profits received or accrued, directly or indirectly, from such other employment shall not reduce or otherwise affect the obligations of Company and Parent to make payments hereunder.

11.Resignation. In the event that Employee’s services hereunder are terminated under any of the provisions of this Agreement (except by death), Employee agrees that Employee will deliver Employee’s written resignation as an officer of Company or Parent, or their subsidiaries and affiliates, to the Board of Directors, such resignation to become effective immediately, or, at the option of the Board of Directors, on a later date as specified by the Board.

12.Insurance. Company shall have the right at its own cost and expense to apply for and to secure in its own name, or otherwise, life, health or accident insurance or any or all of them covering Employee, and Employee agrees to submit to the usual and customary medical examination and otherwise to cooperate with Company in connection with the procurement of any such insurance, and any claims thereunder.

DB2/ 38218719.1    - 11 -

13.Release. As a condition of receiving payments or benefits provided for in this Agreement, at the request of Company or Parent, Employee shall execute and deliver for the benefit of Company and Parent, and any subsidiary or affiliate of Company or Parent, a general release in the form set forth in Attachment A, and such release shall become effective in accordance with its terms. The failure or refusal of Employee to sign such a release or the revocation of such a release shall cause the termination of any and all obligations of Company and Parent to make payments or provide benefits hereunder, and the forfeiture of the right of Employee to receive any such payments and benefits. Employee acknowledges that Company and Parent have advised Employee to consult with an attorney prior to signing this Agreement and that Employee has had an opportunity to do so.

14.Additional Benefits. In addition to the other benefits payable to Employee pursuant to this Agreement, in the event that any payment or benefit received or to be received by Employee under this Agreement (a “Payment”) is subject to the excise tax (the “Excise Tax”) imposed by Section 4999 of the Internal Revenue Code of 1986, as amended (the “Code”), or any successor to such Section, as determined by a nationally recognized independent certified public accounting firm selected by the Company (the “Tax Advisor”), then the Company shall make an additional payment to Employee in a lump sum equal to all federal, state and local taxes imposed on the Employee as a result of payments made under this Agreement, including the amount of additional taxes imposed upon the service provider due to the Company’s payment of the initial taxes on such compensation. Such payment shall be made no later than the end of the calendar year following the calendar year in which the Employee remits the related taxes and in the case of a “specified employee,” as that term is defined under Section 409A of the Code on the date of termination, shall not be made sooner than the first day of the seventh month following termination of employment. The determination of the Tax Advisor as provided herein shall be completed not later than forty-five (45) days following Employee’s date of termination of employment, and such determination shall be communicated in writing to Company, with a copy to Employee within said forty-five (45) day period. The determination of the Tax Advisor as provided herein shall be deemed conclusive and binding on Company and Employee. Company shall pay the fees and other costs of the Tax Advisor hereunder.

15.Notices. All notices under this Agreement shall be in writing and shall be deemed effective when delivered in person to Employee or to the Secretary of Company and Parent, or if mailed, postage prepaid, registered or certified mail, addressed, in the case of Employee, to Employee’s last known address as carried on the personnel records of Company, and, in the case of Company and Parent, to the corporate headquarters, attention of the Secretary, or to such other address as the party to be notified may specify by notice to the other party.

16.Successors and Binding Agreement.

(a)Company and Parent will require any successor, whether direct or indirect, by purchase, merger, consolidation or otherwise to all or substantially all of the business and/or assets of Company and/or Parent, as the case may be, expressly to assume and agree to perform this Agreement in the same manner and to the same extent that Company and Parent are required to perform it. Failure of Company and Parent to obtain such assumption and agreement prior to

DB2/ 38218719.1    - 12 -

the effectiveness of any such succession shall be a breach of this Agreement. As used in this Agreement, “Company” and “Parent” shall include any successor to Company’s and/or Parent’s, as the case may be, business and/or assets as aforesaid which assumes and agrees to perform this Agreement by operation of law, or otherwise.

(b)This Agreement shall inure to the benefit of, and be enforceable by, Employee’s personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees. If Employee dies while any amount is still payable hereunder, all such amounts shall be paid in accordance with the terms of this Agreement to Employee’s devisee, legatee or other designee or, if there is no such designee, to Employee’s estate.

17.Arbitration. Any dispute which may arise between the parties hereto may, if both parties agree, be submitted to binding arbitration in the State of Connecticut in accordance with the Rules of the American Arbitration Association; provided that any such dispute shall first be submitted to Company’s Board of Directors in an effort to resolve such dispute without resort to arbitration.

18.Severability. If any of the terms or conditions of this Agreement shall be declared void or unenforceable by any court or administrative body of competent jurisdiction, such term or condition shall be deemed severable from the remainder of this Agreement, and the other terms and conditions of this Agreement shall continue to be valid and enforceable.

19.Amendment. This Agreement may be modified or amended only by an instrument in writing executed by the parties hereto.

20.Construction. This Agreement shall supersede and replace all prior agreements and understandings between the parties hereto on the subject-matter covered hereby. This Agreement shall be governed and construed under the laws of the State of Connecticut. Words of the masculine gender mean and include correlative words of the feminine gender. Paragraph headings are for convenience only and shall not be considered a part of the terms and provisions of the Agreement.

21.Deferred Compensation. This Agreement has been prepared with reference to Section 409A of the Internal Revenue Code and shall be interpreted and administered in a manner consistent with Section 409A.

22.Assignment Prohibited. Benefits hereunder shall not be subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, attachment or garnishment by creditors of the Employee, Employee’s beneficiary, or estate, and any attempt to anticipate, alienate, transfer, assign or attach the same shall be void. The Employee, Employee’s beneficiary or estate shall only have a contractual right to benefits hereunder and shall have the status of general unsecured creditors.

* * * * * * *

DB2/ 38218719.1    - 13 -

IN WITNESS WHEREOF, Company and Parent have caused this Agreement to be executed by an authorized officer, and Employee has hereunto set Employee’s hand.

	The Connecticut Water Company
December 23, 2008	By	/s/ Daniel J. Meaney
Date
	Connecticut Water Service, Inc.
December 23, 2008	By	/s/ Daniel J. Meaney
Date
December 23, 2008		/s/ Maureen P. Westbrook
Date		Maureen P. Westbrook

DB2/ 38218719.1    - 14 -

ATTACHMENT A

RELEASE

We advise you to consult an attorney before you sign this Release. You have until the date which is seven (7) days after the Release is signed and returned to ______________ (“Company”) to change your mind and revoke your Release. Your Release shall not become effective or enforceable until after that date.

In consideration for the benefits provided under your Employment Agreement dated __________________ with Company and _________________________ (“Parent”), and more specifically enumerated in Exhibit 1 hereto, by your signature below you agree to accept such benefits and not to make any claims of any kind against Company, its past and present and future parent corporations, subsidiaries, divisions, subdivisions, affiliates and related companies or their successors and assigns, including without limitation Parent, or any and all past, present and future Directors, officers, fiduciaries or employees of any of the foregoing (all parties referred to in the foregoing are hereinafter referred to as the “Releasees”) before any agency, court or other forum, and you agree to release the Releasees from all claims, known or unknown, arising in any way from any actions taken by the Releasees up to the date of this Release, including, without limiting the foregoing, any claim for wrongful discharge or breach of contract or any claims arising under the Age Discrimination in Employment Act of 1967, Title VII of the Civil Rights Act of 1964, the Americans with Disabilities Act of 1990, the Employee Retirement Income Security Act of 1974, Connecticut’s Fair Employment Practices Act or any other federal, state or local statute or regulation and any claim for attorneys’ fees, expenses or costs of litigation.

THE PRECEDING PARAGRAPH MEANS THAT BY SIGNING THIS RELEASE YOU WILL HAVE WAIVED ANY RIGHT YOU MAY HAVE TO BRING A LAWSUIT OR MAKE ANY LEGAL CLAIM AGAINST THE RELEASEES BASED ON ANY ACTIONS TAKEN BY THE RELEASEES UP TO THE DATE OF THIS RELEASE.

By signing this Release, you further agree as follows:

1.You have read this Release carefully and fully understand its terms;

2.You have had at least twenty-one (21) days to consider the terms of the Release;

3.You have seven (7) days from the date you sign this Release to revoke it by written notification to Company. After this seven (7) day period, this Release is final and binding and may not be revoked;

4.You have been advised to seek legal counsel and have had an opportunity to do so;

5.You would not otherwise be entitled to the benefits provided under your Employment Agreement with Company and Parent had you not agreed to waive any right you have to bring a lawsuit or legal claim against the Releasees; and

DB2/ 38218719.1

6.Your agreement to the terms set forth above is voluntary.

Name:
Signature:	Date: _______________
Received by:	Date: _______________

DB2/ 38218719.1    - 16 -

EX-10.92

FIRST AMENDMENT TO
AMENDED AND RESTATED EMPLOYMENT AGREEMENT

THIS AMENDMENT, dated this 1st day of April 2014, is made by and between The Connecticut Water Company, a Connecticut corporation having its principal place of business in Clinton, Connecticut (“Company”), Connecticut Water Service, Inc., a Connecticut corporation and holder of all of the outstanding capital stock of Company (“Parent”), and Maureen P. Westbrook, a resident of Westbrook, Connecticut (“Employee”),

WITNESSETH:

WHEREAS, the Employee, Company and Parent entered into an amended and restated Employment Agreement in December 2008; and

WHEREAS, the parties wish to amend the Agreement in the particulars set forth below;

NOW, THEREFORE, Company, Parent and Employee agree as follows:

1. Subparagraph (g) of Paragraph 5 of the Agreement entitled “Stay-on Bonus” is hereby deleted in its entirety.

2. Except as herein above modified and amended, the Agreement shall remain in full force and effect.

IN WITNESS WHEREOF, Company and Parent have caused this Agreement to be executed by an authorized officer, and Employee has hereunto set Employee’s hand.

	THE CONNECTICUT WATER COMPANY
4.14.14	By	/s/ Kristen A. Johnson
Date
	CONNECTICUT WATER SERVICE, INC.
4.14.14	By	/s/ Kristen A. Johnson
Date
4/11/14		/s/ Maureen P. Westbrook
Date		Maureen P. Westbrook

DB2/ 38218624.1

EX-10.93

EXHIBIT 10.93

AMENDED AND RESTATEDEMPLOYMENT AGREEMENT

THIS AGREEMENT, dated this 9th day of October, 2019, is made by and between The Connecticut Water Company, a Connecticut corporation having its principal place of business in Clinton, Connecticut (“Company”), Connecticut Water Service, Inc., a Connecticut corporation and holder of all of the outstanding capital stock of Company (“CTWS”) and Maureen Westbrook, a resident of Connecticut (“Employee”).

WITNESSETH:

WHEREAS, Employee, Company and CTWS entered into an amended and restated Employment Agreement dated December 23, 2008, as subsequently amended on April 1, 2014 (collectively, the “Prior Agreement”); and

WHEREAS, SJW Group (“SJW”) is acquiring CTWS pursuant to that certain Second Amended and Restated Agreement and Plan of Merger, dated as of August 5, 2018 (the “Merger Agreement”), by and among SJW, Hydro Sub, Inc. and CTWS (the “Merger”); and

WHEREAS, Company wishes to continue to employ Employee, and Employee wishes to continue in employment, following the Merger, upon the terms and conditions set forth in this Agreement; and

NOW, THEREFORE, to assure Company of Employee’s continued dedication and the availability of Employee’s advice and counsel, to induce Employee to remain in the employ of Company, and to reward Employee for Employee’s valuable dedicated service to Company should Employee’s service be terminated under circumstances hereinafter described, and for other good and valuable consideration, the receipt and adequacy of which each party acknowledges, effective as of the Effective Date, Company, CTWS and Employee agree as follows:

1.Definitions. For purposes of this Agreement, the following terms shall have the following meanings:

(a)“Cause” shall mean (as reasonably determined by the CTWS Board in its good faith discretion) Employee’s serious, willful misconduct in respect of Employee’s duties under this Agreement, including conviction for a felony or perpetration by Employee of a common law fraud upon any member of the Group, which has resulted or is likely to result in material economic damage to any member of the Group, as determined by a vote of at least seventy-five percent (75%) of all of the directors of the CTWS Board.

(b)“Company Board” shall mean the Board of Directors of Company.

(c)“CTWS Board” shall mean the Board of Directors of CTWS.

(d)“Disability” shall mean the incapacity of Employee by illness or any other cause as determined under the long-term disability insurance plan of Company in effect at the time in question, or if no such plan is in effect, then such incapacity of Employee as prevents Employee from performing the essential functions of Employee’s position with or without reasonable accommodation for a period in excess of two hundred forty (240) days (whether or not consecutive), or one hundred eighty (180) days consecutively, as the case may be, during any twelve (12) month period.

(e)“Effective Date” shall be the time at which the Merger becomes effective.

(f)“Good Reason” shall mean the occurrence of any action, after the Effective Date, which (i) reduces Employee’s job responsibilities or Base Salary; (ii) results in a significant worsening of Employee’s work conditions; (iii) moves Employee’s place of employment to a location that increases Employee’s commute by more than thirty (30) miles over the length of Employee’s commute from Employee’s principal residence at the time the move is requested; or (iv) requires Employee to report to anyone other than the individual serving as the President of CTWS as of the Effective Date or the CTWS Board. In order to constitute Good Reason, (i) Employee must provide written notice of termination for Good Reason to Company within sixty (60) days after the event constituting Good Reason, (ii) Company shall have a period of sixty (60) days in which it may correct the act or failure to act that constitutes the grounds for Good Reason as set forth in Employee’s notice of termination, and (iii) if Company does not correct the act or failure to act, Employee’s employment shall terminate for Good Reason on the first business day following Company’s sixty (60)-day cure period.

(g)“Group” shall mean CTWS, its direct and indirect subsidiaries and parents, and their direct and indirect subsidiaries.

(h)“Involuntary Termination” shall mean termination of Employee’s employment with Company either (i) by Company without Cause (other than due to Employee’s death or Disability) or (ii) by Employee for Good Reason, provided that Employee’s transition to the Consulting Role, as set forth in Paragraph 6(d), shall not be deemed an Involuntary Termination.

(i)“Share Price” shall mean the closing price per share of SJW common stock at the close of regular hours trading on the New York Stock Exchange on the relevant date.

(j)“SJW ECC” shall mean the Executive Compensation Committee of the Board of Directors of SJW.

(k)“Term End Date” shall mean the third anniversary of the Effective Date.

2.Term of Employment. The term of this Agreement shall begin on the Effective Date and shall continue until the Term End Date, or until the termination of Employee’s employment, if earlier (the “Term”), subject to the provisions of Paragraphs 6 and 7 below.

2

3.Duties of Employment.

(a)During the Term and except as otherwise mutually agreed to by Employee and Company, Employee shall serve as the Vice President, Customer and Regulatory Affairs of CTWS and Company, with duties, responsibilities and authority commensurate therewith and shall report to the President of CTWS. Employee understands and agrees that Employee’s principal place of employment shall be in Company’s principal offices and that Employee will be required to travel for business in the course of performing her duties; provided, however, that Employee shall not be required to travel to SJW’s headquarters or other California facilities more than twice a quarter.

(b)During the Term, Employee will serve Company faithfully, diligently and competently and will devote Employee’s full business time to Employee’s employment and will hold such other offices of any member of the Group to which Employee may be elected, appointed or assigned by the Company Board, the CTWS Board or the Board of Directors of SJW and will discharge such Employee duties in connection therewith. Nothing in this Agreement shall preclude Employee, with the prior approval of the CTWS Board, from devoting reasonable periods of time required for (i) serving as a director or member of a committee of any organization involving no conflict of interest with any member of the Group, or (ii) engaging in charitable, religious or community activities, provided, that such directorships, memberships or activities do not materially interfere with the performance of Employee’s duties hereunder.

4.Compensation. During the Term, Company shall pay to Employee as compensation for the services to be rendered by Employee hereunder the following:

(a)Base Salary. Company shall pay Employee a base salary (“Base Salary”), at the annual rate of $340,000, or such larger amount as may from time to time be determined in connection with regular periodic performance reviews pursuant to the policies and practices and other applicable requirements of Company, CTWS and SJW. Such compensation shall be payable in accordance with the normal payroll practices of Company.

(b)Annual Bonus. Employee shall be eligible to receive an annual bonus for each calendar year during the Term, commencing with the 2020 calendar year, based on the attainment of individual and corporate performance goals and targets established by the CTWS Board and the SJW ECC (“Annual Bonus”). The target amount of Employee’s Annual Bonus for each such calendar year shall be no less than $119,000 (the “Target Annual Bonus”), with the actual Annual Bonus for any such calendar year within the Term ranging from $0 to a maximum of $178,500, based on the determination by the CTWS Board and the SJW ECC of the level of achievement of the applicable performance goals for the year. Any Annual Bonus shall be paid after the end of the calendar year to which it relates, at the same time and under the same terms and conditions as the bonuses for other executive officers of SJW (other than the SJW Chief Executive Officer); provided that in no event shall Employee’s Annual Bonus be paid later than two and a half months after the last day of the fiscal year to which the Annual Bonus relates. The Annual Bonus shall be subject to the terms of the annual bonus plan or program that is applicable to other executive officers of SJW (other than the SJW Chief Executive Officer), including requirements as to continued employment, subject to the provisions of Paragraph 7 below.

3

(c)Equity Compensation. Employee shall be eligible to receive awards of restricted stock units (“RSUs”) as set forth below, subject to the terms of SJW’s Long-Term Incentive Plan, as may be amended (the “SJW Equity Plan”).

(i)Special Retention Award. On the Effective Date, Employee shall be granted a special retention award of RSUs (the “Retention Award”) covering a number of shares of SJW common stock determined by dividing $1,250,000 by the Share Price on the date of grant of the Retention Award, rounded to the nearest whole number. The Retention Award shall vest in three equal installments on each of the first, second and third anniversaries of the Effective Date, subject to Employee’s continued employment with Company through the respective vesting dates. The remaining terms of the Retention Award shall be as set forth in the SJW Equity Plan and in the form of the Restricted Stock Unit Issuance Agreement in substantially the form attached hereto as Exhibit A.

(ii)Additional Equity Awards. Contingent on Employee’s continued employment through the applicable grant date, for each calendar year during the Term, commencing with the 2020 calendar year, Employee shall be eligible to receive an award of RSUs with a target value equal to $136,000, covering a number of shares of SJW common stock determined by dividing $136,000 by the Share Price on the date of grant, rounded to the nearest whole number (each an “Annual Award”). Each Annual Award shall be granted at the same time as annual equity awards are granted to other executive officers of SJW (other than the SJW Chief Executive Officer). Each Annual Award shall be granted in the form of a time-based RSU award that vests based on Employee’s continued service with Company over a specified service period (the “Time-Based RSU Award”) and/or a performance-based RSU award that vests based on the achievement of performance goals (as measured over the applicable performance period specified for the award) as determined by the SJW ECC, subject to Employee’s continued employment with Company through the respective vesting dates (the “Performance-Based RSU Award”). The allocation between a Time-Based RSU Award and Performance-Based RSU Award shall be determined by the SJW ECC consistent with the allocation for other executive officers of SJW (other than the SJW Chief Executive Officer). The terms of any Time-Based RSU Award and Performance-Based RSU Award, including the applicable performance goals, shall be as set forth in the SJW Equity Plan and the applicable form Restricted Stock Unit Issuance Agreement provided by SJW for the year of grant, with such form consistent with the form used for other executive officers of SJW (other than the SJW Chief Executive Officer).

(iii)Dividend Equivalent Rights. Dividend equivalent rights will not accrue with respect to the RSU awards granted pursuant to this Paragraph 4.

5.Benefits. During the Term, Employee shall be entitled to the following benefits:

(a)Retirement and Welfare Benefit Plans. During the Term, Employee shall be eligible to participate in Company’s retirement, health and welfare benefit plans and programs applicable to executive officers of Company (including, without limitation, medical, prescription, dental, disability, salary continuance, employee life, and group life), pursuant to their respective terms and conditions. Nothing in this Agreement shall preclude Company, or any member of the

4

Group, from terminating or amending any employee benefit plan or program from time to time after the Effective Date.

(b)Expenses. During the Term, Employee shall be entitled to reimbursement for all reasonable business expenses incurred by Employee in the performance of her duties hereunder in accordance with such policies and procedures as Company may adopt generally from time to time.

(c)Vacation. During the Term, Employee shall be entitled to paid vacation in accordance with the plans and programs of Company, as in effect from time to time.

6.End of Term and Notice of Termination.

(a)End of Term. The Term shall end upon the Term End Date, or if earlier, upon the occurrence of any of the following events:

(i)Termination of Employee’s employment by Company with or without Cause (other than due to death or Disability).

(ii)Termination of Employee’s employment by Employee with or without Good Reason.

(iii)The death of Employee.

(iv)Termination of Employee’s employment by reason of Employee’s Disability.

(v)Termination of Employee’s employment upon Employee’s transition to the Consulting Role, as described in subsection (d) below.

(b)Notice of Termination. Any termination of Employee’s employment by Company or by Employee, in either case for any reason, including on account of Employee’s Disability, shall be communicated by notice to the other party hereto given in accordance with Paragraph 15 of this Agreement. For purposes of this Agreement, a “notice” means a written notice which (i) indicates the specific termination provision in this Agreement relied upon, (ii) sets forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of Employee’s employment under the provision so indicated and (iii) if the date of termination (as defined below) is other than the date of receipt of such notice, specifies the date of termination, in accordance with subsection (c) below. For the avoidance of doubt, no notice of termination shall be required if the parties mutually agree that Employee shall transition into the Consulting Role, as described in subsection (d) below.

(c)Date of Termination. The date of termination means the date of receipt of the notice of termination or any later date specified therein, as the case may be; provided, however, that (i) if Employee’s employment is terminated by Company for Cause, the date of termination shall be immediately upon Employee’s receipt of the notice of termination, (ii) if Employee’s employment is terminated by reason of death, the date of termination shall be the

5

date of death of Employee, (iii) if Employee’s employment is terminated by Employee other than for Good Reason, such date shall not be more than fifteen (15) days after the giving of such notice, (iv) if Employee’s employment is terminated for Good Reason, the date of termination shall be the first business day following Company’s sixty (60)-day cure period, as set forth in Paragraph 1(f), and (v) if Employee’s employment is terminated in connection with her transition to the Consulting Role, the date of termination shall be the day prior to the date on which the Consulting Period (as defined in subsection (d) below) begins.

(d)Transition to Consulting Role.

(i)Consulting Role. Effective no earlier than six (6) months prior to the Term End Date, Employee and Company may mutually agree that Employee’s employment shall terminate and Employee shall transition into a consultant role until the Term End Date upon mutually agreeable terms (the “Consulting Role” and the period during which Employee is performing services in the Consulting Role, the “Consulting Period”). During the Consulting Period, Employee shall not be treated as an employee of any member of the Group for any purpose, including, without limitation, for the purposes of any employee or fringe benefits provided by any member of the Group to its employees including, without limitation, employee insurance, retirement, savings, medical, health care, fringe benefit, equity compensation, deferred compensation or bonus plans, or for withholding tax purposes unless required by applicable law.

(ii)Responsibilities. During the Consulting Period, Employee shall assist Company and CTWS in assuring an orderly transition of her duties to her successor and shall provide such other services as agreed to with Company and CTWS.

(iii)Consulting Compensation. As compensation for Employee’s services during the Consulting Period, Employee shall be eligible to receive the following: (A) Employee shall be paid a consulting fee as mutually agreed to by Company and Employee, (B) Employee shall continue to vest in the Retention Award and any Time-Based RSU Award outstanding as of Employee’s date of termination of employment, in accordance with the terms of the SJW Equity Plan and the applicable Restricted Stock Unit Issuance Agreement, (C) Employee shall, upon completion of the applicable performance period, vest in any Performance-Based RSU Award outstanding as of Employee’s date of termination of employment, determined based on actual performance, in accordance with the terms of the SJW Equity Plan and applicable Restricted Stock Unit Issuance Agreement, prorated based on Employee’s period of employment and continued service in the Consulting Role during the applicable performance period for the award, and (D) Employee shall be eligible to receive the Annual Bonus for the year of Employee’s termination of employment, based on actual performance, which shall be prorated based on Employee’s period of employment during such year (but not Employee’s service in the Consulting Role), and paid in accordance with Paragraph 4(b). For the avoidance of doubt, if Employee transitions into the Consulting Role, Employee shall not be eligible to receive the payments and benefits set forth in Paragraph 7 other than the Accrued Obligations (as defined in Paragraph 7(a) below).

7.Payment Upon Termination.

6

(a)Cause. If Employee’s employment is terminated by Company for Cause, the obligations of all members of the Group under this Agreement shall cease and Employee shall forfeit all right to receive any compensation or other benefits under this Agreement except only compensation or benefits accrued or earned and vested (if applicable) by Employee as of the date of termination, including Base Salary through the date of termination, benefits payable under the terms of any qualified or nonqualified retirement plans or deferred compensation plans maintained by Company, any accrued vacation pay as of the date of termination not yet paid by Company and any benefits required to be paid by law such as continued health care coverage pursuant to the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”) (collectively, the “Accrued Obligations”).

(b)Without Good Reason. If Employee shall voluntarily terminate Employee’s employment during the Term, other than for Good Reason, the obligations of all members of the Group under this Agreement shall cease and Employee shall forfeit all right to receive any compensation or other benefits under this Agreement except only the Accrued Obligations.

(c)Death. In the event of the death of Employee during the Term, then, in addition to the Accrued Obligations and any other benefits which may be payable by Company in respect of the death of Employee, the Base Salary then payable hereunder shall continue to be paid at the then current rate for a period of six (6) months after such death to such beneficiary as shall have been designated in writing by Employee, or if no effective designation exists, then to the estate of Employee. Such payments shall be made on the first (1^st) and fifteenth (15^th) of each month, beginning on the first day of the first month following Employee’s death.

(d)Without Cause; Disability; For Good Reason. If Employee’s employment is terminated prior to the Term End Date due to an Involuntary Termination or Employee’s Disability, Employee shall be entitled to receive, and Company shall be obligated to pay and provide Employee, the amounts set forth in subsections (i)-(ix) below, subject to Paragraph 13, and provided that Employee shall not have breached Paragraphs 8 and 9.

(i)Company shall pay Employee, in equal installments, an amount equal to (A) the sum of Employee’s Base Salary (at the rate in effect as of Employee’s date of termination) plus Annual Target Bonus (as in effect for the year of Employee’s termination) multiplied by (B) the Severance Multiplier. The Severance Multiplier shall be (i) three, for a termination of employment that occurs after the Effective Date but before the first anniversary of the Effective Date, (ii) two, for a termination of employment that occurs on or after the first anniversary of the Effective Date but before the second anniversary of the Effective Date, and (iii) one, for a termination of employment that occurs on or after the second anniversary of the Effective Date but prior to the Term End Date. If, at the time of termination, Employee is not a “specified employee” as defined under Section 409A (as defined in Paragraph 21), payment of such amounts shall be made in equal installments on the first day of each month, commencing with the first day of the first month following termination and ending with the Term End Date; provided, however, that if the Release is not effective on the first such payment date, any amounts that would be payable prior to the effectiveness of the Release contemplated in

7

Paragraph 13 shall be accumulated and paid with the first installment following the effectiveness of the Release in accordance with Paragraphs 13 and 21. If, at the time of termination, Employee is a “specified employee” as that term is defined under Section 409A, seven (7) such equal amounts shall be paid to Employee on the date which is the first day of the seventh (7th) month following the date of termination of employment, and the remaining equal amounts shall be payable on the first day of each month subsequent to the date of the first payment (one payment per month) through the Term End Date.

(ii)Employee shall vest in full in all CTWS incentive awards assumed by SJW in connection with the Merger that remain unvested on the date of the Involuntary Termination, which shall be payable in accordance with the terms and conditions (including any deferral election) set forth in the applicable plan document and award agreement.

(iii)Company shall pay Employee an amount equal to the aggregate amounts that Company would have contributed on behalf of Employee under Company’s qualified defined contribution retirement plan(s), if any such plan(s) shall be in effect (other than amounts attributable to Employee’s before-tax contributions to such plan(s)) plus estimated earnings thereon had Employee continued in the employ of Company until the Term End Date and made contributions under said plan(s) equal to the maximum amount that Employee could have contributed under the terms of such plan(s) for the plan year immediately preceding Employee’s termination. Such amount shall be paid in a lump sum to Employee on the second anniversary of Employee’s termination of employment.

(iv)Company shall pay Employee an amount equal to the additional “interest equivalent” which would have been earned under any deferred compensation agreement between Company and Employee, if any such agreement shall be in effect, had Employee continued in the employ of Company until the Term End Date, received compensation at least equal to that specified in Paragraph 4 of this Agreement during such time, and deferred pursuant to said deferred compensation agreement the amount of compensation specified therein. Such amount shall be paid in a lump sum to Employee on the second anniversary of Employee’s termination of employment.

(v)Company shall pay Employee an amount equal to the additional annual pension benefits that would have been payable to Employee under Company’s qualified defined benefit retirement plan (the “Retirement Plan”) and under any nonqualified supplemental Employee retirement plan covering Employee (the “Supplemental Plan”), if any such Retirement Plan or Supplemental Plan shall be in effect, if Employee had been continued in the employ of Company until the Term End Date and had received compensation at least equal to that specified in Paragraph 4(a) of this Agreement during such time and had been fully vested in the benefits payable under any such Retirement Plan and Supplemental Plan. The discounted present value of such additional benefits shall be payable to Employee in a lump sum, as calculated by the independent actuary for the Retirement Plan using the assumptions specified in the Retirement Plan, on the second anniversary of Employee’s termination of employment.

(vi)If Employee’s employment is terminated by reason of Employee’s Disability, Employee shall be entitled to receive, in addition to the other benefits provided under

8

this Paragraph 7(d), disability benefits payable in accordance with any bona fide disability plan maintained by Company, to the extent Employee qualifies for benefits under the terms of such bona fide disability plan.

(vii)Company shall pay Employee a lump sum cash payment equal to the amount that Company would have contributed on behalf of Employee for coverage through the Term End Date under all life, health, disability and similar welfare benefit plans and programs and other perquisites maintained by Company. Such payment shall be made within 60 days following Employee’s termination of employment, provided, however, if, on the date of termination, Employee is a “specified employee” as that term is defined under Section 409A, such payment shall be made on the first day of the seventh (7th) month following the date of termination of employment.

(viii)Company shall reimburse Employee for the amount of any reasonable legal or accounting fees and expenses incurred by Employee to obtain or enforce any right or benefit provided to Employee by Company hereunder or as confirmed or acknowledged hereunder.

(ix)Company shall provide Employee with reasonable outplacement services from a firm selected by Company for a period of one (1) year commencing on the date of termination, or until Employee accepts other employment, if earlier.

8.Confidential Information.

(a)Employee reaffirms and agrees to observe and abide by any and all existing contractual terms regarding protection of Company’s confidential or proprietary information, specifically including any provisions therein regarding nondisclosure of Company’s trade secrets and confidential and proprietary information, regardless of whether the underlying agreement containing said terms is otherwise superseded by this Agreement. Employee understands that in the course of Employee’s further employment by Company, Employee will continue to receive or have access to Confidential Information concerning the business or purposes of the members of the Group, and which the Group desires to protect. Employee understands that for purposes of this Agreement, “Confidential Information” means any Company and/or Group proprietary information, technical data, trade secrets or know-how, including, but not be limited to, customer lists and information, employee lists, including, if known, confidential personnel information and data of the members of the Group, as well as research, product plans, products, services, customer lists and customers, markets, software, developments, inventions, processes, formulas, technology, designs, drawings, engineering, hardware configuration information, marketing, finances, or other business information. Notwithstanding the generality of the foregoing, Confidential Information does not include information that has become publicly known and made generally available through no wrongful act of Employee or others. Employee agrees that Employee will not, at any time, reveal to anyone outside of any member of the Group or use for Employee’s own benefit any such information without specific written authorization by Company. Employee further agrees not to use any such Confidential Information or trade secrets in competing with any member of the Group at any time.

9

(b)Reports to Government Entities. Nothing in this Agreement shall prohibit or restrict Employee from initiating communications directly with, responding to any inquiries from, providing testimony before, providing confidential information to, reporting possible violations of law or regulation to, or from filing a claim or assisting with an investigation directly with a self-regulatory authority or a government agency or entity, including the U.S. Equal Employment Opportunity Commission, the Department of Labor, the National Labor Relations Board, the Department of Justice, the Securities and Exchange Commission, Congress, and any agency Inspector General (collectively, the “Regulators”), or from making other disclosures that are protected under the whistleblower provisions of state or federal law or regulation. Employee does not need the prior authorization of Company to engage in such communications, respond to such inquiries, provide confidential information or documents to the Regulators, or make any such reports or disclosures to the Regulators. Employee is not required to notify Company that Employee has engaged in such communications with the Regulators. If Employee is required by law to disclose Confidential Information, other than to Regulators as described above, Employee shall give prompt written notice to Company so as to permit Company to protect its interests in confidentiality to the extent possible. Federal law provides criminal and civil immunity to federal and state claims for trade secret misappropriation to individuals who disclose a trade secret to their attorney, a court, or a government official in certain, confidential circumstances that are set forth at 18 U.S.C. §§ 1833(b)(1) and 1833(b)(2), related to the reporting or investigation of a suspected violation of the law, or in connection with a lawsuit for retaliation for reporting a suspected violation of the law.

9.Covenants by Employee Not to Compete With the Group.

(a)During the Term and for a period of two (2) years after the termination of Employee’s employment with Company for any reason, in order to further protect the Confidential Information and other good will of Company and Group, Employee covenants and agrees that Employee will not:

(i)directly or indirectly, in any manner or under any circumstances or conditions, whatsoever be or become interested, as an individual, partner, principal, agent, clerk, employee, stockholder, officer, director, trustee, or in any other capacity whatsoever, except as a nominal owner of stock of a public corporation, in any other business which, at the date of Employee’s termination, is a Competitor (as defined herein), either directly or indirectly, with any member of the Group, or engage or participate in, directly or indirectly (whether as an officer, director, employee, partner, consultant, holder of an equity or debt investment, lender or in any other manner or capacity), or lend Employee’s name (or any part or variant thereof) to, any business which, at the date of Employee’s termination, is a Competitor, either directly or indirectly, with any member of the Group, or as a result of Employee’s engagement or participation would become, a Competitor, either directly or indirectly, with any aspect of the business of any member of the Group as it exists at the time of Employee’s termination; or

(ii)solicit any officer, director, employee or agent of any member of the Group or any subsidiary or affiliate of any member of the Group to become an officer, director, employee or agent of Employee, Employee’s respective affiliates or anyone else.

10

For the purposes of this Agreement, a Competitor is any business which is similar to the business of any member of the Group or in any way in competition with the business of any member of the Group within any of the then-existing water utility service areas of Company.

Ownership, in the aggregate, of less than one percent (1%) of the outstanding shares of capital stock of any corporation with one or more classes of its capital stock listed on a national securities exchange or publicly traded in the over-the-counter market shall not constitute a violation of the foregoing provision.

(b)Employee hereby acknowledges that the nature of Company’s business is such that if Employee were to become employed by, or substantially involved in, the business of a competitor to Company, it would be difficult for Employee not to rely on or use Confidential Information, or otherwise jeopardize the good will of Company, and further acknowledges that Employee’s services are unique and extraordinary, and are not readily replaceable. Accordingly, Employee hereby expressly agrees that Company or any other member of the Group, in enforcing the covenants contained in Paragraphs 8 and 9 herein, in addition to any other remedies provided for herein or otherwise available at law, shall be entitled in any court of equity having jurisdiction to an injunction restraining Employee in the event of a breach, actual or threatened, of the agreements and covenants contained in these Paragraphs, without the requirement of posting any associated bond, and that Company or Group shall be entitled to recoup from Employee any reasonable attorneys’ fees or costs incurred in enforcing these provisions.

(c)The parties hereto believe that the restrictive covenants of these Paragraphs are reasonable, and Employee expressly recognizes that the scope of these provisions are necessary to protect Company and Group’s legitimate business interests, including but not limited to protection of the Confidential Information and good will of Company and Group. Notwithstanding, if at any time it shall be determined by any court of competent jurisdiction that these Paragraphs or any portion of them as written, are unenforceable because the restrictions are unreasonable, the parties hereto agree that such portions as shall have been determined to be unreasonably restrictive shall thereupon be deemed so amended as to make such restrictions reasonable in the determination of such court, and the said covenants, as so modified, shall be enforceable between the parties to the same extent as if such amendments had been made prior to the date of any alleged breach of said covenants.

10.No Obligation to Mitigate. So long as Employee shall not be in breach of any provision of Paragraph 8 or 9, Employee shall have no duty to mitigate damages in the event of a termination and if Employee voluntarily obtains other employment (including self-employment), any compensation or profits received or accrued, directly or indirectly, from such other employment shall not reduce or otherwise affect the obligations of any member of the Group to make payments hereunder, except as specifically provided in Paragraph 7.

11.Resignation. In the event that Employee’s services hereunder are terminated under any of the provisions of this Agreement (except by death), Employee agrees that Employee will deliver to the CTWS Board, Employee’s written resignation as an officer of and as a member of any Board of Directors of each member of the Group, including as a member of the

11

Company Board and CTWS Board, such resignation to become effective immediately, or, at the option of the Company Board, on a later date as specified by the Company Board.

12.Insurance. Company, CTWS and SJW shall have the right, each at its own cost and expense, to apply for and to secure in its own name, or otherwise, life, health or accident insurance or any or all of them covering Employee, and Employee agrees to submit to the usual and customary medical examination and otherwise to cooperate with any member of the Group in connection with the procurement of any such insurance, and any claims thereunder.

13.Release. As a condition of receiving payments or benefits provided for in this Agreement, Employee shall execute and deliver for the benefit of the Group and any affiliate of any member of the Group, a general release in the form set forth in Attachment A (the “Release”), and such Release shall become effective in accordance with its terms. The failure or refusal of Employee to timely sign such Release or the revocation of such a Release shall cause the termination of any and all obligations of the Group to make payments or provide benefits hereunder, and the forfeiture of the right of Employee to receive any such payments and benefits. Employee acknowledges that Company has advised Employee to consult with an attorney prior to signing this Agreement and that Employee has had an opportunity to do so.

14.Additional Benefits. In addition to the other benefits payable to Employee pursuant to this Agreement, in the event that any payment or benefit received or to be received by Employee under this Agreement (a “Payment”) is subject to the excise tax (the “Excise Tax”) imposed by Section 4999 of the Internal Revenue Code of 1986, as amended, and the regulations promulgated thereunder (the “Code”), or any successor to such Section, as determined by a nationally recognized independent certified public accounting firm selected by Company (the “Tax Advisor”), then Company shall make an additional payment to Employee in a lump sum equal to the Excise Tax (and any excise tax imposed under state or local law similar to Section 4999 of the Code, if any) imposed on Employee as a result of payments made under this Agreement, including the amount of additional taxes imposed upon the service provider due to Company’s payment of the Excise Tax on such compensation. Such payment shall be made no later than the end of the calendar year following the calendar year in which Employee remits the related taxes, provided that if, on the date of termination, Employee is a “specified employee,” as that term is defined under Section 409A, and to the extent required to comply with Section 409A, such payment shall not be made sooner than the first day of the seventh (7th) month following termination of employment. The determination of the Tax Advisor as provided herein shall be completed not later than forty-five (45) days following Employee’s date of termination of employment or, if earlier and applicable, following the “change in control” that would trigger the Excise Tax, and such determination shall be communicated in writing to Company, with a copy to Employee within said forty-five (45) day period. The determination of the Tax Advisor as provided herein shall be deemed conclusive and binding on Company and Employee. Company shall pay the fees and other costs of the Tax Advisor hereunder.

15.Notices. All notices under this Agreement shall be in writing and shall be deemed effective when delivered in person to Employee or to the Secretary of Company and CTWS, or if mailed, postage prepaid, registered or certified mail, addressed, in the case of Employee, to

12

Employee’s last known address as carried on the personnel records of Company, and, in the case of Company and CTWS, to the corporate headquarters, attention of the Secretary, or to such other address as the party to be notified may specify by notice to the other party.

16.Successors and Binding Agreement.

(a)Company will require any successor, whether direct or indirect, by purchase, merger, consolidation or otherwise to all or substantially all of the business and/or assets of Company expressly to assume and agree to perform this Agreement in the same manner and to the same extent that Company is required to perform it. Failure of Company to obtain such assumption and agreement prior to the effectiveness of any such succession shall be a breach of this Agreement. As used in this Agreement, “Company” shall include any successor to Company’s business and/or assets as aforesaid which assumes and agrees to perform this Agreement by operation of law, or otherwise.

(b)This Agreement shall inure to the benefit of, and be enforceable by, Employee’s personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees. If Employee dies while any amount is still payable hereunder, all such amounts shall be paid in accordance with the terms of this Agreement to Employee’s devisee, legatee or other designee or, if there is no such designee, to Employee’s estate.

17.Arbitration. Any dispute which may arise between the parties hereto may, if both parties agree, be submitted to binding arbitration in the State of Connecticut in accordance with the Rules of the American Arbitration Association (available at www.adr.org); provided that any such dispute shall first be submitted to the Company Board in an effort to resolve such dispute without resort to arbitration. The arbitration shall be governed by the Federal Arbitration Act, 9 U.S.C. Section 1 et seq, as amended. Claims subject to arbitration include, to the fullest extent permitted by applicable law, all claims under federal, state or local law arising out of or relating to Employee’s employment with Company, the breach of any contract or agreement between Employee and Company or Group (including, but not limited to, this Agreement), the termination of employment with Company, or any other aspect of Employee’s relationship with Company or Group, including claims that Employee may have against Company’s or Group’s officers, directors, members, supervisors, managers, employees, or agents, and claims that Company or Group may have against Employee. All such claims must be brought in an individual capacity, and not as a plaintiff or class member in any purported class, representative or collective proceeding.

18.Severability. If any of the terms or conditions of this Agreement shall be declared void or unenforceable by any court or administrative body of competent jurisdiction, such term or condition shall be deemed severable from the remainder of this Agreement, and the other terms and conditions of this Agreement shall continue to be valid and enforceable.

19.Amendment. This Agreement may be modified or amended only by an instrument in writing executed by the parties hereto.

13

20.Construction. This Agreement shall supersede and replace all prior agreements and understandings between the parties hereto on the subject-matter covered hereby, including the Prior Agreement. Words of the masculine gender mean and include correlative words of the feminine gender. Paragraph headings are for convenience only and shall not be considered a part of the terms and provisions of the Agreement.

21.Deferred Compensation.

(a)This Agreement is intended to comply with section 409A of the Code and its corresponding regulations (“Section 409A”), or an exemption thereto, and payments may only be made under this Agreement upon an event and in a manner permitted by Section 409A, to the extent applicable. Severance benefits under this Agreement are intended to be exempt from Section 409A under the “short-term deferral” exception, to the maximum extent applicable, and then under the “separation pay” exception, to the maximum extent applicable.

(b)With respect to payments that are subject to Section 409A, all payments to be made upon a termination of employment under this Agreement may only be made upon a “separation from service” under Section 409A. For purposes of Section 409A, each payment hereunder shall be treated as a separate payment, and the right to a series of installment payments under this Agreement shall be treated as a right to a series of separate payments. In no event may Employee, directly or indirectly, designate the fiscal year of a payment. Notwithstanding any provision of this Agreement to the contrary, in no event shall the timing of Employee’s execution of the Release, directly or indirectly, result in Employee’s designating the fiscal year of payment of any amounts of deferred compensation subject to Section 409A, and if a payment that is subject to execution of the Release could be made in more than one taxable year, payment shall be made in the later taxable year.

(c)All reimbursements and in-kind benefits provided under this Agreement shall be made or provided in accordance with the requirements of Section 409A, including, where applicable, the requirement that (i) any reimbursement be for expenses incurred during the period specified in this Agreement, (ii) the amount of expenses eligible for reimbursement, or in-kind benefits provided, during a fiscal year not affect the expenses eligible for reimbursement, or in-kind benefits to be provided, in any other fiscal year, (iii) the reimbursement of an eligible expense be made no later than the last day of the fiscal year following the year in which the expense is incurred, and (iv) the right to reimbursement or in-kind benefits not be subject to liquidation or exchange for another benefit.

22.At-Will Employment. Although this Agreement has a term set forth above, Employee’s employment with Company may be terminated by Employee or by Company at any time, for any reason, subject to the provisions of Paragraph 7 above. The at-will nature of Employee’s employment relationship with Company, as described immediately above, may only be changed by express written approval of a disinterested majority of the CTWS Board.

23.Assignment Prohibited. Benefits hereunder shall not be subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, attachment or garnishment by creditors of Employee, Employee’s beneficiary, or estate, and any attempt to

14

anticipate, alienate, transfer, assign or attach the same shall be void. Employee, Employee’s beneficiary or estate shall only have a contractual right to benefits hereunder and shall have the status of general unsecured creditors.

24.Withholding. All payments under this Agreement shall be made subject to applicable tax withholding, and Company shall withhold from any payments under this Agreement all federal, state and local taxes as Company is required to withhold pursuant to any law or governmental rule or regulation. Employee shall bear all expense of, and be solely responsible for, all federal, state and local taxes due with respect to any payment received under this Agreement.

25.Governing Law. This Agreement shall be governed by, and construed and enforced in accordance with, the substantive and procedural laws of Connecticut without regard to rules governing conflicts of law.

26.Counterparts. This Agreement may be executed in any number of counterparts (including facsimile counterparts), each of which shall be an original, but all of which together shall constitute one instrument.

* * * * * * *

15

IN WITNESS WHEREOF, Company and CTWS have caused this Agreement to be executed by an authorized officer, and Employee has hereunto set Employee’s hand.

	The Connecticut Water Company
10/9/19	By	/s/ Eric W. Thornburg
Date
	Connecticut Water Service, Inc.
10/9/19	By	/s/ Eric W. Thornburg
Date
	Employee
10/09/19		/s/ Maureen P. Westbrook
Date

16

Exhibit A

Restricted Stock Unit Issuance Agreement

17

ATTACHMENT A

RELEASE

We advise you to consult an attorney before you sign this Release. You have until the date which is seven (7) days after the Release is signed and returned to The Connecticut Water Company (“Company”) to change your mind and revoke your Release. Your Release shall not become effective or enforceable until after that date.

In consideration for the benefits provided under your Employment Agreement dated ________________, 2019 with Company and Connecticut Water Service, Inc. (“CTWS”) (the “Employment Agreement”), by your signature below you agree to accept such benefits and not to make any claims of any kind against Company, CTWS and SJW Group, and their past and present and future parent corporations, subsidiaries, divisions, subdivisions, affiliates and related companies or their successors and assigns, or any and all past, present and future Directors, officers, fiduciaries or employees of any of the foregoing (all parties referred to in the foregoing are hereinafter referred to as the “Releasees”) before any agency, court or other forum, and you agree to release the Releasees from all claims, known or unknown, arising in any way from any actions taken by the Releasees up to the date of this Release, including, without limiting the foregoing, any claim for wrongful discharge, breach of contract, fraudulent inducement, misrepresentation, or any claims arising under the Age Discrimination in Employment Act of 1967, Title VII of the Civil Rights Act of 1964, the Americans with Disabilities Act of 1990, the Employee Retirement Income Security Act of 1974, Connecticut’s Fair Employment Practices Act, the Connecticut Human Rights and Opportunities Act, the Connecticut Family and Medical Leave Law, Connecticut Minimum Wage and Overtime Law, Connecticut WARN Law, or any other federal, state or local statute or regulation and any claim for attorneys’ fees, expenses or costs of litigation.

THE PRECEDING PARAGRAPH MEANS THAT BY SIGNING THIS RELEASE YOU WILL HAVE WAIVED ANY RIGHT YOU MAY HAVE TO BRING A LAWSUIT OR MAKE ANY LEGAL CLAIM AGAINST THE RELEASEES BASED ON ANY ACTIONS TAKEN BY THE RELEASEES UP TO THE DATE OF THIS RELEASE, WHETHER PRESENTLY KNOWN OR UNKNOWN BY YOU.

By signing this Release, you acknowledge that you have received all compensation and benefits due to you from Company, or any other entity referenced above (if applicable), relating to your employment with Company, including but not limited to all wages earned, sick pay, vacation pay, overtime pay, and any paid and unpaid personal leave for which you were eligible and entitled, and that no other compensation or benefits are due to you other than as contractual termination payments as set forth in the Employment Agreement in exchange for entering into this Release. You acknowledge that such termination payments provide sufficient consideration for this Release. You also acknowledge that you have been reimbursed by Company for all business expenses incurred in conjunction with the performance of your employment and that no other reimbursements or other sums are owed to you.

18

By signing this Release, you further agree as follows:

1.    You have read this Release carefully and fully understand its terms;

2.    You have had at least twenty-one (21) days to consider the terms of the Release;

3.    You have seven (7) days from the date you sign this Release to revoke it by written notification to Company. After this seven (7) day period, this Release is final and binding and may not be revoked;

4.    You have been advised to seek legal counsel and have had an opportunity to do so;

5.    You would not otherwise be entitled to the benefits provided under your Employment Agreement had you not agreed to waive any right you have to bring a lawsuit or legal claim against the Releasees; and

6.    Your agreement to the terms set forth above is voluntary.

This Release shall be governed by the laws of the State of Connecticut, without regard for choice-of-law provisions. By signing below, you agree to be fully bound to the terms of this Release, and consent to personal and exclusive jurisdiction and venue in the State of Connecticut.

Name:
Signature:	Date:
Received by:	Date:

19

EX-10.94

EXHIBIT 10.94

AMENDED AND RESTATED
EMPLOYMENT AGREEMENT

THIS AGREEMENT, dated this 30 day of December, 2008, is made by and between The Connecticut Water Company, a Connecticut corporation having its principal place of business in Clinton, Connecticut, (“Company”), Connecticut Water Service, Inc., a Connecticut corporation and holder of all of the outstanding capital stock of Company (“Parent”) and Kristen A. Johnson, a resident of Broad Brook, Connecticut, (“Employee”).

W I T N E S S E T H:

WHEREAS, Company and Parent desire to reward Employee for Employee’s valuable, dedicated service to Company and Parent should Employee’s service be terminated under circumstances hereinafter described; and

WHEREAS, Employee, Company and Parent entered into an amended and restated Employment Agreement dated January 24, 2008; and

WHEREAS, the parties wish to amend the Agreement to comply with Section 409A of the Internal Revenue Code of 1986, as amended and regulations issued thereunder (collectively the “Code”); and

WHEREAS, Employee, Company and Parent are willing to enter into this Amended and Restated Employment Agreement (“Agreement”) on the terms herein set forth;

NOW, THEREFORE, to assure Company and Parent of Employee’s continued dedication and the availability of Employee’s advice^- and counsel in the event of any such proposal, to induce Employee to remain in the employ of Company and Parent and to reward Employee for Employee’s valuable dedicated service to Company and Parent should Employee’s service be terminated under circumstances hereinafter described, and for other good and valuable consideration, the receipt and adequacy of which each party acknowledges, effective January 1, 2009, Company, Parent and Employee agree as follows:

1.Definitions. For purposes of this Agreement, the following terms shall have the following meanings:

(a)“Cause” shall mean Employee’s serious, willful misconduct in respect of Employee’s duties under this Agreement, including conviction for a felony or perpetration by Employee of a common law fraud upon Company or Parent which has resulted or is likely to result in material economic damage to Company or Parent, as determined by a vote of at least seventy-five percent (75%) of all of the Directors (excluding Employee) of each of Company’s and Parent’s Board of Directors;

(b)“Change-in-Control” shall be deemed to have occurred if after the date hereof (i) a public announcement shall be made or a report on Schedule 13D shall be filed with the Securities and Exchange Commission pursuant to Section 13(d) of the Securities Exchange

Act of 1934 (the “Act”) disclosing that any Person (as defined below), other than Company or Parent or any employee benefit plan sponsored by Company or Parent, is the beneficial owner (as the term is defined in Rule 13d-3 under the Act) directly or indirectly, of twenty percent (20%) or more of the total voting power represented by Company’s or Parent’s then outstanding voting common stock (calculated as provided in paragraph (d) of Rule 13d-3 under the Act in the case of rights to acquire voting common stock); or (ii) any Person, other than Company or Parent or any employee benefit plan sponsored by Company or Parent, shall purchase shares pursuant to a tender offer or exchange offer to acquire any voting common stock of Company or Parent (or securities convertible into such voting common stock) for cash, securities or any other consideration, provided that after consummation of the offer, the Person in question is the beneficial owner directly or indirectly, of twenty percent (20%) or more of the total voting power represented by Company’s or Parent’s then outstanding voting common stock (all as calculated under clause (i)); or (iii) the stockholders of Company or Parent shall approve (A) any consolidation or merger of Company or Parent in which Company or Parent is not the continuing or surviving corporation (other than a merger of Company or Parent in which holders of the outstanding capital stock of Company or Parent immediately prior to the merger have the same proportionate ownership of the outstanding capital stock of the surviving corporation immediately after the merger as immediately before), or pursuant to which the outstanding capital stock of Company or Parent would be converted into cash, securities or other property, or (B) any sale, lease, exchange or other transfer (in one transaction or a series of related transactions) of all or substantially all the assets of Company or Parent; or (iv) there shall have been a change in the composition of the Board of Directors of Company or Parent at any time during any consecutive twenty-four (24) month period such that “continuing directors” cease for any reason to constitute at least a majority of the Board unless the election, or the nomination for election of each new Director was approved by a vote of at least two-thirds (2/3) of the Directors then still in office who were Directors at the beginning of such period; or (v) the Board of Directors of Company or Parent, by a vote of a majority of all the Directors (excluding Employee) adopts a resolution to the effect that a “Change-in-Control” has occurred for purposes of this Agreement.

(c)“Disability” shall mean the incapacity of Employee by illness or any other cause as determined under the long-term disability insurance plan of Company in effect at the time in question, or if no such plan is in effect, then such incapacity of Employee as prevents Employee from performing the essential functions of Employee’s position with or without reasonable accommodation for a period in excess of two hundred forty (240) days (whether or not consecutive), or one hundred eighty (180) days consecutively, as the case may be, during any twelve (12) month period.

(d)“Effective Date” shall be the date on which a Change-in-Control occurs. Anything in this Agreement to the contrary notwithstanding, if Employee’s employment is terminated prior to the date on which a Change-in-Control occurs, and it is reasonably demonstrated that such termination (i) was at the request of a third party who has taken steps reasonably calculated to effect a Change-in-Control or (ii) otherwise arose in connection with or anticipation of a Change-in-Control, then for all purposes of this Agreement the “Effective Date” shall mean the date immediately prior to the date of such termination.

2

(e)“Good Reason” shall mean the occurrence of any action which (i) removes or changes Employee’s title or reduces Employee’s job responsibilities or base salary; (ii) results in a significant worsening of Employee’s work conditions; or (iii) moves Employee’s place of employment to a location that increases Employee’s commute by more than thirty (30) miles over the length of Employee’s commute from Employee’s place of principal residence at the time the move is requested. For purposes of this subparagraph (e), any good faith determination by Employee that any such action has occurred shall be conclusive.

(f)“Person” shall mean any individual, corporation, partnership, company or other entity, and shall include a “group” as defined in Section 13(d)(3) of the Securities Exchange Act of 1934.

2.Employment.

(a)As of the Effective Date, Company hereby agrees to continue to employ Employee and Employee agrees to remain in the employ of Company for the Term of this Agreement upon the terms and conditions hereinafter set forth. Subject to the provisions of subparagraph (b) of this Paragraph 2, and to the provisions of Paragraph 6 below, “Term” shall mean a continuously renewing period of three (3) years commencing on the Effective Date.

(b)At any time during the Term, the Board of Directors of Company and Parent may, by written notice to Employee, advise Employee of their desire to modify or amend any of the terms or provisions of this Agreement or to delete or add any terms or provisions. Any such notice (“Notice”) shall describe the proposed modifications in reasonable detail. In the event a Notice shall be given to Employee, then Company, Parent and Employee agree to discuss the proposed modification(s) and to attempt in good faith to reach agreement with respect thereto and to reduce such agreement to writing in an amendment to be executed by all the parties (“Amendment”). If a Notice is given hereunder and an Amendment shall not have been executed on or before the sixtieth (60th) day following the date on which Notice is given, then the Term shall thereupon be automatically converted to a fixed period ending three (3) years after the expiration of such sixty (60) days.

3.Duties of Employment.

(a)During the Term, Employee’s position (including status, offices, titles and reporting requirements), authority, duties and responsibilities shall be at least commensurate in all material respects with the most significant of those held, exercised and assigned at any time during the ninety (90)-day period immediately preceding the Effective Date and Employee’s services shall be performed at such location as Employee shall determine.

(b)During the Term, Employee will serve Company faithfully, diligently and competently and will devote full-time to Employee’s employment and will hold, in addition to the offices held on the Effective Date, such other Employee offices of Company or Parent, or their respective subsidiaries and affiliates, to which Employee may be elected, appointed or assigned by the Boards of Directors of Company or Parent from time to time and will discharge such Employee duties in connection therewith. Nothing in this Agreement shall preclude

3

Employee, with the prior approval of the Board of Directors of Company, from devoting reasonable periods of time required for (i) serving as a director or member of a committee of any organization involving no conflict of interest with Company or Parent, or (ii) engaging in charitable, religious and community activities, provided, that such directorships, memberships or activities do not materially interfere with the performance of Employee’s duties hereunder.

4.Compensation. During the Term, Company shall pay to Employee as compensation for the services to be rendered by Employee hereunder the following:

(a)A base salary at a rate equal to the highest base salary paid or payable to Employee by Company during the twelve (12)-month period immediately preceding the month in which the Effective Date occurs, or such larger sum as the Company may from time to time determine in connection with regular periodic performance reviews pursuant to Company’s policies and practices. Such compensation shall be payable in accordance with the normal payroll practices of Company. Employee shall receive an annual increase in base salary at each normal pay adjustment date during the Term, but no later than one (1) year after the date of Employee’s last increase and annually thereafter during the Term, of not less than the percentage increase in the cost-of-living since Employee’s last pay adjustment, as measured by the Consumer Price Index-All Urban Consumers of the U.S. Bureau of Labor Statistics.

(b)In addition, Company shall pay to Employee an annual award under the Company’s Performance Stock Program (or other bonus program in effect at the time the Effective Date occurs) payable in cash or other form of compensation, for which he would have been eligible in accordance with the Company’s practice or plan in effect at that time for annual bonuses for said employee for the year preceding the fiscal year in which the Effective Date occurs.

5.Benefits. During the Term, Employee shall be entitled to the following benefits:

(a)Incentive, Savings and Retirement Plans. In addition to base salary and bonus payable as hereinabove provided, Employee shall be entitled to participate during the Term in all savings and retirement plans, practices, policies and programs applicable to employees of Company as may be in effect from time to time. Such plans, practices, policies and programs, in the aggregate, shall provide Employee with compensation, benefits and reward opportunities at least as favorable as the most favorable of such compensation, benefits and reward opportunities provided by Company for Employee under such plans, practices, policies and programs as in effect at any time during the ninety (90)-day period immediately preceding the Effective Date or, if more favorable to Employee, as provided at any time thereafter with respect to other key employees of Company or Parent.

(b)Welfare Benefit Plans. During the Term, Employee and/or Employee’s family, as the case may be, shall be eligible for participation in and shall receive all benefits under welfare benefit plans, practices, policies and programs applicable to employees of Company (including, without limitation, medical, prescription, dental, disability, salary continuance, employee life, group life,) at least as favorable as the most favorable of such

4

plans, practices, policies and programs in effect at any time during the ninety (90)-day period immediately preceding the Effective Date or, if more favorable to Employee and/or Employee’s family, as in effect at any time thereafter with respect to other key employees of Company or Parent.

(c)Expenses. During the Term, Employee shall be entitled to receive prompt reimbursement for all reasonable expenses incurred by Employee in accordance with the most favorable policies, practices and procedures of Company in effect at any time during the ninety (90)-day period immediately preceding the Effective Date or, if more favorable to Employee, as in effect at any time thereafter with respect to other key employees of Company or Parent.

(d)Fringe Benefits. During the Term, Employee shall be entitled to fringe benefits, including use of an automobile and payment of related expenses or payment of an allowance for automobile related expenses, in accordance with the most favorable plans, practices, programs and policies of Company in effect at any time during the ninety (90)-day period immediately preceding the Effective Date or, if more favorable to Employee, as in effect at any time thereafter with respect to other key employees of Company or Parent.

(e)Office and Support Staff. During the Term, Employee shall be entitled to an office or offices of a size and with furnishings and other appointments, and to secretarial and other assistance, at least equal to the most favorable of the foregoing provided to Employee by Company at any time during the ninety (90)-day period immediately preceding the Effective Date or, if more favorable to Employee, as provided at any time thereafter with respect to other key employees of Company or Parent.

(f)Vacation. During the Term, Employee shall be entitled to paid vacation in accordance with the most favorable plans, policies, programs and practices of Company as in effect at any time during the ninety (90)-day period immediately preceding the Effective Date or, if more favorable to Employee, as in effect at any time thereafter with respect to other key employees of Company or Parent.

6.End of Term and Notice of Termination.

(a)End of Term. The Term shall end upon the occurrence of any of the following events:

(i)Termination of Employee’s employment by Company for Cause.

(ii)The voluntary termination of Employee’s employment by Employee other than for Good Reason.

(iii)The death of Employee.

(iv)Employee’s attainment of age sixty-five (65).

5

(v) Full compliance by Company with the provisions of Paragraph 7(e) below, if Employee’s employment shall have been terminated by Company during the Term for any reason other than Cause, or if Employee’s employment shall have been terminated by reason of Employee’s Disability, or if Employee shall have voluntarily terminated Employee’s employment during the Term for Good Reason.

(b)Notice of Termination. Any termination by Company for Cause or by Employee for Good Reason or on account of Employee’s Disability shall be communicated by notice to the other party hereto given in accordance with Section 15 of this Agreement. For purposes of this Agreement, a “notice” means a written notice which (i) indicates the specific termination provision in this Agreement relied upon, (ii) sets forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of Employee’s employment under the provision so indicated and (iii) if the date of termination (as defined below) is other than the date of receipt of such notice, specifies the termination date (which date shall be not more than fifteen (15) days after the giving of such notice).

(c)Date of Termination. The date of termination means the date of receipt of the notice of termination or any later date specified therein, as the case may be; provided, however, that (i) if Employee’s employment is terminated by Company other than for Cause or on account of Employee’s Disability, the date of termination shall be the date on which Company notifies Employee of such termination and (ii) if Employee’s employment is terminated by reason of death, the date of termination shall be the date of death of Employee.

(d)Termination of Employment. In order for the Employee to be considered to have terminated employment with the Company, the Employee must have incurred a separation from service from the Company (and all related companies) within the meaning of Section 409A of the Code, and regulations promulgated thereunder, and the term termination of employment and the like as used in this Agreement shall be construed to mean separation from service as so defined under Section 409A of the Code.

7.Payment Upon Termination.

(a)If Employee’s employment is terminated by Company for Cause, as defined in Paragraph 1(a), the obligations of Company under this Agreement shall cease and Employee shall forfeit all right to receive any compensation or other benefits under this Agreement except only compensation or benefits accrued or earned and vested (if applicable) by Employee as of the date of termination, including base salary through the date of termination, benefits payable under the terms of any qualified or nonqualified retirement plans or deferred compensation plans maintained by Company, any accrued vacation pay as of the date of termination not yet paid by Company and any benefits required to be paid by law such as continued health care coverage pursuant to the Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”) (collectively, the “Accrued Obligations”).

6

(b)If Employee shall voluntarily terminate Employee’s employment during the Term, other than for Good Reason, as defined in Paragraph 1(e), the obligations of Company under this Agreement shall cease and Employee shall forfeit all right to receive any compensation or other benefits under this Agreement except only the Accrued Obligations.

(c)In the event of the death of Employee during the Term, then, in addition to the Accrued Obligations and any other benefits which may be payable by Company in respect of the death of Employee, the base salary then payable hereunder shall continue to be paid at the then current rate for a period of six (6) months after such death to such beneficiary as shall have been designated in writing by Employee, or if no effective designation exists, then to the estate of Employee. Such payment shall be made on the first (1^st) and fifteenth (15^th) of each month, beginning on the first day of the first month following Employee’s death.

(d)If Employee’s employment is terminated by reason of Employee’s attainment of age sixty-five (65), the obligations of Company under this Agreement shall cease and Employee shall forfeit all right to receive any compensation or other benefits under this Agreement except the Accrued Obligations.

(e)If Employee’s employment is terminated by Company during the Term for any reason other than for Cause, or Employee’s death, or Employee’s attainment of age sixty-five (65), or if Employee’s employment is terminated during the Term by reason of Employee’s Disability, or if Employee shall voluntarily terminate Employee’s employment during the Term for Good Reason, Employee shall be entitled to receive, and Company shall be obligated to pay and provide Employee, the following amounts:

(i)An amount in consideration of the covenants by Executive set forth in Paragraphs 8 and 9 below to be determined by a nationally recognized independent certified public accounting firm selected and retained by Company to be the reasonable value of said covenants as of the date of termination of Employee’s employment, but in no event shall such amount be greater than the aggregate value of the benefits provided in subparagraphs (e)(ii), (iii), (iv), (v) and (viii) hereinbelow. The benefits otherwise payable to Executive pursuant to said subparagraphs shall be offset by the amount, if any, payable to Executive in respect of the covenants by Employee set forth in Paragraphs 8 and 9 below. Said amount paid in consideration of the covenants by Executive set forth in Paragraphs 8 and 9 below shall be paid in accordance with subparagraphs (e)(ii), (iii), (iv), (v) and (viii) below, and this subparagraph (i) shall not alter the time or form of payment of such amounts.

(ii)An amount equal to three (3) times the base salary of Employee, at the rate in effect immediately prior to the date of termination, plus an amount equal to three (3) times the target percentage of the midpoint of Employee’s salary grade under the Company’s Officers Incentive Program for the year in which termination occurs if the employee is a participant in such plan at the time of the Change-in-Control. Such amount so determined shall be divided into thirty-six (36) equal amounts. If the Employee is not a “specified employee” as defined under Section 409A of the Code at the time of termination, payment of such equal amounts shall be made on the first day of each month, commencing with the first day of the first month following termination. If the Employee is a “specified employee” as that term is defined

7

under Section 409A of the Code on the date of termination, seven (7) such equal amounts shall be paid to the Employee on the date which is the first day of the seventh (7^th) month following the date of termination of employment, and the twenty-nine (29) remaining equal amounts shall be payable on the first day of each month subsequent to the date of the first payment (one payment per month) until the payments are completed. Payments shall be treated as supplemental wage payments under applicable Treasury Regulations subject to federal tax withholding at the flat percentage rate applicable thereto.

(iii)An amount equal to the aggregate amounts that Company would have contributed on behalf of Employee under Company’s qualified defined contribution retirement plan(s), if any such plan(s) shall be in effect (other than amounts attributable to Employee’s before-tax contributions to such plan(s)) plus estimated earnings thereon had Employee continued in the employ of Company for the three (3)-year period commencing on the date of termination and made contributions under said plan(s) equal to the maximum amount that the Employee could have contributed under the terms of such plan(s) for the plan year immediately preceding Employee’s termination, to be payable in a lump sum to Employee on the second anniversary of the Employee’s termination of employment, provided that Employee shall not have breached said non-competition provisions.

(iv)An amount equal to the additional Interest Equivalent which would have been earned under any deferred compensation agreement between Company and Employee, if any such agreement shall be in effect, had Employee continued in the employ of Company for the three (3)-year period commencing on the date of termination, received compensation at least equal to that specified in Paragraph 4 of this Agreement during such time, and deferred pursuant to said deferred compensation agreement the amount of compensation specified therein; such amount to be payable in a lump sum to Employee on the second anniversary of the Employee’s termination of employment, provided that Employee shall not have breached said non-competition provisions.

(v)Additional retirement benefits equal to the additional annual pension benefits that would have been payable to Employee under Company’s qualified defined benefit retirement plan (the “Plan”) and under any nonqualified supplemental Employee retirement plan covering Employee (the “Supplemental Plan”), if any such Plan or Supplemental Plan shall be in effect, if Employee had been continued in the employ of Company for the three (3)-year period commencing on the date of termination and had received compensation at least equal to that specified in Paragraph 4(a) of this Agreement during such time and had been fully vested in the benefits payable under any such Plan and Supplemental Plan. The discounted present value of such additional benefits, shall be payable to Employee in a lump sum, as calculated by the independent actuary for the Plan using the assumptions specified in the Plan, on the second anniversary of the Employee’s termination of employment, provided that Employee shall not have breached said non-competition provisions.

(vi)At the date of termination of Employee’s employment, Employee shall be fully vested in any form of compensation previously granted to Employee (other than

8

benefits payable under a qualified retirement plan), such as, by way of example only, restricted stock, stock options, and performance share awards.

(vii)If Employee’s employment is terminated by reason of Employee’s Disability, Employee shall be entitled to receive, in addition to the other benefits provided under this Paragraph 7(e), disability benefits payable in accordance with any bona fide disability plan maintained by Company or Parent, to the extent Employee qualifies for benefits under the terms of such bona fide disability plan.

(viii)A lump sum cash payment equal to three (3) times the sum of the average of the annual contributions, payments, credits or allocations made by the Company on behalf of the Employee for coverage under all life, health, disability and similar welfare benefit plans and programs and other perquisites maintained by the Company during the three (3) calendar year period preceding his termination of employment. Such payment shall be made on the first day of the seventh (7’) month following the Employee’s termination of employment, if the Employee is a “specified employee” as defined under Section 409A of the Code on the date of termination. If the Employee is not a specified employee on the date of termination, payment shall be made on the first day of the month following the Employee’s termination of employment.

(ix)Company shall reimburse Employee for the amount of any reasonable legal or accounting fees and expenses incurred by Employee to obtain or enforce any right or benefit provided to Employee by Company hereunder or as confirmed or acknowledged hereunder, provided that no such reimbursement shall be made earlier than seven (7) months following the Employee’s termination, if the Employee is a “specified employee” as that term is defined under Section 409A of the Code on the date of termination, and in no event shall any reimbursement be made any later than December 31 of the calendar year following the year in which the expense is incurred by the Employee.

(x)Company shall provide the Employee with reasonable outplacement services from a firm selected by the Company for a period of one (1) year commencing on the date of termination, or until Employee accepts other employment, if earlier.

8.Confidential Information. Employee understands that in the course of Employee’s employment by Company, Employee will receive or have access to confidential information concerning the business or purposes of Company and Parent, and which Company and Parent desire to protect. Such confidential information shall be deemed to include, but not be limited to, Company’s customer lists and information, and employee lists, including, if known, personnel information and data. Employee agrees that Employee will not, at any time during the period ending two (2) years after the date of termination of Employee’s employment, reveal to anyone outside Company or Parent or use for Employee’s own benefit any such information without specific written authorization by Company or Parent. Employee further agrees not to use any such confidential information or trade secrets in competing with Company or Parent at any time during or in the two (2) year period immediately following the date of termination of Employee’s employment with Company.

9

9.Covenants by Employee Not to Compete With Company or Parent.

(a)Upon the date of termination of Employee’s employment with Company for any reason, Employee covenants and agrees that Employee will not at any time during the period of two (2) years from and after such date of termination directly or indirectly in any manner or under any circumstances or conditions whatsoever be or become interested, as an individual, partner, principal, agent, clerk, employee, stockholder, officer, director, trustee, or in any other capacity whatsoever, except as a nominal owner of stock of a public corporation, in any other business which, at the date of Employee’s termination, is a Competitor (as defined herein), either directly or indirectly, with Company or Parent, or engage or participate in, directly or indirectly (whether as an officer, director, employee, partner, consultant, holder of an equity or debt investment, lender or in any other manner or capacity), or lend Employee’s name (or any part or variant thereof) to, any business which, at the date of Employee’s termination, is a Competitor, either directly or indirectly, with Company or Parent, or as a result of Employee’s engagement or participation would become, a Competitor, either directly or indirectly, with any aspect of the business of Company or Parent as it exists at the time of Employee’s termination, or solicit any officer, director, employee or agent of Company or Parent or any subsidiary or affiliate of Company or Parent to become an officer, director, employee or agent of Employee, Employee’s respective affiliates or anyone else. Ownership, in the aggregate, of less than one percent (1 %) of the outstanding shares of capital stock of any corporation with one or more classes of its capital stock listed on a national securities exchange or publicly traded in the over-the-counter market shall not constitute a violation of the foregoing provision. For the purposes of this Agreement, a Competitor is any business which is similar to the business of Company or Parent or in any way in competition with the business of Company or Parent within any of the then-existing water utility service areas of Company.

(b)Employee hereby acknowledges that Employee’s services are unique and extraordinary, and are not readily replaceable, and hereby expressly agrees that Company and Parent, in enforcing the covenants contained in Paragraphs 8 and 9 herein, in addition to any other remedies provided for herein or otherwise available at law, shall be entitled in any court of equity having jurisdiction to an injunction restraining Employee in the event of a breach, actual or threatened, of the agreements and covenants contained in these Paragraphs.

(c)The parties hereto believe that the restrictive covenants of these Paragraphs are reasonable. However, if at any time it shall be determined by any court of competent jurisdiction that these Paragraphs or any portion of them as written, are unenforceable because the restrictions are unreasonable, the parties hereto agree that such portions as shall have been determined to be unreasonably restrictive shall thereupon be deemed so amended as to make such restrictions reasonable in the determination of such court, and the said covenants, as so modified, shall be enforceable between the parties to the same extent as if such amendments had been made prior to the date of any alleged breach of said covenants.

10.No Obligation to Mitigate. So long as Employee shall not be in breach of any provision of Paragraph 8 or 9, Employee shall have no duty to mitigate damages in the event of a termination and if Employee voluntarily obtains other employment (including self-employment),

10

any compensation or profits received or accrued, directly or indirectly, from such other employment shall not reduce or otherwise affect the obligations of Company and Parent to make payments hereunder.

11.Resignation. In the event that Employee’s services hereunder are terminated under any of the provisions of this Agreement (except by death), Employee agrees that Employee will deliver Employee’s written resignation as an officer of Company or Parent, or their subsidiaries and affiliates, to the Board of Directors, such resignation to become effective immediately, or, at the option of the Board of Directors, on a later date as specified by the Board.

12.Insurance. Company shall have the right at its own cost and expense to apply for and to secure in its own name, or otherwise, life, health or accident insurance or any or all of them covering Employee, and Employee agrees to submit to the usual and customary medical examination and otherwise to cooperate with Company in connection with the procurement of any such insurance, and any claims thereunder.

13.Release. As a condition of receiving payments or benefits provided for in this Agreement, at the request of Company or Parent, Employee shall execute and deliver for the benefit of Company and Parent, and any subsidiary or affiliate of Company or Parent, a general release in the form set forth in Attachment A, and such release shall become effective in accordance with its terms. The failure or refusal of Employee to sign such a release or the revocation of such a release shall cause the termination of any and all obligations of Company and Parent to make payments or provide benefits hereunder, and the forfeiture of the right of Employee to receive any such payments and benefits. Employee acknowledges that Company and Parent have advised Employee to consult with an attorney prior to signing this Agreement and that Employee has had an opportunity to do so.

14.Notices. All notices under this Agreement shall be in writing and shall be deemed effective when delivered in person to Employee or to the Secretary of Company and Parent, or if mailed, postage prepaid, registered or certified mail, addressed, in the case of Employee, to Employee’s last known address as carried on the personnel records of Company, and, in the case of Company and Parent, to the corporate headquarters, attention of the Secretary, or to such other address as the party to be notified may specify by notice to the other party.

15.Successors and Binding Agreement.

(a)Company and Parent will require any successor, whether direct or indirect, by purchase, merger, consolidation or otherwise to all or substantially all of the business and/or assets of Company and/or Parent, as the case may be, expressly to assume and agree to perform this Agreement in the same manner and to the same extent that Company and Parent are required to perform it. Failure of Company and Parent to obtain such assumption and agreement prior to the effectiveness of any such succession shall be a breach of this Agreement. As used in this Agreement, “Company” and “Parent” shall include any successor to Company’s and/or Parent’s, as the case may be, business and/or assets as aforesaid which assumes and agrees to perform this Agreement by operation of law, or otherwise.

11

(b)This Agreement shall inure to the benefit of, and be enforceable by, Employee’s personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees. If Employee dies while any amount is still payable hereunder, all such amounts shall be paid in accordance with the terms of this Agreement to Employee’s devisee, legatee or other designee or, if there is no such designee, to Employee’s estate.

16.Arbitration. Any dispute which may arise between the parties hereto may, if both parties agree, be submitted to binding arbitration in the State of Connecticut in accordance with the Rules of the American Arbitration Association; provided that any such dispute shall first be submitted to Company’s Board of Directors in an effort to resolve such dispute without resort to arbitration.

17.Severability. If any of the terms or conditions of this Agreement shall be declared void or unenforceable by any court or administrative body of competent jurisdiction, such term or condition shall be deemed severable from the remainder of this Agreement, and the other terms and conditions of this Agreement shall continue to be valid and enforceable.

18.Amendment. This Agreement may be modified or amended only by an instrument in writing executed by the parties hereto.

19.Construction. This Agreement shall supersede and replace all prior agreements and understandings between the parties hereto on the subject matter covered hereby. This Agreement shall be governed and construed under the laws of the State of Connecticut. Words of the masculine gender mean and include correlative words of the feminine gender. Paragraph headings are for convenience only and shall not be considered a part of the terms and provisions of the Agreement.

20.Deferred Compensation. This Agreement has been prepared with reference to Section 409A of the Internal Revenue Code and shall be interpreted and administered in a manner consistent with Section 409A.

21.Assignment Prohibited. Benefits hereunder shall not be subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, attachment or garnishment by creditors of the Employee, the Employee’s beneficiary, or estate, and any attempt to anticipate, alienate, transfer, assign or attach the same shall be void. The Employee, the Employee’s beneficiary or estate shall only have a contractual right to benefits hereunder and shall have the status of general unsecured creditors.

* * * * * *

12

EXHIBIT 10.94

IN WITNESS WHEREOF, Company and Parent have caused this Agreement to be executed by an authorized officer, and Employee has hereunto set Employee’s hand.

	The Connecticut Water Company
December 30, 2008	By	/s/ Daniel J. Meaney
Date		Corporate Secretary
	Connecticut Water Service, Inc.
December 30, 2008	By	/s/ Daniel J. Meaney
Date		Corporate Secretary
December 30, 2008		/s/ David C. Benoit
Date		David C. Benoit

ATTACHMENT A

RELEASE

We advise you to consult an attorney before you sign this Release. You have until the date which is seven (7) days after the Release is signed and returned to ________________________ (“Company”) to change your mind and revoke your Release. Your Release shall not become effective or enforceable until after that date.

In consideration for the benefits provided under your Employment Agreement dated ____________________ with Company and    _____________________ (“Parent”), and more specifically enumerated in Exhibit 1 hereto, by your signature below you agree to accept such benefits and not to make any claims of any kind against Company, its past and present and future parent corporations, subsidiaries, divisions, subdivisions, affiliates and related companies or their successors and assigns, including without limitation Parent, or any and all past, present and future Directors, officers, fiduciaries or employees of any of the foregoing (all parties referred to in the foregoing are hereinafter referred to as the “Releasees”) before any agency, court or other forum, and you agree to release the Releasees from all claims, known or unknown, arising in any way from any actions taken by the Releasees up to the date of this Release, including, without limiting the foregoing, any claim for wrongful discharge or breach of contract or any claims arising under the Age Discrimination in Employment Act of 1967, Title VII of the Civil Rights Act of 1964, the Americans with Disabilities Act of 1990, the Employee Retirement Income Security Act of 1974, Connecticut’s Fair Employment Practices Act or any other federal, state or local statute or regulation and any claim for attorneys’ fees, expenses or costs of litigation.

THE PRECEDING PARAGRAPH MEANS THAT BY SIGNING THIS RELEASE YOU WILL HAVE WAIVED ANY RIGHT YOU MAY HAVE TO BRING A LAWSUIT OR MAKE ANY LEGAL CLAIM AGAINST THE RELEASEES BASED ON ANY ACTIONS TAKEN BY THE RELEASEES UP TO THE DATE OF THIS RELEASE.

By signing this Release, you further agree as follows:

1.    You have read this Release carefully and fully understand its terms;

2.    You have had at least twenty-one (21) days to consider the terms of the Release;

3.    You have seven (7) days from the date you sign this Release to revoke it by written notification to Company. After this seven (7) day period, this Release is final and binding and may not be revoked;

4.    You have been advised to seek legal counsel and have had an opportunity to do so;

5.    You would not otherwise be entitled to the benefits provided under your Employment Agreement with Company and Parent had you not agreed to waive any right you have to bring a lawsuit or legal claim against the Releasees; and

6.    Your agreement to the terms set forth above is voluntary.

EXHIBIT 10.94

Name:
Signature:	Date:
Received by:	Date:

EXHIBIT 1

1.

2.

3.

4.

5.

etc.

NOTE: THIS EXHIBIT IS TO BE COMPLETED AT THE TIME OF TERMINATION TO REFLECT ALL BENEFITS AND PAYMENTS MADE UNDER THE EMPLOYMENT AGREEMENT.

Acknowledged and Agreed:

THE CONNECTICUT WATER COMPANY		EMPLOYEE
By
	Its
CONNECTICUT WATER SERVICE
By
	Its

EX-10.97

EXHIBIT 10.97

THIRD AMENDMENT TO
AMENDED AND RESTATED EMPLOYMENT AGREEMENT

THIS THIRD AMENDMENT (the “Amendment”), effective as of November 1, 2019, is made by and between The Connecticut Water Company, a Connecticut corporation having its principal place of business in Clinton, Connecticut (“Company”), Connecticut Water Service, Inc., a Connecticut corporation and holder of all of the outstanding capital stock of Company (“Parent”), and Kristen A. Johnson, a resident of Broad Brook, Connecticut (“Employee”).

WITNESSETH:

WHEREAS, Employee, Company and Parent entered into an amended and restated Employment Agreement in December 2008 (the “Agreement”); and

WHEREAS, Employee, Company and Parent entered into a First Amendment to the Agreement on March 8, 2013 and a Second Amendment to the Agreement on April 1, 2014 (collectively, the “Prior Amendments”); and

WHEREAS, SJW Group (“SJW”) acquired Parent pursuant to that certain Second Amended and Restated Agreement and Plan of Merger, dated as of August 5, 2018, by and among SJW, Hydro Sub, Inc. and Parent (the “Merger”); and

WHEREAS, Company wishes to continue to employ Employee and Employee wishes to continue in employment, following the Merger, upon the terms set forth in the Agreement, as amended by the Prior Amendments and this Amendment;

NOW, THEREFORE, Company, Parent and Employee agree as follows:

1.The definition of “Cause” in subparagraph (a) of Paragraph 1 of the Agreement entitled “Definitions” is hereby replaced with the following:

(a)    “Cause” shall mean (as reasonably determined by the Board of Directors of Parent in its good faith discretion) Employee’s serious, willful misconduct in respect of Employee’s duties under this Agreement, including conviction for a felony or perpetration by Employee of a common law fraud upon any member of the Group, which has resulted or is likely to result in material economic damage to any member of the Group, as determined by a vote of at least seventy-five percent (75%) of all of the directors (excluding Employee) of the Board of Directors of Parent.

2.The definition of “Good Reason” in subparagraph (e) of Paragraph 1 of the Agreement entitled “Definitions” is hereby replaced with the following:

(e)    “Good Reason” shall mean the occurrence of any action, after the Amendment Date (as defined below), which (x) removes or changes Employee’s title or reduces Employee’s job responsibilities or Base Salary; (y) results in a significant worsening of Employee’s work conditions; or (z) moves Employee’s place of employment to a location that

EXHIBIT 10.97

increases Employee’s commute by more than thirty (30) miles over the length of Employee’s commute from Employee’s place of principal residence at the time the move is requested. In order to constitute Good Reason, (i) Employee must provide written notice identifying the event constituting Good Reason to Parent within sixty (60) days after the event constituting Good Reason, (ii) Parent shall have a period of sixty (60) days in which it may correct the act or failure to act that constitutes the grounds for Good Reason as set forth in Employee’s notice of termination, and (iii) if Parent does not correct the act or failure to act, Employee’s employment shall terminate for Good Reason on the first business day following Parent’s sixty (60)-day cure period.

3.Paragraph 1 of the Agreement entitled “Definitions” is hereby amended to add a new subsection (g) to read as follows:

(g)    “Group” shall mean Parent, its direct and indirect subsidiaries and parents, and their direct and indirect subsidiaries.

4.Paragraph 3 of the Agreement entitled “Duties of Employment” is hereby replaced with the following:

3.    Duties of Employment.

(a)    Effective as of November 1, 2019 (the “Amendment Date”), Employee shall serve as the Chief Administrative Officer of SJW Group (“SJW”) and Senior Vice President, Administration of Parent and all its subsidiaries. Employee shall report to the President, Chief Executive Officer of SJW. Employee understands and agrees that Employee’s principal place of employment shall be in Company’s principal offices and that Employee will be required to travel for business in the course of performing her duties.

(b)    During the Term, Employee will serve Company faithfully, diligently and competently and will devote full-time to Employee’s employment and will hold, in addition to the offices held on the Amendment Date, such other offices of any member of the Group to which Employee may be elected, appointed or assigned by the Board of Directors of SJW or Parent from time to time and will discharge such Employee duties in connection therewith. Nothing in this Agreement shall preclude Employee, with the prior approval of the Board of Directors of Parent, from devoting reasonable periods of time required for (i) serving as a director or member of a committee of any organization involving no conflict of interest with any member of the Group, or (ii) engaging in charitable, religious and community activities, provided, that such directorships, memberships or activities do not materially interfere with the performance of Employee’s duties hereunder.

5.Paragraph 4 of the Agreement entitled “Compensation” is hereby replaced with the following:

4.    Compensation. During the Term, Company shall pay to Employee as compensation for the services to be rendered by Employee hereunder the following:

2

EXHIBIT 10.97

(a)    Base Salary. Commencing as of the Amendment Date, Company shall pay Employee a base salary (“Base Salary”) at the annual rate of $375,000. Such compensation shall be payable in accordance with the normal payroll practices of Company. Commencing with the 2021 calendar year, Employee shall receive an annual increase in base salary in connection with an annual performance review, of not less than the percentage increase in the cost-of-living since Employee’s last pay adjustment, as measured by the Consumer Price Index-All Urban Consumers of the U.S. Bureau of Labor Statistics.

(b)    Annual Bonus. Employee shall be eligible to receive an annual bonus (“Annual Bonus”) for each calendar year during the Term, commencing with the 2020 calendar year, based on the attainment of individual and corporate performance goals and targets established by the Board of Directors of Parent and the Executive Compensation Committee of the Board of Directors of SJW (the “ECC”). The target amount of Employee’s Annual Bonus for 2020 shall be 35% of Employee’s Base Salary (the “Target Annual Bonus”), with the actual Annual Bonus for 2020 based on the level of achievement of the applicable performance goals for 2020, as determined by the Board of Directors of Parent and the ECC. Any Annual Bonus shall be paid after the end of the calendar year to which it relates, at the same time and under the same terms and conditions as the bonuses for other executive officers of SJW (other than the SJW Chief Executive Officer); provided that in no event shall Employee’s Annual Bonus be paid later than two and a half months after the last day of the fiscal year to which the Annual Bonus relates. The Annual Bonus shall be subject to the terms of the annual bonus plan or program that is applicable to other executive officers of SJW (other than the SJW Chief Executive Officer), including requirements as to continued employment, subject to the provisions of Paragraph 7 below.

(c)    Equity Compensation. Contingent on Employee’s continued employment through the grant date, for the 2020 calendar year, Employee shall be eligible to receive an award of restricted stock units (“RSUs”) with a target value equal to $250,000, covering a number of shares of SJW common stock determined by dividing $250,000 by the Share Price (as defined below) on the date of grant, rounded to the nearest whole number (the “2020 Award”). The 2020 Award shall be granted at the same time as annual equity awards for 2020 are granted to executive officers of SJW (other than the SJW Chief Executive Officer). The 2020 Award shall be granted in the form of a time-based RSU award that vests based on Employee’s continued service with Company over a specified service period (the “Time-Based RSU Award”) and/or a performance-based RSU award that vests based on the achievement of performance goals (as measured over the applicable performance period specified for the award) as determined by the ECC, subject to Employee’s continued employment with Company through the respective vesting dates (the “Performance-Based RSU Award”). The allocation between a Time-Based RSU Award and Performance-Based RSU Award shall be determined by the ECC consistent with the allocation for 2020 for other executive officers of SJW (other than the SJW Chief Executive Officer). The terms of the Time-Based RSU Award and Performance-Based RSU Award, including the applicable performance goals, shall be as set forth in the SJW Long-Term Incentive Plan, as may be amended, and the applicable form Restricted Stock Unit Issuance Agreement provided by SJW for 2020, with such form consistent with the form used for other executive officers of SJW for 2020 (other than the SJW Chief Executive Officer). Dividend

3

EXHIBIT 10.97

equivalent rights will not accrue with respect to the 2020 Award. “Share Price” shall mean the closing price per share of SJW common stock at the close of regular hours trading on the New York Stock Exchange on the relevant date.

6.Paragraph 5 of the Agreement entitled “Benefits” is hereby replaced with the following:

5.    Benefits. During the Term, Employee shall be entitled to the following benefits:

(a)    Retirement and Welfare Benefit Plans. During the Term, Employee shall be eligible to participate in Company’s retirement, savings, health, welfare and fringe benefit plans and programs applicable to executive officers of Company (including, without limitation, medical, prescription, dental, disability, salary continuance, employee life, and group life), pursuant to their respective terms and conditions. Nothing in this Agreement shall preclude Company, or any member of the Group, from terminating or amending any employee benefit plan or program from time to time after the Effective Date.

(b)    Expenses. During the Term, Employee shall be entitled to reimbursement for all reasonable business expenses incurred by Employee in the performance of her duties hereunder in accordance with such policies and procedures as Company may adopt generally from time to time.

(c)    Vacation. During the Term, Employee shall be entitled to paid vacation in accordance with the plans and programs of Company, as in effect from time to time.

7.Subparagraph (c) of Paragraph 6 of the Agreement entitled “End of Term and Notice of Termination” is hereby amended to add the following subsection (iii) after subsection (ii):

(iii) notwithstanding anything to the contrary in Paragraph 6(b) or this Paragraph 6(c), if Employee’s employment is terminated by Employee for Good Reason, the date of termination shall be the first business day following Parent’s sixty (60)-day cure period as set forth in Paragraph 1(e).

8.Subparagraph (e)(vi) of Paragraph 7 of the Agreement entitled “Payment Upon Termination” is hereby replaced with the following:

(vi)    Employee shall vest in full in all Parent incentive awards assumed by SJW in connection with the Merger that remain unvested on the date of such termination, which shall be payable in accordance with the terms and conditions (including any deferral election) set forth in the applicable plan document and award agreement.

9.Paragraph 8 of the Agreement entitled “Confidential Information” is hereby replaced with the following:

8.    Confidential Information.    

4

EXHIBIT 10.97

(a)    Employee reaffirms and agrees to observe and abide by any and all existing contractual terms regarding protection of Company’s confidential or proprietary information, specifically including any provisions therein regarding nondisclosure of Company’s trade secrets and confidential and proprietary information, regardless of whether the underlying agreement containing said terms is otherwise superseded by this Agreement. Employee understands that in the course of Employee’s further employment by Company, Employee will continue to receive or have access to Confidential Information concerning the business or purposes of the members of the Group, and which the Group desires to protect. Employee understands that for purposes of this Agreement, “Confidential Information” means any Company and/or Group proprietary information, technical data, trade secrets or know-how, including, but not be limited to, customer lists and information, employee lists, including, if known, confidential personnel information and data of the members of the Group, as well as research, product plans, products, services, customer lists and customers, markets, software, developments, inventions, processes, formulas, technology, designs, drawings, engineering, hardware configuration information, marketing, finances, or other business information. Notwithstanding the generality of the foregoing, Confidential Information does not include information that has become publicly known and made generally available through no wrongful act of Employee or others. Employee agrees that Employee will not, at any time, reveal to anyone outside of any member of the Group or use for Employee’s own benefit any such information without specific written authorization by Company. Employee further agrees not to use any such Confidential Information or trade secrets in competing with any member of the Group at any time.

(b)    Nothing in this Agreement shall prohibit or restrict Employee from initiating communications directly with, responding to any inquiries from, providing testimony before, providing confidential information to, reporting possible violations of law or regulation to, or from filing a claim or assisting with an investigation directly with a self-regulatory authority or a government agency or entity, including the U.S. Equal Employment Opportunity Commission, the Department of Labor, the National Labor Relations Board, the Department of Justice, the Securities and Exchange Commission, Congress, and any agency Inspector General (collectively, the “Regulators”), or from making other disclosures that are protected under the whistleblower provisions of state or federal law or regulation. Employee does not need the prior authorization of Company to engage in such communications, respond to such inquiries, provide confidential information or documents to the Regulators, or make any such reports or disclosures to the Regulators. Employee is not required to notify Company that Employee has engaged in such communications with the Regulators. If Employee is required by law to disclose Confidential Information, other than to Regulators as described above, Employee shall give prompt written notice to Company so as to permit Company to protect its interests in confidentiality to the extent possible. Federal law provides criminal and civil immunity to federal and state claims for trade secret misappropriation to individuals who disclose a trade secret to their attorney, a court, or a government official in certain, confidential circumstances that are set forth at 18 U.S.C. §§ 1833(b)(1) and 1833(b)(2), related to the reporting or investigation of a suspected violation of the law, or in connection with a lawsuit for retaliation for reporting a suspected violation of the law.

5

EXHIBIT 10.97

10.Paragraph 9 of the Agreement entitled “Covenants by Employee Not to Compete With the Group” is hereby replaced with the following:

9.    Covenants by Employee Not to Compete With the Group.

(a)    During the Term and for a period of two (2) years after the termination of Employee’s employment with Company for any reason, in order to further protect the Confidential Information and other good will of Company and Group, Employee covenants and agrees that Employee will not:

(i)    directly or indirectly, in any manner or under any circumstances or conditions, whatsoever be or become interested, as an individual, partner, principal, agent, clerk, employee, stockholder, officer, director, trustee, or in any other capacity whatsoever, except as a nominal owner of stock of a public corporation, in any other business which, at the date of Employee’s termination, is a Competitor (as defined herein), either directly or indirectly, with any member of the Group, or engage or participate in, directly or indirectly (whether as an officer, director, employee, partner, consultant, holder of an equity or debt investment, lender or in any other manner or capacity), or lend Employee’s name (or any part or variant thereof) to, any business which, at the date of Employee’s termination, is a Competitor, either directly or indirectly, with any member of the Group, or as a result of Employee’s engagement or participation would become, a Competitor, either directly or indirectly, with any aspect of the business of any member of the Group as it exists at the time of Employee’s termination; or

(ii)    solicit any officer, director, employee or agent of any member of the Group or any subsidiary or affiliate of any member of the Group to become an officer, director, employee or agent of Employee, Employee’s respective affiliates or anyone else.

For the purposes of this Agreement, a Competitor is any business which is similar to the business of any member of the Group or in any way in competition with the business of any member of the Group within any of the then-existing water utility service areas of Company.

Ownership, in the aggregate, of less than one percent (1%) of the outstanding shares of capital stock of any corporation with one or more classes of its capital stock listed on a national securities exchange or publicly traded in the over-the-counter market shall not constitute a violation of the foregoing provision.

(b)    Employee hereby acknowledges that the nature of Company’s business is such that if Employee were to become employed by, or substantially involved in, the business of a competitor to Company, it would be difficult for Employee not to rely on or use Confidential Information, or otherwise jeopardize the good will of Company, and further acknowledges that Employee’s services are unique and extraordinary, and are not readily replaceable. Accordingly, Employee hereby expressly agrees that Company or any other member of the Group, in enforcing the covenants contained in Paragraphs 8 and 9 herein, in addition to any other remedies provided for herein or otherwise available at law, shall be entitled in any court of equity having jurisdiction to an injunction restraining Employee in the event of a

6

EXHIBIT 10.97

breach, actual or threatened, of the agreements and covenants contained in these Paragraphs, without the requirement of posting any associated bond, and that Company or Group shall be entitled to recoup from Employee any reasonable attorneys’ fees or costs incurred in enforcing these provisions.

(c)    The parties hereto believe that the restrictive covenants of these Paragraphs are reasonable, and Employee expressly recognizes that the scope of these provisions are necessary to protect Company’s and Group’s legitimate business interests, including but not limited to protection of the Confidential Information and good will of Company and Group. Notwithstanding, if at any time it shall be determined by any court of competent jurisdiction that these Paragraphs or any portion of them as written, are unenforceable because the restrictions are unreasonable, the parties hereto agree that such portions as shall have been determined to be unreasonably restrictive shall thereupon be deemed so amended as to make such restrictions reasonable in the determination of such court, and the said covenants, as so modified, shall be enforceable between the parties to the same extent as if such amendments had been made prior to the date of any alleged breach of said covenants.

11.Good Reason Waiver. By signing below, Employee acknowledges that Employee’s change in employment terms in connection with the Merger, and as specified in this Amendment, do not constitute Good Reason and do not entitle Employee to severance benefits solely with respect to such changes.

12.Paragraph 20 of the Agreement entitled “Deferred Compensation” is hereby replaced with the following:

20.    Deferred Compensation.

(a)    This Agreement is intended to comply with section 409A of the Code and its corresponding regulations (“Section 409A”), or an exemption thereto, and payments may only be made under this Agreement upon an event and in a manner permitted by Section 409A, to the extent applicable. Severance benefits under this Agreement are intended to be exempt from Section 409A under the “short-term deferral” exception, to the maximum extent applicable, and then under the “separation pay” exception, to the maximum extent applicable.

(b)    With respect to payments that are subject to Section 409A, all payments to be made upon a termination of employment under this Agreement may only be made upon a “separation from service” under Section 409A. For purposes of Section 409A, each payment hereunder shall be treated as a separate payment, and the right to a series of installment payments under this Agreement shall be treated as a right to a series of separate payments. In no event may Employee, directly or indirectly, designate the fiscal year of a payment. Notwithstanding any provision of this Agreement to the contrary, in no event shall the timing of Employee’s execution of a release of claims, directly or indirectly, result in Employee’s designating the fiscal year of payment of any amounts of deferred compensation subject to Section 409A, and if a payment that is subject to execution of a release of claims could be made in more than one taxable year, payment shall be made in the later taxable year.

7

EXHIBIT 10.97

(c)    All reimbursements and in-kind benefits provided under this Agreement shall be made or provided in accordance with the requirements of Section 409A, including, where applicable, the requirement that (i) any reimbursement be for expenses incurred during the period specified in this Agreement, (ii) the amount of expenses eligible for reimbursement, or in-kind benefits provided, during a fiscal year not affect the expenses eligible for reimbursement, or in-kind benefits to be provided, in any other fiscal year, (iii) the reimbursement of an eligible expense be made no later than the last day of the fiscal year following the year in which the expense is incurred, and (iv) the right to reimbursement or in-kind benefits not be subject to liquidation or exchange for another benefit.

13.Withholding. All payments under this Amendment and the Agreement shall be made subject to applicable tax withholding, and Company shall withhold from any payments under this Amendment and the Agreement all federal, state and local taxes as Company is required to withhold pursuant to any law or governmental rule or regulation. Employee shall bear all expense of, and be solely responsible for, all federal, state and local taxes due with respect to any payment received by Employee under this Amendment and the Agreement.

14.Effect of Amendment. Except as hereinabove modified and amended, the Agreement shall remain in full force and effect. This Amendment may be executed in any number of counterparts (including facsimile counterparts), each of which shall be an original, but all of which together shall constitute one instrument.

* * * * *

8

EXHIBIT 10.97

IN WITNESS WHEREOF, Company and Parent have caused this Amendment to be executed by an authorized officer, and Employee has hereunto set Employee’s hand, to be effective as of November 1, 2019.

	THE CONNECTICUT WATER COMPANY
November 12, 2019	By	/s/ Eric W. Thornburg
Date
	CONNECTICUT WATER SERVICE, INC.
November 12, 2019	By	/s/ Eric W. Thornburg
Date
	EMPLOYEE
11.1.19		/s/ Kristen A. Johnson
Date		Kristen A. Johnson

EX-10.98

EXHIBIT 10.98

AMENDED AND RESTATEDEMPLOYMENT AGREEMENT

THIS AGREEMENT, dated this 23^rd day of December, 2008, is made by and between The Connecticut Water Company, a Connecticut corporation having its principal place of business in Clinton, Connecticut, (“Company”), Connecticut Water Service, Inc., a Connecticut corporation and holder of all of the outstanding capital stock of Company (“Parent”) and David C. Benoit, a resident of Wethersfield, Connecticut (“Employee”).

WITNESSETH:

WHEREAS, Company and Parent desire to reward Employee for Employee’s valuable, dedicated service to Company and Parent should Employee’s service be terminated under circumstances hereinafter described; and

WHEREAS, Employee, Company and Parent entered into an amended and restated Employment Agreement dated January 24, 2008; and

WHEREAS, the parties wish to amend the Agreement to comply with Section 409A of the Internal Revenue Code of 1986, as amended and regulations issued thereunder (collectively the “Code”); and

WHEREAS, Employee, Company and Parent are willing to enter into this Amended and Restated Employment Agreement (“Agreement”) on the terms herein set forth;

NOW, THEREFORE, to assure Company and Parent of Employee’s continued dedication and the availability of Employee’s advice and counsel in the event of any such proposal, to induce Employee to remain in the employ of Company and Parent and to reward Employee for Employee’s valuable dedicated service to Company and Parent should Employee’s service be terminated under circumstances hereinafter described, and for other good and valuable consideration, the receipt and adequacy of which each party acknowledges, effective January 1, 2009, Company, Parent and Employee agree as follows:

1.Definitions. For purposes of this Agreement, the following terms shall have the following meanings:

(a)“Cause” shall mean Employee’s serious, willful misconduct in respect of Employee’s duties under this Agreement, including conviction for a felony or perpetration by Employee of a common law fraud upon Company or Parent which has resulted or is likely to result in material economic damage to Company or Parent, as determined by a vote of at least seventy-five percent (75%) of all of the Directors (excluding Employee) of each of Company’s and Parent’s Board of Directors;

(b)“Change-in-Control” shall be deemed to have occurred if after the date hereof (i) a public announcement shall be made or a report on Schedule 13D shall be filed with

Employment Agreement - Amended & Restated - DBC - 12-08

the Securities and Exchange Commission pursuant to Section 13(d) of the Securities Exchange Act of 1934 (the “Act”) disclosing that any Person (as defined below), other than Company or Parent or any employee benefit plan sponsored by Company or Parent, is the beneficial owner (as the term is defined in Rule 13d-3 under the Act) directly or indirectly, of twenty percent (20%) or more of the total voting power represented by Company’s or Parent’s then outstanding voting common stock (calculated as provided in paragraph (d) of Rule 13d-3 under the Act in the case of rights to acquire voting common stock); or (ii) any Person, other than Company or Parent or any employee benefit plan sponsored by Company or Parent, shall purchase shares pursuant to a tender offer or exchange offer to acquire any voting common stock of Company or Parent (or securities convertible into such voting common stock) for cash, securities or any other consideration, provided that after consummation of the offer, the Person in question is the beneficial owner directly or indirectly, of twenty percent (20%) or more of the total voting power represented by Company’s or Parent’s then outstanding voting common stock (all as calculated under clause (i)); or (iii) the stockholders of Company or Parent shall approve (A) any consolidation or merger of Company or Parent in which Company or Parent is not the continuing or surviving corporation (other than a merger of Company or Parent in which holders of the outstanding capital stock of Company or Parent immediately prior to the merger have the same proportionate ownership of the outstanding capital stock of the surviving corporation immediately after the merger as immediately before), or pursuant to which the outstanding capital stock of Company or Parent would be converted into cash, securities or other property, or (B) any sale, lease, exchange or other transfer (in one transaction or a series of related transactions) of all or substantially all the assets of Company or Parent; or (iv) there shall have been a change in the composition of the Board of Directors of Company or Parent at any time during any consecutive twenty-four (24) month period such that “continuing directors” cease for any reason to constitute at least a majority of the Board unless the election, or the nomination for election of each new Director was approved by a vote of at least two-thirds (2/3) of the Directors then still in office who were Directors at the beginning of such period; or (v) the Board of Directors of Company or Parent, by a vote of a majority of all the Directors (excluding Employee) adopts a resolution to the effect that a “Change-in-Control” has occurred for purposes of this Agreement.

(c)“Disability” shall mean the incapacity of Employee by illness or any other cause as determined under the long-term disability insurance plan of Company in effect at the time in question, or if no such plan is in effect, then such incapacity of Employee as prevents Employee from performing the essential functions of Employee’s position with or without reasonable accommodation for a period in excess of two hundred forty (240) days (whether or not consecutive), or one hundred eighty (180) days consecutively, as the case may be, during any twelve (12) month period.

(d)“Effective Date” shall be the date on which a Change-in-Control occurs. Anything in this Agreement to the contrary notwithstanding, if Employee’s employment is terminated prior to the date on which a Change-in-Control occurs, and it is reasonably demonstrated that such termination (i) was at the request of a third party who has taken steps reasonably calculated to effect a Change-in-Control or (ii) otherwise arose in connection with or

2

anticipation of a Change-in-Control, then for all purposes of this Agreement the “Effective Date” shall mean the date immediately prior to the date of such termination.

(e)“Good Reason” shall mean the occurrence of any action which (i) removes or changes Employee’s title or reduces Employee’s job responsibilities or base salary; (ii) results in a significant worsening of Employee’s work conditions; or (iii) moves Employee’s place of employment to a location that increases Employee’s commute by more than thirty (30) miles over the length of Employee’s commute from Employee’s place of principal residence at the time the move is requested. For purposes of this subparagraph (e), any good faith determination by Employee that any such action has occurred shall be conclusive. Notwithstanding the foregoing, at any time during the period commencing on the Effective Date and ending on the 30th day after the first anniversary of the Effective Date, except for purposes of Paragraph 5(g), “Good Reason” shall mean any reason or no reason.

(f)“Person” shall mean any individual, corporation, partnership, company or other entity, and shall include a “group” as defined in Section 13(d)(3) of the Securities Exchange Act of 1934.

2.Employment.

(a)As of the Effective Date, Company hereby agrees to continue to employ Employee and Employee agrees to remain in the employ of Company for the Term of this Agreement upon the terms and conditions hereinafter set forth. Subject to the provisions of subparagraph (b) of this Paragraph 2, and to the provisions of Paragraph 6 below, “Term” shall mean a continuously renewing period of three (3) years commencing on the Effective Date.

(b)At any time during the Term, the Board of Directors of Company and Parent may, by written notice to Employee, advise Employee of their desire to modify or amend any of the terms or provisions of this Agreement or to delete or add any terms or provisions. Any such notice (“Notice”) shall describe the proposed modifications in reasonable detail. In the event a Notice shall be given to Employee, then Company, Parent and Employee agree to discuss the proposed modification(s) and to attempt in good faith to reach agreement with respect thereto and to reduce such agreement to writing in an amendment to be executed by all the parties (“Amendment”). If a Notice is given hereunder and an Amendment shall not have been executed on or before the sixtieth (60th) day following the date on which Notice is given, then the Term shall thereupon be automatically converted to a fixed period ending three (3) years after the expiration of such sixty (60) days.

3.Duties of Employment.

(a)During the Term, Employee’s position (including status, offices, titles and reporting requirements), authority, duties and responsibilities shall be at least commensurate in all material respects with the most significant of those held, exercised and assigned at any time during the ninety (90)-day period immediately preceding the Effective Date and Employee’s services shall be performed at such location as Employee shall determine.

3

(b)During the Term, Employee will serve Company faithfully, diligently and competently and will devote full-time to Employee’s employment and will hold, in addition to the offices held on the Effective Date, such other Employee offices of Company or Parent, or their respective subsidiaries and affiliates, to which Employee may be elected, appointed or assigned by the Boards of Directors of Company or Parent from time to time and will discharge such Employee duties in connection therewith. Nothing in this Agreement shall preclude Employee, with the prior approval of the Board of Directors of Company, from devoting reasonable periods of time required for (i) serving as a director or member of a committee of any organization involving no conflict of interest with Company or Parent, or (ii) engaging in charitable, religious and community activities, provided, that such directorships, memberships or activities do not materially interfere with the performance of Employee’s duties hereunder.

4.Compensation. During the Term, Company shall pay to Employee as compensation for the services to be rendered by Employee hereunder the following:

(a)A base salary at a rate equal to the highest base salary paid or payable to Employee by Company during the twelve (12)-month period immediately preceding the month in which the Effective Date occurs, or such larger sum as the Company may from time to time determine in connection with regular periodic performance reviews pursuant to Company’s policies and practices. Such compensation shall be payable in accordance with the normal payroll practices of Company. Employee shall receive an annual increase in base salary at each normal pay adjustment date during the Term, but no later than one (1) year after the date of Employee’s last increase and annually thereafter during the Term, of not less than the percentage increase in the cost-of-living since Employee’s last pay adjustment, as measured by the Consumer Price Index-All Urban Consumers of the U.S. Bureau of Labor Statistics.

(b)In addition, Company shall pay to Employee an annual award under the Company’s Performance Stock Program (or other bonus program in effect at the time the Effective Date occurs) payable in cash or other form of compensation, for which he would have been eligible in accordance with the Company’s practice or plan in effect at that time for annual bonuses for said employee for the year preceding the fiscal year in which the Effective Date occurs.

5.Benefits. During the Term, Employee shall be entitled to the following benefits:

(a)Incentive, Savings and Retirement Plans. In addition to base salary and bonus payable as hereinabove provided, Employee shall be entitled to participate during the Term in all savings and retirement plans, practices, policies and programs applicable to employees of Company as may be in effect from time to time. Such plans, practices, policies and programs, in the aggregate, shall provide Employee with compensation, benefits and reward opportunities at least as favorable as the most favorable of such compensation, benefits and reward opportunities provided by Company for Employee under such plans, practices, policies and programs as in effect at any time during the ninety (90)-day period immediately preceding the Effective Date or, if more favorable to Employee, as provided at any time thereafter with respect to other key employees of Company or Parent.

4

(b)Welfare Benefit Plans. During the Term, Employee and/or Employee’s family, as the case may be, shall be eligible for participation in and shall receive all benefits under welfare benefit plans, practices, policies and programs applicable to employees of Company (including, without limitation, medical, prescription, dental, disability, salary continuance, employee life, group life,) at least as favorable as the most favorable of such plans, practices, policies and programs in effect at any time during the ninety (90)-day period immediately preceding the Effective Date or, if more favorable to Employee and/or Employee’s family, as in effect at any time thereafter with respect to other key employees of Company or Parent.

(c)Expenses. During the Term, Employee shall be entitled to receive prompt reimbursement for all reasonable expenses incurred by Employee in accordance with the most favorable policies, practices and procedures of Company in effect at any time during the ninety (90)-day period immediately preceding the Effective Date or, if more favorable to Employee, as in effect at any time thereafter with respect to other key employees of Company or Parent.

(d)Fringe Benefits. During the Term, Employee shall be entitled to fringe benefits, including use of an automobile and payment of related expenses or payment of an allowance for automobile related expenses, in accordance with the most favorable plans, practices, programs and policies of Company in effect at any time during the ninety (90)-day period immediately preceding the Effective Date or, if more favorable to Employee, as in effect at any time thereafter with respect to other key employees of Company or Parent.

(e)Office and Support Staff. During the Term, Employee shall be entitled to an office or offices of a size and with furnishings and other appointments, and to secretarial and other assistance, at least equal to the most favorable of the foregoing provided to Employee by Company at any time during the ninety (90)-day period immediately preceding the Effective Date or, if more favorable to Employee, as provided at any time thereafter with respect to other key employees of Company or Parent.

(f)Vacation. During the Term, Employee shall be entitled to paid vacation in accordance with the most favorable plans, policies, programs and practices of Company as in effect at any time during the ninety (90)-day period immediately preceding the Effective Date or, if more favorable to Employee, as in effect at any time thereafter with respect to other key employees of Company or Parent.

(g)Stay-on Bonus: (i) If Employee is employed on a date on which the Board of Directors of Company or Parent approves a transaction described in clause (iii) of Paragraph 1(b) and the shareholders of Company or Parent, as applicable subsequently approve such transaction, provided that such transaction qualifies as a “Change in Control” within the meaning of Section 409A of the Code and regulations issued thereunder, Employee shall receive a lump sum equal to the base salary of Employee, at the rate in effect immediately prior to such date, plus an amount equal to the target percentage of the midpoint of Employee’s salary grade under the Company’s Officers Incentive Program for the year in which such date occurs; provided Employee is employed on the fifth (5^th) day following the closing of such transaction. Payment hereunder shall be made on the fifth (5^th) business day following the closing of such a

5

transaction. (ii) If the Employee separates from service from the Company following such approval by the applicable Board of Directors of a transaction described in subparagraph (i) of this Paragraph (g) (provided that such transaction qualifies as a “Change in Control” within the meaning of Section 409A of the Code and regulations issued thereunder), and prior to the fifth (5^th) day following the closing of such transaction for any reason other than for Cause, or Employee’s death, or Employee’s attainment of age sixty-five (65), or if Employee’s employment is terminated during such period by reason of Employee’s Disability, or if Employee shall voluntarily terminate Employee’s employment during such period for Good Reason, then, in addition to the amounts payable to Employee pursuant to Section 7, Employee shall be paid a lump sum equal to the base salary of Employee, at the rate in effect immediately prior to the date of termination, plus an amount equal to the target percentage of the midpoint of Employee’s salary grade under the Company’s Officers Incentive Program for the year in which termination occurs. If the Employee is a “specified employee,” as that term is defined under Section 409A of the Code at the time he incurs a separation from service, prior to payment under (ii), payment under (ii) shall be made on the later of the first day of the seventh (7^th) month following the Employee’s termination of Employment, or on the fifth (5^th) business day following the closing of such transaction. If the Employee is not a specified employee, payment under (ii) shall be made on the fifth (5^th) business day following the closing of such transaction.

6.End of Term and Notice of Termination.

(a)End of Term. The Term shall end upon the occurrence of any of the following events:

(i) Termination of Employee’s employment by Company for Cause.

(ii) The voluntary termination of Employee’s employment by Employee other than for Good Reason.

(iii) The death of Employee.

(iv) Employee’s attainment of age sixty-five (65).

(v) Full compliance by Company with the provisions of Paragraph 7(e) below, if Employee’s employment shall have been terminated by Company during the Term for any reason other than Cause, or if Employee’s employment shall have been terminated by reason of Employee’s Disability, or if Employee shall have voluntarily terminated Employee’s employment during the Term for Good Reason.

(b)Notice of Termination. Any termination by Company for Cause or by Employee for Good Reason or on account of Employee’s Disability shall be communicated by notice to the other party hereto given in accordance with Section 15 of this Agreement. For purposes of this Agreement, a “notice” means a written notice which (i) indicates the specific termination provision in this Agreement relied upon, (ii) sets forth in reasonable detail the facts

6

and circumstances claimed to provide a basis for termination of Employee’s employment under the provision so indicated and (iii) if the date of termination (as defined below) is other than the date of receipt of such notice, specifies the termination date (which date shall be not more than fifteen (15) days after the giving of such notice).

(c)Date of Termination. The date of termination means the date of receipt of the notice of termination or any later date specified therein, as the case may be; provided, however, that (i) if Employee’s employment is terminated by Company other than for Cause or on account of Employee’s Disability, the date of termination shall be the date on which Company notifies Employee of such termination and (ii) if Employee’s employment is terminated by reason of death, the date of termination shall be the date of death of Employee.

(d)Termination of Employment. In order for the Employee to be considered to have terminated employment with the Company, the Employee must have incurred a separation from service from the Company (and all related companies) within the meaning of Section 409A of the Code, and regulations promulgated thereunder, and the term termination of employment and the like as used in this Agreement shall be construed to mean separation from service as so defined under Section 409A of the Code.

7.Payment Upon Termination.

(a)If Employee’s employment is terminated by Company for Cause, as defined in Paragraph 1(a), the obligations of Company under this Agreement shall cease and Employee shall forfeit all right to receive any compensation or other benefits under this Agreement except only compensation or benefits accrued or earned and vested (if applicable) by Employee as of the date of termination, including base salary through the date of termination, benefits payable under the terms of any qualified or nonqualified retirement plans or deferred compensation plans maintained by Company, any accrued vacation pay as of the date of termination not yet paid by Company and any benefits required to be paid by law such as continued health care coverage pursuant to the Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”) (collectively, the “Accrued Obligations”).

(b)If Employee shall voluntarily terminate Employee’s employment during the Term, other than for Good Reason, as defined in Paragraph 1(e), the obligations of Company under this Agreement shall cease and Employee shall forfeit all right to receive any compensation or other benefits under this Agreement except only the Accrued Obligations.

(c)In the event of the death of Employee during the Term, then, in addition to the Accrued Obligations and any other benefits which may be payable by Company in respect of the death of Employee, the base salary then payable hereunder shall continue to be paid at the then current rate for a period of six (6) months after such death to such beneficiary as shall have been designated in writing by Employee, or if no effective designation exists, then to the estate of Employee. Such payment shall be made on the first (1^st) and fifteenth (15^th) of each month, beginning on the first day of the first month following Employee’s death.

7

(d)If Employee’s employment is terminated by reason of Employee’s attainment of age sixty-five (65), the obligations of Company under this Agreement shall cease and Employee shall forfeit all right to receive any compensation or other benefits under this Agreement except the Accrued Obligations.

(e)If Employee’s employment is terminated by Company during the Term for any reason other than for Cause, or Employee’s death, or Employee’s attainment of age sixty-five (65), or if Employee’s employment is terminated during the Term by reason of Employee’s Disability, or if Employee shall voluntarily terminate Employee’s employment during the Term for Good Reason, Employee shall be entitled to receive, and Company shall be obligated to pay and provide Employee, the following amounts:

(i)An amount in consideration of the covenants by Executive set forth in Paragraphs 8 and 9 below to be determined by a nationally recognized independent certified public accounting firm selected and retained by Company to be the reasonable value of said covenants as of the date of termination of Employee’s employment, but in no event shall such amount be greater than the aggregate value of the benefits provided in subparagraphs (e)(ii), (iii), (iv), (v) and (viii) hereinbelow. The benefits otherwise payable to Executive pursuant to said subparagraphs shall be offset by the amount, if any, payable to Executive in respect of the covenants by Employee set forth in Paragraphs 8 and 9 below. Said amount paid in consideration of the covenants by Executive set forth in Paragraphs 8 and 9 below shall be paid in accordance with subparagraphs (e)(ii), (iii), (iv), (v) and (viii) below, and this subparagraph (i) shall not alter the time or form of payment of such amounts.

(ii)An amount equal to three (3) times the base salary of Employee, at the rate in effect immediately prior to the date of termination, plus an amount equal to three (3) times the target percentage of the midpoint of Employee’s salary grade under the Company’s Officers Incentive Program for the year in which termination occurs if the employee is a participant in such plan at the time of the Change-in-Control. Such amount so determined shall be divided into thirty-six (36) equal amounts. If the Employee is not a “specified employee” as defined under Section 409A of the Code at the time of termination, payment of such equal amounts shall be made on the first day of each month, commencing with the first day of the first month following termination. If the Employee is a “specified employee” as that term is defined under Section 409A of the Code on the date of termination, seven (7) such equal amounts shall be paid to the Employee on the date which is the first day of the seventh (7^th) month following the date of termination of employment, and the twenty-nine (29) remaining equal amounts shall be payable on the first day of each month subsequent to the date of the first payment (one payment per month) until the payments are completed. Payments shall be treated as supplemental wage payments under applicable Treasury Regulations subject to federal tax withholding at the flat percentage rate applicable thereto.

(iii)An amount equal to the aggregate amounts that Company would have contributed on behalf of Employee under Company’s qualified defined contribution retirement plan(s), if any such plan(s) shall be in effect (other than amounts attributable to Employee’s before-tax contributions to such plan(s)) plus estimated earnings thereon had

8

Employee continued in the employ of Company for the three (3)-year period commencing on the date of termination and made contributions under said plan(s) equal to the maximum amount that the Employee could have contributed under the terms of such plan(s) for the plan year immediately preceding Employee’s termination, to be payable in a lump sum to Employee on the second anniversary of the Employee’s termination of employment, provided that Employee shall not have breached said non-competition provisions.

(iv)An amount equal to the additional Interest Equivalent which would have been earned under any deferred compensation agreement between Company and Employee, if any such agreement shall be in effect, had Employee continued in the employ of Company for the three (3)-year period commencing on the date of termination, received compensation at least equal to that specified in Paragraph 4 of this Agreement during such time, and deferred pursuant to said deferred compensation agreement the amount of compensation specified therein; such amount to be payable in a lump sum to Employee on the second anniversary of the Employee’s termination of employment, provided that Employee shall not have breached said non-competition provisions.

(v)Additional retirement benefits equal to the additional annual pension benefits that would have been payable to Employee under Company’s qualified defined benefit retirement plan (the “Plan”) and under any nonqualified supplemental Employee retirement plan covering Employee (the “Supplemental Plan”), if any such Plan or Supplemental Plan shall be in effect, if Employee had been continued in the employ of Company for the three (3)-year period commencing on the date of termination and had received compensation at least equal to that specified in Paragraph 4(a) of this Agreement during such time and had been fully vested in the benefits payable under any such Plan and Supplemental Plan. The discounted present value of such additional benefits, shall be payable to Employee in a lump sum, as calculated by the independent actuary for the Plan using the assumptions specified in the Plan, on the second anniversary of the Employee’s termination of employment, provided that Employee shall not have breached said non-competition provisions.

(vi)At the date of termination of Employee’s employment, Employee shall be fully vested in any form of compensation previously granted to Employee (other than benefits payable under a qualified retirement plan), such as, by way of example only, restricted stock, stock options, and performance share awards.

(vii)If Employee’s employment is terminated by reason of Employee’s Disability, Employee shall be entitled to receive, in addition to the other benefits provided under this Paragraph 7(e), disability benefits payable in accordance with any bona fide disability plan maintained by Company or Parent, to the extent Employee qualifies for benefits under the terms of such bona fide disability plan.

(viii)A lump sum cash payment equal to three (3) times the sum of the average of the annual contributions, payments, credits or allocations made by the Company on behalf of the Employee for coverage under all life, health, disability and similar welfare benefit plans and programs and other perquisites maintained by the Company during the three (3) calendar year period preceding his termination of employment. Such payment shall be made

9

on the first day of the seventh (7^th) month following the Employee’s termination of employment, if the Employee is a “specified employee” as defined under Section 409A of the Code on the date of termination. If the Employee is not a specified employee on the date of termination, payment shall be made on the first day of the month following the Employee’s termination of employment.

(ix)Company shall reimburse Employee for the amount of any reasonable legal or accounting fees and expenses incurred by Employee to obtain or enforce any right or benefit provided to Employee by Company hereunder or as confirmed or acknowledged hereunder, provided that no such reimbursement shall be made earlier than seven (7) months following the Employee’s termination, if the Employee is a “specified employee” as that term is defined under Section 409A of the Code on the date of termination, and in no event shall any reimbursement be made any later than December 31 of the calendar year following the year in which the expense is incurred by the Employee.

(x)Company shall provide the Employee with reasonable outplacement services from a firm selected by the Company for a period of one (1) year commencing on the date of termination, or until Employee accepts other employment, if earlier.

8.Confidential Information. Employee understands that in the course of Employee’s employment by Company, Employee will receive, or have access to confidential information concerning the business or purposes of Company and Parent, and which Company and Parent desire to protect. Such confidential information shall be deemed to include, but not be limited to, Company’s customer lists and information, and employee lists, including, if known, personnel information and data. Employee agrees that Employee will not, at any time during the period ending two (2) years after the date of termination of Employee’s employment, reveal to anyone outside Company or Parent or use for Employee’s own benefit any such information without specific written authorization by Company or Parent. Employee further agrees not to use any such confidential information or trade secrets in competing with Company or Parent at any time during or in the two (2) year period immediately following the date of termination of Employee’s employment with Company.

9.Covenants by Employee Not to Compete With Company or Parent.

(a)Upon the date of termination of Employee’s employment with Company for any reason, Employee covenants and agrees that Employee will not at any time during the period of two (2) years from and after such date of termination directly or indirectly in any manner or under any circumstances or conditions whatsoever be or become interested, as an individual, partner, principal, agent, clerk, employee, stockholder, officer, director, trustee, or in any other capacity whatsoever, except as a nominal owner of stock of a public corporation, in any other business which, at the date of Employee’s termination, is a Competitor (as defined herein), either directly or indirectly, with Company or Parent, or engage or participate in, directly or indirectly (whether as an officer, director, employee, partner, consultant, holder of an equity or debt investment, lender or in any other manner or capacity), or lend Employee’s name (or any part or variant thereof) to, any business which, at the date of Employee’s termination, is a Competitor, either directly or indirectly, with Company or Parent, or as a result of Employee’s

10

engagement or participation would become, a Competitor, either directly or indirectly, with any aspect of the business of Company or Parent as it exists at the time of Employee’s termination, or solicit any officer, director, employee or agent of Company or Parent or any subsidiary or affiliate of Company or Parent to become an officer, director, employee or agent of Employee, Employee’s respective affiliates or anyone else. Ownership, in the aggregate, of less than one percent (1%) of the outstanding shares of capital stock of any corporation with one or more classes of its capital stock listed on a national securities exchange or publicly traded in the over-the-counter market shall not constitute a violation of the foregoing provision. For the purposes of this Agreement, a Competitor is any business which is similar to the business of Company or Parent or in any way in competition with the business of Company or Parent within any of the then-existing water utility service areas of Company.

(b)Employee hereby acknowledges that Employee’s services are unique and extraordinary, and are not readily replaceable, and hereby expressly agrees that Company and Parent, in enforcing the covenants contained in Paragraphs 8 and 9 herein, in addition to any other remedies provided for herein or otherwise available at law, shall be entitled in any court of equity having jurisdiction to an injunction restraining Employee in the event of a breach, actual or threatened, of the agreements and covenants contained in these Paragraphs.

(c)The parties hereto believe that the restrictive covenants of these Paragraphs are reasonable. However, if at any time it shall be determined by any court of competent jurisdiction that these Paragraphs or any portion of them as written, are unenforceable because the restrictions are unreasonable, the parties hereto agree that such portions as shall have been determined to be unreasonably restrictive shall thereupon be deemed so amended as to make such restrictions reasonable in the determination of such court, and the said covenants, as so modified, shall be enforceable between the parties to the same extent as if such amendments had been made prior to the date of any alleged breach of said covenants.

10.No Obligation to Mitigate. So long as Employee shall not be in breach of any provision of Paragraph 8 or 9, Employee shall have no duty to mitigate damages in the event of a termination and if Employee voluntarily obtains other employment (including self-employment), any compensation or profits received or accrued, directly or indirectly, from such other employment shall not reduce or otherwise affect the obligations of Company and Parent to make payments hereunder.

11.Resignation. In the event that Employee’s services hereunder are terminated under any of the provisions of this Agreement (except by death), Employee agrees that Employee will deliver Employee’s written resignation as an officer of Company or Parent, or their subsidiaries and affiliates, to the Board of Directors, such resignation to become effective immediately, or, at the option of the Board of Directors, on a later date as specified by the Board.

12.Insurance. Company shall have the right at its own cost and expense to apply for and to secure in its own name, or otherwise, life, health or accident insurance or any or all of them covering Employee, and Employee agrees to submit to the usual and customary medical examination and otherwise to cooperate with Company in connection with the procurement of any such insurance, and any claims thereunder.

11

13.Release. As a condition of receiving payments or benefits provided for in this Agreement, at the request of Company or Parent, Employee shall execute and deliver for the benefit of Company and Parent, and any subsidiary or affiliate of Company or Parent, a general release in the form set forth in Attachment A, and such release shall become effective in accordance with its terms. The failure or refusal of Employee to sign such a release or the revocation of such a release shall cause the termination of any and all obligations of Company and Parent to make payments or provide benefits hereunder, and the forfeiture of the right of Employee to receive any such payments and benefits. Employee acknowledges that Company and Parent have advised Employee to consult with an attorney prior to signing this Agreement and that Employee has had an opportunity to do so.

14.Additional Benefits. In addition to the other benefits payable to Employee pursuant to this Agreement, in the event that any payment or benefit received or to be received by Employee under this Agreement (a “Payment”) is subject to the excise tax (the “Excise Tax”) imposed by Section 4999 of the Internal Revenue Code of 1986, as amended (the “Code”), or any successor to such Section, as determined by a nationally recognized independent certified public accounting firm selected by the Company (the “Tax Advisor”), then the Company shall make an additional payment to Employee in a lump sum equal to all federal, state and local taxes imposed on the Employee as a result of payments made under this Agreement, including the amount of additional taxes imposed upon the service provider due to the Company’s payment of the initial taxes on such compensation. Such payment shall be made no later than the end of the calendar year following the calendar year in which the Employee remits the related taxes and in the case of a “specified employee,” as that term is defined under Section 409A of the Code on the date of termination, shall not be made sooner than the first day of the seventh month following termination of employment. The determination of the Tax Advisor as provided herein shall be completed not later than forty‑five (45) days following Employee’s date of termination of employment, and such determination shall be communicated in writing to Company, with a copy to Employee within said forty-five (45) day period. The determination of the Tax Advisor as provided herein shall be deemed conclusive and binding on Company and Employee. Company shall pay the fees and other costs of the Tax Advisor hereunder.

15.Notices. All notices under this Agreement shall be in writing and shall be deemed effective when delivered in person to Employee or to the Secretary of Company and Parent, or if mailed, postage prepaid, registered or certified mail, addressed, in the case of Employee, to Employee’s last known address as carried on the personnel records of Company, and, in the case of Company and Parent, to the corporate headquarters, attention of the Secretary, or to such other address as the party to be notified may specify by notice to the other party.

16.Successors and Binding Agreement.

(a)Company and Parent will require any successor, whether direct or indirect, by purchase, merger, consolidation or otherwise to all or substantially all of the business and/or assets of Company and/or Parent, as the case may be, expressly to assume and agree to perform this Agreement in the same manner and to the same extent that Company and Parent are required to perform it. Failure of Company and Parent to obtain such assumption and agreement prior to

12

the effectiveness of any such succession shall be a breach of this Agreement. As used in this Agreement, “Company” and “Parent” shall include any successor to Company’s and/or Parent’s, as the case may be, business and/or assets as aforesaid which assumes and agrees to perform this Agreement by operation of law, or otherwise.

(b)This Agreement shall inure to the benefit of, and be enforceable by, Employee’s personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees. If Employee dies while any amount is still payable hereunder, all such amounts shall be paid in accordance with the terms of this Agreement to Employee’s devisee, legatee or other designee or, if there is no such designee, to Employee’s estate.

17.Arbitration. Any dispute which may arise between the parties hereto may, if both parties agree, be submitted to binding arbitration in the State of Connecticut in accordance with the Rules of the American Arbitration Association; provided that any such dispute shall first be submitted to Company’s Board of Directors in an effort to resolve such dispute without resort to arbitration.

18.Severability. If any of the terms or conditions of this Agreement shall be declared void or unenforceable by any court or administrative body of competent jurisdiction, such term or condition shall be deemed severable from the remainder of this Agreement, and the other terms and conditions of this Agreement shall continue to be valid and enforceable.

19.Amendment. This Agreement may be modified or amended only by an instrument in writing executed by the parties hereto.

20.Construction. This Agreement shall supersede and replace all prior agreements and understandings between the parties hereto on the subject-matter covered hereby. This Agreement shall be governed and construed under the laws of the State of Connecticut. Words of the masculine gender mean and include correlative words of the feminine gender. Paragraph headings are for convenience only and shall not be considered a part of the terms and provisions of the Agreement.

21.Deferred Compensation. This Agreement has been prepared with reference to Section 409A of the Internal Revenue Code and shall be interpreted and administered in a manner consistent with Section 409A.

22.Assignment Prohibited. Benefits hereunder shall not be subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, attachment or garnishment by creditors of the Employee, Employee’s beneficiary, or estate, and any attempt to anticipate, alienate, transfer, assign or attach the same shall be void. The Employee, Employee’s beneficiary or estate shall only have a contractual right to benefits hereunder and shall have the status of general unsecured creditors.

* * * * * * *

13

IN WITNESS WHEREOF, Company and Parent have caused this Agreement to be executed by an authorized officer, and Employee has hereunto set Employee’s hand.

	The Connecticut Water Company
December 23, 2008	By	/s/ Daniel J. Meaney
Date		Corporate Secretary
	Connecticut Water Service, Inc.
December 23, 2008	By	/s/ Daniel J. Meaney
Date		Corporate Secretary
December 23, 2008		/s/ David C. Benoit
Date		David C. Benoit

14

ATTACHMENT A

RELEASE

We advise you to consult an attorney before you sign this Release. You have until the date which is seven (7) days after the Release is signed and returned to ____________________ (“Company”) to change your mind and revoke your Release. Your Release shall not become effective or enforceable until after that date.

In consideration for the benefits provided under your Employment Agreement dated ____________________ with Company and ____________________ (“Parent”), and more specifically enumerated in Exhibit 1 hereto, by your signature below you agree to accept such benefits and not to make any claims of any kind against Company, its past and present and future parent corporations, subsidiaries, divisions, subdivisions, affiliates and related companies or their successors and assigns, including without limitation Parent, or any and all past, present and future Directors, officers, fiduciaries or employees of any of the foregoing (all parties referred to in the foregoing are hereinafter referred to as the “Releasees”) before any agency, court or other forum, and you agree to release the Releasees from all claims, known or unknown, arising in any way from any actions taken by the Releasees up to the date of this Release, including, without limiting the foregoing, any claim for wrongful discharge or breach of contract or any claims arising under the Age Discrimination in Employment Act of 1967, Title VII of the Civil Rights Act of 1964, the Americans with Disabilities Act of 1990, the Employee Retirement Income Security Act of 1974, Connecticut’s Fair Employment Practices Act or any other federal, state or local statute or regulation and any claim for attorneys’ fees, expenses or costs of litigation.

THE PRECEDING PARAGRAPH MEANS THAT BY SIGNING THIS RELEASE YOU WILL HAVE WAIVED ANY RIGHT YOU MAY HAVE TO BRING A LAWSUIT OR MAKE ANY LEGAL CLAIM AGAINST THE RELEASEES BASED ON ANY ACTIONS TAKEN BY THE RELEASEES UP TO THE DATE OF THIS RELEASE.

By signing this Release, you further agree as follows:

1.    You have read this Release carefully and fully understand its terms;

2.    You have had at least twenty-one (21) days to consider the terms of the Release;

3.    You have seven (7) days from the date you sign this Release to revoke it by written notification to Company. After this seven (7) day period, this Release is final and binding and may not be revoked;

4.    You have been advised to seek legal counsel and have had an opportunity to do so;

5.    You would not otherwise be entitled to the benefits provided under your Employment Agreement with Company and Parent had you not agreed to waive any right you have to bring a lawsuit or legal claim against the Releasees; and

6.    Your agreement to the terms set forth above is voluntary.

Name:
Signature:	Date:
Received by:	Date:

2

EXHIBIT 1

1.

2.

3.

4.

5.

etc.

NOTE: THIS EXHIBIT IS TO BE COMPLETED AT THE TIME OF TERMINATION TO REFLECT ALL BENEFITS AND PAYMENTS MADE UNDER THE EMPLOYMENT AGREEMENT.

Acknowledged and Agreed:

THE CONNECTICUT WATER COMPANY		EMPLOYEE
By
	Its
CONNECTICUT WATER SERVICE
By
	Its

EX-10.99

EXHIBIT 10.99

FIRST AMENDMENT TOAMENDED AND RESTATED EMPLOYMENT AGREEMENT

THIS AMENDMENT, dated this 1st day of April 2014, is made by and between The Connecticut Water Company, a Connecticut corporation having its principal place of business in Clinton, Connecticut (“Company”), Connecticut Water Service, Inc., a Connecticut corporation and holder of all of the outstanding capital stock of Company (“Parent”), and David C. Benoit, a resident of Wethersfield, Connecticut (“Employee”),

W I T N E S S E T H:

WHEREAS, the Employee, Company and Parent entered into an amended and restated Employment Agreement in December 2008; and

WHEREAS, the parties wish to amend the Agreement in the particulars set forth below;

NOW, THEREFORE, Company, Parent and Employee agree as follows:

1.    Subparagraph (g) of Paragraph 5 of the Agreement entitled “Stay-on Bonus” is hereby deleted in its entirety.

2.    Except as hereinabove modified and amended, the Agreement shall remain in full force and effect.

IN WITNESS WHEREOF, Company and Parent have caused this Agreement to be executed by an authorized officer, and Employee has hereunto set Employee’s hand.

	THE CONNECTICUT WATER COMPANY
4.7.14	By	/s/ Kristen A. Johnson
Date
	CONNECTICUT WATER SERVICE, INC.
4.7.14	By	/s/ Kristen A. Johnson
Date
4/7/14		/s/ David C. Benoit
Date		David C. Benoit

EX-21.1

EXHIBIT 21.1

SUBSIDIARIES OF SJW GROUP

Following is a list of the subsidiaries of SJW Group as of December 31, 2019, each of which, unless otherwise indicated, is wholly owned by the company either directly or through another subsidiary.

Name	State of Incorporation
San Jose Water Company	California
SJW Land Company	California
SJWTX, Inc., also doing business as Canyon Lake Water Service Company	Texas
SJWNE LLC	Delaware
Connecticut Water Service, Inc.	Connecticut
The Connecticut Water Company	Connecticut
Chester Realty, Inc.	Connecticut
New England Water Utility Services, Inc.	Connecticut
The Maine Water Company	Maine
The Heritage Village Water Company	Connecticut
The Avon Water Company	Connecticut

EX-23.1

EXHIBIT 23.1

Consent of Independent Registered Public Accounting Firm

The Board of Directors

SJW Group:

We consent to the incorporation by reference in the registration statements (Nos. 333-234140, 333-105010 and 333-195796) on Form S-8 of SJW Group of our report dated March 2, 2020, with respect to the consolidated balance sheets of SJW Group as of December 31, 2019 and 2018, and the related consolidated statements of comprehensive income, changes in stockholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2019, and the related notes and financial statement schedule II (collectively, the "consolidated financial statements"), and the effectiveness of internal control over financial reporting as of December 31, 2019, which report appears in the December 31, 2019 annual report on Form 10-K of SJW Group.

/s/ KPMG LLP

San Francisco, California

March 2, 2020

EX-31.1

Exhibit 31.1

CERTIFICATIONS

I, Eric W. Thornburg, certify that:

1.    I have reviewed this Annual Report on Form 10-K of SJW Group (the “registrant”);

2.    Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.    Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.    The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)    designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)    designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)    evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)    disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.    The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

a)    all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)    any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	March 2, 2020	/s/ Eric W. Thornburg
		ERIC W. THORNBURG
		Chairman, President and Chief Executive Officer
		(Principal executive officer)

EX-31.2

Exhibit 31.2

CERTIFICATIONS

I, James P. Lynch, certify that:

1.    I have reviewed this Annual Report on Form 10-K of SJW Group (the “registrant”);

2.    Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.    Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.    The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)    designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)    designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)    evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)    disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.    The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

a)    all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)    any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	March 2, 2020	/s/ James P. Lynch
		JAMES P. LYNCH
		Chief Financial Officer and Treasurer
		(Principal financial officer)

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of SJW Group (the “Company”) on Form 10-K for the year ended December 31, 2019, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Eric W. Thornburg, President, Chief Executive Officer and Chariman of the Board of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge on the date hereof:

(1) the Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Eric W. Thornburg

ERIC W. THORNBURG

Chairman, President and Chief Executive Officer

(Principal executive officer)

March 2, 2020

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of SJW Group (the “Company”) on Form 10-K for the year ended December 31, 2019, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, James P. Lynch, Chief Financial Officer and Treasurer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge on the date hereof:

(1) the Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ James P. Lynch

JAMES P. LYNCH

Chief Financial Officer and Treasurer

(Principal financial officer)

March 2, 2020

XML

Valuation and Qualifying Accounts and Reserves

12 Months Ended

Dec. 31, 2019

SEC Schedule, 12-09, Valuation and Qualifying Accounts [Abstract]

Valuation and Qualifying Accounts and Reserves

VALUATION AND QUALIFYING ACCOUNTS AND RESERVES

Years ended December 31, 2019, 2018 and 2017

(in thousands)

Description	2019			2018		2017
Allowance for doubtful accounts:
Balance, beginning of period	$	272		190		200
Opening balance, SJWNE, LLC	1,283			—		—
Charged to expense	520			430		399
Accounts written off	(875		)	(650	)	(675	)
Recoveries of accounts written off	312			302		266
Balance, end of period	$	1,512		272		190
Reserve for litigation and claims:
Balance, beginning of period	$	2,181		1,892		2,105
Charged to expense	3,221			480		528
Revision to accrual, due to settlements	(135		)	1		(245	)
Payments	(2,369		)	(192	)	(496	)
Balance, end of period	$	2,898		2,181		1,892

XML

Income Taxes (Tables)

12 Months Ended

Dec. 31, 2019

Income Tax Disclosure [Abstract]

Schedule of Components of Income Tax Expense (Benefit)

The components of income tax expense were:

	2019			2018		2017
Current:
Federal	$	7,577		14,485		29,377
State	2,126			5,066		6,452
Deferred:
Federal	(1,929		)	(7,702	)	(1,174	)
State	680			(1,784	)	738
	$	8,454		10,065		35,393

Schedule of Effective Income Tax Rate Reconciliation

The following table reconciles income tax expense to the amount computed by applying the federal statutory rate to income before income taxes of $32,081, $48,832 and $96,493 in 2019, 2018 and 2017:

	2019			2018		2017
“Expected” federal income tax	$	6,737		10,255		33,773
Increase (decrease) in taxes attributable to:
State taxes, net of federal income tax benefit	2,251			3,420		4,986
Uncertain tax positions	323			24		12
Property flow-through	(2,054		)	(839	)	(1,027	)
Capitalized merger costs	5,350			—		—
Tax reform - rate change impact on deferred taxes	77			—		(2,357	)
Reversal of excess deferred taxes recognized in regulatory liability	(2,355		)	(1,383	)	—
Pension flow-through	(1,244		)	—		—
Stock-based compensation	(223		)	(1,602	)	(552	)
Other items, net	(408		)	190		558
	$	8,454		10,065		35,393

Schedule of Deferred Tax Assets and Liabilities

The components of the net deferred tax liability as of December 31 was as follows:

	2019			2018
Deferred tax assets:
Advances and contributions	$	19,547		14,592
Unamortized investment tax credit	649			418
Pensions and postretirement benefits	32,450			20,439
Debt premium, net	7,002			—
California franchise tax	456			981
Net operating loss	1,046			—
Merger related expenses	—			4,527
Tax related net regulatory liability	—			16,212
Other	7,211			3,336
Gross deferred tax assets	68,361			60,505
Valuation allowance	(1,924		)	—
Total deferred tax assets	66,437			60,505
Deferred tax liabilities:
Utility plant	211,079			114,731
Pension and postretirement benefits	22,263			18,534
Deferred gain and other-property related	5,872			5,753
Regulatory asset - business combinations debt premium, net	7,002			—
Intangibles	3,693			—
Deferred revenue	1,962			—
Regulatory asset - income tax temporary differences, net	295			—
Section 481(a) adjustments	5,721			—
Other	4,148			1,138
Total deferred tax liabilities	262,035			140,156
Net deferred tax liabilities	$	195,598		79,651

Schedule of Unrecognized Tax Benefits Roll Forward

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:

	2019			2018	2017
Balance at beginning of year	$	1,382		1,307	1,132
Increase related to tax positions taken during the current year, including interest	351			—	—
Increase related to tax positions taken during a prior year, including interest	3,483			75	185
Reductions related to tax positions taken in a prior year, including interest	(1,382		)	—	(10	)
Balance at end of year	$	3,834		1,382	1,307

Summary of Income Tax Examinations

SJW Group files U.S. federal income tax returns and income tax returns in various states. SJW Group is no longer subject to tax examination for fiscal years prior to 2016 for federal purposes and 2015 for state purposes. The open tax years for the jurisdictions in which SJW Group files are as follows:

Jurisdiction	Years Open
Federal	2016 - 2018
California	2015 - 2018
Arizona	2015 - 2016
Tennessee	2016 - 2018
Texas	2015 - 2018
Connecticut	2016 - 2018
Maine	2016 - 2018

XML

Long-Term Debt Long-term Debt Schedule (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Debt Instrument [Line Items]
Long-term debt	$ 1,292,586	$ 435,000
Unamortized debt premium, net	25,020	0
Unamortized Debt Issuance Expense	11,737	3,576
Current portion	22,272	0
Long-term debt, less current portion	1,283,597	431,424
SJW Group [Member] | Senior Notes [Member]
Debt Instrument [Line Items]
Long-term debt	$ 560,000	50,000
SJW Group [Member] | Senior Notes [Member] | Maximum [Member]
Debt Instrument [Line Items]
Stated interest rates	4.35%
San Jose Water Company [Member] | California Pollution Control Financing Authority Revenue Bonds [Member]
Debt Instrument [Line Items]
Long-term debt	$ 450,000	370,000
San Jose Water Company [Member] | Senior Notes [Member]
Debt Instrument [Line Items]
Long-term debt	$ 330,000	250,000
San Jose Water Company [Member] | Senior Notes [Member] | Minimum [Member]
Debt Instrument [Line Items]
Stated interest rates	4.29%
San Jose Water Company [Member] | Senior Notes [Member] | Maximum [Member]
Debt Instrument [Line Items]
Stated interest rates	9.45%
San Jose Water Company [Member] | Public Utility, Bonds [Member] | California Pollution Control Financing Authority Revenue Bonds [Member]
Debt Instrument [Line Items]
Long-term debt	$ 120,000	120,000
San Jose Water Company [Member] | Public Utility, Bonds [Member] | California Pollution Control Financing Authority Revenue Bonds [Member] | Minimum [Member]
Debt Instrument [Line Items]
Stated interest rates	4.75%
San Jose Water Company [Member] | Public Utility, Bonds [Member] | California Pollution Control Financing Authority Revenue Bonds [Member] | Maximum [Member]
Debt Instrument [Line Items]
Stated interest rates	5.10%
Connecticut Water Service, Inc. [Member] | Notes Payable to Banks [Member]
Debt Instrument [Line Items]
Long-term debt	$ 23,935	0
Connecticut Water Service, Inc. [Member] | Notes Payable to Banks [Member] | Minimum [Member]
Debt Instrument [Line Items]
Stated interest rates	4.09%
Connecticut Water Service, Inc. [Member] | Notes Payable to Banks [Member] | Maximum [Member]
Debt Instrument [Line Items]
Stated interest rates	4.15%
Connecticut Water Company [Member]
Debt Instrument [Line Items]
Long-term debt	$ 198,646	0
Connecticut Water Company [Member] | Senior Notes [Member]
Debt Instrument [Line Items]
Long-term debt	$ 35,000	0
Stated interest rates	3.53%
Connecticut Water Company [Member] | Public Utility, Bonds [Member] | Connecticut Innovations Revenue Bonds, Variable Rate [Member]
Debt Instrument [Line Items]
Long-term debt	$ 22,050	0
Connecticut Water Company [Member] | Public Utility, Bonds [Member] | Connecticut Innovations Revenue Bonds [Member]
Debt Instrument [Line Items]
Long-term debt	$ 22,506	0
Stated interest rates	5.00%
Connecticut Water Company [Member] | Notes Payable to Banks [Member]
Debt Instrument [Line Items]
Long-term debt	$ 119,090	0
Connecticut Water Company [Member] | Notes Payable to Banks [Member] | Minimum [Member]
Debt Instrument [Line Items]
Stated interest rates	3.16%
Connecticut Water Company [Member] | Notes Payable to Banks [Member] | Maximum [Member]
Debt Instrument [Line Items]
Stated interest rates	4.75%
SJWTX, Inc. [Member] | Senior Notes [Member]
Debt Instrument [Line Items]
Long-term debt	$ 15,000	15,000
Stated interest rates	6.27%
Maine Water Company [Member]
Debt Instrument [Line Items]
Long-term debt	$ 38,032	0
Maine Water Company [Member] | Public Utility, Bonds [Member] | State Revolving Fund Loans [Member]
Debt Instrument [Line Items]
Long-term debt	$ 16,032	0
Maine Water Company [Member] | Public Utility, Bonds [Member] | State Revolving Fund Loans [Member] | Minimum [Member]
Debt Instrument [Line Items]
Stated interest rates	0.00%
Maine Water Company [Member] | Public Utility, Bonds [Member] | State Revolving Fund Loans [Member] | Maximum [Member]
Debt Instrument [Line Items]
Stated interest rates	2.58%
Maine Water Company [Member] | Public Utility, Bonds [Member] | First Mortgage Bonds [Member]
Debt Instrument [Line Items]
Stated interest rates	8.95%
Maine Water Company [Member] | Notes Payable to Banks [Member]
Debt Instrument [Line Items]
Long-term debt	$ 17,500	0
Maine Water Company [Member] | Notes Payable to Banks [Member] | Minimum [Member]
Debt Instrument [Line Items]
Stated interest rates	4.18%
Maine Water Company [Member] | Notes Payable to Banks [Member] | Maximum [Member]
Debt Instrument [Line Items]
Stated interest rates	5.51%
Maine Water Company [Member] | Mortgages [Member] | First Mortgage Bonds [Member]
Debt Instrument [Line Items]
Long-term debt	$ 4,500	0
Heritage Valley Water Company [Member] | Notes Payable to Banks [Member]
Debt Instrument [Line Items]
Long-term debt	$ 4,164	0
Stated interest rates	4.75%
Avon Water Company [Member] | Mortgages [Member]
Debt Instrument [Line Items]
Long-term debt	$ 2,809	$ 0
Stated interest rates	3.05%

XML

Summary of Significant Accounting Policies (Earnings per Share) (Details) - shares	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Restricted Stock and Stock Options [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Anti-dilutive restricted common stock units excluded from computation of earnings per share	27,082	5,551	4,474

XML

Benefit Plans Fair Value of Plan Assets (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	$ 260,747	$ 133,459
Quoted Prices in Active Markets for Identical Assets (Level 1)
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	192,752	82,677
Significant Observable Inputs (Level 2)
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	67,995	50,782
Significant Unobservable Inputs (Level 3)
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	0	0
Fixed Income Funds [Member]
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	91,896	44,855
Fixed Income Funds [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1)
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	31,686	0
Fixed Income Funds [Member] | Significant Observable Inputs (Level 2)
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	60,210	44,855
Fixed Income Funds [Member] | Significant Unobservable Inputs (Level 3)
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	0	0
Cash and Cash Equivalents [Member]
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	11,801	8,136
Cash and Cash Equivalents [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1)
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	11,801	8,136
Cash and Cash Equivalents [Member] | Significant Observable Inputs (Level 2)
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	0	0
Cash and Cash Equivalents [Member] | Significant Unobservable Inputs (Level 3)
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	0	0
Actively Managed Investments [Member]
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	157,050	80,468
Actively Managed Investments [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1)
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	149,265	74,541
Actively Managed Investments [Member] | Significant Observable Inputs (Level 2)
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	7,785	5,927
Actively Managed Investments [Member] | Significant Unobservable Inputs (Level 3)
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	0	$ 0
Executive Supplemental Retirement Plan [Member]
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	3,183
Executive Supplemental Retirement Plan [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1)
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	3,183
Executive Supplemental Retirement Plan [Member] | Significant Observable Inputs (Level 2)
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	0
Executive Supplemental Retirement Plan [Member] | Significant Unobservable Inputs (Level 3)
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	0
Executive Supplemental Retirement Plan [Member] | Money Market Funds [Member]
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	20
Executive Supplemental Retirement Plan [Member] | Money Market Funds [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1)
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	20
Executive Supplemental Retirement Plan [Member] | Money Market Funds [Member] | Significant Observable Inputs (Level 2)
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	0
Executive Supplemental Retirement Plan [Member] | Money Market Funds [Member] | Significant Unobservable Inputs (Level 3)
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	0
Executive Supplemental Retirement Plan [Member] | Mutual Fund [Member]
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	834
Executive Supplemental Retirement Plan [Member] | Mutual Fund [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1)
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	834
Executive Supplemental Retirement Plan [Member] | Mutual Fund [Member] | Significant Observable Inputs (Level 2)
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	0
Executive Supplemental Retirement Plan [Member] | Mutual Fund [Member] | Significant Unobservable Inputs (Level 3)
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	0
Executive Supplemental Retirement Plan [Member] | Fixed Income Funds [Member]
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	2,329
Executive Supplemental Retirement Plan [Member] | Fixed Income Funds [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1)
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	2,329
Executive Supplemental Retirement Plan [Member] | Fixed Income Funds [Member] | Significant Observable Inputs (Level 2)
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	0
Executive Supplemental Retirement Plan [Member] | Fixed Income Funds [Member] | Significant Unobservable Inputs (Level 3)
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	$ 0

XML

Benefit Plans Amounts Recognized in Balance Sheet (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Defined Benefit Plan Disclosure [Line Items]
Noncurrent liabilities	$ 108,044	$ 70,490
Pension Plan [Member]
Defined Benefit Plan Disclosure [Line Items]
Current liabilities	1,899	1,323
Noncurrent liabilities	92,820	58,944
Liabilities	94,719	60,267
Other Postretirement Benefits Plan [Member]
Defined Benefit Plan Disclosure [Line Items]
Current liabilities	96	94
Noncurrent liabilities	15,224	11,546
Liabilities	$ 15,320	$ 11,640

XML

Equity Plans Equity Plans (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Option Indexed to Issuer's Equity [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested, Grant Date Fair Value	$ 2,420	$ 1,913	$ 2,775
Document Period End Date	Dec. 31, 2019
Restricted Stock Awards, Performance-based, Vested Balance	7,676
Restricted Stock Awards, Performance-based, Outstanding Balance	42,700
Restricted Stock Awards, Performance-based, Issued, Intrinsic Value	6,120	52,629	15,390
Summary of Activity under the Plan [Abstract]
Compensation costs charged to income	$ 3,406	$ 2,117	$ 2,643
Proceeds from the exercise of stock options and similar instruments	$ 1,603	$ 1,371	$ 1,215
Employee Stock Purchase Plan [Abstract]
Shares issued during the period under the plan	30,255	25,907	27,743
Cash received from employees toward purchases under the plan	$ 1,682	$ 1,523	$ 1,282
Restricted Stock and Deferred Restricted Stock [Member]
Summary of Activity under the Plan [Abstract]
Compensation costs charged to income	3,123	$ 1,875	$ 2,429
Employee Stock Purchase Plan [Abstract]
Unrecognized compensation cost	$ 3,915
Deferred Restricted Stock Awards [Member]
Dividend Equivalent Rights [Abstract]
Cumulative dividend equivalent rights converted to deferred restricted stock awards	81,231	79,478	77,034
Dividend Equivalent Rights [Member]
Dividend Equivalent Rights [Abstract]
Liability for dividend equivalent rights	$ 93	$ 97	$ 139
Incentive Plan [Member]
Option Indexed to Issuer's Equity [Line Items]
Number of shares reserved for issuance under the plan	1,800,000
Maximum number of shares per employee	600,000
Share-based Compensation Arrangement by Share-based Payment Award, Shares Issued Pursuant To The Plan	819,340	793,811	628,546
Shares issuable under the plan upon exercise of outstanding awards	174,764	124,275	228,885
Number of shares available for grant	805,896
CTWS Plan [Member]
Option Indexed to Issuer's Equity [Line Items]
Number of shares reserved for issuance under the plan	156,022
Employee Stock Purchase Plan [Member]
Summary of Activity under the Plan [Abstract]
Compensation costs charged to income	$ 283	$ 242	$ 214
Proceeds from the exercise of stock options and similar instruments	$ 1,603	1,371	1,215
Employee Stock Purchase Plan [Abstract]
Purchase price of common stock to employees under the plan, percent	85.00%
Maximum amount of base salary employees can designate for share purchase under the plan	10.00%
Expenses recorded under the plan	$ 294	$ 265	$ 229
Unrecognized compensation cost	$ 206
Common Stock [Member] | Employee Stock Purchase Plan [Member]
Option Indexed to Issuer's Equity [Line Items]
Number of shares reserved for issuance under the plan	400,000

XML

Income Taxes Components of Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Deferred tax assets:
Advances and contributions	$ 19,547	$ 14,592
Unamortized investment tax credit	649	418
Pensions and postretirement benefits	32,450	20,439
Deferred Tax Assets, Tax Deferred Expense, Reserves and Accruals, Unearned Premiums Reserve	7,002	0
California franchise tax	456	981
Deferred Tax Assets, Operating Loss Carryforwards	1,046	0
Merger related expenses	0	4,527
Tax related net regulatory liability	0	16,212
Other	7,211	3,336
Gross deferred tax assets	68,361	60,505
Deferred Tax Assets, Valuation Allowance	(1,924)	0
Deferred Tax Assets, Net of Valuation Allowance	66,437	60,505
Deferred tax liabilities:
Utility plant	211,079	114,731
Pension and postretirement benefits	22,263	18,534
Deferred gain and other-property related	5,872	5,753
Deferred Tax Liabilities, Regulatory Asset, Debt Premium	7,002	0
Deferred Tax Liabilities, Intangible Assets	3,693	0
Deferred Tax Liabilities, Tax Deferred Income	1,962	0
Deferred Tax Liability, Regulatory Asset, Income Tax Temporary Differences	295	0
Deferred Tax Liabilities, Change in Accounting Policy	5,721	0
Other	4,148	1,138
Total deferred tax liabilities	(262,035)	(140,156)
Net deferred tax liabilities	$ 195,598	$ 79,651

XML

Intangible Assets Narrative (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 1997
Finite-Lived Intangible Assets [Line Items]
Intangible assets	$ 33,424	$ 15,799
Document Period End Date	Dec. 31, 2019
Purchase premium customer relationships	$ 13,400	0
Net intangible assets	20,245	7,059
Amortization of Intangible Assets	745	647	$ 616
Future Amortization of Intangible Assets
2020	745
2021	647
2022	647
2023	647
2024	647
Concession Fees [Member]
Finite-Lived Intangible Assets [Line Items]
Intangible assets	6,800	6,800
Accumulated amortization of intangible assets	6,052	5,780
Other Intangible Assets [Member]
Finite-Lived Intangible Assets [Line Items]
Intangible assets	13,224	8,999
Accumulated amortization of intangible assets	7,127	$ 2,960
Service Agreements [Member]
Finite-Lived Intangible Assets [Line Items]
Intangible assets	4,128
Useful life of intangible assets				25 years
Infrastructure [Member]
Finite-Lived Intangible Assets [Line Items]
Intangible assets	3,831
Contractual Rights [Member]
Finite-Lived Intangible Assets [Line Items]
Intangible assets	$ 1,040
Minimum [Member]
Finite-Lived Intangible Assets [Line Items]
Useful life of intangible assets	5 years
Maximum [Member]
Finite-Lived Intangible Assets [Line Items]
Useful life of intangible assets	70 years

XML

SJW Group and CTWS Merger (the “Merger”) (Details) $ / shares in Units, $ in Thousands					3 Months Ended	12 Months Ended
	Oct. 09, 2019 USD ($) $ / shares	Oct. 08, 2019 USD ($)	Dec. 05, 2018 shares	Dec. 03, 2018 shares	Dec. 31, 2019 USD ($) people_served service_connection communities_served	Dec. 31, 2019 USD ($) people_served service_connection communities_served $ / shares	Dec. 31, 2018 USD ($) $ / shares shares	Dec. 31, 2017 USD ($)
Business Acquisition [Line Items]
Share-based compensation related to business combination						$ 6,384
Proceeds from debt financing						590,000	$ 0	$ 0
Borrowings from lines of credit						105,349	76,000	$ 56,500
Goodwill					$ 628,287	628,287	1,680
Total revenues						515,153	514,364
Pretax income (loss)						60,862	72,938
Net income (loss)						$ 56,968	$ 65,449
Basic earnings per share (in dollars per share) | $ / shares						$ 2.00	$ 2.31
CTWS [Member]
Business Acquisition [Line Items]
Acquiree's common shares converted in cash (in USD per share) | $ / shares	$ 70.00
Payments to Acquire Businesses, Gross	$ 838,475
Cash Acquired from Acquisition	3,011
Share-based compensation related to business combination	6,384
Proceeds from debt financing	18,463
Borrowings from lines of credit	60,000
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Nonutility Plant, Net	848
Utility plant, net	750,703
Nonutility plant	42,673
Current assets	12,489
Regulatory assets and deferred charges, less current portion	83,132
Other intangible assets	17,181
Other assets	2,592
Goodwill	626,523
Total assets acquired	1,536,141
Long-term debt	281,009
Current liabilities, including maturities of long-term debt	125,772
Deferred income taxes	107,789
Post-retirement benefit plans	31,789
Contributions in aid of construction and construction advances	137,327
Other long-term liabilities	10,607
Total liabilities assumed	694,293
Assumed equity	$ 841,848
Total revenues					21,672
Pretax (loss)					$ (3,174)
Connecticut Water Service, Inc. [Member]
Business Acquisition [Line Items]
Number of people served | people_served					480,000	480,000
Public Utilities, Number of Communities Served | communities_served					80	80
Common Stock [Member] | Underwritten Public Offering [Member]
Business Acquisition [Line Items]
Common stock issued, shares | shares			1,012,500	6,750,000			7,762,000
Proceeds from Issuance of Common Stock, Gross							$ 411,077
Series 2019A/B/C [Member] | Senior Notes [Member] | SJW Group [Member]
Business Acquisition [Line Items]
Principal Debt Sold		$ 427,398
Connecticut and Maine | Connecticut Water Service, Inc. [Member]
Business Acquisition [Line Items]
Public Utilities, Service Connections | service_connection					137,000	137,000
Connecticut | Connecticut Water Service, Inc. [Member]
Business Acquisition [Line Items]
Public Utilities, Service Connections | service_connection					3,000	3,000

XML

Capitalization

12 Months Ended

Dec. 31, 2019

Equity [Abstract]

CAPITALIZATION

Capitalization

SJW Group was authorized to issue 36,000,000 shares of common stock of $0.001 par value per share. On April 24, 2019, SJW Group amended its certificate of incorporation to increase the authorized number of shares of common stock to 70,000,000 shares. At December 31, 2019 and 2018, 28,456,508 and 28,404,316, respectively, shares of common stock were issued and outstanding.

At December 31, 2019 and 2018, 1,000,000 shares of preferred stock of $0.001 par value per share were authorized for SJW Group. At December 31, 2019 and 2018, no shares of preferred stock were issued or outstanding.

On November 28, 2018, SJW Group entered into an underwriting agreement with J.P. Morgan Securities LLC, Barclays Capital Inc., RBC Capital Markets, LLC and UBS Securities LLC, as representatives of the several underwriters (the “Underwriters”), pursuant to which SJW Group sold to the Underwriters an aggregate of 6,750,000 shares of SJW Group’s common stock, par value $0.001 per share (the “Firm Shares”), in an underwritten public offering. Pursuant to the underwriting agreement, SJW Group granted the Underwriters a 30-day option to purchase up to an additional 1,012,500 shares of its common stock (the “Option Shares”), which was exercised in full on December 3, 2018. The offering of the Firm Shares closed on December 3, 2018 and the offering of the Option Shares on December 5, 2018.

SJW Group received net proceeds of approximately $358,256 from the sale of the Firm Shares and received additional net proceeds of approximately $53,738 from the sale of the Option Shares, in each case after deducting the underwriting discounts and commissions and estimated offering expenses payable by SJW Group. SJW Group used the net proceeds from the offering, together with the net offering proceeds from the new debt financing in 2019, to finance the merger of CTWS on October 9, 2019 and to pay related fees and expenses. See Note 12 for a discussion on the CTWS merger. Pending such use, the company had invested the net proceeds temporarily in a short-term money market fund.

XML

Intangible Assets

12 Months Ended

Dec. 31, 2019

Goodwill and Intangible Assets Disclosure [Abstract]

INTANGIBLE ASSETS

Intangible Assets

Intangible assets consist of a concession fee paid to the City of Cupertino of $6,800 for operating the City of Cupertino municipal water system, $13,400 related to the purchase premium for customer relationships and other intangibles of $13,224 as of December 31, 2019. Other intangibles primarily consist of $4,128 which was paid for service area and water rights related to CLWSC, $3,831 for infrastructure related to the Cupertino service concession arrangement, $1,400 for customer relationships and $1,040 incurred in conjunction with Valley Water water contracts related to the operation of SJWC. All intangible assets are recorded at cost and all are being amortized using the straight-line method over the legal or estimated economic life of the asset ranging from 5 to 70 years.

Amortization expense for the intangible assets was $745, $647 and $616 for the years ended December 31, 2019, 2018 and 2017, respectively. Amortization expense for 2020 through 2024 is anticipated to be $745 per year.

The costs of intangible assets as of December 31, 2019 and 2018 are as follows:

	2019		2018
Concession fees	$	6,800	6,800
Purchase premium customer relationships	13,400		—
Other intangibles	13,224		8,999
Intangible assets	33,424		15,799
Less: Accumulated amortization
Concession fees	6,052		5,780
Other intangibles	7,127		2,960
Net intangible assets	$	20,245	7,059

XML

Consolidated Statements of Changes in Stockholders' Equity (Parenthetical) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Statement of Stockholders' Equity [Abstract]
Cumulative Effect on Retained Earnings, Tax	$ 33	$ 1,507	$ 0
Unrealized loss on investment, taxes	97	0	466
Other Comprehensive Income (Loss), Pension and Other Postretirement Benefit Plans, Plan Amendments, Tax Effect	$ 22	$ 0	$ 0
Common stock, dividends per share, paid	$ 1.20	$ 1.12	$ 1.04

XML

Equity Plans

12 Months Ended

Dec. 31, 2019

Share-based Payment Arrangement [Abstract]

Equity Plans

Equity Plans

Common Stock

SJW Group has a Long-Term Stock Incentive Plan (the “Plan”), which has 1,800,000 shares of common stock reserved for issuance. The Plan was initially adopted by the Board of Directors on March 6, 2002. On January 30, 2013, the amended and restated Plan was adopted by the Board and became effective on April 24, 2013. The Plan was subsequently amended and the amended and restated Plan was adopted by the Board on July 29, 2015.

The Plan allows SJW Group to provide employees, non-employee Board members or the board of directors of any parent or subsidiary, consultants, and other independent advisors who provide services to the Company or any parent or subsidiary the opportunity to acquire an equity interest in SJW Group.

A participant in the Plan generally may not receive Plan awards covering an aggregate of more than 600,000 shares of common stock in any calendar year. Additionally, awards granted under the Plan may be conditioned upon the attainment of specified Company performance goals. The types of awards included in the Plan are restricted stock awards, restricted stock units, performance shares, or other share-based awards. In addition, shares are issued to employees under the Employee Stock Purchase Plan (“ESPP”) that was approved by SJW Group stockholders.

As of December 31, 2019, 2018 and 2017, 819,340, 793,811 and 628,546 shares have been issued pursuant to the Plan, and 174,764, 124,275 and 228,885 shares are issuable upon the exercise of outstanding restricted stock units and deferred restricted stock units for the years ended 2019, 2018 and 2017, respectively. The remaining shares available for issuance under the Plan are 805,896 as of December 31, 2019. The compensation costs charged to income is recognized on a straight-line basis over the requisite service period.

A summary of compensation costs charged to income and proceeds from the exercise of stock options and similar instruments, that are recorded to additional paid-in capital and common stock, by award type, are presented below for the years ended December 31:

	2019		2018	2017
Compensation costs charged to income:
ESPP	$	283	242	214
Restricted stock and deferred restricted stock	3,123		1,875	2,429
Total compensation costs charged to income	$	3,406	2,117	2,643
Proceeds from the exercise of stock options and similar instruments:
ESPP	1,603		1,371	1,215
Total proceeds from the exercise of stock options and similar instruments	$	1,603	1,371	1,215

Restricted Stock and Deferred Restricted Stock

Under SJW Group’s Amended and Restated Deferred Restricted Stock Program (the “Deferred Restricted Stock Program”), SJW Group granted deferred restricted stock units to non-employee Board members. This program was amended effective January 1, 2008. As a result of that amendment, no new awards of deferred restricted stock units will be made under the Deferred Restricted Stock Program with respect to Board service after December 31, 2007.

A summary of SJW Group’s restricted and deferred restricted stock awards under the Plan as of December 31, 2019, and changes during the year ended December 31, 2019, are presented below:

	Units		Weighted- Average Grant- Date Fair Value
Outstanding as of January 1, 2019	124,275		$	38.80
Issued	76,018		$	59.78
Exercised	(25,529	)	$	49.77
Forfeited or expired	—		$	—
Outstanding as of December 31, 2019	174,764		$	46.63
Shares vested as of December 31, 2019	81,611		$	31.12

A summary of the status of SJW Group’s nonvested restricted and deferred restricted stock awards under the Plan as of December 31, 2019, and changes during the year ended December 31, 2019, are presented below:

	Units		Weighted-  Average Grant- Date Fair Value
Nonvested as of January 1, 2019	55,098		$	54.42
Granted	76,018		$	59.78
Vested	(37,963	)	$	59.27
Forfeited	—		$	—
Nonvested as of December 31, 2019	93,153		$	39.57

In connection with the merger with CTWS, SJW Group assumed outstanding awards of restricted stock units and deferred share units under the following stock plans: CTWS 2014 Performance Stock Program, CTWS 2004 Performance Stock Program and CTWS 1994 Performance Stock Program (collectively, the “CTWS Plan”); as of October 9, 2019 a total of 156,022 shares of SJW common stock have been reserved for issuance under the assumed awards. These assumed awards generally retain all of the rights, terms and conditions of the respective plans and award agreements under which they were originally granted. During the period October 9, 2019 to December 31, 2019, the CTWS Plan issued, exercised and forfeited 105,233, 23 and 2,279 of shares respectively, of restricted stock based awards and deferred restricted stock. As of December 31, 2019, approximately 102,931 shares of restricted stock based awards and deferred restricted stock were outstanding under the CTWS Plan that were assumed by SJW Group on October 9, 2019.

Total grant date fair value of restricted stock awards for all plans that were vested for the years ended 2019, 2018 and 2017 were $2,420, $1,913 and $2,775, respectively. As of December 31, 2019, the total unrecognized compensation costs related to restricted and deferred restricted stock plans amounted to $3,915. This cost is expected to be recognized over a weighted-average period of 1.84 years.

For the the years ended December 31, 2019, 2018 and 2017, 6,120, 52,629 and 15,390, respectively, of performance-based and market-based restricted stock awards were issued upon the attainment of certain performance metrics and service-based vesting under the Plan. Based upon actual attainment relative to the target performance metric, the number of shares issuable can range between 0% to 150% of the target number of shares for performance-based restricted stock awards, or between 0% and 200% of the target number of shares for market-based restricted stock awards. As of December 31, 2019, 7,676 performance-based and market-based restricted stock awards vested and 42,700 remained outstanding.

Dividend Equivalent Rights

Under the Plan, certain holders of restricted stock and deferred restricted stock awards may have the right to receive dividend equivalent rights (“DERs”) each time a dividend is paid on common stock after the grant date. Stock compensation on DERs is recognized as a liability and recorded against retained earnings on the date dividends are issued.

The Deferred Restricted Stock and Deferral Election Programs for non-employee Board members were amended effective January 1, 2008, to allow the DERs’ with respect to the deferred shares to remain in effect only through December 31, 2017. Accordingly, the last DERs’ conversion into deferred restricted stock units under such programs occurred on the first business day in January 2018. Previously, no such time limitation was placed in the Deferred Restricted Stock and Deferral Election Program.

Certain CTWS restricted stock awards and deferred restricted stock assumed under the merger agreement retained rights to receive DERs that will convert on SJW Group’ quarterly dividend payment dates.

As of December 31, 2019, 2018 and 2017, a cumulative of 81,231, 79,478 and 77,034 dividend equivalent rights were converted, since inception, to deferred restricted stock awards, respectively. For the years ended December 31, 2019, 2018 and 2017, $93, $97 and $139, respectively, related to dividend equivalent rights were recorded against retained earnings and were accrued as a liability.

Employee Stock Purchase Plan

The ESPP allows eligible employees to purchase shares of SJW Group’s common stock at 85% of the fair value of shares on the purchase date. Under the ESPP, employees can designate up to a maximum of 10% of their base compensation for the purchase of shares of common stock, subject to certain restrictions. A total of 400,000 shares of SJW Group’s common stock have been reserved for issuance under the ESPP.

As of December 31, 2019, the ESPP had ten purchase intervals since its inception. For the year ended December 31, 2019, 2018 and 2017, a total of 30,255, 25,907 and 27,743 shares, respectively, were issued under the ESPP. The plan has no look-back provisions. For the years ended December 31, 2019, 2018 and 2017, cash received from employees towards the ESPP amounted to $1,682, $1,523 and $1,282, respectively.

For the years ended December 31, 2019, 2018 and 2017, SJW Group’s recorded expenses were $294, $265 and $229, respectively, related to the ESPP.

The total unrecognized compensation costs related to the semi-annual offering period that ended January 31, 2020 for the ESPP is approximately $206. This cost is expected to be recognized during the first quarter of 2020.

XML

Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Current assets:
Allowance for uncollectible accounts	$ 1,512	$ 272
Capitalization:
Common stock, par value	$ 0.001	$ 0.001
Common stock, shares authorized	70,000,000	36,000,000
Common stock, shares issued	28,456,508	28,404,316
Common stock, shares outstanding	28,456,508	28,404,316

XML

Summary of Significant Accounting Policies (Regulatory Rate Filings) (Details)													3 Months Ended		9 Months Ended	12 Months Ended
	Feb. 01, 2020 USD ($)	Jan. 31, 2020 USD ($)	Jan. 20, 2020 USD ($)	Dec. 20, 2019 USD ($)	Nov. 20, 2019 USD ($)	Oct. 01, 2019 USD ($)	Sep. 30, 2019 USD ($)	Aug. 30, 2019 USD ($)	Feb. 01, 2019 USD ($)	Jan. 28, 2019 USD ($)	Jan. 01, 2019 USD ($)	Sep. 14, 2018 USD ($)	Dec. 31, 2019 USD ($) mi²	Mar. 31, 2019	Dec. 31, 2019 USD ($) mi²	Dec. 31, 2019 USD ($) mi²	Dec. 31, 2018 USD ($)	Dec. 31, 2017 USD ($)	Feb. 07, 2020	Jan. 28, 2020	Dec. 06, 2019 USD ($)	Oct. 18, 2019 USD ($)	Aug. 01, 2019 USD ($)	Jul. 26, 2019 USD ($)	Feb. 08, 2019 USD ($)	Jan. 04, 2018 USD ($)
Public Utilities, General Disclosures [Line Items]
Regulatory Balancing and Memorandum Accounts, Net Under-Collected													$ 1,428,000		$ 1,428,000	$ 1,428,000
Balancing and Memorandum Cost Recovery Account, Refunds (Collections)																(2,603,000)	$ 1,000
Balancing and Memorandum Revenue Account, Increase (Decrease)																(4,984,000)	3,827,000
Revenue from contracts with customers																$ 447,720,000	389,302,000	$ 381,777,000
Minimum [Member]
Public Utilities, General Disclosures [Line Items]
Service area in square miles | mi²													246		246	246
CPED Proposed Penalty, Per Offense, Per Day												$ 500
Maximum [Member]
Public Utilities, General Disclosures [Line Items]
CPED Proposed Penalty, Per Offense, Per Day												50,000
2018 WCMA [Member]
Public Utilities, General Disclosures [Line Items]
Balancing and Memorandum Revenue Account, Increase (Decrease)																$ (9,386,000)	$ 9,386,000
San Jose Water Company [Member]
Public Utilities, General Disclosures [Line Items]
CPED Calculated Double-Billing Refund												4,935,000
San Jose Water Company [Member] | General Rate Case No. 18-01-004 [Member]
Public Utilities, General Disclosures [Line Items]
Requested Rate Increase, Year One																										$ 34,288,000
Requested Rate Increase, Year One, Percentage																										9.76%
Requested Rate Increase, Year Two																										$ 14,232,000
Requested Rate Increase, Year Two, Percentage																										3.70%
Requested Rate Increase, Year Three																										$ 20,582,000
Requested Rate Increase, Year Three, Percentage																										5.17%
Requested Balancing and Memorandum Accounts, net																										$ 20,725,000
San Jose Water Company [Member] | Advice Letter No. 528/528A [Member]
Public Utilities, General Disclosures [Line Items]
Public Utilities, Approved Rate Increase (Decrease), Amount											$ 16,378,000
Public Utilities, Approved Rate Increase (Decrease), Percentage											4.55%
Balancing and Memorandum Cost Recovery Account, Refunds (Collections)											$ 27,045,000
San Jose Water Company [Member] | Advice Letter No. 530 [Member]
Public Utilities, General Disclosures [Line Items]
Approved Service Charge Refund																									$ 2,020,000
San Jose Water Company [Member] | CPED Calculated Refund 2014-2016 [Member]
Public Utilities, General Disclosures [Line Items]
CPED Calculated Service Charge Refund												2,061,000
San Jose Water Company [Member] | CPED Calculated Refund 1987-2013 [Member]
Public Utilities, General Disclosures [Line Items]
CPED Calculated Service Charge Refund												$ 1,990,000
San Jose Water Company [Member] | OII No. 18-09-003 Settlement Agreement [Member]
Public Utilities, General Disclosures [Line Items]
Utility Plant Investment Commitment																								$ 5,000,000
San Jose Water Company [Member] | OII No. 18-09-003 Settlement Agreement [Member] | Maximum [Member]
Public Utilities, General Disclosures [Line Items]
Customer Credit Refund																								$ 2,100,000
San Jose Water Company [Member] | Advice Letter No. 531 [Member]
Public Utilities, General Disclosures [Line Items]
Public Utilities, Approved Reimbursement Fee, Percentage														1.40%	1.23%
San Jose Water Company [Member] | Advice Letter No. 532 [Member] | 2018 WCMA [Member]
Public Utilities, General Disclosures [Line Items]
Balancing and Memorandum Revenue Account, Increase (Decrease)																9,386,000
San Jose Water Company [Member] | Advice Letter No. 532 [Member] | 2019 WCMA [Member]
Public Utilities, General Disclosures [Line Items]
Balancing and Memorandum Revenue Account, Increase (Decrease)																$ (639,000)
San Jose Water Company [Member] | Advice Letter No. 537 [Member]
Public Utilities, General Disclosures [Line Items]
Memorandum Account, Requested Recovery (Refund), Monthly Amount																						$ (20.84)
San Jose Water Company [Member] | Advice Letter No. 541 [Member]
Public Utilities, General Disclosures [Line Items]
Public Utilities, Requested Rate Increase (Decrease), Amount					$ 8,600,000
Public Utilities, Requested Rate Increase (Decrease), Percentage					2.28%
San Jose Water Company [Member] | Application No. 19-12-002 [Member]
Public Utilities, General Disclosures [Line Items]
Requested Rate Increase, Year One																					$ 2,300,000
Requested Rate Increase, Year One, Percentage																					0.61%
Requested Rate Increase, Year Two																					$ 4,000,000.0
Requested Rate Increase, Year Two, Percentage																					1.04%
Requested Rate Increase, Year Three																					$ 2,500,000
Requested Rate Increase, Year Three, Percentage																					0.65%
Regulatory Rate Filings, Requested Rate Increase, Year Four																					$ 300,000
Regulatory Rate Filings, Requested Rate Increase, Percent of Authorized Revenue, Year Four																					0.09%
San Jose Water Company [Member] | Advice Letter No. 534 [Member]
Public Utilities, General Disclosures [Line Items]
Memorandum Account, Requested Recovery (Refund)																							$ 1,243,000
San Jose Water Company [Member] | Advice Letter No. 535 [Member]
Public Utilities, General Disclosures [Line Items]
Public Utilities, Requested Rate Increase (Decrease), Amount								$ 700,000
Public Utilities, Requested Rate Increase (Decrease), Percentage								0.17%
Connecticut Water Company [Member]
Public Utilities, General Disclosures [Line Items]
Authorized WICA Surcharge, Percentage													3.24%		3.24%	3.24%
Connecticut Water Company [Member] | Subsequent Event [Member]
Public Utilities, General Disclosures [Line Items]
Requested WICA Surcharge, Percentage																			5.75%	5.84%
Requested WICA Surcharge Increase (Decrease), Percentage																			(0.09%)	2.60%
Connecticut Water Company & Heritage Valley Water Company [Member]
Public Utilities, General Disclosures [Line Items]
Authorized WRA Revenue													$ 18,588,000
Revenue from contracts with customers													20,428,000
WRA Adjustment to Revenue													$ (1,840,000)
Avon Water Company [Member]
Public Utilities, General Disclosures [Line Items]
Authorized WICA Surcharge, Percentage													9.31%		9.31%	9.31%
SJWTX, Inc. [Member]
Public Utilities, General Disclosures [Line Items]
Authorized Regulatory Surcharge, Per Thousand Gallons									$ 1.05	$ 1.13
Deer Creek Ranch [Member]
Public Utilities, General Disclosures [Line Items]
Authorized Regulatory Surcharge, Per Thousand Gallons						$ 2.02	$ 2.19
Authorized Regulatory Base Charge, Per Thousand Gallons						$ 3.04
Canyon Lake [Member] | Subsequent Event [Member]
Public Utilities, General Disclosures [Line Items]
Authorized Regulatory Surcharge, Per Thousand Gallons	$ 0.95	$ 1.05
Maine Water Company [Member]
Public Utilities, General Disclosures [Line Items]
Public Utilities, Requested Rate Increase (Decrease), Amount				$ 221,000
Public Utilities, Requested Rate Increase (Decrease), Percentage				14.70%
Maine Water Company [Member] | Subsequent Event [Member]
Public Utilities, General Disclosures [Line Items]
Public Utilities, Requested Rate Increase (Decrease), Amount			$ 371
Maine Water Company [Member] | Minimum [Member] | Subsequent Event [Member]
Public Utilities, General Disclosures [Line Items]
Requested WISC Surcharge Increase (Decrease), Percentage			1.76%
Maine Water Company [Member] | Maximum [Member] | Subsequent Event [Member]
Public Utilities, General Disclosures [Line Items]
Requested WISC Surcharge Increase (Decrease), Percentage			3.00%

XML

Unaudited Quarterly Financial Data (Tables)

12 Months Ended

Dec. 31, 2019

Quarterly Financial Information Disclosure [Abstract]

Schedule of Quarterly Financial Information

Summarized quarterly financial data is as follows:

	2019 Quarter Ended
	March		June	September	December
Operating revenue	$	77,682	102,965	113,997	125,838
Operating income	12,408		21,971	17,084	6,016
SJW Group net income	5,873		13,538	9,478	(5,486	)
Comprehensive income	5,873		13,538	9,478	(5,360	)
Earnings per share:
—Basic	0.21		0.48	0.33	(0.20	)
—Diluted	0.21		0.47	0.33	(0.19	)
Market price range of stock:
—High	63.76		63.40	69.23	74.47
—Low	54.74		59.83	61.23	67.13
Dividend per share	0.30		0.30	0.30	0.30

XML

Income Taxes Additional Information (Details) - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Income Tax Contingency [Line Items]
Document Period End Date		Dec. 31, 2019
Deferred tax liabilities, period increase (decrease)		$ 115,947
Unrecognized tax benefits before impact of deductions for state taxes, excluding interest and penalties	$ 4,037	4,037	$ 1,411
Unrecognized tax benefits that would impact effective tax rate	27	27	70
Accrued interest expense net of the benefit of tax deductions	27	27
Cumulative reduction in unrecognized tax benefits, due to lapsing of statutes of limitations		43
Other	4,148	4,148	1,138
Provision for income taxes		8,454	10,065	$ 35,393
Tax Cuts and Jobs Act, Incomplete Accounting, Change in Tax Rate, Deferred Tax Asset, Provisional Income Tax Expense			2,357
Tax Cuts and Jobs Act, Measurement Period Adjustment, Income Tax Expense (Benefit)	67
Tax Cuts And Jobs Act Of 2017, Measurement Period Adjustment, Increase (Decrease) Of Regulatory Liability	455
Liability recorded in tax memorandum account			6,504
Deferred Income Tax Charge
Income Tax Contingency [Line Items]
Deferred tax liabilities, period increase (decrease)		109,435
Tax Cuts and Jobs Act, Incomplete Accounting, Change in Tax Rate, Deferred Tax Asset, Provisional Income Tax Expense			$ 83,666
Federal
Income Tax Contingency [Line Items]
Operating Loss Carryforwards	9,213	9,213
Connecticut
Income Tax Contingency [Line Items]
Operating Loss Carryforwards	32,604	32,604
Tax Credit Carryforward, Amount	1,000	1,000
Maine
Income Tax Contingency [Line Items]
Operating Loss Carryforwards	$ 9,506	$ 9,506

XML

Commitments Narrative (Details) $ in Thousands			12 Months Ended
	Nov. 07, 2015 gal	May 19, 2003 gal	Dec. 31, 2019 USD ($) employee acre_foot $ / yr $ / million_gallons $ / Ccf gal	Dec. 31, 2018 USD ($) gal	Dec. 31, 2017 USD ($) gal	Dec. 31, 2008 $ / yr	Dec. 31, 1997	Jan. 08, 2020 USD ($)	Nov. 30, 2016	Dec. 31, 2008 $ / million_gallons
Long-term Purchase Commitment [Line Items]
Document Period End Date			Dec. 31, 2019
Purchased water			$ 99,118	$ 97,378	$ 86,456
Reduction in delivery schedule			10.00%
Intangible assets			$ 33,424	$ 15,799
Collective bargaining agreement percent of wage increase for 2017									3.00%
Collective bargaining agreement percent of wage increase for 2018									3.00%
Collective bargaining agreement percent of wage increase for 2019									4.00%
Santa Clara Valley Water District [Member]
Long-term Purchase Commitment [Line Items]
Master contract, negotiated term for delivery schedules			3 years
Water purchased in millions of gallons | gal			21,862,000,000	21,345,000,000	20,857,000,000
Purchased water			$ 96,285	$ 87,702	$ 78,703
Minimum percent of delivery schedule to be purchased in 2017			90.00%
Minimum volume of water to be purchased in 2017 | gal			19,794,000,000
Cost of water to be purchased in 2017			$ 89,539
Current contract water rate | $ / million_gallons			4.5
Service Agreements [Member]
Long-term Purchase Commitment [Line Items]
Contract life of agreement with City of Cupertino							25 years
Intangible assets			$ 4,128
Concession Fees [Member]
Long-term Purchase Commitment [Line Items]
Intangible assets			$ 6,800	$ 6,800
SJW Group [Member]
Long-term Purchase Commitment [Line Items]
Number of employees | employee			361
SJWTX,Inc. dba Canyon Lake Water Supply Corporation [Member] | Guadalupe-Blanco River Authority [Member]
Long-term Purchase Commitment [Line Items]
Long-term Purchase Commitment, Minimum Area Required, Next Twelve Months | acre_foot			6,900
Notice period required for contract adjustment			60 days
SJWTX,Inc. dba Canyon Lake Water Supply Corporation [Member] | Lower Colorado River Authority [Member]
Long-term Purchase Commitment [Line Items]
Long-term Purchase Commitment, Minimum Area Required, Next Twelve Months | acre_foot			250
RWA
Long-term Purchase Commitment [Line Items]
Purchase commitment period						50 years
RWA | Capacity Agreement
Long-term Purchase Commitment [Line Items]
Current contract water rate						75				2,621
Purchase commitment period						14 years
MDC | Capacity Agreement
Long-term Purchase Commitment [Line Items]
Purchase commitment period		50 years
Agreement to purchase water | gal		283,000,000
Kennebec Water District
Long-term Purchase Commitment [Line Items]
Current contract water rate | $ / yr			5,000
Tariff rate | $ / Ccf			1.51
Purchase commitment period	5 years
Agreement to purchase water | gal	60,000,000
Executive, Administrative or Supervisory Personnel [Member] | SJW Group [Member]
Long-term Purchase Commitment [Line Items]
Number of employees | employee			136
Union Member [Member] | SJW Group [Member]
Long-term Purchase Commitment [Line Items]
Number of employees | employee			225
Minimum [Member]
Long-term Purchase Commitment [Line Items]
Contract life of agreement with City of Cupertino			5 years
Maximum [Member]
Long-term Purchase Commitment [Line Items]
Contract life of agreement with City of Cupertino			70 years
Subsequent Event [Member] | Concession Fees [Member]
Long-term Purchase Commitment [Line Items]
Intangible assets								$ 5,000

XML

Segment and Non-Tariffed Business Reporting (Details) $ in Thousands		3 Months Ended									12 Months Ended
		Dec. 31, 2019 USD ($)		Sep. 30, 2019 USD ($)	Jun. 30, 2019 USD ($)	Mar. 31, 2019 USD ($)	Dec. 31, 2018 USD ($)	Sep. 30, 2018 USD ($)	Jun. 30, 2018 USD ($)	Mar. 31, 2018 USD ($)	Dec. 31, 2019 USD ($) subsidiary reportable_segment		Dec. 31, 2018 USD ($)	Dec. 31, 2017 USD ($)
Segment Reporting Information [Line Items]
Number of Subsidiaries | subsidiary											4
Number of Reportable Segments | reportable_segment											2
Operating revenue		$ 125,838		$ 113,997	$ 102,965	$ 77,682	$ 98,718	$ 124,853	$ 99,086	$ 75,042	$ 420,482		$ 397,699	$ 389,225
Utilities Operating Expense											363,003		324,259	287,374
Operating Income (Loss)		6,016		17,084	21,971	12,408	17,482	25,828	22,799	7,331	57,479		73,440	101,851
SJW Group net income		(5,486)		$ 9,478	$ 13,538	$ 5,873	8,823	$ 15,788	$ 12,871	$ 1,285	23,403		38,767	59,204
Net income before noncontrolling interest											23,627		38,767	61,100
Depreciation and amortization											65,592		54,601	48,292
Interest Expense											31,796		24,332	22,929
Provision for income taxes											8,454		10,065	35,393
Assets		3,132,470					1,956,389				3,132,470		1,956,389	1,458,001
Regulated [Member] | Water Utility Services [Member]
Segment Reporting Information [Line Items]
Operating revenue											407,116	[1]	384,639	376,104
Utilities Operating Expense											329,520	[1]	294,536	276,061
Operating Income (Loss)											77,596	[1]	90,103	100,043
SJW Group net income											42,691	[1]	53,181	47,736
Depreciation and amortization											63,775	[1]	53,067	46,500
Interest Expense											25,073	[1]	22,157	20,670
Provision for income taxes											8,382	[1]	14,826	30,127
Assets		3,016,846	[1]				1,492,954				3,016,846	[1]	1,492,954	1,406,221
Regulated [Member] | SJW Corp. [Member]
Segment Reporting Information [Line Items]
Operating revenue											407,116		384,639	376,104
Utilities Operating Expense											329,520		294,536	276,061
Operating Income (Loss)											77,596		90,103	100,043
SJW Group net income											42,691		53,181	47,736
Depreciation and amortization											63,775		53,067	46,500
Interest Expense											25,073		22,157	20,670
Provision for income taxes											8,382		14,826	30,127
Assets		3,016,846					1,492,954				3,016,846		1,492,954	1,406,221
Nonregulated Operation [Member] | Water Utility Services [Member]
Segment Reporting Information [Line Items]
Operating revenue											7,969		7,578	7,419
Utilities Operating Expense											5,443		5,012	4,855
Operating Income (Loss)											2,526		2,566	2,564
SJW Group net income											2,019		1,848	1,137
Depreciation and amortization											420		338	572
Interest Expense											0		0	0
Provision for income taxes											708		719	993
Assets		5,507					4,489				5,507		4,489	4,471
Nonregulated Operation [Member] | Real Estate Services [Member]
Segment Reporting Information [Line Items]
Operating revenue											5,397		5,482	5,702
Utilities Operating Expense											3,751		3,539	3,688
Operating Income (Loss)											1,646		1,943	2,014
SJW Group net income											1,623		885	6,193
Depreciation and amortization											1,196		1,196	1,220
Interest Expense											0		0	60
Provision for income taxes											486		903	644
Assets		46,778					46,517				46,778		46,517	47,668
Nonregulated Operation [Member] | All Other [Member]
Segment Reporting Information [Line Items]
Operating revenue	[2]										0		0	0
Utilities Operating Expense	[2]										24,289		21,172	2,770
Operating Income (Loss)	[2]										(24,289)		(21,172)	(2,770)
SJW Group net income	[2]										(22,930)		(17,147)	4,138
Depreciation and amortization	[2]										201		0	0
Interest Expense	[2]										6,723		2,175	2,199
Provision for income taxes	[2]										(1,122)		(6,383)	3,629
Assets	[2]	63,339					412,429				63,339		412,429	(359)
Nonregulated Operation [Member] | SJW Corp. [Member]
Segment Reporting Information [Line Items]
Operating revenue											13,366		13,060	13,121
Utilities Operating Expense											33,483		29,723	11,313
Operating Income (Loss)											(20,117)		(16,663)	1,808
SJW Group net income											(19,288)		(14,414)	11,468
Depreciation and amortization											1,817		1,534	1,792
Interest Expense											6,723		2,175	2,259
Provision for income taxes											72		(4,761)	5,266
Assets		$ 115,624					$ 463,435				$ 115,624		$ 463,435	$ 51,780

[1] As of December 31, 2019, the Company has performed a preliminary allocation of goodwill associated with the acquisition of CTWS to two reporting units, Connecticut and Maine, which are both aggregated within the Regulated Water Utility Services reportable segment.

[2] The “All Other” category for the year ended December 31, 2019, includes the accounts of SJW Group, SJWNE, LLC and CTWS, Inc. on a stand-alone basis. For the years ended December 31, 2018 and 2017, the “All Other” category includes the accounts of SJW Group on a stand-alone basis.

XML

Consolidated Statements of Changes in Stockholders' Equity - USD ($) $ in Thousands	Total	Common Stock [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	Accumulated Other Comprehensive Income [Member]	Noncontrolling Interest [Member]
Balance, value at Dec. 31, 2016	$ 421,646	$ 21	$ 81,715	$ 338,386	$ 1,524	$ 0
Balance, shares at Dec. 31, 2016		20,456,225
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	61,100			59,204		1,896
Distribution to noncontrolling interest	(1,896)					(1,896)
Unrealized income on investment, net of tax effect	679				679
Adjustment to pension benefit plans, net of taxes	0
Share-based compensation	2,504		2,643	(139)
Issuance of restricted and deferred stock units, value	(707)		(707)
Issuance of restricted and deferred stock units, shares		36,888
Employee stock purchase plan, value	$ 1,215		1,215
Employee stock purchase plan, shares	27,743	27,743
Dividends	$ (21,332)			(21,332)
Balance, value at Dec. 31, 2017	463,209	$ 21	84,866	376,119	2,203	0
Balance, shares at Dec. 31, 2017		20,520,856
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	38,767			38,767
Adjustment to pension benefit plans, net of taxes	0
Share-based compensation	2,020		2,117	(97)
Issuance of restricted and deferred stock units, value	(4,057)		(4,057)
Issuance of restricted and deferred stock units, shares		95,053
Employee stock purchase plan, value	$ 1,371		1,371
Employee stock purchase plan, shares	25,907	25,907
Common stock issued, shares		7,762,500
Common stock issued, value		$ 7
Dividends	$ (23,074)			(23,074)
Balance, value at Dec. 31, 2018	$ 889,312	$ 28	495,366	393,918	0	0
Balance, shares at Dec. 31, 2018	28,404,316	28,404,316
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	$ 23,627			23,403		224
Distribution to noncontrolling interest	(224)					(224)
Unrealized income on investment, net of tax effect	117				117
Adjustment to pension benefit plans, net of taxes	9				9
Share-based compensation	3,313		3,406	(93)
Share-based compensation related to business combination	6,384		6,384
Issuance of restricted and deferred stock units, value	(110)		(110)
Issuance of restricted and deferred stock units, shares		21,909
Employee stock purchase plan, value	$ 1,603		1,603
Employee stock purchase plan, shares	30,255	30,283
Common stock issued, value	$ 411,076		411,069
Common stock issuance cost	(10)		(10)
Dividends	(34,134)			(34,134)
Balance, value at Dec. 31, 2019	$ 889,984	$ 28	$ 506,639	$ 383,191	$ 126	$ 0
Balance, shares at Dec. 31, 2019	28,456,508	28,456,508

XML

Segment and Non-Tariffed Businesses Reporting

12 Months Ended

Dec. 31, 2019

Segment Reporting [Abstract]

Segment and Non-Tariffed Businesses Reporting

Segment and Non-Tariffed Businesses Reporting

SJW Group is a holding company with four subsidiaries: (i) SJWC, a water utility operation with both regulated and non-tariffed businesses, (ii) SJWTX, Inc. which is doing business as CLWSC, a regulated water utility located in Canyon Lake, Texas, and its consolidated non-tariffed variable interest entity, Acequia Water Supply Corporation, (iii) SJW Land Company and its consolidated variable interest entity, 444 West Santa Clara Street, L.P., which operated commercial building rentals, and (iv) as of October 9, 2019, SJWNE LLC a holding company for CTWS and its subsidiaries, Connecticut Water, Maine Water, HVWC, Avon Water, NEWUS and Chester Realty, Inc. (see discussion on the merger at Note 12).  In November 2017, SJW Group sold its equity interest in its wholly-owned subsidiary TWA, a non-tariffed water utility operation that was undertaking activities to develop a water supply project in Texas. In accordance with FASB ASC Topic 280—“Segment Reporting,” SJW Group has determined that it has two reportable business segments. The first segment is that of providing water utility and utility-related services to its customers through SJW Group’s subsidiaries, SJWC, Connecticut Water, CLWSC, Maine Water, HVWC, Avon Water, NEWUS and, up to the date of the sale, TWA, together referred to as “Water Utility Services.” The second segment is property management and investment activity conducted by SJW Land Company and Chester Realty, Inc., referred to as “Real Estate Services.”

SJW Group’s reportable segments have been determined based on information used by the chief operating decision maker. SJW Group’s chief operating decision maker includes the Chairman, President and Chief Executive Officer, and his executive staff. The executive staff reviews financial information presented on a consolidated basis that is accompanied by disaggregated information about operating revenue, net income and total assets, by subsidiary.

The following tables set forth information relating to SJW Group’s reportable segments and distribution of regulated and non-tariffed business activities within the reportable segments. Certain allocated assets, revenue and expenses have been included in the reportable segment amounts. Other business activity of SJW Group not included in the reportable segments is included in the “All Other” category.

	For the year ended December 31, 2019
	Water Utility Services			Real Estate Services	All Other (1)		SJW Group
	Regulated (2)		Non- tariffed	Non- tariffed	Non- tariffed		Regulated	Non- tariffed		Total
Operating revenue	$	407,116	7,969	5,397	—		407,116	13,366		420,482
Operating expense	329,520		5,443	3,751	24,289		329,520	33,483		363,003
Operating income (loss)	77,596		2,526	1,646	(24,289	)	77,596	(20,117	)	57,479
Net income (loss)	42,691		2,019	1,623	(22,930	)	42,691	(19,288	)	23,403
Depreciation and amortization	63,775		420	1,196	201		63,775	1,817		65,592
Senior note and other interest expense	25,073		—	—	6,723		25,073	6,723		31,796
Income tax expense (benefit) in net income	8,382		708	486	(1,122	)	8,382	72		8,454
Assets	3,016,846		5,507	46,778	63,339		3,016,846	115,624		3,132,470

	For the year ended December 31, 2018
	Water Utility Services			Real Estate Services	All Other (1)		SJW Group
	Regulated		Non- tariffed	Non- tariffed	Non- tariffed		Regulated	Non- tariffed		Total
Operating revenue	$	384,639	7,578	5,482	—		384,639	13,060		397,699
Operating expense	294,536		5,012	3,539	21,172		294,536	29,723		324,259
Operating income (loss)	90,103		2,566	1,943	(21,172	)	90,103	(16,663	)	73,440
Net income (loss)	53,181		1,848	885	(17,147	)	53,181	(14,414	)	38,767
Depreciation and amortization	53,067		338	1,196	—		53,067	1,534		54,601
Senior note and other interest expense	22,157		—	—	2,175		22,157	2,175		24,332
Income tax expense (benefit) in net income	14,826		719	903	(6,383	)	14,826	(4,761	)	10,065
Assets	1,492,954		4,489	46,517	412,429		1,492,954	463,435		1,956,389

	For the year ended December 31, 2017
	Water Utility Services			Real Estate Services	All Other (1)		SJW Group
	Regulated		Non- tariffed	Non- tariffed	Non- tariffed		Regulated	Non- tariffed	Total
Operating revenue	$	376,104	7,419	5,702	—		376,104	13,121	389,225
Operating expense	276,061		4,855	3,688	2,770		276,061	11,313	287,374
Operating income (loss)	100,043		2,564	2,014	(2,770	)	100,043	1,808	101,851
Net income (loss)	47,736		1,137	6,193	4,138		47,736	11,468	59,204
Depreciation and amortization	46,500		572	1,220	—		46,500	1,792	48,292
Senior note and other interest expense	20,670		—	60	2,199		20,670	2,259	22,929
Income tax expense (benefit) in net income	30,127		993	644	3,629		30,127	5,266	35,393
Assets	1,406,221		4,471	47,668	(359	)	1,406,221	51,780	1,458,001

____________________

(1)    The “All Other” category for the year ended December 31, 2019, includes the accounts of SJW Group, SJWNE, LLC and CTWS, Inc. on a stand-alone basis. For the years ended December 31, 2018 and 2017, the “All Other” category includes the accounts of SJW Group on a stand-alone basis.

(2)    As of December 31, 2019, the Company has performed a preliminary allocation of goodwill associated with the acquisition of CTWS to two reporting units, Connecticut and Maine, which are both aggregated within the Regulated Water Utility Services reportable segment.

XML

Consolidated Balance Sheets - USD ($)	Dec. 31, 2019	Dec. 31, 2018
Utility plant:
Land	$ 34,395,000	$ 18,296,000
Depreciable plant and equipment	2,988,454,000	1,833,051,000
Construction in progress	112,232,000	68,765,000
Intangible assets	33,424,000	15,799,000
Property, Plant and Equipment, Gross	3,168,505,000	1,935,911,000
Less accumulated depreciation and amortization	962,019,000	607,090,000
Public Utilities, Property, Plant and Equipment, Net	2,206,486,000	1,328,821,000
Real estate investments	57,699,000	56,336,000
Less accumulated depreciation and amortization	13,597,000	12,327,000
Property, Plant and Equipment, Net	44,102,000	44,009,000
Current assets:
Cash	12,944,000	8,722,000
Restricted fund	5,000,000	0
Money market fund	0	412,000,000
Accounts receivable:
Customers, net of allowances for uncollectible accounts of $1,512 and $272 in 2019 and 2018, respectively	36,305,000	19,154,000
Income tax	8,837,000	1,888,000
Other	2,833,000	1,203,000
Accrued unbilled utility revenue	40,102,000	27,974,000
Current regulatory assets, net	6,472,000	26,910,000
Other current assets	9,553,000	4,871,000
Assets, Current	122,046,000	502,722,000
Other assets:
Net regulatory assets, less current portion	113,945,000	76,715,000
Investments	12,928,000	0
Goodwill	628,287,000	1,680,000
Other	4,676,000	2,442,000
Assets, Noncurrent	759,836,000	80,837,000
Assets	3,132,470,000	1,956,389,000
Stockholders’ equity:
Common stock, $0.001 par value; authorized 70,000,000 shares in 2019 and 36,000,000 shares in 2018; issued and outstanding 28,456,508 shares in 2019 and 28,404,316 shares in 2018	28,000	28,000
Additional paid-in capital	506,639,000	495,366,000
Retained earnings	383,191,000	393,918,000
Accumulated other comprehensive income	126,000	0
Total stockholders’ equity	889,984,000	889,312,000
Long-term debt, less current portion	1,283,597,000	431,424,000
Capitalization, Long-term Debt and Equity	2,173,581,000	1,320,736,000
Current liabilities:
Lines of credit	117,209,000	100,000,000
Current portion of long-term debt	22,272,000	0
Accrued groundwater extraction charges, purchased water and power	17,211,000	13,694,000
Accounts payable	34,886,000	24,937,000
Accrued interest	13,140,000	7,132,000
Accrued property taxes and other non-income taxes	2,039,000	1,926,000
Accrued payroll	11,570,000	7,181,000
Other current liabilities	16,240,000	9,115,000
Liabilities, Current	234,567,000	163,985,000
Deferred income taxes	195,598,000	79,651,000
Advances for construction	112,339,000	80,610,000
Contributions in aid of construction	286,035,000	168,243,000
Postretirement benefit plans	108,044,000	70,490,000
Regulatory liabilities, net	0	59,149,000
Other noncurrent liabilities	22,306,000	13,525,000
Commitments and contingencies	0	0
Liabilities and Equity	$ 3,132,470,000	$ 1,956,389,000

XML

Lines of Credit

12 Months Ended

Dec. 31, 2019

Line of Credit Facility [Abstract]

LINES OF CREDIT

Lines of Credit

SJWC entered into a $125,000 credit agreement (the “Credit Agreement”) with JPMorgan Chase Bank, N.A., as the lender (the “Lender”) on June 1, 2016. The Credit Agreement provides an unsecured credit facility with a letter of credit sublimit of $10,000. Proceeds of borrowings under the Credit Agreement may be used to refinance existing debt, for working capital, and for general corporate purposes. The Credit Agreement has a maturity date of June 1, 2021.

The Credit Agreement contains customary representations, warranties and events of default, as well as certain restrictive covenants customary for facilities of this type, including restrictions on indebtedness, liens, acquisitions and investments, restricted payments, asset sales, and fundamental changes. The Credit Agreement also includes certain financial covenants that require the Company to maintain a maximum funded debt to capitalization ratio and a minimum interest coverage ratio.

SJW Group and SJW Land Company (collectively, the “Borrowers”), entered into a $15,000 credit agreement with the Lender (the “SJW Group Credit Agreement”) on June 1, 2016, which provides an unsecured credit facility to the Borrowers with a letter of credit sublimit of $5,000. The SJW Group Credit Agreement matures on June 1, 2021. Borrowings under the SJW Group Credit Agreement bear interest under the same terms and conditions as those in the Credit Agreement.

In addition, on June 1, 2016, SJW Group, as guarantor, and SJWTX, Inc. (the “Borrower”), entered into a $5,000 credit agreement with the Lender (the “SJWTX Credit Agreement”), which provides an unsecured credit facility to the Borrower with a letter of credit sublimit of $1,000. The SJWTX Credit Agreement matures on June 1, 2021.

CTWS maintains a $15,000 line of credit agreement with CoBank, ACB, which is currently scheduled to expire on July 1, 2020.  CTWS maintains an additional credit agreement of $95,000 with RBS Citizens, N.A., which will be reduced to $75,000 on March 1, 2020, with a final maturity on December 14, 2023.

As of December 31, 2019 and 2018, SJW Group had outstanding balances on the lines of credit of $117,209 and $100,000, respectively.

Cost of borrowing on the lines of credit averaged 3.73% and 2.94% as of December 31, 2019 and 2018, respectively.

The SJW Group and SJWTX, Inc. unsecured bank lines of credit have the following affirmative covenants calculated with the financial statements of SJW Group, on a consolidated basis: (1) the funded debt cannot exceed 66-2/3% of total capitalization, and (2) net income available for interest charges for the trailing 12-calendar-month period cannot be less than 175% of interest charges. As of December 31, 2019, SJW Group and SJWTX, Inc. were in compliance with all covenants.

SJWC’s unsecured bank lines of credit have the following affirmative covenants: (1) the funded debt cannot exceed 66-2/3% of total capitalization, and (2) net income available for interest charges for the trailing 12-calendar-month period cannot be less than 175% of interest charges. As of December 31, 2019, SJWC was in compliance with all covenants.

The CTWS unsecured bank lines of credit have the following affirmative covenants: (1) Connecticut Water’s earnings before interest and taxes to its interest expense shall be equal or greater to 3 to 1, (2) Maine Water’s debt to capitalization ratio shall not exceed 60%, (3) Connecticut Water’s debt to capitalization ratio shall not exceed 60%, and (4) CTWS’s debt to capitalization ratio shall not exceed 65%. As of December 31, 2019, CTWS was in compliance with all covenants.

XML

Commitments

12 Months Ended

Dec. 31, 2019

Commitments Disclosure [Abstract]

Commitments

Commitments

SJWC purchases water from Valley Water under terms of a master contract expiring in 2051. Delivery schedules for purchased water are based on a contract year beginning July 1, and are negotiated every three years under terms of the master contract with Valley Water. For the years ended December 31, 2019, 2018 and 2017, SJWC purchased from Valley Water 21,862 million gallons ($96,285), 21,345 million gallons ($87,702) and 20,857 million gallons ($78,703), respectively, of contract water. On June 13, 2017, the Valley Water Board of Directors approved treated water deliveries reflecting the contractual delivery schedule reduced by 10% through June 30, 2020. Based on current prices and estimated deliveries, SJWC

is committed to purchase from Valley Water a minimum of 90% of the reduced delivery schedule, or 19,794 million gallons ($89,539) of water at the current contract water rate of $4.5 per million gallons for the year ending December 31, 2020. Additionally, SJWC purchases non-contract water from Valley Water on an “as needed” basis if the water supply is available.

In 1997, SJWC entered into a 25-year contract agreement with the City of Cupertino to operate the City’s municipal water system. SJWC paid a one-time, upfront concession fee of $6,800 to the City of Cupertino which is amortized over the contract term. Under the terms of the contract agreement, SJWC assumed responsibility for maintenance and operating costs, while receiving all payments for water service. SJWC and the City of Cupertino signed an amendment to the lease agreement dated January 8, 2020. Under the terms of the amended lease agreement, SJWC agreed to an incremental up-front payment of $5,000 to be used by the City of Cupertino for capital improvements to the City’s municipal water system prior to the expiration of the lease in September 2022. Any unspent funds at lease termination remain the property of the City.

Connecticut Water has an agreement with the South Central Connecticut Regional Water Authority (“RWA”) to purchase water from RWA. The agreement was signed in April 2006 and became effective upon the receipt of all regulatory approvals in 2008 and will remain in effect for a minimum of fifty years upon becoming effective. Connecticut Water will pay RWA $75 per year as part of a capacity agreement, for a total of 14 years, starting on the effective date of the agreement. In addition, Connecticut Water is able, but under no obligation, to purchase up to one million gallons of water per day at the then current wholesale rates per the agreement, $2.621 per million gallons as of December 31, 2019. Connecticut Water has an agreement with The Metropolitan District (“MDC”) to purchase water from MDC to serve the Unionville system. The agreement became effective on October 6, 2000 and has a term of fifty years beginning May 19, 2003, the date the water supply facilities related to the agreement were placed in service. Connecticut Water agrees to purchase 283 million gallons of water annually from MDC. Rate charged by the MDC at December 31, 2019 were three dollars and fifty cents per hundred cubic feet.

CLWSC has long-term contracts with the GBRA. The terms of the agreements expire in 2037, 2040, 2044 and 2050. The agreements, which are take-or-pay contracts, provide CLWSC with 6,900 acre-feet per year of water supply from Canyon Lake. The water rate may be adjusted by GBRA at any time, provided they give CLWSC a 60-day written notice on the proposed adjustment. In 2018, CLWSC acquired raw water supply agreements with the Lower Colorado River Authority (“LCRA”) and West Travis Public Utility Agency (“WTPUA”) expiring in 2053 and 2046, respectively, for 250 acre-feet of water under each agreement per year from Lake Austin and the Colorado River, respectively, at prices that may be adjusted periodically by the agencies.

Maine Water has an agreement with the Kennebec Water District for potable water service. The agreement was extended and became effective on November 7, 2015 for a new term of 5 years. Maine Water guarantees a minimum consumption of 60 million gallons of water annually. Water sales to Maine Water are billed at a flat rate of $5 per year plus the monthly minimum tariff rate of $1.51 per hundred cubic feet for a 4-inch metered service as of December 31, 2019.

As of December 31, 2019, SJWC had 361 employees, of whom 136 were executive, administrative or supervisory personnel, and of whom 225 were members of unions. On November 12, 2019 and February 20, 2020, SJWC reached three-year bargaining agreements with the International Union of Operating Engineers, representing certain employees in the engineering department, and the Utility Workers of America, representing the majority of all nonadministrative employees at SJWC, respectively, covering January 1, 2020 through December 31, 2022. The agreements include a 3% wage increase in 2020, 3% in 2021 and 4% in 2022 for members of both unions.

XML

Summary of Significant Accounting Policies (Real Estate Investments) (Details)			3 Months Ended	12 Months Ended
	Sep. 14, 2018 USD ($)	Apr. 06, 2017 USD ($)	Dec. 31, 2019 USD ($) mi²	Dec. 31, 2019 USD ($) mi²	Dec. 31, 2018 USD ($)	Dec. 31, 2017 USD ($)
Components of Real Estate Investments [Abstract]
Land			$ 14,168,000	$ 14,168,000	$ 13,262,000
Buildings and improvements			43,531,000	43,531,000	43,074,000
Total real estate investment			57,699,000	57,699,000	56,336,000
Proceeds from sale of real estate held-for-investment			745,000
Gain on sale of real estate investments				929,000	0	$ 6,903,000
Operating Leases, Future Minimum Payments Receivable [Abstract]
2017			4,520,000	4,520,000
2018			3,208,000	3,208,000
2019			2,527,000	2,527,000
2020			2,564,000	2,564,000
2021			2,645,000	2,645,000
Thereafter			$ 10,544,000	$ 10,544,000
CA Undeveloped Land
Components of Real Estate Investments [Abstract]
Proceeds from sale of real estate held-for-investment		$ 1,350,000
Gain on sale of real estate investments		580,000
Selling expense		14,000
Minimum [Member]
Schedule of Investments [Line Items]
Service area in square miles | mi²			246	246
CPED Proposed Penalty, Per Offense, Per Day	$ 500
Components of Real Estate Investments [Abstract]
Estimated useful life				7 years
Maximum [Member]
Schedule of Investments [Line Items]
CPED Proposed Penalty, Per Offense, Per Day	$ 50,000
Components of Real Estate Investments [Abstract]
Estimated useful life				39 years
Land and Building [Member]
Assets Leased or Available for Lease [Abstract]
Assets leased or available for lease			$ 56,839,000	$ 56,839,000	$ 56,090,000
Connecticut Water Company [Member]
Components of Real Estate Investments [Abstract]
Gain on sale of real estate investments				$ 4,000
444 West Santa Clara Street, L.P. [Member]
Components of Real Estate Investments [Abstract]
Limited partership interest percentage				70.00%
444 West Santa Clara Street, L.P. [Member] | 444 West Santa Clara Street
Components of Real Estate Investments [Abstract]
Proceeds from sale of real estate held-for-investment		11,000,000
Gain on sale of real estate investments		6,323,000
Selling expense		1,157,000
Maine Water Company [Member]
Components of Real Estate Investments [Abstract]
Conservation easement, value			1,200,000	$ 1,200,000
Proceeds from sale of real estate held-for-investment				600,000
Contribution of Property				600,000
Gain on sale of real estate investments				$ 180,000
Parent [Member]
Components of Real Estate Investments [Abstract]
Gain on sale of real estate investments			521,000
Parent [Member] | 444 West Santa Clara Street
Components of Real Estate Investments [Abstract]
Gain on sale of real estate investments		4,427,000
Noncontrolling Interest [Member]
Components of Real Estate Investments [Abstract]
Gain on sale of real estate investments			$ 224,000
Noncontrolling Interest [Member] | 444 West Santa Clara Street
Components of Real Estate Investments [Abstract]
Gain on sale of real estate investments		$ 1,896,000

XML

SJW Group and CTWS Merger (the “Merger”) Business Combination, Proforma Information (Tables)

12 Months Ended

Dec. 31, 2019

Business Acquisition, Pro Forma Information [Abstract]

Business Acquisition, Pro Forma Information [Table Text Block]

The amounts of revenue and pretax loss of CTWS included in SJW Group’s Consolidated Statements of Comprehensive Income from the acquisition date in October 2019 through December 31, 2019 are as follows:

Total revenues	$	21,672
Pretax (loss)	(3,174		)

The following unaudited pro forma financial information summarizes the combined results of operations for SJW Group and CTWS, as though the companies were combined as of January 1, 2018.

	Fiscal Year Ended December 31,
	2019		2018
Total revenues	$	515,153	514,364
Pretax income (loss)	60,862		72,938
Net income (loss)	56,968		65,449
Basic earnings per share	2.00		2.31

XML

Summary of Significant Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2019

Accounting Policies [Abstract]

Business Combinations Policy [Policy Text Block]

SJW Group applies the provisions of ASC Topic 805—“Business Combinations” for the purchase accounting related to the merger with CTWS on October 9, 2019. Topic 805 requires SJW Group to recognize separately from goodwill the assets acquired and the liabilities assumed at the acquisition date fair values. Goodwill as of the acquisition date is measured as the excess of consideration transferred over the net of the acquisition date fair values of the assets acquired and the liabilities assumed. While SJW Group uses our best estimates and assumptions to accurately value assets acquired and liabilities assumed at the acquisition date, our estimates are inherently uncertain and subject to refinement. As a result, during the measurement period, which may be up to one year from the acquisition date, we record adjustments to the assets acquired and liabilities assumed with the corresponding offset to goodwill. Upon the conclusion of the measurement period or final determination of the values of assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recorded to our Consolidated Statements of Comprehensive Income. Accounting for business combinations requires SJW Group to make significant estimates and assumptions, especially at the acquisition date, including estimates for intangible assets, contractual obligations assumed and pre-acquisition contingencies. Although SJW Group believes that the assumptions and estimates we make are reasonable and appropriate, they are based in part on historical experience and information obtained from CTWS’s management and are inherently uncertain. Events and circumstances may occur that may affect the accuracy or validity of such assumptions, estimates or actual results. The purchase price allocation process requires management to make

significant estimates and assumptions with respect to intangible assets. Although SJW Group believes the assumptions and estimates made are reasonable, they are based in part on historical experience, market conditions and information obtained from management of the acquired companies and are inherently uncertain. Examples of critical estimates in valuing certain of the intangible assets we have acquired or may acquire in the future include, but are not limited to: future expected cash flows from services; historical and expected customer attrition rates and anticipated growth in revenue from acquired customers; the expected use of the acquired assets; and discount rates.

Consolidation Policy

The accompanying consolidated financial statements include the accounts of SJW Group, its wholly owned subsidiaries, and two variable interest entities in which two SJW Group subsidiaries are the primary beneficiaries. All intercompany transactions and balances have been eliminated in consolidation.

Recently Adopted Accounting Principles Policy

In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-02, “Leases (Topic 842),” as amended, which supersedes the lease requirements in “Leases (Topic 840).” This ASU generally requires lessees to recognize operating and financing lease liabilities and corresponding right-of-use assets on the Consolidated Balance Sheets and to provide enhanced disclosures surrounding the amount, timing and uncertainty of cash flows arising from leasing arrangements. ASU 2016-02 also makes some changes to lessor accounting and aligns with the new

revenue recognition guidance. SJW Group adopted the new standard effective January 1, 2019, on a modified retrospective basis and did not restate comparative periods. SJW Group also elected the package of practical expedients permitted under the transition guidance and combined lease and non-lease components. In addition, SJW Group kept leases with an initial term of 12 months or less off the Consolidated Balance Sheets and recognized the associated lease payments in the Consolidated Statements of Comprehensive Income on a straight-line basis over the lease term. The adoption of this standard did not have a material impact on SJW Group’s consolidated financial statements.

Use of Estimates Policy

The preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the United States of America 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 date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Utility Plant Policy

The cost of additions, replacements and betterments to utility plant is capitalized. The amount of interest capitalized in 2019, 2018 and 2017 was $4,323, $2,856 and $2,807, respectively. Construction in progress was $112,232 and $68,765 at December 31, 2019 and 2018, respectively.

The major components of depreciable plant and equipment as of December 31, 2019 and 2018 are as follows:

	2019		2018
Equipment	$	521,183	335,358
Transmission and distribution	2,207,051		1,375,821
Office buildings and other structures	260,220		121,872
Total depreciable plant and equipment	$	2,988,454	1,833,051

Depreciation is computed using the straight-line method over the estimated remaining service lives of groups of assets, ranging from 5 to 75 years. The estimated service lives of depreciable plant and equipment are as follows:

	Useful Lives
Equipment	5 to 35 years
Transmission and distribution plant	35 to 75 years
Office buildings and other structures	7 to 50 years

For the years 2019, 2018 and 2017, depreciation expense as a percent of the beginning of the year balance of depreciable plant was approximately 3.8%, 3.6% and 3.6%, respectively. A portion of depreciation expense was allocated to administrative and general expense. For the years 2019, 2018 and 2017, the amounts allocated to administrative and general expense were $2,869, $2,306 and $2,209, respectively. Depreciation expense for utility plant for the years ended December 31, 2019, 2018 and 2017 was $63,785, $53,031 and $46,456, respectively. The cost of utility plant retired, including retirement costs (less salvage), is charged to accumulated depreciation and no gain or loss is recognized.

Utility Plant Intangible Assets Policy

All intangible assets are recorded at cost and are amortized using the straight-line method over the estimated useful life of the asset, ranging from 5 to 70 years (see Note 6, “Utility Plant Intangible Assets”).

Real Estate Investments Policy

Real estate investments are recorded at cost and consist primarily of land and buildings. Net gains and losses from the sale of real estate investments are recorded as a component of other (expense) income in the Consolidated Statements of Comprehensive Income. Nonutility property in Water Utility Services is also classified in real estate investments and not separately disclosed on the balance sheet based on the immateriality of the amount. Nonutility property is property that is neither used nor useful in providing water utility services to customers and is excluded from the rate base for rate-setting purposes. SJWC recognizes gain/loss on disposition of nonutility property in accordance with California Public Utilities Commission (“CPUC”) Code Section 790, whereby the net proceeds are reinvested back into property that is useful in providing water utility services to customers. There is no depreciation associated with nonutility property as it is all land.

Depreciation on buildings and improvements for real estate investments is computed using the straight-line method over the estimated useful lives of the assets, ranging from 7 to 39 years.

Impairment of Long-Lived Assets Policy

In accordance with the requirements of FASB ASC Topic 360—“Property, Plant and Equipment,” the long-lived assets of SJW Group are reviewed for impairment when changes in circumstances or events require adjustments to the carrying values of the assets. When such changes in circumstances or events occur, the company assesses recoverability by determining whether the carrying value of such assets will be recovered through the undiscounted expected future cash flows. To the extent an impairment exists, the asset is written down to its estimated fair value with a corresponding charge to operations in the period in which the impairment is identified. Long-lived assets consist primarily of utility plant in service, real estate investments, intangible assets, and regulatory assets. In addition, the company tests unamortized intangible assets, which primarily relate to water rights, at least annually or more frequently if events or changes in circumstances indicate that the asset may be impaired. SJW Group first performs a qualitative assessment to determine whether it is necessary to perform the quantitative impairment test. In assessing the qualitative factors, SJW Group considers the impact of these key factors: change in industry and competitive environment, financial performance, and other relevant Company-specific events. If SJW Group determines that as a result of the qualitative assessment it is more likely than not (> 50% likelihood) that the fair value is less than carrying amount, then a quantitative test is performed.

Goodwill and Intangible Assets, Policy [Policy Text Block]

Goodwill represents the excess of the purchase price paid over the estimated fair value of the assets acquired and liabilities assumed in the acquisition of a business. Goodwill is not amortized and must be allocated at the reporting unit level, which is defined as an operating segment or one level below, and tested for impairment at least annually, or more frequently if an event occurs or circumstances change that would more likely than not, reduce the fair value of a reporting unit below its carrying value.

Cash and Cash Equivalents, Policy [Policy Text Block]

Cash and cash equivalents primarily consist of cash on deposit with banks with maturities of three months or less from the date of purchase.

Financial Instruments Policy

The following instruments are not measured at fair value on the company’s consolidated balance sheets but, require disclosure of fair values: cash and cash equivalents, accounts receivable and accounts payable. The estimated fair value of such instruments approximates their carrying value as reported on the consolidated balance sheets. The fair value of such financial instruments are determined using the income approach based on the present value of estimated future cash flows. The fair value of these instruments would be categorized as Level 2 in the fair value hierarchy, with the exception of cash and cash equivalents, which would be categorized as Level 1.

Investment in Caifornia Water Service Group Policy

SJW Group’s had an investment in California Water Service Group which was accounted for under FASB ASC Topic 320—“Investment—Debt and Equity Securities,” as an available-for-sale marketable security. The investment was recorded on the Consolidated Balance Sheet at its quoted market price with the change in unrealized gain or loss reported, net of tax, as a

component of other expense (income) with the adoption of ASU 2016-01 on January 1, 2018. Prior to adoption, the changes in unrealized gain or loss, net of tax, were reported as a component of other comprehe

Balancing and Memorandum Accounts Policy

In California, the CPUC has established a balancing account mechanism for the purpose of tracking the under-collection or over-collection associated with expense changes and the revenue authorized by the CPUC to offset those expense changes. SJWC also maintains memorandum accounts to track revenue impacts due to catastrophic events, certain unforeseen water quality expenses related to new federal and state water quality standards, energy efficiency, water conservation, water tariffs, and other approved activities or as directed by the CPUC.

Balancing and memorandum accounts are recognized by SJWC 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. In addition, in the case of special revenue programs such as the Water Conservation Memorandum Account (“WCMA”) and WRA, SJWC and CTWS follow the requirements of ASC Topic 980-605-25—“Alternative Revenue Programs” in determining revenue recognition, including the requirement that such revenues will be collected within 24 months of the year-end in which the revenue is recorded. A reserve is recorded for amounts SJW Group estimates will not be collected within the 24-month period. This reserve is based on an estimate of actual usage over the recovery period, offset by applicable drought surcharges. In assessing the probability criteria for balancing and memorandum accounts between general rate cases, SJWC considers evidence that may exist prior to CPUC authorization that would satisfy ASC Topic 980 subtopic 340-25 recognition criteria. Such evidence may include regulatory rules and decisions, past practices, and other facts and circumstances that would indicate that recovery or refund is probable. When such evidence provides sufficient support, the balances are recorded in SJW Group’s consolidated financial statements.

Regulatory Assets and Liabilities Policy

Generally accepted accounting principles for water utilities include the recognition of regulatory assets and liabilities as permitted by ASC Topic 980. In accordance with ASC Topic 980, Water Utility Services, to the extent applicable, records deferred costs and credits on the balance sheet as regulatory assets and liabilities when it is probable that these costs and credits will be recognized in the ratemaking process in a period different from when the costs and credits are incurred. Accounting for such costs and credits is based on management’s judgment and prior historical ratemaking practices, and it occurs when management determines that it is probable that these costs and credits will be recognized in the future revenue of Water Utility Services through the ratemaking process. The regulatory assets and liabilities recorded by Water Utility Services primarily relate to the recognition of deferred income taxes for ratemaking versus tax accounting purposes, balancing and memorandum

accounts, debt premiums related to business combinations, postretirement pension benefits, medical costs, accrued benefits for vacation and asset retirement obligations that have not yet been passed through in rates. For Connecticut and Maine water utility services, regulatory assets and liabilities also include deferred revenues associated with the WRA regulatory mechanism (see discussion in Regulatory and Rates Regulation section above). The company adjusts the related asset and liabilities for these items through its regulatory asset and liability accounts at year-end, except for certain postretirement benefit costs and balancing and memorandum accounts which are adjusted monthly. The company expects to recover regulatory assets related to plant depreciation income tax temporary differences over the average lives of the plant assets of between 5 to 75 years.

Rate-regulated enterprises are required to charge a regulatory asset to earnings if and when that asset no longer meets the criteria for being recorded as a regulatory asset. SJW Group continually evaluates the recoverability of regulatory assets by assessing whether the amortization of the balance over the remaining life can be recovered through expected and undiscounted future cash flows.

Income Tax Policy

Income taxes are accounted for using the asset and liability method. Deferred tax assets and liabilities are recognized for the effect of temporary differences between financial and tax reporting. Deferred tax assets and liabilities are measured using current tax rates in effect. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the period that includes the enactment date.

Regulatory Income Taxes Policy

To the extent permitted by the regulators, investment tax credits resulting from utility plant additions are deferred and amortized over the estimated useful lives of the related property.

Advances for Construction and Contributions in Aid of Construction Policy

Contributions in aid of construction represent funds received from developers that are not refundable under applicable regulations. Depreciation applicable to utility plant constructed with these contributions is charged to contributions in aid of construction.

Customer advances and contributions in aid of construction received subsequent to 1986 and prior to June 12, 1996 generally must be included in federal taxable income, except for CTWS. Taxes paid relating to advances and contributions are recorded as deferred tax assets for financial reporting purposes and are amortized over 40 years for advances and over the tax depreciable life of the related asset for contributions. Receipts subsequent to June 12, 1996 are generally exempt from federal taxable income, unless specifically prescribed under treasury regulations, including CTWS.

Advances and contributions received subsequent to 1991 and prior to 1997 are included in state taxable income, except for CTWS.

Asset Retirement Obligations Policy

SJW Group’s asset retirement obligation is recorded as a liability included in other non-current liabilities. It reflects principally the retirement costs of wells and other anticipated clean-up costs, which by law, must be remediated upon retirement. Retirement costs have historically been recovered through rates at the time of retirement. As a result, the liability is offset by a regulatory asset.

Revenue Recognition Policy

ASC Topic 606 - “Revenue from Contracts with Customers.” In accordance with Topic 606, management has determined that the company has principally four categories of revenues. The first category, revenue from contracts with customers, represents metered revenue of Water Utility Services which includes billings to customers based on meter readings plus an estimate of water used between the customers’ last meter reading and the end of the accounting period. SJW Group satisfies its performance obligation upon delivery of water to the customer at which time the customer consumes the benefits provided by the company. The customer is typically billed on a quarterly or bi-monthly basis after water delivery has occurred. The customer is charged both a service charge which is based upon meter size and covers a portion of the fixed costs of furnishing water to the customer and a consumption charge based on actual water usage. Unbilled revenue from the last meter reading date to the end of the accounting period is estimated based on the most recent usage patterns, production records and the effective tariff rates. As the company has the right to bill for services that it has provided, SJW Group estimates the dollar value of deliveries during the unbilled period and recognizes the associated revenue. Actual results could differ from those estimates, which may result in an adjustment to revenue when billed in a subsequent period. The second category, rental income, represents lease rental income from SJW Land Company and Chester Realty, Inc. tenants. The tenants pay monthly in accordance with lease agreements and SJW Group recognizes the income ratably over the lease term as this is the most representative of the pattern in which the benefit is expected to be derived from SJW Group’s underlying asset.

The third and fourth revenue categories are other balancing and memorandum accounts and alternative revenue programs. Both are scoped out of Topic 606 and are accounted for under FASB ASC Topic 980 - “Regulated Operations.” Balancing and memorandum accounts are recognized by SJWC 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. In addition, in the case of special revenue programs, SJWC, Connecticut Water, and HVWC follow the requirements of ASC Topic 980-605-25, “Alternative Revenue Programs” in determining revenue recognition, including the requirement that such revenues will be collected within 24 months of the year-end in which the revenue is recorded. A reserve is recorded for amounts SJW Group estimates will not be collected within the 24-month period. This reserve is based on an estimate of actual usage over the recovery period, offset by applicable drought surcharges. In assessing the probability criteria for balancing and memorandum accounts between general rate cases, SJWC considers evidence that may exist prior to CPUC authorization that would satisfy ASC Topic 980 subtopic 340-25 recognition criteria. Such evidence may include regulatory rules and decisions, past practices, and other facts and circumstances that would indicate that recovery or refund is probable. When such evidence provides sufficient support, the balances are recorded in SJW Group’s financial statements.

Share-based Payment Policy

SJW Group calculates the fair value of service-based and performance-based restricted stock awards based on the grant date fair market value of the company’s stock price reduced by the present value of the dividends expected to be declared on outstanding shares.

SJW Group utilizes the Monte Carlo valuation model, which requires the use of subjective assumptions, to compute the fair value of market-vesting restricted stock units.

The compensation cost for service-based restricted stock awards are charged to income on a straight-line basis over the requisite service period, which is the vesting period. For performance-based stock awards, compensation expense is charged to income on a straight-line basis over the requisite service period based on expected attainment of performance targets. Changes in the estimates of the expected attainment of performance targets will result in a change in the number of shares that are expected to vest which may cause a cumulative catch up for the amount of share-based compensation expense during each reporting period in which such estimates are altered. Forfeitures are accounted for as they occur.

Maintenance Expense Policy

Planned major maintenance projects are charged to expense as incurred.

Earnings Per Share Policy

Basic earnings per share is calculated using income available to common stockholders, divided by the weighted average number of shares outstanding during the year. The two-class method in computing basic earnings per share is not used because the number of participating securities as defined in FASB ASC Topic 260—“Earnings Per Share” is not significant. The two-class method is an earnings allocation formula that determines earnings per share for each class of common stock and participating security. Diluted earnings per share is calculated using income available to common stockholders divided by the weighted average number of shares of common stock including both shares outstanding and shares potentially issuable in connection with deferred restricted common stock awards under SJW Group’s Long-Term Incentive Plan and shares potentially issuable under the Employee Stock Purchase Plans.

XML

Intangible Assets (Tables)

12 Months Ended

Dec. 31, 2019

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Finitie-Lived Intangible Assets

The costs of intangible assets as of December 31, 2019 and 2018 are as follows:

	2019		2018
Concession fees	$	6,800	6,800
Purchase premium customer relationships	13,400		—
Other intangibles	13,224		8,999
Intangible assets	33,424		15,799
Less: Accumulated amortization
Concession fees	6,052		5,780
Other intangibles	7,127		2,960
Net intangible assets	$	20,245	7,059

XML

Lines of Credit Narrative (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2019 USD ($)	Mar. 01, 2020 USD ($)	Dec. 31, 2018 USD ($)	Jun. 01, 2016 USD ($)
Document Period End Date	Dec. 31, 2019
Revolving Credit Facility [Member] | SJW Group [Member]
Aggregate outstanding balance on lines of credit	$ 117,209		$ 100,000
Unsecured Debt [Member] | Chase Bank, N.A. [Member] | SJW Group [Member]
Debt covenant interest charge maximum to net Income available to stockholders	1.75
Ratio of indebtedness to total capital	0.666
Line of Credit [Member] | Revolving Credit Facility [Member] | SJW Group [Member]
Line of Credit Facility, Interest Rate at Period End	3.73%		2.94%
Line of Credit [Member] | Revolving Credit Facility [Member] | Chase Bank, N.A. [Member] | SJW Corp. and SJW Land Company [Member]
LIne of credit facility, maximum borrowing capacity				$ 15,000
Line of Credit [Member] | Revolving Credit Facility [Member] | CoBank [Member] | Connecticut Water Service, Inc. [Member]
LIne of credit facility, maximum borrowing capacity	$ 15,000
Line of Credit [Member] | Revolving Credit Facility [Member] | RBS Citizens, N.A. [Member] | Connecticut Water Service, Inc. [Member]
LIne of credit facility, maximum borrowing capacity	$ 95,000
Line of Credit [Member] | Credit Agreement [Member] | Chase Bank, N.A. [Member] | San Jose Water Company [Member]
LIne of credit facility, maximum borrowing capacity				125,000
Line of Credit [Member] | Credit Agreement [Member] | Standby Letters of Credit [Member] | Chase Bank, N.A. [Member] | San Jose Water Company [Member]
LIne of credit facility, maximum borrowing capacity				10,000
Line of Credit [Member] | SJW Corp Credit Agreement [Member] | Standby Letters of Credit [Member] | Chase Bank, N.A. [Member] | SJW Corp. and SJW Land Company [Member]
LIne of credit facility, maximum borrowing capacity				5,000
Line of Credit [Member] | SJWTX Credit Agreement [Member] | Revolving Credit Facility [Member] | Chase Bank, N.A. [Member] | SJW Corp. and SJWTX, Inc. [Member]
LIne of credit facility, maximum borrowing capacity				5,000
Line of Credit [Member] | SJWTX Credit Agreement [Member] | Standby Letters of Credit [Member] | Chase Bank, N.A. [Member] | SJW Corp. and SJWTX, Inc. [Member]
LIne of credit facility, maximum borrowing capacity				$ 1,000
Subsequent Event [Member] | Line of Credit [Member] | Revolving Credit Facility [Member] | RBS Citizens, N.A. [Member] | Connecticut Water Service, Inc. [Member]
LIne of credit facility, maximum borrowing capacity		$ 75,000

XML

Summary of Significant Accounting Policies (Revenue) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Accounting Policies [Abstract]
Revenue from contracts with customers	$ 447,720	$ 389,302	$ 381,777
Alternative revenue programs, net	(18,232)	10,456	12,584
Other balancing and memorandum accounts revenue, net	(14,403)	(7,541)	(10,838)
Rental income	5,397	5,482	5,702
Operating revenue	420,482	397,699	389,225
Balancing and Memorandum Cost Recovery Account, Increase (Decrease)	962	2,643
Regulated operating revenue, water surcharge	$ 4,955	$ 5,013	$ 5,017

XML

Equity Plans Restricted Stock and Deferred Restricted Stock Activity (Details) - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Restricted and Deferred Restricted Stock Awards, Nonvested, Weighted Average Grant Date Fair Value [Roll Forward]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested, Grant Date Fair Value	$ 2,420	$ 1,913	$ 2,775
Document Period End Date	Dec. 31, 2019
Cash received from employees toward purchases under the plan	$ 1,682	$ 1,523	$ 1,282
Employee stock purchase plan, shares	30,255	25,907	27,743
Restricted Stock Awards, Performance-based, Issued, Intrinsic Value	6,120	52,629	15,390
Restricted Stock Awards, Performance-based, Vested Balance	7,676
Restricted Stock Awards, Performance-based, Outstanding Balance	42,700
Incentive Plan [Member]
Restricted and Deferred Restricted Stock Awards, Nonvested, Weighted Average Grant Date Fair Value [Roll Forward]
Number of shares reserved for issuance under the plan	1,800,000
CTWS Plan [Member]
Restricted and Deferred Restricted Stock Awards, Nonvested, Weighted Average Grant Date Fair Value [Roll Forward]
Number of shares reserved for issuance under the plan	156,022
Employee Stock Purchase Plan [Member]
Restricted and Deferred Restricted Stock Awards, Nonvested, Weighted Average Grant Date Fair Value [Roll Forward]
Expenses recorded under the plan	$ 294	$ 265	$ 229
Unrecognized compensation cost	$ 206
Purchase price of common stock to employees under the plan, percent	85.00%
Maximum amount of base salary employees can designate for share purchase under the plan	10.00%
Restricted Stock and Deferred Restricted Stock [Member]
Restricted and Deferred Restricted Stock Awards, Nonvested, Weighted Average Grant Date Fair Value [Roll Forward]
Unrecognized compensation cost	$ 3,915
Period for recognition of compensation cost	1 year 10 months 2 days
Restricted Stock and Deferred Restricted Stock [Member] | Incentive Plan [Member]
Restricted and Deferred Restricted Stock Awards Outstanding [Roll Forward]
Outstanding as of January 1, 2016, units	124,275
Issued, units	76,018
Exercised, units	25,529
Forfeited or expired	0
Outstanding as of December 31, 2016, units	174,764	124,275
Shares vested as of December 31, 2016, shares	81,611
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Weighted Average Grant Date Fair Value [Roll Forward] [Roll Forward]
Outstanding as of January 1, 2016, wtd avg grant date fair value	$ 38.80
Issued, wtd avg grant date fair value	59.78
Exercised, wtd avg grant date fair value	49.77
Forfeited or expired, wtd avg grant date fair value	0
Outstanding as od December 31, 2016, wtd avg grant date fair value	46.63	$ 38.80
Shares vested as of December 31, 2016, wtd avg grant date fair value	$ 31.12
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward]
Nonvested as of January 1, 2016, units	55,098
Granted, units	76,018
Vested, units	(37,963)
Forfeited, units	0
Nonvested as of December 31, 2016, units	93,153	55,098
Restricted and Deferred Restricted Stock Awards, Nonvested, Weighted Average Grant Date Fair Value [Roll Forward]
Nonvested as of January 1, 2016, wtd avg grant date fair value	$ 54.42
Granted, wtd avg grant date fair value	59.78
Vested, wtd avg grant date fair value	59.27
Forfeited, wtd avg grant date fair value	0
Nonvested as of December 31, 2016, wtd avg grant date fair value	$ 39.57	$ 54.42
Restricted Stock and Deferred Restricted Stock [Member] | CTWS Plan [Member]
Restricted and Deferred Restricted Stock Awards Outstanding [Roll Forward]
Issued, units	105,233
Exercised, units	23
Forfeited or expired	2,279
Outstanding as of December 31, 2016, units	102,931
Deferred Restricted Stock Awards [Member]
Restricted and Deferred Restricted Stock Awards, Nonvested, Weighted Average Grant Date Fair Value [Roll Forward]
Cumulative dividend equivalent rights converted to deferred restricted stock awards	81,231	79,478	77,034
Dividend Equivalent Rights [Member]
Restricted and Deferred Restricted Stock Awards, Nonvested, Weighted Average Grant Date Fair Value [Roll Forward]
Liability for dividend equivalent rights	$ 93	$ 97	$ 139
Common Stock [Member] | Employee Stock Purchase Plan [Member]
Restricted and Deferred Restricted Stock Awards, Nonvested, Weighted Average Grant Date Fair Value [Roll Forward]
Number of shares reserved for issuance under the plan	400,000

XML

Benefit Plans Actuarial Calculation Assumptions (Details)	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Pension Plan [Member]
Defined Benefit Plan Disclosure [Line Items]
Net periodic benefit cost, discount rate		3.52%	4.04%
Net periodic benefit cost, expected return on plan assets		7.00%	7.00%
Net periodic benefit cost, rate of compensation increase	4.00%	4.00%	4.00%
Benefit obligations, discount rate		4.16%
Benefit obligations, rate of compensation increase	4.00%	4.00%
Other Postretirement Benefits Plan [Member]
Defined Benefit Plan Disclosure [Line Items]
Net periodic benefit cost, discount rate		3.45%	3.93%
Net periodic benefit cost, expected return on plan assets		7.00%	7.00%
Benefit obligations, discount rate		4.09%
Maximum [Member] | Pension Plan [Member]
Defined Benefit Plan Disclosure [Line Items]
Net periodic benefit cost, discount rate	4.16%
Net periodic benefit cost, expected return on plan assets	7.25%
Benefit obligations, discount rate	3.23%
Maximum [Member] | Other Postretirement Benefits Plan [Member]
Defined Benefit Plan Disclosure [Line Items]
Net periodic benefit cost, discount rate	4.09%
Net periodic benefit cost, expected return on plan assets	7.00%
Benefit obligations, discount rate	3.18%
Minimum [Member] | Pension Plan [Member]
Defined Benefit Plan Disclosure [Line Items]
Net periodic benefit cost, discount rate	3.04%
Net periodic benefit cost, expected return on plan assets	7.00%
Benefit obligations, discount rate	3.05%
Minimum [Member] | Other Postretirement Benefits Plan [Member]
Defined Benefit Plan Disclosure [Line Items]
Net periodic benefit cost, discount rate	2.52%
Net periodic benefit cost, expected return on plan assets	4.00%
Benefit obligations, discount rate	2.59%

XML

Benefit Plans Regulatory Asset (Details) - Postretirement pensions and other medical benefits [Member] - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Defined Benefit Plan Disclosure [Line Items]
Funded status of obligation	$ 110,039	$ 71,907
Accrued benefit cost	(36,514)	(5,674)
Regulatory asset	$ 73,525	$ 66,233

XML

Unaudited Quarterly Financial Information (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2019	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Operating revenue	$ 125,838	$ 113,997	$ 102,965	$ 77,682	$ 98,718	$ 124,853	$ 99,086	$ 75,042	$ 420,482	$ 397,699	$ 389,225
Operating Income (Loss)	6,016	17,084	21,971	12,408	17,482	25,828	22,799	7,331	57,479	73,440	101,851
Net income	(5,486)	9,478	13,538	5,873	8,823	15,788	12,871	1,285	23,403	38,767	59,204
Comprehensive income	$ (5,360)	$ 9,478	$ 13,538	$ 5,873	$ 8,823	$ 15,788	$ 12,871	$ 1,285	$ 23,529	$ 38,767	$ 59,883
SJW Group earnings per share
—Basic (in dollars per share)	$ (0.20)	$ 0.33	$ 0.48	$ 0.21	$ 0.38	$ 0.77	$ 0.63	$ 0.06	$ 0.82	$ 1.83	$ 2.89
—Diluted (in dollars per share)	(0.19)	0.33	0.47	0.21	0.38	0.76	0.62	0.06	$ 0.82	$ 1.82	$ 2.86
Dividends per share	0.30	0.30	0.30	0.30	0.28	0.28	0.28	0.28
--- High (in dollars per share) [Member]
SJW Group earnings per share
Market Price, Stock	74.47	69.23	63.40	63.76	65.31	67.29	68.15	63.47
--- Low (in dollars per share) [Member]
SJW Group earnings per share
Market Price, Stock	$ 67.13	$ 61.23	$ 59.83	$ 54.74	$ 52.63	$ 56.12	$ 51.68	$ 51.96

XML

Income Taxes Federal Statutory Rate Reconciliation (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Income Tax Disclosure [Abstract]
Income before income taxes	$ 32,081	$ 48,832	$ 96,493
Income Tax Statutory Rate Reconciliation [Abstract]
“Expected” federal income tax	6,737	10,255	33,773
Increase (decrease) in taxes attributable to:
State taxes, net of federal income tax benefit	2,251	3,420	4,986
Uncertain tax positions	323	24	12
Property flow-through	(2,054)	(839)	(1,027)
Effective Income Tax Rate Reconciliation, Nondeductible Expense, Other, Amount	5,350	0	0
Tax reform - rate change impact on deferred taxes	77	0	(2,357)
Reversal of excess deferred taxes recognized in regulatory liability	(2,355)	(1,383)	0
Effective Income Tax Rate Reconciliation, Nondeductible Expense, Pensions	(1,244)	0	0
Stock-based compensation	(223)	(1,602)	(552)
Other items, net	(408)	190	558
Income Tax Expense (Benefit)	$ 8,454	$ 10,065	$ 35,393

XML

Income Taxes Tax Years Under Examination (Details)	12 Months Ended
	Dec. 31, 2019
Minimum [Member] | Federal
Income Tax Examination [Line Items]
Open Tax Year	2016
Minimum [Member] | California
Income Tax Examination [Line Items]
Open Tax Year	2015
Minimum [Member] | Arizona
Income Tax Examination [Line Items]
Open Tax Year	2015
Minimum [Member] | Tennessee
Income Tax Examination [Line Items]
Open Tax Year	2016
Minimum [Member] | Texas
Income Tax Examination [Line Items]
Open Tax Year	2015
Minimum [Member] | Connecticut
Income Tax Examination [Line Items]
Open Tax Year	2016
Minimum [Member] | Maine
Income Tax Examination [Line Items]
Open Tax Year	2016
Maximum [Member] | Federal
Income Tax Examination [Line Items]
Open Tax Year	2018
Maximum [Member] | California
Income Tax Examination [Line Items]
Open Tax Year	2018
Maximum [Member] | Arizona
Income Tax Examination [Line Items]
Open Tax Year	2016
Maximum [Member] | Tennessee
Income Tax Examination [Line Items]
Open Tax Year	2018
Maximum [Member] | Texas
Income Tax Examination [Line Items]
Open Tax Year	2018
Maximum [Member] | Connecticut
Income Tax Examination [Line Items]
Open Tax Year	2018
Maximum [Member] | Maine
Income Tax Examination [Line Items]
Open Tax Year	2018

XML

Benefit Plans Narrative (Details) - USD ($)	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Pension Plans [Abstract]
Market gains (losses)	$ 2,520,000	$ (1,388,000)
Document Period End Date	Dec. 31, 2019
Value of life insurance contracts	$ 3,829,000
Flexible Spending Plan [Abstract]
Annual maximum contribution limit under Health Care Spending Account plan	2,500
Annual maximum contribution limit under Dependent Care Spending Account plan	5,000
Deferral Plan [Abstract]
Employer contributions to deferral plan	$ 2,046,000	1,569,000	$ 1,683,000
Minimum [Member]
Pension Plans [Abstract]
Period for performance standards	3 years
Maximum [Member]
Pension Plans [Abstract]
Period for performance standards	5 years
Executive Supplemental Retirement Plan [Member]
Pension Plans [Abstract]
Projected benefit obligation	$ 41,768,000	25,380,000
Total investments made to fund SERP	7,070,000
Net periodic pension cost	3,219,000	2,905,000	2,186,000
Executives and Non-employee Directors [Member] | Deferred Compensation Arrangement with Individual, by Type of Compensation, Pension and Other Postretirement Benefits [Member]
Special Deferral Election Plan and Deferral Election Program [Abstract]
Deferrals by executives and non-employee directors	7,834,000	$ 4,244,000	$ 4,528,000
Connecticut Water Service, Inc. [Member] | Executives and Non-employee Directors [Member] | Deferred Compensation Arrangement with Individual, by Type of Compensation, Pension and Other Postretirement Benefits [Member]
Special Deferral Election Plan and Deferral Election Program [Abstract]
Deferrals by executives and non-employee directors	$ 3,801,000

XML

Summary of Significant Accounting Policies (Balancing and Memorandum Accounts) (Details) - USD ($)		12 Months Ended
	Jan. 01, 2019	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Balancing and Memorandum Account [Roll Forward]
Revenue Accounts, Beginning Balance	$ 25,549,000	$ 25,549,000	$ 21,705,000
Balancing and Memorandum Revenue Account, Increase (Decrease)		(4,984,000)	3,827,000
Balancing and Memorandum Revenue Account, Refunds (Collections)		(22,505,000)	17,000
Balancing and Memorandum Revenue Account, Surcharge Offset		0	0
Revenue Accounts, Ending Balance		(1,940,000)	25,549,000	$ 21,705,000
Balancing and Memorandum Cost Recovery Account [Roll Forward]
Cost-recovery Accounts, Beginning Balance	8,864,000	8,864,000	6,220,000
Balancing and Memorandum Cost Recovery Account, Increase (Decrease)		962,000	2,643,000
Balancing and Memorandum Cost Recovery Account, Refunds (Collections)		(2,603,000)	1,000
Balancing and Memorandum Cost Recovery Account, Surcharge Offset		0	0
Cost-recovery Accounts, Ending Balance		7,223,000	8,864,000	6,220,000
Balancing and Memorandum Account [Roll Forward]
Balancing and Memorandum Account, Beginning Balance	34,413,000	34,413,000	27,925,000	25,909,000
Balancing and Memorandum Account, Increase (Decrease)		(4,022,000)	6,470,000	22,187,000
Balancing and Memorandum Account, Refunds (Collections), Net		(25,108,000)	18,000	(21,206,000)
Balancing and Memorandum Account, Surcharge Offset		0	0	1,035,000
Balancing and Memorandum Account, Ending Balance		5,283,000	34,413,000	27,925,000
Regulatory Balancing and Memorandum Accounts, Net Under-Collected		$ 1,428,000
Regulatory Balancing and Memorandum Accounts Review, Authorized Revenue, Threshold Percentage		2.00%
2017 WCMA [Member]
Balancing and Memorandum Account [Roll Forward]
Balancing and Memorandum Revenue Account, Increase (Decrease)			1,182
Balancing and Memorandum Revenue Account, Surcharge Offset			0
2014-2017 WCMA [Member]
Balancing and Memorandum Account [Roll Forward]
Revenue Accounts, Beginning Balance	7,750,000	$ 7,750,000	6,680,000	1,589,000
Balancing and Memorandum Revenue Account, Increase (Decrease)		0	1,066,000	17,288,000
Balancing and Memorandum Revenue Account, Refunds (Collections)		(7,042,000)	4,000	(4,704,000)
Balancing and Memorandum Revenue Account, Surcharge Offset				(7,493,000)
Revenue Accounts, Ending Balance		708,000	7,750,000	6,680,000
2017 WCMA Reserve Recorded [Member]
Balancing and Memorandum Account [Roll Forward]
Revenue Accounts, Beginning Balance	0	0
Balancing and Memorandum Revenue Account, Increase (Decrease)			1,169
Revenue Accounts, Ending Balance			0
2018 WCMA [Member]
Balancing and Memorandum Account [Roll Forward]
Revenue Accounts, Beginning Balance	9,386,000	9,386,000	0
Balancing and Memorandum Revenue Account, Increase (Decrease)		(9,386,000)	9,386,000
Balancing and Memorandum Revenue Account, Refunds (Collections)		0	0
Balancing and Memorandum Revenue Account, Surcharge Offset		0
Revenue Accounts, Ending Balance		0	9,386,000	0
2012 General Rate Case True-up [Member]
Balancing and Memorandum Account [Roll Forward]
Revenue Accounts, Beginning Balance	11,328,000	11,328,000	11,319,000	20,682,000
Balancing and Memorandum Revenue Account, Increase (Decrease)		96,000	0	0
Balancing and Memorandum Revenue Account, Refunds (Collections)		(10,672,000)	9,000	(9,363,000)
Balancing and Memorandum Revenue Account, Surcharge Offset		0	0	0
Revenue Accounts, Ending Balance		752,000	11,328,000	11,319,000
Cost of capital [Member]
Balancing and Memorandum Account [Roll Forward]
Revenue Accounts, Beginning Balance	(1,523,000)	(1,523,000)	(144,000)	(817,000)
Balancing and Memorandum Revenue Account, Increase (Decrease)		(30,000)	(1,379,000)	0
Balancing and Memorandum Revenue Account, Refunds (Collections)		0	0	673,000
Balancing and Memorandum Revenue Account, Surcharge Offset		0	0	0
Revenue Accounts, Ending Balance		(1,553,000)	(1,523,000)	(144,000)
Tax memorandum [Member]
Balancing and Memorandum Account [Roll Forward]
Revenue Accounts, Beginning Balance	(6,504,000)	(6,504,000)	0
Balancing and Memorandum Revenue Account, Increase (Decrease)		(139,000)	(6,504,000)
Balancing and Memorandum Revenue Account, Refunds (Collections)		0	0
Balancing and Memorandum Revenue Account, Surcharge Offset		0	0
Revenue Accounts, Ending Balance		(6,643,000)	(6,504,000)	0
Water supply balancing accounts [Member]
Balancing and Memorandum Cost Recovery Account [Roll Forward]
Cost-recovery Accounts, Beginning Balance	9,617,000	9,617,000	8,679,000
Balancing and Memorandum Cost Recovery Account, Increase (Decrease)		207,000	939,000
Balancing and Memorandum Cost Recovery Account, Refunds (Collections)		(5,496,000)	(1,000)
Balancing and Memorandum Cost Recovery Account, Surcharge Offset		0	0
Cost-recovery Accounts, Ending Balance		4,328,000	9,617,000	8,679,000
Pension Balancing Account [Member]
Balancing and Memorandum Cost Recovery Account [Roll Forward]
Cost-recovery Accounts, Beginning Balance	(1,843,000)	(1,843,000)	(2,459,000)
Balancing and Memorandum Cost Recovery Account, Increase (Decrease)		745,000	614,000
Balancing and Memorandum Cost Recovery Account, Refunds (Collections)		3,547,000	2,000
Balancing and Memorandum Cost Recovery Account, Surcharge Offset		0	0
Cost-recovery Accounts, Ending Balance		2,449,000	(1,843,000)	(2,459,000)
Other Regulatory Assets [Member]
Balancing and Memorandum Account [Roll Forward]
Revenue Accounts, Beginning Balance	5,112,000	5,112,000	3,850,000	8,962,000
Balancing and Memorandum Revenue Account, Increase (Decrease)		4,475,000	1,258,000	1,084,000
Balancing and Memorandum Revenue Account, Refunds (Collections)		(4,791,000)	4,000	(6,271,000)
Balancing and Memorandum Revenue Account, Surcharge Offset		0	0	75,000
Revenue Accounts, Ending Balance		4,796,000	5,112,000	3,850,000
Balancing and Memorandum Cost Recovery Account [Roll Forward]
Cost-recovery Accounts, Beginning Balance	1,090,000	1,090,000	0
Balancing and Memorandum Cost Recovery Account, Increase (Decrease)		10,000	1,090,000
Balancing and Memorandum Cost Recovery Account, Refunds (Collections)		(654,000)	0
Balancing and Memorandum Cost Recovery Account, Surcharge Offset		0
Cost-recovery Accounts, Ending Balance		$ 446,000	1,090,000	0
Drought Surcharges [Member]
Balancing and Memorandum Account [Roll Forward]
Revenue Accounts, Beginning Balance			0	(7,688,000)
Balancing and Memorandum Revenue Account, Increase (Decrease)				0
Balancing and Memorandum Revenue Account, Refunds (Collections)				(765,000)
Balancing and Memorandum Revenue Account, Surcharge Offset				8,453,000
Revenue Accounts, Ending Balance				0
Cost-Recovery Accounts [Member]
Balancing and Memorandum Account [Roll Forward]
Revenue Accounts, Beginning Balance			$ 6,220,000	3,181,000
Balancing and Memorandum Revenue Account, Increase (Decrease)				3,815,000
Balancing and Memorandum Revenue Account, Refunds (Collections)				(776,000)
Revenue Accounts, Ending Balance				$ 6,220,000
San Jose Water Company [Member] | Advice Letter No. 528/528A [Member]
Balancing and Memorandum Cost Recovery Account [Roll Forward]
Balancing and Memorandum Cost Recovery Account, Refunds (Collections)	27,045,000
Balancing and Memorandum Account [Roll Forward]
Public Utilities, Approved Rate Increase (Decrease), Amount	$ 16,378,000

XML

Summary of Significant Accounting Policies (Narrative) (Details)				3 Months Ended	12 Months Ended
	Feb. 03, 2020 USD ($)	Sep. 14, 2018 USD ($)	Nov. 16, 2017 USD ($)	Dec. 31, 2019 USD ($) mi² people_served service_connection communities_served	Dec. 31, 2019 USD ($) mi² people_served service_connection communities_served	Dec. 31, 2018 USD ($)	Dec. 31, 2017 USD ($)	Dec. 06, 2019 USD ($)
Public Utilities, General Disclosures [Line Items]
Gain on sale of real estate investments					$ 929,000	$ 0	$ 6,903,000
Balancing and Memorandum Revenue Account, Increase (Decrease)					(4,984,000)	3,827,000
Balancing and Memorandum Account, Refunds (Collections)					(25,108,000)	18,000	(21,206,000)
Restricted Cash				$ 750,000	$ 750,000
Document Period End Date					Dec. 31, 2019
Proceeds from Sale of Real Estate Held-for-investment				$ 745,000
Long-term borrowings held as restricted cash					$ 5,000,000	$ 0	$ 0
Acequia Water Supply Corporation [Member]
Public Utilities, General Disclosures [Line Items]
Ownership percentage in Acequia Water Supply Corporation					25.00%
Minimum [Member]
Public Utilities, General Disclosures [Line Items]
Service area in square miles | mi²				246	246
CPED Proposed Penalty, Per Offense, Per Day		$ 500
Maximum [Member]
Public Utilities, General Disclosures [Line Items]
CPED Proposed Penalty, Per Offense, Per Day		$ 50,000
Sales [Member] | Product Concentration Risk [Member]
Public Utilities, General Disclosures [Line Items]
Percentage of revenue derived from sales of water to business and residential customers					91.00%
San Jose Water Company [Member]
Public Utilities, General Disclosures [Line Items]
Public Utilities, Service Connections | service_connection				231,000	231,000
Number of people served | people_served				1,000,000,000,000	1,000,000,000,000
Connecticut Water Service, Inc. [Member]
Public Utilities, General Disclosures [Line Items]
Number of people served | people_served				480,000	480,000
Public Utilities, Number of Communities Served | communities_served				80	80
444 West Santa Clara Street, L.P. [Member]
Public Utilities, General Disclosures [Line Items]
Limited partership interest percentage					70.00%
Maine Water Company [Member]
Public Utilities, General Disclosures [Line Items]
Gain on sale of real estate investments					$ 180,000
Proceeds from Sale of Real Estate Held-for-investment					600,000
Long-term borrowings held as restricted cash					$ 5,000,000
SJWTX,Inc. dba Canyon Lake Water Supply Corporation [Member]
Public Utilities, General Disclosures [Line Items]
Number of people served | people_served				54,000	54,000
Texas Water Alliance Alliance [Member]
Public Utilities, General Disclosures [Line Items]
Proceeds from Sales of Business, Affiliate and Productive Assets			$ 31,000,000
Purchase and Sales Agreement, Holdback Amount			3,000,000
Gain (Loss) on Disposition of Assets			$ 12,501,000
Subsequent Event [Member] | Maine Water Company [Member]
Public Utilities, General Disclosures [Line Items]
Increase (Decrease) in Restricted Cash	$ 4,114,000
Application No. 19-12-002 [Member] | San Jose Water Company [Member]
Public Utilities, General Disclosures [Line Items]
Regulatory Rate Filings, Requested Rate Increase, Year One								$ 2,300,000
Connecticut and Maine | Connecticut Water Service, Inc. [Member]
Public Utilities, General Disclosures [Line Items]
Public Utilities, Service Connections | service_connection				137,000	137,000
Connecticut | Connecticut Water Service, Inc. [Member]
Public Utilities, General Disclosures [Line Items]
Public Utilities, Service Connections | service_connection				3,000	3,000

XML

Segment and Non-Tariffed Businesses Reporting (Tables)

12 Months Ended

Dec. 31, 2019

Segment Reporting [Abstract]

Schedule of Segment Reporting Information, by Segment

The following tables set forth information relating to SJW Group’s reportable segments and distribution of regulated and non-tariffed business activities within the reportable segments. Certain allocated assets, revenue and expenses have been included in the reportable segment amounts. Other business activity of SJW Group not included in the reportable segments is included in the “All Other” category.

	For the year ended December 31, 2019
	Water Utility Services			Real Estate Services	All Other (1)		SJW Group
	Regulated (2)		Non- tariffed	Non- tariffed	Non- tariffed		Regulated	Non- tariffed		Total
Operating revenue	$	407,116	7,969	5,397	—		407,116	13,366		420,482
Operating expense	329,520		5,443	3,751	24,289		329,520	33,483		363,003
Operating income (loss)	77,596		2,526	1,646	(24,289	)	77,596	(20,117	)	57,479
Net income (loss)	42,691		2,019	1,623	(22,930	)	42,691	(19,288	)	23,403
Depreciation and amortization	63,775		420	1,196	201		63,775	1,817		65,592
Senior note and other interest expense	25,073		—	—	6,723		25,073	6,723		31,796
Income tax expense (benefit) in net income	8,382		708	486	(1,122	)	8,382	72		8,454
Assets	3,016,846		5,507	46,778	63,339		3,016,846	115,624		3,132,470

	For the year ended December 31, 2018
	Water Utility Services			Real Estate Services	All Other (1)		SJW Group
	Regulated		Non- tariffed	Non- tariffed	Non- tariffed		Regulated	Non- tariffed		Total
Operating revenue	$	384,639	7,578	5,482	—		384,639	13,060		397,699
Operating expense	294,536		5,012	3,539	21,172		294,536	29,723		324,259
Operating income (loss)	90,103		2,566	1,943	(21,172	)	90,103	(16,663	)	73,440
Net income (loss)	53,181		1,848	885	(17,147	)	53,181	(14,414	)	38,767
Depreciation and amortization	53,067		338	1,196	—		53,067	1,534		54,601
Senior note and other interest expense	22,157		—	—	2,175		22,157	2,175		24,332
Income tax expense (benefit) in net income	14,826		719	903	(6,383	)	14,826	(4,761	)	10,065
Assets	1,492,954		4,489	46,517	412,429		1,492,954	463,435		1,956,389

	For the year ended December 31, 2017
	Water Utility Services			Real Estate Services	All Other (1)		SJW Group
	Regulated		Non- tariffed	Non- tariffed	Non- tariffed		Regulated	Non- tariffed	Total
Operating revenue	$	376,104	7,419	5,702	—		376,104	13,121	389,225
Operating expense	276,061		4,855	3,688	2,770		276,061	11,313	287,374
Operating income (loss)	100,043		2,564	2,014	(2,770	)	100,043	1,808	101,851
Net income (loss)	47,736		1,137	6,193	4,138		47,736	11,468	59,204
Depreciation and amortization	46,500		572	1,220	—		46,500	1,792	48,292
Senior note and other interest expense	20,670		—	60	2,199		20,670	2,259	22,929
Income tax expense (benefit) in net income	30,127		993	644	3,629		30,127	5,266	35,393
Assets	1,406,221		4,471	47,668	(359	)	1,406,221	51,780	1,458,001

____________________

(1)    The “All Other” category for the year ended December 31, 2019, includes the accounts of SJW Group, SJWNE, LLC and CTWS, Inc. on a stand-alone basis. For the years ended December 31, 2018 and 2017, the “All Other” category includes the accounts of SJW Group on a stand-alone basis.

XML

Consolidated Statements of Income and Comprehensive Income - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Income Statement [Abstract]
Operating revenue	$ 420,482	$ 397,699	$ 389,225
Production Expenses:
Purchased water	99,118	97,378	86,456
Power	7,443	6,180	7,295
Groundwater extraction charges	43,917	46,770	47,817
Other production expenses	25,291	18,398	16,571
Total production expenses	175,769	168,726	158,139
Administrative and general	66,301	48,933	48,940
Maintenance	20,505	18,414	18,361
Property taxes and other non-income taxes	19,068	14,975	13,642
Depreciation and amortization	65,592	54,601	48,292
Merger related expenses	15,768	18,610	0
Total operating expense	363,003	324,259	287,374
Operating income	57,479	73,440	101,851
Other (expense) income:
Interest on long-term debt, mortgage and other interest expense	(31,796)	(24,332)	(22,929)
Pension non-service cost	(3,158)	(2,356)	(3,772)
Unrealized loss on California Water Service Group stock	0	(527)	0
Gain on sale of California Water Service Group stock	0	104	0
(Loss) gain on sale of utility property	(20)	9	12,499
Gain on sale of real estate investments	929	0	6,903
Other, net	6,536	155	0
Other, net	2,111	2,339	1,941
Income before income taxes	32,081	48,832	96,493
Provision for income taxes	8,454	10,065	35,393
Net income before noncontrolling interest	23,627	38,767	61,100
Less net income attributable to the noncontrolling interest	224	0	1,896
SJW Group net income	23,403	38,767	59,204
Other comprehensive income:
Unrealized gain on investment, net of taxes of $43 in 2019, $0 in 2018 and $466 in 2017	117	0	679
Adjustment to pension benefit plans, net of taxes of $22 in 2019	(9)	0	0
SJW Group comprehensive income	$ 23,529	$ 38,767	$ 59,883
SJW Group earnings per share
—Basic (in dollars per share)	$ 0.82	$ 1.83	$ 2.89
—Diluted (in dollars per share)	$ 0.82	$ 1.82	$ 2.86
Weighted average shares outstanding
—Basic (shares)	28,443,052	21,214,277	20,506,960
—Diluted (shares)	28,562,546	21,332,387	20,685,118

XML

Income Taxes

12 Months Ended

Dec. 31, 2019

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

The components of income tax expense were:

	2019			2018		2017
Current:
Federal	$	7,577		14,485		29,377
State	2,126			5,066		6,452
Deferred:
Federal	(1,929		)	(7,702	)	(1,174	)
State	680			(1,784	)	738
	$	8,454		10,065		35,393

The following table reconciles income tax expense to the amount computed by applying the federal statutory rate to income before income taxes of $32,081, $48,832 and $96,493 in 2019, 2018 and 2017:

	2019			2018		2017
“Expected” federal income tax	$	6,737		10,255		33,773
Increase (decrease) in taxes attributable to:
State taxes, net of federal income tax benefit	2,251			3,420		4,986
Uncertain tax positions	323			24		12
Property flow-through	(2,054		)	(839	)	(1,027	)
Capitalized merger costs	5,350			—		—
Tax reform - rate change impact on deferred taxes	77			—		(2,357	)
Reversal of excess deferred taxes recognized in regulatory liability	(2,355		)	(1,383	)	—
Pension flow-through	(1,244		)	—		—
Stock-based compensation	(223		)	(1,602	)	(552	)
Other items, net	(408		)	190		558
	$	8,454		10,065		35,393

The components of the net deferred tax liability as of December 31 was as follows:

	2019			2018
Deferred tax assets:
Advances and contributions	$	19,547		14,592
Unamortized investment tax credit	649			418
Pensions and postretirement benefits	32,450			20,439
Debt premium, net	7,002			—
California franchise tax	456			981
Net operating loss	1,046			—
Merger related expenses	—			4,527
Tax related net regulatory liability	—			16,212
Other	7,211			3,336
Gross deferred tax assets	68,361			60,505
Valuation allowance	(1,924		)	—
Total deferred tax assets	66,437			60,505
Deferred tax liabilities:
Utility plant	211,079			114,731
Pension and postretirement benefits	22,263			18,534
Deferred gain and other-property related	5,872			5,753
Regulatory asset - business combinations debt premium, net	7,002			—
Intangibles	3,693			—
Deferred revenue	1,962			—
Regulatory asset - income tax temporary differences, net	295			—
Section 481(a) adjustments	5,721			—
Other	4,148			1,138
Total deferred tax liabilities	262,035			140,156
Net deferred tax liabilities	$	195,598		79,651

Management evaluates the realizability of deferred tax assets based on all available evidence, both positive and negative. The realization of deferred tax assets is dependent on our ability to generate sufficient future taxable income during periods in which the deferred tax assets are expected to reverse. Based on all available evidence, management believes it is more likely than not

that SJW Group will realize the benefits of these deferred tax assets. The valuation allowance as of December 31, 2019 relates to state net operating losses assumed from CTWS. Net operating loss carryforwards assumed from the CTWS merger expire beginning in 2029 and ending in 2038. Federal net operating loss carryforward generated after December 31, 2017 have no expiration. As of December 31, 2019, the estimated amount of CTWS net operating loss carryforwards available to offset future taxable income for Federal, Connecticut and Maine purposes are $9,213, $32,604 and $9,506, respectively. SJW Group also assumed from the CTWS merger estimated state tax credit carryforwards of $1,000 which will expire beginning in 2020 and ending in 2040. The valuation allowance, the net operating losses, and the state tax credit carryforwards are expected to be adjusted during the acquisition measurement period.

The change in the net deferred tax liabilities of $115,947 in 2019 included $109,435 from recording the acquisition of CTWS and other non-cash items primarily consisting of regulatory assets and liabilities relating to income tax temporary differences.

The total amount of unrecognized tax benefits, before the impact of deductions for state taxes, excluding interest and penalties was $4,037 and $1,411 as of December 31, 2019 and 2018, respectively. The amount of tax benefits, net of any federal benefits for state taxes and inclusive of interest that would impact the effective rate, if recognized, is approximately $27 and $70 as of December 31, 2019 and 2018, respectively.

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:

	2019			2018	2017
Balance at beginning of year	$	1,382		1,307	1,132
Increase related to tax positions taken during the current year, including interest	351			—	—
Increase related to tax positions taken during a prior year, including interest	3,483			75	185
Reductions related to tax positions taken in a prior year, including interest	(1,382		)	—	(10	)
Balance at end of year	$	3,834		1,382	1,307

The increase in gross unrecognized tax benefits in 2019 was primarily a result of the acquisition of CTWS.

SJW Group’s policy is to classify interest and penalties associated with unrecognized tax benefits, if any, in tax expense. Accrued interest expense, net of the benefit of tax deductions which would be available on the payment of such interest, is approximately $27 as of December 31, 2019. SJW Group has not accrued any penalties for unrecognized tax benefits. The amount of interest recognized in 2019 was a decrease to expense of $43.

SJW Group does not foresee material changes to its gross uncertain tax liability within the next 12 months following December 31, 2019.

On December 22, 2017 the Tax Act was signed into law. The Tax Act includes a number of changes in existing tax law impacting businesses including, among other things, a reduction in the corporate income tax rate from 35% to 21%. The rate reduction was effective on January 1, 2018.

In accordance with generally accepted accounting principles, SJW Group recorded the revaluation of deferred taxes and related impacts using the new corporate tax rate in its December 31, 2017 consolidated financial statements. The amounts recorded were based on information known and reasonable estimates used as of December 31, 2017. As such, SJW Group recorded this estimate as a provisional amount. SJW Group recorded a tax benefit of $2,357 related to the deferred taxes revaluation impacting non-regulated operations due to the tax rate reduction. However, for regulated operations governed by state public utility commissions, the lower tax rate benefits are expected to flow back to customers under current normalization rules and agreed-upon methods with the commissions. The revaluation of deferred tax assets and liabilities of the regulated operations resulted in a decrease in net deferred tax liabilities of $83,666 which was recorded as a regulatory liability in 2017.

SJW Group completed its accounting for the tax effects of tax reform in the fourth quarter of 2018. An additional tax expense of $67 and a reduction of $455 in regulatory liability was recorded.

The CPUC has directed SJWC to establish a memorandum account to capture all of the impacts of the Tax Act including the benefit of the reduction in the federal statutory income tax rate from 35% to 21% on its regulated revenue requirement. The PUCT has directed water utilities to record as a regulatory liability the difference between the revenues collected under existing rates and the revenue that would have been collected had the existing rates been set using the new federal statutory income tax rate. The benefits associated with regulatory activities is expected to flow back to customers as directed by the CPUC and PUCT, with no impact to net income. As per Advice Letter No. 522A filed with CPUC, the benefit of the reduction in the federal statutory income tax rate from 35% to 21% were reflected in the customer bills effective July 1, 2018. The tax

memorandum account only includes the benefit of the reduction in the federal statutory income tax rate through June 30, 2018.  The other impacts of the Tax Act were recorded in the tax memorandum account for the entire year.  Accordingly, SJWC recorded $6,504 liability in the tax memorandum account for the year ended December 31, 2018. For discussion on approved refunds, please see “Regulatory Rate Filings” in Note 1. CLWSC refunded the accrued amounts for the period January 25, 2018, through April 30, 2018, in the second quarter of 2018. The FTCC will continue to be reflected on customer bills every month starting from May 1, 2018 until the implementation of new rates resulting from the next rate case.

SJW Group expects the Internal Revenue Service to issue guidance in future periods that will determine the final disposition of the excess deferred taxes and other impacts of the Tax Act. At this time, the Company has applied a reasonable interpretation of the Tax Act. Future clarification of the Tax Act may change the amounts estimated.

SJW Group files U.S. federal income tax returns and income tax returns in various states. SJW Group is no longer subject to tax examination for fiscal years prior to 2016 for federal purposes and 2015 for state purposes. The open tax years for the jurisdictions in which SJW Group files are as follows:

Jurisdiction	Years Open
Federal	2016 - 2018
California	2015 - 2018
Arizona	2015 - 2016
Tennessee	2016 - 2018
Texas	2015 - 2018
Connecticut	2016 - 2018
Maine	2016 - 2018

XML

Consolidated Statement of Cash Flows - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Operating activities:
Net income before noncontrolling interest	$ 23,627	$ 38,767	$ 61,100
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	68,489	56,907	50,501
Deferred income taxes	(1,249)	(9,486)	(436)
Share-based compensation	3,406	2,117	2,643
Unrealized loss on California Water Service Group stock	0	527	0
Gain on sale of California Water Service Group stock	0	(104)	0
Gain on sale of real estate investments	(929)	0	(6,903)
Loss (gain) on sale of utility property	20	(9)	(12,499)
Changes in operating assets and liabilities, net of acquired assets and liabilities:
Accounts receivable and accrued unbilled utility revenue	(3,860)	(2,003)	(1,702)
Accounts payable and other current liabilities	1,946	2,130	2,888
Accrued groundwater extraction charges, purchased water and power	2,853	(688)	3,536
Tax receivable and accrued taxes	(6,044)	5,841	2,164
Postretirement benefits	(4,000)	203	(769)
Regulatory asset related to balancing and memorandum accounts	30,838	(6,488)	(979)
Other noncurrent assets and noncurrent liabilities	7,439	1,923	741
Other changes, net	7,469	1,706	827
Net cash provided by operating activities	130,005	91,343	101,112
Investing activities:
Company-funded	(164,325)	(135,973)	(141,213)
Contributions in aid of construction	(13,563)	(8,454)	(7,842)
Additions to real estate investment	(137)	(123)	(116)
Payments for business/asset acquisition and water rights	(835,465)	(2,496)	(1,149)
Cost to retire utility plant, net of salvage	(5,026)	(3,909)	(3,356)
Proceeds from sale of California Water Service Group stock	0	4,112	0
Proceeds from sale of real estate investments and utility property	745	0	39,802
Net cash used in investing activities	(1,017,771)	(146,843)	(113,874)
Financing activities:
Borrowings from lines of credit	105,349	76,000	56,500
Repayments of lines of credit	(192,055)	(1,000)	(45,700)
Long-term borrowings	590,000	0	0
Long-term borrowings held as restricted cash	5,000	0	0
Repayments of long-term borrowings	(1,400)	0	(2,717)
Payments of Debt Issuance Costs	(4,918)	0	0
Dividends paid	(34,134)	(23,074)	(21,332)
Receipts of advances and contributions in aid of construction	18,904	10,890	12,581
Refunds of advances for construction	(2,911)	(2,700)	(2,622)
Issuance of common stock, net of issuance costs	(10)	411,385	0
Other changes, net	1,163	(3,078)	(1,499)
Net cash provided by (used in) financing activities	484,988	468,423	(4,789)
Net change in cash, cash equivalents and restricted cash	(402,778)	412,923	(17,551)
Cash and cash equivalents, beginning of year	420,722	7,799	25,350
Cash, cash equivalents and restricted cash, end of year	17,944	420,722	7,799
Cash paid during the year for:
Interest	32,138	27,038	25,254
Income taxes	16,448	13,750	34,052
Supplemental disclosure of non-cash activities:
Increase (Decrease) in accrued payables for construction costs capitalized	(516)	340	2,700
Utility property installed by developers	3,077	1,747	3,723
Reconciliation to Consolidated Balance Sheets:
Cash, cash equivalents and restricted cash, end of year	$ 420,722	$ 420,722	$ 25,350

XML

Benefit Plans

12 Months Ended

Dec. 31, 2019

Retirement Benefits [Abstract]

Benefit Plans

Benefit Plans

Pension Plans

SJW Group maintains noncontributory defined benefit pension plans for its eligible employees. SJWC and CTWS employees hired before March 31, 2008 and January 1, 2009, respectively, are entitled to benefits under the pension plans based on the employee’s years of service and compensation. For SJWC employees hired on or after March 31, 2008, benefits are determined using a cash balance formula based upon compensation credits and interest credits for each employee. CTWS employees hired on or after January 1, 2009 are entitled to an additional 1.5% of eligible compensation to their company sponsored savings plan. SJW Group does not have multi-employer plans.

The pension plans are administered by their respective committees where the investment strategy of the investments of the various pension and post-retirement benefit plans are reviewed and approved to achieve the goals of income generation and long-term capital preservation. SJW Group engages third-party investment managers to assist with, among other things, asset allocation strategy, investment policy advice, performance monitoring, and investment manager due diligence. Individual investment decisions have been delegated by the pension plan committees to the investment managers who are also monitored by an investment consultant. Investment managers are not permitted to invest outside of the asset class or strategy under the pension plans’ investment guidelines. The committees ensure that the plans establish a target mix that is expected to achieve its investment objectives, by assuring a broad diversification of investment assets among investment types, while minimizing volatility of the target asset mix, unless market conditions make such a change appropriate to reduce risk. The pension plans require a minimum portion of plan assets to be allocated to fixed income securities and guidelines and restrictions on equity investments for the assets.

Plan assets are marked to market at each measurement date, resulting in unrealized actuarial gains or losses. Unrealized actuarial gains and losses on pension assets are amortized over the expected future working lifetime of participants for actuarial expense calculation purposes. For the SJWC retirement plans, market gains in 2018 decreased pension expense by approximately $2,520 in 2019 and market losses in 2017 increased pension expense by approximately $1,388 in 2018.

Generally, it is expected of the investment managers that the performance of the assets held in the pension plans, computed on a total annual rate of return basis, should meet or exceed specific performance standards over a three-to-five-year period and/or full market cycle. These standards include specific absolute and risk-adjusted performance standards over a three-to-five-year period and/or full market cycle. The expected long-term rate of return on the pension plan assets is between 7.00% and 7.25%.

SJW Group calculates the market-related value of defined benefit pension plan assets, which is defined under FASB ASC Topic 715—“Compensation—Retirement Benefits” as a balance used to calculate the expected return on plan assets, using fair value. The fair value is based on quoted prices in active markets for identical assets and significant observable inputs.

Senior management hired before March 31, 2008 for SJWC and January 1, 2009 for CTWS are eligible to receive additional retirement benefits under the supplemental executive retirement plans and retirement contracts (“SERP”). SJWC’s senior management hired on or after March 31, 2008 are eligible to receive additional retirement benefits under SJWC’s Cash Balance Executive Supplemental Retirement Plans. Both of the plans are non-qualified plans in which only senior management and other designated members of management may participate. The annual cost of the plans has been included in the determination of the net periodic benefit cost shown below. The SERP and Cash Balance Executive Supplemental Retirement Plan had a projected benefit obligation of $41,768 and $25,380 as of December 31, 2019 and 2018, respectively, and net periodic pension cost of $3,219, $2,905 and $2,186 for 2019, 2018 and 2017, respectively. SJWC’s plans are unfunded while CTWS’s SERP is funded through investments consisting primarily of life insurance contracts and assets in a Rabbi Trust. As of December 31, 2019, total investments made to fund CTWS’s SERP was $7,070 which is included in investments in SJW Group’s consolidated balance sheets. The life insurance contracts are valued at cash surrender value of the policies as reported by the insurer. As of December 31, 2019, the value of the life insurance contracts was $3,829.

The following tables summarize the fair values of the Rabbi Trust investment assets to fund CTWS’s SERP by major categories as of December 31, 2019:

			Fair Value Measurements at December 31, 2019
Asset Category	Total		Quoted Prices in Active Markets for Identical Assets (Level 1)	Significant Observable Inputs (Level 2)	Significant Unobservable Inputs (Level 3)
Money market funds	$	20	20	—	—
Mutual funds	834		834	—	—
Fixed income	2,329		2,329	—	—
Total	$	3,183	3,183	—	—

Other Postretirement Benefits

In addition to providing pension and savings benefits, the company also provides health care and life insurance benefits for eligible retired employees under the respective employer-sponsored post-retirement benefits other than pension plans. The benefits are paid by the company and not from plan assets due to limitations imposed by Internal Revenue Service.

Flexible Spending Plan

SJW Group sponsors flexible spending account plans for its employees for the purpose of providing eligible employees with the opportunity to choose from among the fringe benefits available under the plans. The flexible spending plan is intended to qualify as a cafeteria plan under the provisions of the Internal Revenue Code Section 125. The flexible spending plan allows employees to save pre-tax income in a Health Care Spending Account (“HCSA”) and/or a Dependent Care Spending Account (“DCSA”) to help defray the cost of out-of-pocket medical and dependent care expenses. The annual maximum limit under the HCSA and DCSA plans is $2.5 and $5, respectively.

Savings Plans for Employees

SJW Group also sponsors salary deferral plans which are defined contribution plans that allow employees to defer and contribute a portion of their earnings to the plan. Contributions, not to exceed set limits, are matched by the company. For CTWS’s employees hired on or after January 1, 2009 and ineligible to participate in the defined benefit pension plan, CTWS contributes an additional 1.5% of eligible contributions. SJW Group contributions were $2,046, $1,569 and $1,683 in 2019, 2018 and 2017, respectively. All of the company’s contributions are invested at the direction of the employees in funds offered under the plans.

Special Deferral Election Plans and Deferral Election Program

SJW Group maintains a special deferral election plan and a deferred compensation plan and agreements for senior management and a deferral election program for non-employee directors allowing for the deferral of a portion of their earnings each year and to realize an investment return on those funds during the deferral period. Senior management and non-employee directors have

to make an election on the deferral and distribution method of the deferrals before services are rendered. CTWS’s deferred compensation plan allows the company to make discretionary contributions. Senior management and non-employee directors had deferred $7,834, $4,244 and $4,528 under the plans as of December 31, 2019, 2018 and 2017, respectively. As of December 31, 2019, $3,801 of the total amount deferred is related to CTWS agreements that were assumed as part of the merger transaction on October 9, 2019.

Assumptions Utilized on Actuarial Calculations

Net periodic cost for the defined benefit plans and other postretirement benefits was calculated using the following weighted-average assumptions:

	Pension Benefits			Other Benefits
	2019	2018	2017	2019	2018	2017
	%	%	%	%	%	%
Discount rate	3.04% - 4.16%	3.52	4.04	2.52% - 4.09%	3.45	3.93
Expected return on plan assets	7.00%, 7.25%	7.00	7.00	4.00%, 7.00%	7.00	7.00
Rate of compensation increase	4.00	4.00	4.00	N/A	N/A	N/A

The expected rate of return on plan assets was determined based on a review of historical returns, for the pension plans and for medium- to large-sized defined benefit pension funds with similar asset allocations. This review generated separate expected returns for each asset class. These expected future returns were then blended based on the pension plans’ target asset allocations.

Benefit obligations for the defined benefit plans and other postretirement benefits were calculated using the following weighted-average assumptions as of December 31:

	Pension Benefits		Other Benefits
	2019	2018	2019	2018
	%	%	%	%
Discount rate	3.05% - 3.23%	4.16	2.59% - 3.18%	4.09
Rate of compensation increase	4.00	4.00	N/A	N/A

SJW Group utilized each plan’s projected benefit stream in conjunction with the FTSE Pension Discount Curve (formerly the Citigroup Pension Discount Curve) and the FTSE Above Median Double-A Curve for SJWC and CTWS, respectively, in determining the discount rate used in calculating the pension and other postretirement benefits liabilities at the measurement date.

In 2019 and 2018, SJW Group adopted the newly then issued MP-2019 and MP-2018, respectively, Mortality Improvement Scales to determine mortality assumptions. The tables and scales reflect increasing life expectancies of participants in the United States. See also “Reconciliation of Funded Status” below.

Net Periodic Pension Costs

Net periodic costs for the defined benefit plans and other postretirement benefits for the years ended December 31 was as follows:

	Pension Benefits							Other Benefits
	2019			2018		2017		2019			2018		2017
Components of net periodic benefit cost
Service cost	$	5,947		5,790		4,699		$	581		616		529
Interest cost	8,506			6,879		6,993		775			627		634
Expected return on assets	(10,118		)	(9,255	)	(7,888	)	(475		)	(450	)	(376	)
Amortization of prior service cost	48			51		94		197			197		198
Recognized actuarial loss	3,984			3,986		3,844		240			321		273
Net periodic benefit cost	$	8,367		7,451		7,742		$	1,318		1,311		1,258

Reconciliation of Funded Status

For the defined benefit plans and other postretirement benefits, the benefit obligation is the projected benefit obligation and the accumulated benefit obligation, respectively. The projected benefit obligations and the funded status of the defined benefit pension and other postretirement plans as of December 31 were as follows:

	Pension Benefits					Other Benefits
	2019			2018		2019			2018
Change in benefit obligation
Benefit obligation at beginning of year	$	187,877		196,207		$	17,489		18,003
Service cost	5,947			5,790		581			616
Interest cost	8,506			6,879		775			627
Business combinations	108,162			—		12,537			—
Actuarial (gain)/loss	35,502			(14,447	)	2,027			(988	)
Implicit rate subsidy	—			—		(217		)	(207	)
Plan participants contributions	—			—		85			—
Administrative expenses paid	(10		)	—		—			—
Benefits paid	(7,744		)	(6,552	)	(731		)	(562	)
Benefit obligation at end of year	$	338,240		187,877		$	32,546		17,489
Change in plan assets
Fair value of assets at beginning of year	$	127,610		133,360		$	5,849		6,804
Actual return on plan assets	34,807			(7,700	)	1,972			(262	)
Business combinations	79,382			—		9,314			—
Employer contributions	9,476			8,502		738			629
Plan participants contributions	—			—		85			—
Administrative expenses paid	(10		)	—		(55		)	—
Benefits paid	(7,744		)	(6,552	)	(677		)	(1,322	)
Fair value of plan assets at end of year	243,521			127,610		17,226			5,849
Funded status at end of year	$	(94,719	)	(60,267	)	$	(15,320	)	(11,640	)

The amounts recognized on the balance sheet as of December 31 were as follows:

	Pension Benefits			Other Benefits
	2019		2018	2019		2018
Current liabilities	$	1,899	1,323	$	96	94
Noncurrent liabilities	92,820		58,944	15,224		11,546
	$	94,719	60,267	$	15,320	11,640

SJW Group recorded a regulatory asset on the projected benefit obligation of the postretirement benefit plans as follows:

	2019			2018
Funded status of obligation	$	110,039		71,907
Accrued benefit cost	(36,514		)	(5,674	)
Regulatory asset, amount to be recovered in future rates	$	73,525		66,233

Plan Assets

Plan assets as of December 31 were as follows:

	Pension Benefits					Other Benefits
	2019			2018		2019			2018
Fair value of assets at end of year:
Debt securities	$	86,288		42,654		$	5,608		2,200
	36		%	33	%	33		%	38	%
Equity securities	146,210			77,053		10,840			3,416
	60		%	60	%	63		%	58	%
Cash and equivalents	11,023			7,903		778			233
	5		%	6	%	5		%	4	%
Total	$	243,521		127,610		$	17,226		5,849

The following tables summarize the fair values of plan assets by major categories as of December 31, 2019 and 2018:

			Fair Value Measurements at December 31, 2019
Asset Category	Total		Quoted Prices in Active Markets for Identical Assets (Level 1)	Significant Observable Inputs (Level 2)	Significant Unobservable Inputs (Level 3)
Cash and cash equivalents	$	11,801	11,801	—	—
Equity securities (a)	157,050		149,265	7,785	—
Fixed Income (b)	91,896		31,686	60,210	—
Total	$	260,747	192,752	67,995	—

___________________________________

(a) Actively managed portfolio of equity securities with the goal to exceed the benchmark performance.

(b) Actively managed portfolio of fixed income securities with the goal to exceed the benchmark performance

			Fair Value Measurements at December 31, 2018
Asset Category	Total		Quoted Prices in Active Markets for Identical Assets (Level 1)	Significant Observable Inputs (Level 2)	Significant Unobservable Inputs (Level 3)
Cash and cash equivalents	$	8,136	8,136	—	—
Equity securities (a)	80,468		74,541	5,927	—
Fixed Income (b)	44,855		—	44,855	—
Total	$	133,459	82,677	50,782	—

___________________________________

(a) Actively managed portfolio of equity securities with the goal to exceed the benchmark performance.

(b) Actively managed portfolio of fixed income securities with the goal to exceed the benchmark performance

In 2020, SJW Group expects to make required and discretionary cash contributions of up to $8,404 to the pension plans and other postretirement benefit plans.

Benefits expected to be paid in the next five years and in the aggregate for the five years thereafter are:

	Pension Plan		Other Postretirement Benefit Plan
2020	$	13,930	$	1,336
2021	14,358		1,447
2022	14,626		1,513
2023	15,187		1,600
2024	15,604		1,648
2025 - 2029	86,971		8,908

XML

Unaudited Quarterly Financial Data

12 Months Ended

Dec. 31, 2019

Quarterly Financial Information Disclosure [Abstract]

Unaudited Quarterly Financial Data

Unaudited Quarterly Financial Data

Summarized quarterly financial data is as follows:

	2019 Quarter Ended
	March		June	September	December
Operating revenue	$	77,682	102,965	113,997	125,838
Operating income	12,408		21,971	17,084	6,016
SJW Group net income	5,873		13,538	9,478	(5,486	)
Comprehensive income	5,873		13,538	9,478	(5,360	)
Earnings per share:
—Basic	0.21		0.48	0.33	(0.20	)
—Diluted	0.21		0.47	0.33	(0.19	)
Market price range of stock:
—High	63.76		63.40	69.23	74.47
—Low	54.74		59.83	61.23	67.13
Dividend per share	0.30		0.30	0.30	0.30

	2018 Quarter Ended
	March		June	September	December
Operating revenue	$	75,042	99,086	124,853	98,718
Operating income	7,331		22,799	25,828	17,482
SJW Group net income	1,285		12,871	15,788	8,823
Comprehensive income	1,285		12,871	15,788	8,823
Earnings per share:
—Basic	0.06		0.63	0.77	0.38
—Diluted	0.06		0.62	0.76	0.38
Market price range of stock:
—High	63.47		68.15	67.29	65.31
—Low	51.96		51.68	56.12	52.63
Dividend per share	0.28		0.28	0.28	0.28

XML

Long-Term Debt (Tables)

12 Months Ended

Dec. 31, 2019

Debt Disclosure [Abstract]

Schedule of Maturities of Long-term Debt [Table Text Block]

The following is a table of the consolidated company’s schedule of principal payments:

Year
2020	$	22,343
2021	76,943
2022	39,388
2023	4,583
2024	49,256
Thereafter	1,100,073

Schedule of Long-term Debt Instruments

Long-term debt as of December 31 was as follows:

Description	Rate	Maturity	2019		2018
SJW Group:
Senior notes	3.05% - 4.35%	2021 - 2039	$	560,000	50,000
SJWC:
Senior notes	4.29% - 9.45%	2020 - 2049	330,000		250,000
California Pollution Control Financing Authority Revenue Bonds	4.75%, 5.10%	2040, 2046	120,000		120,000
Total SJWC			450,000		370,000
CTWS bank term loans	4.09%, 4.15%	2027, 2037	23,935		—
Connecticut Water:
Connecticut Innovations Revenue Bonds, variable rate		2028 - 2029	22,050		—
Connecticut Innovations Revenue Bonds, fixed rate	5.00%	2021	22,506		—
Senior note	3.53%	2037	35,000		—
Bank term loans	3.16% - 4.75%	2020 - 2036	119,090		—
Total Connecticut Water			198,646		—
SJWTX, Inc. senior note	6.27%	2036	15,000		15,000
Maine Water:
State revolving fund loans	0.00% - 2.58%	2022 - 2048	16,032		—
Other First Mortgage Bonds	8.95%	2024	4,500		—
Bank term loans	4.18% - 5.51%	2024 - 2043	17,500		—
Total Maine Water			38,032		—
HVWC bank term loan	4.75%	2034	4,164		—
Avon Water mortgage loan	3.05%	2033	2,809		—
Total debt			1,292,586		435,000
Unamortized debt premium, net (a)			25,020		—
Less:
Unamortized debt issuance costs			11,737		3,576
Current portion			22,272		—
Total long-term debt, less current portion			$	1,283,597	431,424

___________________________________

(a) Consists of fair value adjustments recognized through purchase accounting for the completed merger with CTWS on October 9, 2019.

XML

Equity Plans (Tables)

12 Months Ended

Dec. 31, 2019

Share-based Payment Arrangement [Abstract]

Schedule of Compensation Cost for Share-based Payment Arrangements, Allocation of Share-based Compensation Costs by Plan

A summary of compensation costs charged to income and proceeds from the exercise of stock options and similar instruments, that are recorded to additional paid-in capital and common stock, by award type, are presented below for the years ended December 31:

	2019		2018	2017
Compensation costs charged to income:
ESPP	$	283	242	214
Restricted stock and deferred restricted stock	3,123		1,875	2,429
Total compensation costs charged to income	$	3,406	2,117	2,643
Proceeds from the exercise of stock options and similar instruments:
ESPP	1,603		1,371	1,215
Total proceeds from the exercise of stock options and similar instruments	$	1,603	1,371	1,215

Schedule of Share-based Compensation, Restricted Stock Units Award Activity

A summary of SJW Group’s restricted and deferred restricted stock awards under the Plan as of December 31, 2019, and changes during the year ended December 31, 2019, are presented below:

	Units		Weighted- Average Grant- Date Fair Value
Outstanding as of January 1, 2019	124,275		$	38.80
Issued	76,018		$	59.78
Exercised	(25,529	)	$	49.77
Forfeited or expired	—		$	—
Outstanding as of December 31, 2019	174,764		$	46.63
Shares vested as of December 31, 2019	81,611		$	31.12

Schedule of Nonvested Restricted Stock Units Activity

A summary of the status of SJW Group’s nonvested restricted and deferred restricted stock awards under the Plan as of December 31, 2019, and changes during the year ended December 31, 2019, are presented below:

	Units		Weighted-  Average Grant- Date Fair Value
Nonvested as of January 1, 2019	55,098		$	54.42
Granted	76,018		$	59.78
Vested	(37,963	)	$	59.27
Forfeited	—		$	—
Nonvested as of December 31, 2019	93,153		$	39.57

XML

Benefit Plans Reconciliation of Funded Status (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward]
Fair value of assets at beginning of year	$ 133,459
Fair value of assets at end of year	260,747	$ 133,459
Pension Plan [Member]
Defined Benefit Plan, Change in Benefit Obligation [Roll Forward]
Benefit obligation at beginning of year	187,877	196,207
Service cost	5,947	5,790	$ 4,699
Interest cost	8,506	6,879	6,993
Defined Benefit Plan, Benefit Obligation, Business Combination	108,162	0
Expected return on assets	10,118	9,255	7,888
Actuarial loss	35,502	(14,447)
Implicit rate subsidy	0	0
Defined Benefit Plan, Benefit Obligation, Contributions by Plan Participant	0	0
Defined Benefit Plan, Benefit Obligation, Increase (Decrease) for Other Change	(10)	0
Benefits paid	(7,744)	(6,552)
Benefit obligation at end of year	338,240	187,877	196,207
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward]
Fair value of assets at beginning of year	127,610	133,360
Actual return on plan assets	34,807	(7,700)
Defined Benefit Plan, Plan Assets, Business Combination	79,382	0
Employer contributions	9,476	8,502
Defined Benefit Plan, Plan Assets, Contributions by Plan Participant	0	0
Defined Benefit Plan, Plan Assets, Period Increase (Decrease)	(10)	0
Benefits paid	(7,744)	(6,552)
Fair value of assets at end of year	243,521	127,610	133,360
Funded status at end of year	(94,719)	(60,267)
Other Postretirement Benefits Plan [Member]
Defined Benefit Plan, Change in Benefit Obligation [Roll Forward]
Benefit obligation at beginning of year	17,489	18,003
Service cost	581	616	529
Interest cost	775	627	634
Defined Benefit Plan, Benefit Obligation, Business Combination	12,537	0
Expected return on assets	475	450	376
Actuarial loss	2,027	(988)
Implicit rate subsidy	(217)	(207)
Defined Benefit Plan, Benefit Obligation, Contributions by Plan Participant	85	0
Defined Benefit Plan, Benefit Obligation, Increase (Decrease) for Other Change	0	0
Benefits paid	(731)	(562)
Benefit obligation at end of year	32,546	17,489	18,003
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward]
Fair value of assets at beginning of year	5,849	6,804
Actual return on plan assets	1,972	(262)
Defined Benefit Plan, Plan Assets, Business Combination	9,314	0
Employer contributions	738	629
Defined Benefit Plan, Plan Assets, Contributions by Plan Participant	85	0
Defined Benefit Plan, Plan Assets, Period Increase (Decrease)	(55)	0
Benefits paid	(677)	(1,322)
Fair value of assets at end of year	17,226	5,849	$ 6,804
Funded status at end of year	$ (15,320)	$ (11,640)

XML

Benefit Plans Benefits Expected to be Paid in Next Five Years (Details) $ in Thousands	Dec. 31, 2019 USD ($)
Pension Plan [Member]
Expected Future Benefit Payments [Abstract]
2020	$ 13,930
2021	14,358
2022	14,626
2023	15,187
2024	15,604
2025 - 2028	86,971
Other Postretirement Benefits Plan [Member]
Expected Future Benefit Payments [Abstract]
2020	1,336
2021	1,447
2022	1,513
2023	1,600
2024	1,648
2025 - 2028	8,908
Maximum [Member]
Defined Benefit Plan Disclosure [Line Items]
Estimated required and discretionary employer cash contributions in 2017	$ 8,404

XML

Long-Term Debt Narrative (Details)				12 Months Ended
	Feb. 03, 2020 USD ($)	Oct. 08, 2019 USD ($)	Mar. 28, 2019 USD ($)	Dec. 31, 2019 USD ($)	Dec. 19, 2019 USD ($)	Dec. 31, 2018 USD ($)
Unamortized Debt Issuance Expense				$ (11,737,000)		$ (3,576,000)
Long-term debt				$ 1,292,586,000		435,000,000
Document Period End Date				Dec. 31, 2019
Significant Observable Inputs (Level 2)
Fair value of long-term debt				$ 1,396,205,000		490,148,000
San Jose Water Company [Member] | Senior Notes [Member]
Ratio of indebtedness to total capital				0.6666
Ratio of net income available for interest charges for the trailing 12-month calendar period to interest charges				1.75
SJW Group [Member] | Senior Notes [Member]
Long-term debt				$ 560,000,000		50,000,000
SJW Group [Member] | Senior Notes [Member] | Maximum [Member]
Stated interest rates				4.35%
SJW Group [Member] | Senior Notes [Member] | Series A [Member]
Ratio of indebtedness to total capital				0.6666
Minimum net worth required for compliance				$ 175,000,000
Cumulative net income, percentage included in net worth for compliance				30.00%
SJW Group [Member] | Senior Notes [Member] | Series A [Member] | Minimum [Member]
Stated interest rates				3.05%
SJW Group [Member] | Senior Notes [Member] | Series A [Member] | Financial Guarantee [Member]
Ratio of indebtedness to total capital				0.6666
Minimum net worth required for compliance				$ 125,000,000
SJW Group [Member] | Senior Notes [Member] | Series A [Member] | Financial Guarantee [Member] | Minimum [Member]
Cumulative net income, percentage included in net worth for compliance				30.00%
SJW Group [Member] | Senior Notes [Member] | Series 2019A [Member]
Stated interest rates		3.05%
Principal Debt Sold		$ 310,000,000
SJW Group [Member] | Senior Notes [Member] | Series 2019B [Member]
Stated interest rates		3.15%
Principal Debt Sold		$ 75,000,000
SJW Group [Member] | Senior Notes [Member] | Series 2019C [Member]
Stated interest rates		3.53%
Principal Debt Sold		$ 125,000,000
San Jose Water Company [Member] | California Pollution Control Financing Authority Revenue Bonds [Member]
Long-term debt				$ 450,000,000		370,000,000
San Jose Water Company [Member] | Public Utility, Bonds [Member] | California Pollution Control Financing Authority Revenue Bonds [Member]
Long-term debt				$ 120,000,000		120,000,000
San Jose Water Company [Member] | Public Utility, Bonds [Member] | California Pollution Control Financing Authority Revenue Bonds [Member] | Minimum [Member]
Stated interest rates				4.75%
San Jose Water Company [Member] | Public Utility, Bonds [Member] | California Pollution Control Financing Authority Revenue Bonds [Member] | Maximum [Member]
Stated interest rates				5.10%
San Jose Water Company [Member] | Senior Notes [Member]
Long-term debt				$ 330,000,000		250,000,000
San Jose Water Company [Member] | Senior Notes [Member] | Minimum [Member]
Stated interest rates				4.29%
San Jose Water Company [Member] | Senior Notes [Member] | Maximum [Member]
Stated interest rates				9.45%
San Jose Water Company [Member] | Senior Notes [Member] | Series M [Member]
Stated interest rates			4.29%
Principal Debt Sold			$ 80,000,000
Connecticut Water Service, Inc. [Member] | Notes Payable to Banks [Member]
Long-term debt				$ 23,935,000		0
Ratio of indebtedness to total capital				0.60
Connecticut Water Service, Inc. [Member] | Notes Payable to Banks [Member] | Minimum [Member]
Stated interest rates				4.09%
Connecticut Water Service, Inc. [Member] | Notes Payable to Banks [Member] | Maximum [Member]
Stated interest rates				4.15%
Connecticut Water Company [Member]
Long-term debt				$ 198,646,000		0
Connecticut Water Company [Member] | Public Utility, Bonds [Member] | Connecticut Innovations Revenue Bonds, Variable Rate [Member]
Long-term debt				44,556,000
Connecticut Water Company [Member] | Public Utility, Bonds [Member] | Connecticut Innovations Revenue Bonds [Member]
Long-term debt				$ 22,506,000		0
Stated interest rates				5.00%
Connecticut Water Company [Member] | Notes Payable to Banks [Member]
Long-term debt				$ 119,090,000		0
Ratio of indebtedness to total capital				0.60
Connecticut Water Company [Member] | Notes Payable to Banks [Member] | Minimum [Member]
Stated interest rates				3.16%
Connecticut Water Company [Member] | Notes Payable to Banks [Member] | Maximum [Member]
Stated interest rates				4.75%
Connecticut Water Company [Member] | Senior Notes [Member]
Long-term debt				$ 35,000,000		0
Stated interest rates				3.53%
SJWTX, Inc. [Member] | Senior Notes [Member]
Long-term debt				$ 15,000,000		15,000,000
Stated interest rates				6.27%
Maine Water Company [Member]
Long-term debt				$ 38,032,000		0
Maine Water Company [Member] | Public Utility, Bonds [Member] | State Revolving Fund Loans [Member]
Long-term debt				$ 16,032,000		0
Maine Water Company [Member] | Public Utility, Bonds [Member] | State Revolving Fund Loans [Member] | Minimum [Member]
Stated interest rates				0.00%
Maine Water Company [Member] | Public Utility, Bonds [Member] | State Revolving Fund Loans [Member] | Maximum [Member]
Stated interest rates				2.58%
Maine Water Company [Member] | Public Utility, Bonds [Member] | First Mortgage Bonds [Member]
Stated interest rates				8.95%
Ratio of indebtedness to total capital				0.65
Maine Water Company [Member] | Public Utility, Bonds [Member] | State Revolving Fund Loans Series S [Member]
Long-term debt					$ 5,000,000
Stated interest rates					1.00%
Maine Water Company [Member] | Mortgages [Member] | First Mortgage Bonds [Member]
Long-term debt				$ 4,500,000		0
Maine Water Company [Member] | Notes Payable to Banks [Member]
Long-term debt				$ 17,500,000		0
Maine Water Company [Member] | Notes Payable to Banks [Member] | Minimum [Member]
Stated interest rates				4.18%
Maine Water Company [Member] | Notes Payable to Banks [Member] | Maximum [Member]
Stated interest rates				5.51%
Heritage Valley Water Company [Member] | Notes Payable to Banks [Member]
Long-term debt				$ 4,164,000		0
Stated interest rates				4.75%
Principal and interest payments				$ 31,000
Avon Water Company [Member] | Mortgages [Member]
Long-term debt				$ 2,809,000		$ 0
Loan amortization period				20 years
Stated interest rates				3.05%
Principal and interest payments				$ 22,000
SJWTX,Inc. dba Canyon Lake Water Supply Corporation [Member] | Senior Notes [Member] | Series A [Member]
Ratio of indebtedness to total capital				0.6666
Ratio of net income available for interest charges for the trailing 12-month calendar period to interest charges				1.75
Subsequent Event [Member] | Maine Water Company [Member]
Increase (Decrease) in Restricted Cash	$ (4,114,000)

XML

Summary of Significant Accounting Policies Financial Instruments and Investments (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Investments, All Other Investments [Abstract]
Bank Owned Life Insurance	$ 7,086
Value of life insurance contracts	3,829
Available for Sale Marketable Security, Shares Sold		100,000
Proceeds from sale of California Water Service Group stock	0	$ 4,112	$ 0
Fees Incurred on Sale of Available for Sale Securities		9
Gain on sale of California Water Service Group stock	$ 0	104	$ 0
Available for Sales Securities, Tax on Realized Gain		29
Debt and Equity Securities, Gain (Loss)		$ 75

XML

Summary of Significant Accounting Policies (Advances for Construction and Contributions in Aid of Construction) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Accounting Policies [Abstract]
Refund period for advances for construction received after 1981	40 years
Estimated Refunds of Advances for Construction [Abstract]
2020	$ 2,890
2021	2,890
2022	2,890
2023	2,878
2024	2,799
Thereafter	49,631
Customer Advances for Construction	112,339	$ 80,610
Customer Advances for Construction, Non-Refundable	21,463
Customer Advances for Construction, Refunded on Service Connections	$ 26,898
Amortization period for taxes paid relating to advances and contributions	40 years

XML

Benefit Plans (Tables)

12 Months Ended

Dec. 31, 2019

Retirement Benefits [Abstract]

Schedule of Assumptions Used

Net periodic cost for the defined benefit plans and other postretirement benefits was calculated using the following weighted-average assumptions:

	Pension Benefits			Other Benefits
	2019	2018	2017	2019	2018	2017
	%	%	%	%	%	%
Discount rate	3.04% - 4.16%	3.52	4.04	2.52% - 4.09%	3.45	3.93
Expected return on plan assets	7.00%, 7.25%	7.00	7.00	4.00%, 7.00%	7.00	7.00
Rate of compensation increase	4.00	4.00	4.00	N/A	N/A	N/A

Benefit obligations for the defined benefit plans and other postretirement benefits were calculated using the following weighted-average assumptions as of December 31:

	Pension Benefits		Other Benefits
	2019	2018	2019	2018
	%	%	%	%
Discount rate	3.05% - 3.23%	4.16	2.59% - 3.18%	4.09
Rate of compensation increase	4.00	4.00	N/A	N/A

Schedule of Net Benefit Costs

Net periodic costs for the defined benefit plans and other postretirement benefits for the years ended December 31 was as follows:

	Pension Benefits							Other Benefits
	2019			2018		2017		2019			2018		2017
Components of net periodic benefit cost
Service cost	$	5,947		5,790		4,699		$	581		616		529
Interest cost	8,506			6,879		6,993		775			627		634
Expected return on assets	(10,118		)	(9,255	)	(7,888	)	(475		)	(450	)	(376	)
Amortization of prior service cost	48			51		94		197			197		198
Recognized actuarial loss	3,984			3,986		3,844		240			321		273
Net periodic benefit cost	$	8,367		7,451		7,742		$	1,318		1,311		1,258

Schedule of Net Funded Status

The projected benefit obligations and the funded status of the defined benefit pension and other postretirement plans as of December 31 were as follows:

	Pension Benefits					Other Benefits
	2019			2018		2019			2018
Change in benefit obligation
Benefit obligation at beginning of year	$	187,877		196,207		$	17,489		18,003
Service cost	5,947			5,790		581			616
Interest cost	8,506			6,879		775			627
Business combinations	108,162			—		12,537			—
Actuarial (gain)/loss	35,502			(14,447	)	2,027			(988	)
Implicit rate subsidy	—			—		(217		)	(207	)
Plan participants contributions	—			—		85			—
Administrative expenses paid	(10		)	—		—			—
Benefits paid	(7,744		)	(6,552	)	(731		)	(562	)
Benefit obligation at end of year	$	338,240		187,877		$	32,546		17,489
Change in plan assets
Fair value of assets at beginning of year	$	127,610		133,360		$	5,849		6,804
Actual return on plan assets	34,807			(7,700	)	1,972			(262	)
Business combinations	79,382			—		9,314			—
Employer contributions	9,476			8,502		738			629
Plan participants contributions	—			—		85			—
Administrative expenses paid	(10		)	—		(55		)	—
Benefits paid	(7,744		)	(6,552	)	(677		)	(1,322	)
Fair value of plan assets at end of year	243,521			127,610		17,226			5,849
Funded status at end of year	$	(94,719	)	(60,267	)	$	(15,320	)	(11,640	)

Schedule of Amounts Recognized in Balance Sheet

The amounts recognized on the balance sheet as of December 31 were as follows:

	Pension Benefits			Other Benefits
	2019		2018	2019		2018
Current liabilities	$	1,899	1,323	$	96	94
Noncurrent liabilities	92,820		58,944	15,224		11,546
	$	94,719	60,267	$	15,320	11,640

Schedule of Regulatory Asset Recorded on the Projected Benefit Obligation of the Postretirement Benefit Plans

SJW Group recorded a regulatory asset on the projected benefit obligation of the postretirement benefit plans as follows:

	2019			2018
Funded status of obligation	$	110,039		71,907
Accrued benefit cost	(36,514		)	(5,674	)
Regulatory asset, amount to be recovered in future rates	$	73,525		66,233

Schedule of Allocation of Plan Assets

Plan assets as of December 31 were as follows:

	Pension Benefits					Other Benefits
	2019			2018		2019			2018
Fair value of assets at end of year:
Debt securities	$	86,288		42,654		$	5,608		2,200
	36		%	33	%	33		%	38	%
Equity securities	146,210			77,053		10,840			3,416
	60		%	60	%	63		%	58	%
Cash and equivalents	11,023			7,903		778			233
	5		%	6	%	5		%	4	%
Total	$	243,521		127,610		$	17,226		5,849

The following tables summarize the fair values of plan assets by major categories as of December 31, 2019 and 2018:

			Fair Value Measurements at December 31, 2019
Asset Category	Total		Quoted Prices in Active Markets for Identical Assets (Level 1)	Significant Observable Inputs (Level 2)	Significant Unobservable Inputs (Level 3)
Cash and cash equivalents	$	11,801	11,801	—	—
Equity securities (a)	157,050		149,265	7,785	—
Fixed Income (b)	91,896		31,686	60,210	—
Total	$	260,747	192,752	67,995	—

___________________________________

(a) Actively managed portfolio of equity securities with the goal to exceed the benchmark performance.

(b) Actively managed portfolio of fixed income securities with the goal to exceed the benchmark performance

			Fair Value Measurements at December 31, 2018
Asset Category	Total		Quoted Prices in Active Markets for Identical Assets (Level 1)	Significant Observable Inputs (Level 2)	Significant Unobservable Inputs (Level 3)
Cash and cash equivalents	$	8,136	8,136	—	—
Equity securities (a)	80,468		74,541	5,927	—
Fixed Income (b)	44,855		—	44,855	—
Total	$	133,459	82,677	50,782	—

___________________________________

(a) Actively managed portfolio of equity securities with the goal to exceed the benchmark performance.

(b) Actively managed portfolio of fixed income securities with the goal to exceed the benchmark performance

Schedule of Expected Benefit Payments

Benefits expected to be paid in the next five years and in the aggregate for the five years thereafter are:

	Pension Plan		Other Postretirement Benefit Plan
2020	$	13,930	$	1,336
2021	14,358		1,447
2022	14,626		1,513
2023	15,187		1,600
2024	15,604		1,648
2025 - 2029	86,971		8,908

XML

SJW Group and CTWS Merger (the Merger)

12 Months Ended

Dec. 31, 2019

Business Combinations [Abstract]

SJW Group and CTWS Merger (the “Merger”)

SJW Group and CTWS Merger (the “Merger”)

On October 9, 2019, SJW Group completed its previously announced acquisition of CTWS pursuant to the terms of the Second Amended and Restated Agreement and Plan of Merger, dated as of August 5, 2018, by and among SJW Group, Hydro Sub, Inc., a Connecticut corporation and a wholly-owned subsidiary of SJW Group, and CTWS. CTWS provides water service to approximately 137,000 connections that serve a population of approximately 480,000 people in 80 municipalities throughout Connecticut and Maine and more than 3,000 wastewater connections in Southbury, Connecticut. In addition, CTWS has a real estate company in Connecticut which provides property management services. SJW Group has included the financial results of CTWS in the consolidated financial statements from the date of acquisition.

SJW Group acquired all of the outstanding stock of CTWS for $70.00 per share in cash (without interest and less any applicable withholding taxes). The total cash purchase price is approximately $838,475, less cash received of $3,011, and approximately $6,384 related to outstanding awards of restricted stock units and deferred share units assumed in connection with the merger with CTWS. SJW Group financed the acquisition with net proceeds from its December 2018 sale of 7,762,000 common equity shares of approximately $411,077, and the October 2019 issuance of $427,398 in new fixed rate term loans. SJW Group raised an additional $18,463 in the debt financing to partially finance transaction costs incurred in connection with the CTWS acquisition. Along with the acquisition debt financing, SJW Group raised $60,000 of new proceeds used to partially refinance certain CTWS short-term borrowings on its existing lines of credit after the CTWS acquisition closed.

Management estimated the preliminary fair values of net tangible and intangible assets acquired, and the excess of the consideration transferred over the aggregate of such fair values was recorded as goodwill. The preliminary value of the acquired deferred tax assets and deferred tax liabilities are based on a preliminary analysis, and our estimates and assumptions are subject to change within the measurement period (up to one year from the acquisition date). In addition, management is still gathering information necessary to complete the recognition and measurement of the opening balance sheet. The following table summarizes the estimated preliminary fair value of assets acquired and liabilities assumed as of the date of acquisition:

	Fair Value
Utility plant, net	$	750,703
Nonutility plant	848
Current assets	42,673
Investments	12,489
Regulatory assets and deferred charges, less current portion	83,132
Other intangible assets	17,181
Other assets	2,592
Goodwill	626,523
Total assets acquired	$	1,536,141
Long-term debt	281,009
Current liabilities, including maturities of long-term debt	125,772
Deferred income taxes	107,789
Post-retirement benefit plans	31,789
Contributions in aid of construction and construction advances	137,327
Other long-term liabilities	10,607
Total liabilities assumed	694,293
Assumed equity	$	841,848

Other intangible assets primarily consists of customer relationships.

The goodwill balance is primarily attributable to assembled workforce and diversification of markets both from a geographic and regulatory perspective. We do not expect the goodwill recognized to be deductible for income tax purposes.

The amounts of revenue and pretax loss of CTWS included in SJW Group’s Consolidated Statements of Comprehensive Income from the acquisition date in October 2019 through December 31, 2019 are as follows:

Total revenues	$	21,672
Pretax (loss)	(3,174		)

The following unaudited pro forma financial information summarizes the combined results of operations for SJW Group and CTWS, as though the companies were combined as of January 1, 2018.

	Fiscal Year Ended December 31,
	2019		2018
Total revenues	$	515,153	514,364
Pretax income (loss)	60,862		72,938
Net income (loss)	56,968		65,449
Basic earnings per share	2.00		2.31

The historical consolidated financial information has been adjusted in the pro forma combined financial statements to give effect to pro forma events that are: (1) directly attributable to the transaction, (2) factually supportable and (3) expected to have continuing impact on the combined results of SJW Group and CTWS. As such, the impact of non-recurring transaction related expenses is not included. The pro forma financial statements do not reflect all cost savings (or associated costs to achieve such savings) from operating efficiencies or synergies that could result from the transaction. In addition, the pro forma financial information is for informational purposes only and is not indicative of the results of operations that would have been achieved if the acquisition had taken place at January 1, 2018.

XML

Summary of Significant Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2019

Accounting Policies [Abstract]

Property, Plant and Equipment

The major components of depreciable plant and equipment as of December 31, 2019 and 2018 are as follows:

	2019		2018
Equipment	$	521,183	335,358
Transmission and distribution	2,207,051		1,375,821
Office buildings and other structures	260,220		121,872
Total depreciable plant and equipment	$	2,988,454	1,833,051

Depreciation is computed using the straight-line method over the estimated remaining service lives of groups of assets, ranging from 5 to 75 years. The estimated service lives of depreciable plant and equipment are as follows:

	Useful Lives
Equipment	5 to 35 years
Transmission and distribution plant	35 to 75 years
Office buildings and other structures	7 to 50 years

Schedule of Real Estate Investments

The major components of real estate investments as of December 31, 2019 and 2018 are as follows:

	2019		2018
Land	$	14,168	13,262
Buildings and improvements	43,531		43,074
Total real estate investment	$	57,699	56,336

Schedule of Future Minimum Rental Payments for Operating Leases

The following schedule shows the future minimum rental payments to be received from third parties under operating leases that have remaining noncancelable lease terms in excess of one year as of December 31, 2019:

Year ending December 31:	Rental Revenue
2020	$	4,520
2021	3,208
2022	2,527
2023	2,564
2024	2,645
Thereafter	10,544

Schedule of Balancing and Memorandum Accounts

SJWC met the recognition requirements for certain of its balancing and memorandum accounts and certain amounts subject to balancing and memorandum accounts and recorded revenue and regulatory assets as follows:

	For the year ended December 31, 2019
	Beginning Balance			Regulatory Asset Increase (Decrease)		Refunds (Collections) Adjustments		Surcharge Offset and Other	Ending Balance
Revenue accounts:
2014 - 2017 WCMA	$	7,750		—		(7,042	)	—	708
2018 WCMA	9,386			(9,386	)	—		—	—
2012 General Rate Case true-up	11,328			96		(10,672	)	—	752
Cost of capital memorandum accounts	(1,523		)	(30	)	—		—	(1,553	)
Tax memorandum account	(6,504		)	(139	)	—		—	(6,643	)
All others	5,112			4,475		(4,791	)	—	4,796
Total revenue accounts	25,549			(4,984	)	(22,505	)	—	(1,940	)
Cost-recovery accounts:
Water supply costs	9,617			207		(5,496	)	—	4,328
Pension	(1,843		)	745		3,547		—	2,449
All others	1,090			10		(654	)	—	446
Total cost-recovery accounts	8,864			962		(2,603	)	—	7,223
Total	$	34,413		(4,022	)	(25,108	)	—	5,283

	For the year ended December 31, 2018
	Beginning Balance			Regulatory Asset Increase (Decrease)		Refunds (Collections) Adjustments		Surcharge Offset and Other	Ending Balance
Revenue accounts:
2014 - 2017 WCMA	$	6,680		1,066		4		—	7,750
2018 WCMA	—			9,386		—		—	9,386
2012 General Rate Case true-up	11,319			—		9		—	11,328
Cost of capital memorandum accounts	(144		)	(1,379	)	—		—	(1,523	)
Tax memorandum account	—			(6,504	)	—		—	(6,504	)
All others	3,850			1,258		4		—	5,112
Total revenue accounts	21,705			3,827		17		—	25,549
Cost-recovery accounts:
Water supply costs	8,679			939		(1	)	—	9,617
Pension	(2,459		)	614		2		—	(1,843	)
All others	—			1,090		—		—	1,090
Total cost-recovery accounts	6,220			2,643		1		—	8,864
Total	$	27,925		6,470		18		—	34,413

	For the year ended December 31, 2017
	Beginning Balance			Regulatory Asset Increase (Decrease)	Refunds (Collections) Adjustments		Surcharge Offset and Other		Ending Balance
Revenue accounts:
2014 - 2017 WCMA	$	1,589		17,288	(4,704	)	(7,493	)	6,680
2012 General Rate Case true-up	20,682			—	(9,363	)	—		11,319
Cost of capital memorandum accounts	(817		)	—	673		—		(144	)
Drought surcharges	(7,688		)	—	(765	)	8,453		—
Cost-recovery accounts	3,181			3,815	(776	)	—		6,220
All others	8,962			1,084	(6,271	)	75		3,850
Total	$	25,909		22,187	(21,206	)	1,035		27,925

Schedule of Regulatory Assets and Liabilities

Regulatory assets and liabilities are comprised of the following as of December 31:

	2019		2018
Regulatory assets:
Income tax temporary differences, net	$	2,433	—
Postretirement pensions and other medical benefits	73,525		66,233
Business combinations debt premium, net	25,020		—
Balancing and memorandum accounts, net	5,283		34,413
WRA	9,108		—
Other, net	5,048		2,979
Total regulatory assets, net in Consolidated Balance Sheets	120,417		103,625
Less: current regulatory asset, net	6,472		26,910
Total regulatory assets, net, less current portion	$	113,945	76,715
Regulatory liability:
Income tax temporary differences, net	$	—	59,149
Total regulatory liability in Consolidated Balance Sheets	$	—	59,149

Schedule of Estimated Refunds of Advances for Construction and Contributions in Aid of Construction

stimated refunds for the next five years and thereafter are shown below:

	Estimated Refunds
2020	$	2,890
2021	2,890
2022	2,890
2023	2,878
2024	2,799
Thereafter	49,631

Schedule of Asset Retirement Obligations

December 31, 2019 and 2018, the asset retirement obligation is as follows:

	2019			2018
Retirement obligation	$	4,803		4,803
Discount rate	6		%	6	%
Regulatory asset, present value, recorded as a liability	$	942		942

Disaggregation of Revenue

The major streams of revenue for SJW Group are as follows:

	2019			2018		2017
Revenue from contracts with customers	$	447,720		389,302		381,777
Alternative revenue programs, net	(18,232		)	10,456		12,584
Other balancing and memorandum accounts revenue, net (1)	(14,403		)	(7,541	)	(10,838	)
Rental income	5,397			5,482		5,702
	$	420,482		397,699		389,225

___________________________________

(1) For year ended December 31, 2019 and 2018, $962 and $2,643, respectively, of amounts related to cost-recovery balancing accounts which upon adoption of Topic 606 are recorded as capitalized costs rather than revenue until recovery is approved by the CPUC. Prior to adoption of Topic 606, these amounts were recorded as revenue. For further discussion, please see “Balancing and Memorandum Accounts” above.

XML

Benefit Plans Net Periodic Benefit Cost (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Pension Plan [Member]
Defined Benefit Plan Disclosure [Line Items]
Service cost	$ 5,947	$ 5,790	$ 4,699
Interest cost	8,506	6,879	6,993
Expected return on assets	(10,118)	(9,255)	(7,888)
Amortization of prior service cost	48	51	94
Recognized actuarial loss	3,984	3,986	3,844
Net periodic pension cost	8,367	7,451	7,742
Other Postretirement Benefits Plan [Member]
Defined Benefit Plan Disclosure [Line Items]
Service cost	581	616	529
Interest cost	775	627	634
Expected return on assets	(475)	(450)	(376)
Amortization of prior service cost	197	197	198
Recognized actuarial loss	240	321	273
Net periodic pension cost	$ 1,318	$ 1,311	$ 1,258

XML

Benefit Plans Plan Assets (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	$ 260,747	$ 133,459
Cash and Cash Equivalents [Member]
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	11,801	8,136
Pension Plan [Member]
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	243,521	127,610	$ 133,360
Pension Plan [Member] | Debt Securities [Member]
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	$ 86,288	$ 42,654
Actual plan asset allocations as a percent of toal plan assets	36.00%	33.00%
Pension Plan [Member] | Equity Securities [Member]
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	$ 146,210	$ 77,053
Actual plan asset allocations as a percent of toal plan assets	60.00%	60.00%
Pension Plan [Member] | Cash and Cash Equivalents [Member]
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	$ 11,023	$ 7,903
Actual plan asset allocations as a percent of toal plan assets	5.00%	6.00%
Other Postretirement Benefits Plan [Member]
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	$ 17,226	$ 5,849	$ 6,804
Other Postretirement Benefits Plan [Member] | Debt Securities [Member]
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	$ 5,608	$ 2,200
Actual plan asset allocations as a percent of toal plan assets	33.00%	38.00%
Other Postretirement Benefits Plan [Member] | Equity Securities [Member]
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	$ 10,840	$ 3,416
Actual plan asset allocations as a percent of toal plan assets	63.00%	58.00%
Other Postretirement Benefits Plan [Member] | Cash and Cash Equivalents [Member]
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	$ 778	$ 233
Actual plan asset allocations as a percent of toal plan assets	5.00%	4.00%

XML

Label	Element	Value
Cash and Cash Equivalents, at Carrying Value	us-gaap_CashAndCashEquivalentsAtCarryingValue	$ 7,799,000
Cash and Cash Equivalents, at Carrying Value	us-gaap_CashAndCashEquivalentsAtCarryingValue	12,944,000
Cash and Cash Equivalents, at Carrying Value	us-gaap_CashAndCashEquivalentsAtCarryingValue	420,722,000
Cumulative Effect of New Accounting Principle in Period of Adoption	us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption	0
Cumulative Effect of New Accounting Principle in Period of Adoption	us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption	97,000
Restricted Cash and Cash Equivalents	us-gaap_RestrictedCashAndCashEquivalents	0
Restricted Cash and Cash Equivalents	us-gaap_RestrictedCashAndCashEquivalents	5,000,000
Restricted Cash and Cash Equivalents	us-gaap_RestrictedCashAndCashEquivalents	0
Retained Earnings [Member]
Cumulative Effect of New Accounting Principle in Period of Adoption	us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption	2,203,000
Cumulative Effect of New Accounting Principle in Period of Adoption	us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption	97,000
AOCI Attributable to Parent [Member]
Cumulative Effect of New Accounting Principle in Period of Adoption	us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption	$ (2,203,000)

XML

Capitalization Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands			12 Months Ended
	Dec. 05, 2018	Dec. 03, 2018	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017	Nov. 28, 2018
Class of Stock [Line Items]
Issuance of common stock, net of issuance costs			$ (10)	$ 411,385	$ 0
Common stock, shares authorized			70,000,000	36,000,000
Document Period End Date			Dec. 31, 2019
Common stock, par value (usd per share)			$ 0.001	$ 0.001
Common stock, shares issued			28,456,508	28,404,316
Common stock, shares outstanding			28,456,508	28,404,316
Preferred stock, shares authorized			1,000,000	1,000,000
Preferred stock, par value (usd per share)			$ 0.001	$ 0.001
Preferred stock, shares outstanding			0	0
Preferred stock, shares issued			0	0
Underwritten Public Offering [Member] | Common Stock [Member]
Class of Stock [Line Items]
Issuance of common stock, net of issuance costs	$ 53,738	$ 358,256
Common stock, par value (usd per share)						$ 0.001
Stock Issued During Period, Length of Option to Purchase Overalltement	30 days
Common stock issued, shares	1,012,500	6,750,000		7,762,000

XML

Summary of Significant Accounting Policies (Asset Retirement Obligation) (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Accounting Policies [Abstract]
Retirement obligation	$ 4,803	$ 4,803
Discount rate	6.00%	6.00%
Regulatory asset	$ 942	$ 942

XML

Long-Term Debt Debt Maturity Schedule (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Debt Instrument [Line Items]
Long-term debt	$ 1,292,586	$ 435,000
Long-term Debt, Maturities, Repayments of Principal in Next Twelve Months	22,343
Long-term Debt, Maturities, Repayments of Principal in Year Two	76,943
Long-term Debt, Maturities, Repayments of Principal in Year Three	39,388
Long-term Debt, Maturities, Repayments of Principal in Year Four	4,583
Long-term Debt, Maturities, Repayments of Principal in Year Five	49,256
Long-term Debt, Maturities, Repayments of Principal after Year Five	1,100,073
Maine Water Company [Member]
Debt Instrument [Line Items]
Long-term debt	38,032	0
Maine Water Company [Member] | Public Utility, Bonds [Member] | State Revolving Fund Loans [Member]
Debt Instrument [Line Items]
Long-term debt	$ 16,032	$ 0
Maine Water Company [Member] | Public Utility, Bonds [Member] | State Revolving Fund Loans [Member] | Minimum [Member]
Debt Instrument [Line Items]
Stated interest rates	0.00%
Maine Water Company [Member] | Public Utility, Bonds [Member] | State Revolving Fund Loans [Member] | Maximum [Member]
Debt Instrument [Line Items]
Stated interest rates	2.58%

XML

Valuation and Qualifying Accounts and Reserves (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
SEC Schedule, 12-09, Allowance, Credit Loss [Member]
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward]
Beginning Balance	$ 272	$ 190	$ 200
Opening balance, SJWNE, LLC	1,283	0	0
Charged to expense	520	430	399
Accounts written off	(875)	(650)	(675)
Recoveries of accounts written off	312	302	266
Ending Balance	1,512	272	190
SEC Schedule, 12-09, Reserve, Legal [Member]
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward]
Beginning Balance	2,181	1,892	2,105
Charged to expense	3,221	480	528
Accounts written off	(135)	1	(245)
Payments	(2,369)	(192)	(496)
Ending Balance	$ 2,898	$ 2,181	$ 1,892

XML

Contingencies Narrative (Details) - USD ($) $ in Thousands		12 Months Ended
	Jan. 10, 2020	Dec. 31, 2019
Loss Contingencies [Line Items]
Damages sought		$ 1,500
Subsequent Event [Member]
Loss Contingencies [Line Items]
Litigation Settlement, Amount Awarded to Other Party	$ 325

XML

Income Taxes Components of Income Tax Expense (Benefit) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Current:
Federal	$ 7,577	$ 14,485	$ 29,377
State	2,126	5,066	6,452
Deferred:
Federal	(1,929)	(7,702)	(1,174)
State	680	(1,784)	738
Income Tax Expense (Benefit)	$ 8,454	$ 10,065	$ 35,393

XML

Income Taxes Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Reconciliation of Unrecognized Tax Benefits [Roll Forward]
Balance at beginning of year	$ 1,382	$ 1,307	$ 1,132
Increase related to tax positions taken during a prior year, including interest	351	0	0
Unrecognized Tax Benefits, Increase Resulting from Prior Period Tax Positions	3,483	75	185
Reductions related to tax positions taken in a prior year, including interest	(1,382)	0	(10)
Balance at end of year	$ 3,834	$ 1,382	$ 1,307

XML

Summary of Significant Accounting Policies (Utility Plant) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Public Utility, Property, Plant and Equipment [Line Items]
Capitalized interest costs	$ 4,323	$ 2,856	$ 2,807
Construction in progress	112,232	68,765
Major components of depreciable plant and equipment [Abstract]
Equipment	521,183	335,358
Transmission and distribution	2,207,051	1,375,821
Office buildings and other structures	260,220	121,872
Total depreciable plant and equipment	$ 2,988,454	$ 1,833,051
Estimated Useful Lives of Plant and Equipment [Abstract]
Depreciation expense as percentage of beginning of year balance of depreciable plant	3.80%	3.60%	3.60%
Minimum [Member]
Public Utility, Property, Plant and Equipment [Line Items]
Estimated useful life	7 years
Estimated Useful Lives of Plant and Equipment [Abstract]
Estimated useful life of equipment	5 years
Estimated useful life of transmission and distribution plant	35 years
Estimated useful lives of office buildings and other structures	7 years
Estimated service lives of assets	5 years
Useful life of intangible assets	5 years
Maximum [Member]
Public Utility, Property, Plant and Equipment [Line Items]
Estimated useful life	39 years
Estimated Useful Lives of Plant and Equipment [Abstract]
Estimated useful life of equipment	35 years
Estimated useful life of transmission and distribution plant	75 years
Estimated useful lives of office buildings and other structures	50 years
Estimated service lives of assets	75 years
Useful life of intangible assets	70 years
Administrative and general expense
Estimated Useful Lives of Plant and Equipment [Abstract]
Depreciation	$ 2,869	$ 2,306	$ 2,209
Water Plant [Member]
Estimated Useful Lives of Plant and Equipment [Abstract]
Depreciation	$ 63,785	$ 53,031	$ 46,456
Building and Building Improvements [Member] | Minimum [Member]
Public Utility, Property, Plant and Equipment [Line Items]
Estimated useful life	7 years
Building and Building Improvements [Member] | Maximum [Member]
Public Utility, Property, Plant and Equipment [Line Items]
Estimated useful life	39 years
Finite-Lived Intangible Assets [Member] | Minimum [Member]
Public Utility, Property, Plant and Equipment [Line Items]
Estimated useful life	7 years
Finite-Lived Intangible Assets [Member] | Maximum [Member]
Public Utility, Property, Plant and Equipment [Line Items]
Estimated useful life	12 years

XML

SJW Group and CTWS Merger (the “Merger”) Schedule of Preliminary Fair Value of Assets Acquired and Liabilities Assumed (Tables)

12 Months Ended

Dec. 31, 2019

Schedule of Preliminary Fair Value of Assets and Liabilities Assumed [Abstract]

Schedule of Recognized Identified Assets Acquired and Liabilities Assumed [Table Text Block]

The following table summarizes the estimated preliminary fair value of assets acquired and liabilities assumed as of the date of acquisition:

	Fair Value
Utility plant, net	$	750,703
Nonutility plant	848
Current assets	42,673
Investments	12,489
Regulatory assets and deferred charges, less current portion	83,132
Other intangible assets	17,181
Other assets	2,592
Goodwill	626,523
Total assets acquired	$	1,536,141
Long-term debt	281,009
Current liabilities, including maturities of long-term debt	125,772
Deferred income taxes	107,789
Post-retirement benefit plans	31,789
Contributions in aid of construction and construction advances	137,327
Other long-term liabilities	10,607
Total liabilities assumed	694,293
Assumed equity	$	841,848

XML

Summary of Significant Accounting Policies (Schedule of Regulatory Assets and Liabilities) (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Regulatory Assets and Liabilities [Abstract]
Net Regulatory Assets	$ 120,417	$ 103,625
Current regulatory assets, net	6,472	26,910
Total regulatory assets, net, less current portion	113,945	76,715
Regulatory Liabilities	0	59,149
Deferred Income Tax Charge [Member]
Regulatory Assets and Liabilities [Abstract]
Regulatory assets	2,433	0
Postretirement pensions and other medical benefits [Member]
Regulatory Assets and Liabilities [Abstract]
Regulatory assets	73,525	66,233
Business combinations debt premium, net [Member]
Regulatory Assets and Liabilities [Abstract]
Regulatory assets	25,020	0
Balancing and Memorandum Accounts [Member]
Regulatory Assets and Liabilities [Abstract]
Regulatory assets	5,283	34,413
WRA [Member]
Regulatory Assets and Liabilities [Abstract]
Regulatory assets	9,108	0
Other Regulatory Assets [Member]
Regulatory Assets and Liabilities [Abstract]
Regulatory assets	5,048	2,979
Deferred Income Tax Charge [Member]
Regulatory Assets and Liabilities [Abstract]
Regulatory Liabilities	$ 0	$ 59,149

XML

Long-Term Debt

12 Months Ended

Dec. 31, 2019

Debt Disclosure [Abstract]

Long-term Debt

Long-Term Debt

Long-term debt as of December 31 was as follows:

Description	Rate	Maturity	2019		2018
SJW Group:
Senior notes	3.05% - 4.35%	2021 - 2039	$	560,000	50,000
SJWC:
Senior notes	4.29% - 9.45%	2020 - 2049	330,000		250,000
California Pollution Control Financing Authority Revenue Bonds	4.75%, 5.10%	2040, 2046	120,000		120,000
Total SJWC			450,000		370,000
CTWS bank term loans	4.09%, 4.15%	2027, 2037	23,935		—
Connecticut Water:
Connecticut Innovations Revenue Bonds, variable rate		2028 - 2029	22,050		—
Connecticut Innovations Revenue Bonds, fixed rate	5.00%	2021	22,506		—
Senior note	3.53%	2037	35,000		—
Bank term loans	3.16% - 4.75%	2020 - 2036	119,090		—
Total Connecticut Water			198,646		—
SJWTX, Inc. senior note	6.27%	2036	15,000		15,000
Maine Water:
State revolving fund loans	0.00% - 2.58%	2022 - 2048	16,032		—
Other First Mortgage Bonds	8.95%	2024	4,500		—
Bank term loans	4.18% - 5.51%	2024 - 2043	17,500		—
Total Maine Water			38,032		—
HVWC bank term loan	4.75%	2034	4,164		—
Avon Water mortgage loan	3.05%	2033	2,809		—
Total debt			1,292,586		435,000
Unamortized debt premium, net (a)			25,020		—
Less:
Unamortized debt issuance costs			11,737		3,576
Current portion			22,272		—
Total long-term debt, less current portion			$	1,283,597	431,424

___________________________________

(a) Consists of fair value adjustments recognized through purchase accounting for the completed merger with CTWS on October 9, 2019.

Senior notes held by institutional investors are unsecured obligations of SJW Group, SJWC, Connecticut Water, SJWTX, Inc. and Maine Water and require interest-only payments until maturity. To minimize issuance costs, the companies’ debt has primarily been placed privately.

The senior note agreements of SJW Group have terms and conditions that restrict SJW Group from issuing additional funded debt if: (1) the funded consolidated debt would exceed 66-2/3% of total capitalization, (2) the minimum net worth of SJW Group becomes less than $175,000 plus 30% of Water Utility Services cumulative net income, since June 30, 2011, and (3) net income available for interest charges for the trailing 12-calendar-month period would be less than 175% of interest charges. As of December 31, 2019, SJW Group was not restricted from issuing future indebtedness as a result of these terms and conditions.

On October 8, 2019, SJW Group entered into a note purchase agreement with the purchasers listed in the agreement, pursuant to which SJW Group sold an aggregate principal amount of $310,000 of its 3.05% Senior Notes, Series 2019A, due November 1, 2029, $75,000 of its 3.15% Senior Notes, Series 2019B, due November 1, 2031, and $125,000 of its 3.53% Senior Notes, Series 2019C, due November 1, 2039. The notes are unsecured obligations of the Company. Interest is payable semi-annually in arrears on May 1st and November 1st of each year. The note purchase agreement contains customary representations and warranties. Under the note purchase agreement, SJW Group is required to comply with certain customary affirmative and negative covenants for as long as the notes are outstanding. The notes are also subject to customary events of default, the

occurrence of which may result in all of the notes then outstanding becoming immediately due and payable. The closing occurred simultaneously with the signing of the note purchase agreement.

The senior note agreements of SJWC generally have terms and conditions that restrict the company from issuing additional funded debt if: (1) the funded debt would exceed 66-2/3% of total capitalization, and (2) net income available for interest charges for the trailing 12-calendar-month period would be less than 175% of interest charges. As of December 31, 2019, SJWC was not restricted from issuing future indebtedness as a result of these terms and conditions.

On March 28, 2019, SJWC entered into a note purchase agreement with certain affiliates of MetLife, Inc., Brighthouse Financial, Inc. and New York Life Insurance (collectively the “Purchasers”), pursuant to which the company sold an aggregate principal amount of $80,000 of its 4.29% Senior Notes, Series M (“Series M Notes”) to the Purchasers. The Series M Notes are unsecured obligations of SJWC and are due on April 1, 2049. Interest is payable semi-annually in arrears on April 1st and October 1st of each year. The note purchase agreement contains customary affirmative and negative covenants for as long as the Series M Notes are outstanding. The Series M Notes are also subject to customary events of default, the occurrence of which may result in all of the Series M Notes then outstanding becoming immediately due and payable. The closing occurred simultaneously with the signing of the note purchase agreement.

SJWC has obligations pursuant to loan agreements with the California Pollution Control Financing Activity (“CPCFA”) totaling $120,000 in aggregate principal amounts of CPCFA revenue bonds outstanding as of December 31, 2019. The loan agreements contain affirmative and negative covenants customary for loan agreements relating to revenue bonds, containing, among other things, certain disclosure obligations, the tax exempt status of the interest on the bonds and limitations, and prohibitions on the transfer of projects funded by the loan proceeds and assignment of the loan agreements. As of December 31, 2019, SJWC was in compliance with all such covenants.

CTWS has outstanding term loans with a commercial bank in an aggregate amount of $23,935 as of December 31, 2019. Under the master loan agreement, CTWS is required to comply with certain financial ratio and operational covenants. The most restrictive of these covenants is to maintain a consolidated (CTWS and its subsidiaries) debt to capitalization ratio of not more than 60%. As of December 31, 2019, CTWS was in compliance with all covenants under the master loan agreement.

Connecticut Water has outstanding term loans with a commercial bank in an aggregate amount of $119,090 as of December 31, 2019. Under its master loan agreement, Connecticut Water is required to comply with financial and operational covenants substantially identical to those found in CTWS’ master loan agreement. Connecticut Water is required to maintain a debt to capitalization ratio of not more than 60%. As of December 31, 2019, Connecticut Water was in compliance with all covenants under its master loan agreement.

Connecticut Water has outstanding $44,556 of tax exempt and taxable Water Facilities Revenue Bonds issued through Connecticut Innovations (formerly the Connecticut Development Authority). The bond indentures and loan agreements contain customary affirmative and negative covenants and require compliance with financial and operational covenants, and also provide for the acceleration of the Revenue Bonds upon the occurrence of stated events of default. As of December 31, 2019, Connecticut Water was in compliance with all covenants of the bond indentures and loan agreements.

Connecticut Water has a $35,000 unsecured senior note that has terms and conditions that restrict Connecticut Water from issuing additional debt or paying a dividend to CTWS if such debt or distribution would trigger an event of default. The senior note agreement also requires Connecticut Water to maintain a debt to capitalization ratio of not more than 60%. As of December 31, 2019, Connecticut Water was in compliance with all financial ratio and operational covenants under this agreement.

The senior note agreement of SJWTX, Inc. has terms and conditions that restrict SJWTX, Inc. from issuing additional funded debt if: (1) the funded debt would exceed 66-2/3% of total capitalization, and (2) net income available for interest charges for the trailing 12-calendar-month period would be less than 175% of interest charges. In addition, SJW Group is a guarantor of SJWTX, Inc.’s senior note which has terms and conditions that restrict SJW Group from issuing additional funded debt if: (1) the funded consolidated debt would exceed 66-2/3% of total capitalization, and (2) the minimum net worth of SJW Group becomes less than $125,000 plus 30% of Water Utility Services cumulative net income, since December 31, 2005. As of December 31, 2019, SJWTX, Inc. and SJW Group were not restricted from issuing future indebtedness as a result of these terms and conditions.

Maine Water has $16,032 of First Mortgage Bonds issued to the Maine Municipal Bond Bank through the State Safe Drinking Water Revolving Loan Fund and $4,500 of First Mortgage Bonds issued to One America. The associated bond indentures and loan agreements contain customary affirmative and negative covenants, including a prohibition on the issuance of indebtedness secured by assets or revenue of Maine Water where the lien is senior to the lien of the bond trustee under the above bonds except as permitted by the bond indentures and related loan and security agreements, a requirement to maintain a debt to capitalization ratio of not more than 65%, required compliance with various financial and operational covenants, and a

provision for maturity acceleration upon the occurrence of stated events of default. As of December 31, 2019, Maine Water was in compliance with all covenants in its bond indentures and related loan agreements.

On December 19, 2019, Maine Water issued $5,000 of Series S First Mortgage Bonds to the Maine Municipal Bond Bank through the State Safe Drinking Water Revolving Loan Fund. The Series S bonds mature on October 1, 2039 and carry 1% interest. The Series S First Mortgage Bond covenants are the same as all other First Mortgage Bonds. The proceeds of the Series S bond issuance are represented as restricted cash on the Consolidated Balance Sheets at December 31, 2019. The restricted cash will be used for pre-approved projects primarily related to preliminary engineering and design work of a water treatment plant in Maine’s Biddeford and Saco division.

Maine Water has outstanding term loans with a commercial bank in an aggregate amount of $17,500 as of December 31, 2019. Under its master loan agreement, Maine Water is required to comply with financial and operational covenants substantially identical to those found in CTWS and Connecticut Water’s master loan agreements. Maine is required to maintain a debt to capitalization ratio of not more than 60%. As of December 31, 2019, Maine Water was in compliance with all covenant under its master loan agreement. On February 3, 2020, the trustee released proceeds of $4,114 from the bond.

HVWC has a term loan with a commercial bank due in 2034. The loan bears interest at a rate of 4.75% with monthly payments of principal and interest of $31. The loan is secured by real property owned by HVWC. The loan agreement restricts HVWC’s ability to incur additional debt and requires compliance with a funded debt to capitalization covenant and other operational covenants. As of December 31, 2019, HVWC was in compliance with all covenants of the loan and $4,164 was outstanding.

Avon Water has a mortgage loan that is due in 2033. This loan amortizes over 20 years and carries a fixed interest rate of 3.05% with monthly principal and interest payments of $22. The loan agreement (1) generally restricts the ability of Avon Water to incur additional debt or make dividend payments other than in the ordinary course of business, and (2) requires submission of periodic financial reports as part of loan covenants. As of December 31, 2019, Avon Water was in compliance with all covenants of the loan and $2,809 was outstanding.

The following is a table of the consolidated company’s schedule of principal payments:

Year
2020	$	22,343
2021	76,943
2022	39,388
2023	4,583
2024	49,256
Thereafter	1,100,073

The estimated fair value of long-term debt as of December 31, 2019 and 2018 was approximately $1,396,205 and $490,148, respectively, and was determined using a discounted cash flow analysis, based on the current rates for similar financial instruments of the same duration and creditworthiness of the Company. The fair value of long-term debt would be categorized as Level 2 of the fair value hierarchy.

XML

Summary of Significant Accounting Policies

12 Months Ended

Dec. 31, 2019

Accounting Policies [Abstract]

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Summary of Significant Accounting Policies

The accompanying consolidated financial statements include the accounts of SJW Group, its wholly owned subsidiaries, and two variable interest entities in which two SJW Group subsidiaries are the primary beneficiaries. All intercompany transactions and balances have been eliminated in consolidation. The accounting policies of SJW Group’s subsidiaries comply with the applicable uniform system of accounts prescribed by the respective regulators and conform to generally accepted accounting principles for rate-regulated public utilities.

SJW Group’s principal subsidiary, San Jose Water Company (“SJWC”), is a regulated California water utility providing water service to approximately 231,000 connections that serve approximately one million people in the greater metropolitan San Jose area. Approximately 91% of SJWC’s revenues are derived from the sale of water to residential and business customers.

Connecticut Water Service, Inc. (“CTWS”), headquartered in Connecticut, is a holding company for water utilities companies providing water service to approximately 137,000 connections that serve a population of approximately 480,000 people in 80 municipalities throughout Connecticut and Maine and more than 3,000 wastewater connections in Southbury, Connecticut. As part of the merger transaction between SJW Group and CTWS on October 9, 2019, CTWS became a wholly-owned subsidiary of SJWNE LLC which is a wholly-owned subsidiary of SJW Group (see, Note 12, “SJW Group and CTWS Merger”). The subsidiaries held by CTWS that provide utility water services are The Connecticut Water Company (“Connecticut Water”), The Heritage Village Water Company (“HVWC”), The Avon Water Company (“Avon Water”) and The Maine Water Company (“Maine Water”). The remaining two subsidiaries are Chester Realty, Inc., a real estate company in Connecticut, and New England Water Utility Services, Inc. (“NEWUS”), which provides contract water and sewer operations and other water related services.

SJWTX, Inc., a wholly owned subsidiary of SJW Group, is incorporated in the State of Texas and is doing business as Canyon Lake Water Service Company (“CLWSC”). CLWSC is a public utility in the business of providing water service to approximately 54,000 people. CLWSC’s service area comprises more than 246 square miles in the southern region of the Texas Hill Country in Blanco, Comal, Hays and Travis counties, the growing region between San Antonio and Austin, Texas. SJWTX, Inc. has a 25% interest in Acequia Water Supply Corporation. Acequia has been determined to be a variable interest entity within the scope of ASC Topic 810 with SJWTX, Inc. as the primary beneficiary. As a result, Acequia has been consolidated with SJWTX, Inc.

SJW Land Company owns a commercial property, an undeveloped real estate property, and a warehouse property in the state of Tennessee. In September 1999, SJW Land Company contributed real property for a 70% limited partnership interest in 444 West Santa Clara Street, L.P. A commercial building was constructed on the partnership property and was leased to an unrelated international real estate firm under a long-term lease. 444 West Santa Clara Street, L.P. was determined to be a variable interest entity within the scope of ASC Topic 810 with SJW Land Company as the primary beneficiary. As a result, 444 West Santa Clara Street L.P. has been consolidated with SJW Land Company. The consolidated financial statements of SJW Group at December 31, 2019 and 2018 include the operating results of 444 West Santa Clara Street, L.P. Intercompany balances and transactions have been eliminated. In 2017, the commercial building owned by the partnership was sold. Results of operations and balances of the non-controlling interest are not material to the consolidated financial statements (see below in Note 1, “Real Estate Investments”).

Texas Water Alliance Limited (“TWA”), formerly a wholly owned subsidiary of SJW Group, was undertaking activities that were necessary to develop a water supply project in Texas. On February 22, 2016, SJW Group entered into a Purchase and Sale Agreement with the Guadalupe-Blanco River Authority (“GBRA”) pursuant to which SJW Group agreed to sell all of its equity interests in TWA to GBRA for $31,000 in cash. The sales transaction closed on November 16, 2017. As provided in the sale agreement, GBRA held back $3,000 (“Holdback Amount“) from the payment of the purchase price at the closing, which amount will be paid to SJW Group on June 30, 2021, subject to reduction under certain conditions. The transaction resulted in a pre-tax gain on sale of utility property of $12,501, excluding the Holdback Amount.

Recently Adopted Accounting Principles

In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-02, “Leases (Topic 842),” as amended, which supersedes the lease requirements in “Leases (Topic 840).” This ASU generally requires lessees to recognize operating and financing lease liabilities and corresponding right-of-use assets on the Consolidated Balance Sheets and to provide enhanced disclosures surrounding the amount, timing and uncertainty of cash flows arising from leasing arrangements. ASU 2016-02 also makes some changes to lessor accounting and aligns with the new

revenue recognition guidance. SJW Group adopted the new standard effective January 1, 2019, on a modified retrospective basis and did not restate comparative periods. SJW Group also elected the package of practical expedients permitted under the transition guidance and combined lease and non-lease components. In addition, SJW Group kept leases with an initial term of 12 months or less off the Consolidated Balance Sheets and recognized the associated lease payments in the Consolidated Statements of Comprehensive Income on a straight-line basis over the lease term. The adoption of this standard did not have a material impact on SJW Group’s consolidated financial statements.

Use of Estimates

The preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the United States of America 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 date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Utility Plant

The cost of additions, replacements and betterments to utility plant is capitalized. The amount of interest capitalized in 2019, 2018 and 2017 was $4,323, $2,856 and $2,807, respectively. Construction in progress was $112,232 and $68,765 at December 31, 2019 and 2018, respectively.

The major components of depreciable plant and equipment as of December 31, 2019 and 2018 are as follows:

	2019		2018
Equipment	$	521,183	335,358
Transmission and distribution	2,207,051		1,375,821
Office buildings and other structures	260,220		121,872
Total depreciable plant and equipment	$	2,988,454	1,833,051

Depreciation is computed using the straight-line method over the estimated remaining service lives of groups of assets, ranging from 5 to 75 years. The estimated service lives of depreciable plant and equipment are as follows:

	Useful Lives
Equipment	5 to 35 years
Transmission and distribution plant	35 to 75 years
Office buildings and other structures	7 to 50 years

For the years 2019, 2018 and 2017, depreciation expense as a percent of the beginning of the year balance of depreciable plant was approximately 3.8%, 3.6% and 3.6%, respectively. A portion of depreciation expense was allocated to administrative and general expense. For the years 2019, 2018 and 2017, the amounts allocated to administrative and general expense were $2,869, $2,306 and $2,209, respectively. Depreciation expense for utility plant for the years ended December 31, 2019, 2018 and 2017 was $63,785, $53,031 and $46,456, respectively. The cost of utility plant retired, including retirement costs (less salvage), is charged to accumulated depreciation and no gain or loss is recognized.

Utility Plant Intangible Assets

All intangible assets are recorded at cost and are amortized using the straight-line method over the estimated useful life of the asset, ranging from 5 to 70 years (see Note 6, “Utility Plant Intangible Assets”).

Real Estate Investments

Real estate investments are recorded at cost and consist primarily of land and buildings. Net gains and losses from the sale of real estate investments are recorded as a component of other (expense) income in the Consolidated Statements of Comprehensive Income. Nonutility property in Water Utility Services is also classified in real estate investments and not separately disclosed on the balance sheet based on the immateriality of the amount. Nonutility property is property that is neither used nor useful in providing water utility services to customers and is excluded from the rate base for rate-setting purposes. SJWC recognizes gain/loss on disposition of nonutility property in accordance with California Public Utilities Commission (“CPUC”) Code Section 790, whereby the net proceeds are reinvested back into property that is useful in providing water utility services to customers. There is no depreciation associated with nonutility property as it is all land.

The major components of real estate investments as of December 31, 2019 and 2018 are as follows:

	2019		2018
Land	$	14,168	13,262
Buildings and improvements	43,531		43,074
Total real estate investment	$	57,699	56,336

Depreciation on buildings and improvements for real estate investments is computed using the straight-line method over the estimated useful lives of the assets, ranging from 7 to 39 years.

On December 19, 2019, Maine Water completed the second half of a previously announced land sale with the Coastal Mountains Land Trust, Maine nonprofit corporation. The second transaction was structured such that Maine Water sold a conservation easement valued at $1,200 for $600. Accordingly, Maine Water expects to claim a $600 charitable deduction for federal and state income tax purposes on the bargain sale. The MPUC has previously ruled that the net proceeds from the transaction will be shared equally between the customers of the Camden Rockland division and Maine Water. The transaction generated approximately $180 in pre-tax gain on sale of nonutility property at Maine Water. Additionally, Connecticut Water disposed of a small parcel of land generating an additional $4 in pre-tax gain on sale of nonutility property.

On April 6, 2017, 444 West Santa Clara Street, L.P. sold all of its interests in the commercial building and land the partnership owned and operated for $11,000. 444 West Santa Clara Street, L.P. recognized a pre-tax gain on sale of real estate investments of $6,323, after selling expenses of $1,157. SJW Land Company holds a 70% limited interest in 444 West Santa Clara Street, L.P. SJW Land Company and the noncontrolling interest recognized a pre-tax gain on sale of real estate investments of $4,427 and $1,896, respectively, on the transaction. In connection with this sale, the partnership was required to deposit $750 into an escrow account for estimated repairs to the creek next to the land the partnership sold. On April 22, 2019, all creek repairs were completed and a reimbursement of $745 was provided to the partnership. SJW Land Company and the noncontrolling interest recognized a pre-tax gain on the creek reimbursement of $521 and $224, respectively, on the transaction. In addition, SJW Land Company sold undeveloped land located in San Jose, California for $1,350 on April 6, 2017. SJW Land Company recognized a pre-tax gain on sale of real estate investments of $580 on the transaction, after selling expenses of $14.

Real estate investments include $56,839 and $56,090 as of December 31, 2019 and 2018, respectively, of assets that are leased or available for lease. The following schedule shows the future minimum rental payments to be received from third parties under operating leases that have remaining noncancelable lease terms in excess of one year as of December 31, 2019:

Year ending December 31:	Rental Revenue
2020	$	4,520
2021	3,208
2022	2,527
2023	2,564
2024	2,645
Thereafter	10,544

Business Combinations

SJW Group applies the provisions of ASC Topic 805—“Business Combinations” for the purchase accounting related to the merger with CTWS on October 9, 2019. Topic 805 requires SJW Group to recognize separately from goodwill the assets acquired and the liabilities assumed at the acquisition date fair values. Goodwill as of the acquisition date is measured as the excess of consideration transferred over the net of the acquisition date fair values of the assets acquired and the liabilities assumed. While SJW Group uses our best estimates and assumptions to accurately value assets acquired and liabilities assumed at the acquisition date, our estimates are inherently uncertain and subject to refinement. As a result, during the measurement period, which may be up to one year from the acquisition date, we record adjustments to the assets acquired and liabilities assumed with the corresponding offset to goodwill. Upon the conclusion of the measurement period or final determination of the values of assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recorded to our Consolidated Statements of Comprehensive Income. Accounting for business combinations requires SJW Group to make significant estimates and assumptions, especially at the acquisition date, including estimates for intangible assets, contractual obligations assumed and pre-acquisition contingencies. Although SJW Group believes that the assumptions and estimates we make are reasonable and appropriate, they are based in part on historical experience and information obtained from CTWS’s management and are inherently uncertain. Events and circumstances may occur that may affect the accuracy or validity of such assumptions, estimates or actual results. The purchase price allocation process requires management to make

significant estimates and assumptions with respect to intangible assets. Although SJW Group believes the assumptions and estimates made are reasonable, they are based in part on historical experience, market conditions and information obtained from management of the acquired companies and are inherently uncertain. Examples of critical estimates in valuing certain of the intangible assets we have acquired or may acquire in the future include, but are not limited to: future expected cash flows from services; historical and expected customer attrition rates and anticipated growth in revenue from acquired customers; the expected use of the acquired assets; and discount rates. As of December 31, 2019, management estimated the preliminary fair values of net tangible and intangible assets acquired, and the excess of the consideration transferred over the aggregate of such fair values was recorded as goodwill. The preliminary value of the acquired deferred tax assets and deferred tax liabilities are based on a preliminary analysis, and our estimates and assumptions are subject to change within the measurement period (up to one year from the acquisition date). In addition, management is still gathering information necessary to complete the recognition and measurement of the opening balance sheet (see Note 12, “SJW Group and CTWS Merger”).

Impairment of Long-Lived Assets and Goodwill

In accordance with the requirements of FASB ASC Topic 360—“Property, Plant and Equipment,” the long-lived assets of SJW Group are reviewed for impairment when changes in circumstances or events require adjustments to the carrying values of the assets. When such changes in circumstances or events occur, the company assesses recoverability by determining whether the carrying value of such assets will be recovered through the undiscounted expected future cash flows. To the extent an impairment exists, the asset is written down to its estimated fair value with a corresponding charge to operations in the period in which the impairment is identified. Long-lived assets consist primarily of utility plant in service, real estate investments, intangible assets, and regulatory assets. In addition, the company tests unamortized intangible assets, which primarily relate to water rights, at least annually or more frequently if events or changes in circumstances indicate that the asset may be impaired. SJW Group first performs a qualitative assessment to determine whether it is necessary to perform the quantitative impairment test. In assessing the qualitative factors, SJW Group considers the impact of these key factors: change in industry and competitive environment, financial performance, and other relevant Company-specific events. If SJW Group determines that as a result of the qualitative assessment it is more likely than not (> 50% likelihood) that the fair value is less than carrying amount, then a quantitative test is performed. No impairments occurred during 2019, 2018 or 2017.

Goodwill represents the excess of the purchase price paid over the estimated fair value of the assets acquired and liabilities assumed in the acquisition of a business. Goodwill is not amortized and must be allocated at the reporting unit level, which is defined as an operating segment or one level below, and tested for impairment at least annually, or more frequently if an event occurs or circumstances change that would more likely than not, reduce the fair value of a reporting unit below its carrying value. SJW Group’s goodwill is primarily associated with the recent merger with CTWS on October 9, 2019. As of December 31, 2019, SJW Group performed a qualitative assessment and found no indicators of impairment and therefore did not perform the quantitative impairment test.

Cash and Cash Equivalents, and Restricted Fund

Cash and cash equivalents primarily consist of cash on deposit with banks with maturities of three months or less from the date of purchase. Restricted funds consist of proceeds from a Maine state revolving fund bond issuance to Maine Water of $5,000 on December 19, 2019 for construction of a new water treatment plant. Proceeds are held by a trustee for the bond and as conditions are met, funds are released. On February 3, 2020, the trustee released proceeds of $4,114 from the bond.

Financial Instruments and Investments

The following instruments are not measured at fair value on the company’s consolidated balance sheets but, require disclosure of fair values: cash and cash equivalents, accounts receivable and accounts payable. The estimated fair value of such instruments approximates their carrying value as reported on the consolidated balance sheets. The fair value of such financial instruments are determined using the income approach based on the present value of estimated future cash flows. The fair value of these instruments would be categorized as Level 2 in the fair value hierarchy, with the exception of cash and cash equivalents, which would be categorized as Level 1. The fair value of long-term debt is discussed in Note 4, “Long-Term Debt” and pension plan assets in Note 9, “Benefit Plans”.

SJW Group has investments in company owned life insurance which are valued at cash surrender value of the policies as reported by the insurer. These contracts are based principally on a referenced pool of investment funds that actively redeem shares, are observable and measurable, and are presented in “Other investments” on SJW Group’s consolidated balance sheets. As of December 31, 2019, the value of the company owned life insurance was $7,086 of which $3,829 was related to assets to fund CTWS’ supplemental retirement plan agreements. See discussion on pension plans in Note 9, “Benefit Plans”.

SJW Group’s had an investment in California Water Service Group which was accounted for under FASB ASC Topic 320—“Investment—Debt and Equity Securities,” as an available-for-sale marketable security. The investment was recorded on the Consolidated Balance Sheet at its quoted market price with the change in unrealized gain or loss reported, net of tax, as a

component of other expense (income) with the adoption of ASU 2016-01 on January 1, 2018. Prior to adoption, the changes in unrealized gain or loss, net of tax, were reported as a component of other comprehensive income.

During the year ended December 31, 2018, SJW Group sold its remaining 100,000 shares of California Water Service Group for $4,112 before fees of $9. SJW Group recognized a gain on the sale of the stock of approximately $104 and tax expense of approximately $29 for a net gain of $75.

Regulatory Rate Filings

California Regulatory Affairs

SJWC’s rates, service and other matters affecting its business are subject to regulation by the CPUC.

Generally, there are three types of rate adjustments that affect SJWC’s revenue collection: general rate adjustments, cost of capital adjustments, and offset rate adjustments. General rate adjustments are authorized in general rate case decisions, which usually authorize an initial rate adjustment followed by two annual escalation adjustments. General rate applications are normally filed and processed during the last year covered by the most recent general rate case as required by the CPUC in order to avoid any gaps in regulatory decisions on general rate adjustments.

Cost of capital adjustments are rate adjustments resulting from the CPUC’s usual tri-annual establishment of a reasonable rate of return for SJWC’s capital investments.

The purpose of an offset rate adjustment is to compensate utilities for changes in specific pre-authorized offsettable capital investments or expenses, primarily for purchased water, groundwater extraction, purchased power and pensions. Pursuant to Section 792.5 of the California Public Utilities Code, a balancing account must be maintained for each expense item for which such revenue offsets have been authorized. Memorandum accounts track revenue impacts due to catastrophic events, certain unforeseen water quality expenses related to new federal and state water quality standards, energy efficiency, water conservation during periods of mandated water restrictions, water tariffs and other approved activities or as directed by the CPUC such as the memorandum account for the Tax Cuts and Jobs Act (H.R. 1) (the “Tax Act”). The purpose of a balancing and memorandum account is to track the under-collection or over-collection associated with such expense changes and activities.

On January 4, 2018, SJWC filed General Rate Case Application No. 18-01-004 (“GRC”) with the CPUC requesting authority for an increase of revenue of $34,288, or 9.76%, in 2019, $14,232, or 3.7%, in 2020 and $20,582, or 5.17%, in 2021. Among other things, the application also included requests to recover $20,725 from balancing and memorandum accounts, the establishment of a Water Revenue Adjustment Mechanism and Sales Reconciliation Mechanism (“WRAM/SRM”), and a shift to greater revenue collection in the service charge. On June 28, 2018, the CPUC issued an order in the case identifying the issues to be considered, including whether the proposed merger between SJW Group and CTWS will have any ratemaking impact on the customers of SJWC (see discussion on the merger with CTWS at Note 12). This consideration was subsequently removed from the GRC to be considered in an Order Instituting Investigation (“OII”) on the proposed merger issued on July 20, 2018, see below for further discussion. On August 10, 2018, SJWC and the Office of Ratepayer Advocates filed a joint motion for partial settlement (“Settlement”) of the GRC with the CPUC, resolving all issues in the GRC with the exception of authorization of a WRAM/SRM and the recovery of the balance in the Hydro Generation Research, Development and Demonstration Memorandum Account, such issues being subsequently contested in legal briefs. The Settlement also lowered authorized sales to a level that aligns more closely with current actual consumption.  In addition, it allowed for a shift in cost recovery allowing 40% of total revenue to be collected through the fixed charge. On October 16, 2018, the CPUC issued a Proposed Decision adopting the Settlement in part, without any impact on the proposed revenue requirement outlined in the Settlement, and delaying ruling on the contested issues in order to allow the Settlement rates to become effective January 1, 2019. On December 4, 2018, the CPUC issued Decision 18-11-025 authorizing new rates for 2019. Accordingly, SJWC filed Advice Letter No. 528/528A on December 7, 2018, requesting authorization to increase revenue requirement by $16,378 or 4.55% in 2019 and to implement surcharges to recover $27,045 of under-collections from memorandum and balancing accounts. This was approved on December 28, 2018, and new rates became effective January 1, 2019.

On July 20, 2018, the CPUC issued an Order Instituting Investigation (“OII”) No. 18-07-007 concerning SJW Group’s then proposed merger with CTWS. A Scoping Memorandum was issued on September 7, 2018, which identified the issues to be considered in the proceeding as to whether the proposed merger is subject to CPUC approval and to evaluate the merger’s likely impacts within California. On September 14, 2018, SJW Group and SJWC submitted joint comments in response to the issues identified in accordance with the Scoping Memorandum’s adopted schedule, and reply comments were submitted on October 19, 2018. A Public Participation Hearing was held on January 31, 2019. On March 4, 2019, the CPUC suspended this proceeding due to SJW Group’s announcement of its intention to file a new merger approval application with the Connecticut Public Utilities Regulatory Authority (“PURA”). On April 3, 2019, SJW Group and CTWS jointly filed a new merger

application with PURA. After securing the required approvals from both PURA and the MPUC, SJW Group announced the close of the merger on October 9, 2019, and notified the CPUC accordingly.

In January 2017, a SJWC customer inquired about the company’s billing practice as it related to the proration of service charges in billing cycles where a rate change occurred. On June 22, 2017, SJWC was served with Complaint 17-06-009 regarding its billing practice for service charge rate changes. The billing issue was made a part of SJWC’s GRC proceeding and a settlement agreement was reached with the Office of Ratepayer Advocates (now the Public Advocates Office) on May 23, 2018, limiting the duration from which to calculate customer refunds from June 1, 2011, through December 31, 2016. Accordingly, SJWC provided an additional reserve to cover the remaining period covered by the settlement. In accordance with Decision 18-11-025 for the GRC, SJWC filed Advice Letter No. 530 proposing total refunds of $2,020 for the period from June 1, 2011 through December 31, 2016. This advice letter became effective February 8, 2019, and refunds were completed by mid-May 2019. On April 22, 2019, the CPUC dismissed Complaint 17-07-009 citing the relief provided in Advice Letter No. 530 and the current OII on this matter (see below for further discussion). The Complainant filed an appeal with the CPUC to dispute the dismissal. This appeal was rejected and the Complaint was dismissed via CPUC Decision No. 19-09-040 on September 24, 2019.

On September 14, 2018, the CPUC issued OII No. 18-09-003 to which SJWC was named as Respondent. The OII will determine whether the company unlawfully overcharged customers over a 30-year period by failing to pro-rate service charges when increases occurred during a billing period, and whether the company double-billed service charges during one billing period when allegedly switching from billing such charges in advance to billing in arrears.  The OII resulted from a report by the CPUC’s Consumer Protection and Enforcement Division (“CPED”), dated August 16, 2018, recommending an investigation into SJWC’s billing practice.  CPED calculated a refund obligation of approximately $2,061 for the years 2014 to 2016 that had been the subject of SJWC’s Advice Letter No. 510.  CPED calculated a further refund obligation of approximately $1,990 for the years 1987 to 2013.  CPED also asserted that the company double-billed its customers during a billing period when it allegedly converted from billing in advance to billing in arrears, assumed that such double-billing occurred in January 2011, and calculated a refund obligation of approximately $4,935.  The OII notes these estimates and identifies the proper refund amount as an issue in the proceeding.  The OII also identifies the CPUC’s authority to consider imposing penalties on SJWC in amounts ranging from five hundred dollars to fifty thousand dollars per offense, per day. On July 24, 2019, SJWC and CPED jointly filed a motion for CPUC approval of a Settlement Agreement (“Agreement”) over SJWC’s past customer billing practices. The Agreement requires the company to pay approximately $2,100 in customer credits, consisting of $1,757 for refunds during the period from 1987 to 2011 and an additional $350 in customer credits to low income water customers, and invest $5,000 in utility plant that is not allowed an investment return or rate recovery. SJWC has recorded the $2,100 customer credit expense as an offset to revenues in the accompanying December 31, 2019, Consolidated Statements of Comprehensive Income. The $5,000 commitment to invest in utility plant will be recognized as plant in service on the company’s financial statements once invested. The Agreement is subject to final approval by the CPUC. A CPUC Presiding Officer’s Decision approved the Agreement in December 2019, but an appeal was filed in January 2020 by a group of SJWC customers. A final CPUC decision approving the Settlement and dismissing the appeal was approved on February 27, 2020.

On February 28, 2019, SJWC filed Advice Letter No. 531 with the CPUC requesting to adjust the Utilities Reimbursement Account User Fees as directed by CPUC Resolution M-4839. The reimbursement fee was reduced from 1.4% to 1.23%. This request was approved and the new fee became effective on April 1, 2019.

On March 29, 2019, SJWC filed Advice Letter No. 532 with the CPUC requesting authorization to recover its 2018 WCMA balance for the period of January 1, 2018, through December 31, 2018. On December 19, 2019, the CPUC denied the recovery via Resolution W-5210 citing the elimination of mandatory conservation requirements. SJWC recorded a reduction of balancing and memorandum accounts of $9,386 with an offset to revenues for the 2018 WCMA and reversed revenues of $639 recorded in the 2019 WCMA during the period ended December 31, 2019.

On June 19, 2019, the CPUC issued its final decision resolving the remaining issues in SJWC’s GRC. Decision 19-06-010 denied the establishment of a WRAM/SRM and authorized the recovery of the Hydro Generation Research, Development and Demonstration Memorandum Account balance of $1,243. SJWC filed Advice Letter No. 534 on August 1, 2019, to recover this amount via a surcharge over a three-year period. The CPUC rejected the advice letter on October 10, 2019, citing an error and recommended a correction and a new filing for recovery. SJWC has made a filing to correct the record and is awaiting the CPUC’s decision. A new advice letter for recovery is anticipated to be filed in the first quarter of 2020 pending the decision.

On August 30, 2019, SJWC filed Advice Letter No. 535 with the CPUC requesting authorization to increase the total 2019 authorized revenue requirements by $0.7 million or 0.17% for plant additions related to the Montevina Water Treatment Plant Upgrade Project in 2018. This advice letter became effective on September 29, 2019.

SJWC filed Advice Letter No. 537 with the CPUC requesting authorization to refund the balance in its 2018 Tax Accounting Memorandum Account as required by the GRC decision on October 18, 2019.  On December 3, 2019, Advice Letter 537-A was filed to refund the balance via a one-time surcredit. For a typical residential customer with a 3/4-inch meter, the one-time

refund will be $20.84.  This advice letter was approved effective January 1, 2020, and refunds to customers began on January 27, 2020.

SJWC filed Advice Letter No. 541 on November 20, 2019, with the CPUC requesting authorization to increase its revenue requirement by $8,600 or 2.28% in 2020 for the first escalation year authorized in our 2018 General Rate Case Decision 18-011-025 which established rates for 2019, 2020, and 2021. This advice letter was approved on December 26, 2019, and new rates became effective January 1, 2020.

On December 6, 2019, SJWC filed Application No. 19-12-002 with the CPUC requesting approval for cost recovery to deploy Advanced Metering Infrastructure throughout its service area.  The application seeks revenue increases of $2.3 million or 0.61% in 2021, $4.0 million or 1.04% in 2022, and $2.5 million or 0.65% in 2023, and $0.3 million or 0.09% in 2024 based on current rates in effect.  A decision from the CPUC is anticipated in the fourth quarter of 2020.

On January 22, 2020, SJWC, along with California-American Water Company, California Water Service Company, and Golden State Water Company, filed a joint request for a one-year deferment on the Cost of Capital filings which would otherwise be due on May 1, 2020. Postponing the filing one year would alleviate administrative processing costs on the utilities as well as the CPUC staff, and provide relief for both CPUC and utility resources already strained by numerous other proceedings. The request is conditioned on no changes to the current Water Cost of Capital Mechanism in place during the one-year deferment. A CPUC decision is expected in the first quarter of 2020.

Connecticut Regulatory Affairs

Connecticut Water, HVWC and Avon Water’s rates, service and other matters affecting its business are subject to regulation by the Public Utilities Regulatory Authority of Connecticut (“PURA”). The Connecticut regulated operations seek rate relief as necessary to enable it to achieve an authorized rate of return.

PURA generally establishes rates in Connecticut on a company-wide basis and allows the Connecticut regulated operations to add surcharges to customers’ bills in order to recover certain costs associated with approved eligible capital projects through the Water Infrastructure Conservation Adjustment (“WICA”) in between full rate cases, as well as approved surcharges for the Water Revenue Adjustment (“WRA”). Connecticut Water and HVWC mitigate the risk associated with changes in demand through a PURA approved WRA mechanism. The WRA is used to reconcile actual water demands with the demands projected in the most recent general rate case and allows companies to implement a surcharge or surcredit as necessary to recover the revenues approved in the general rate case. The WRA removes the financial disincentive for water utilities to develop and implement effective water conservation programs. The WRA allows water companies to defer on the balance sheet, as a regulatory asset or liability, for later collection from or crediting to customers the amount by which actual revenues deviate from the revenues allowed in the most recent general rate proceedings, including WICA proceedings. Projects eligible for WICA surcharges include certain types of aging utility plant, primarily water mains, meters, and service lines. Additionally, certain energy conservation projects, improvements required to comply with streamflow regulations, and improvements to acquired systems are eligible for WICA surcharges. Avon Water does not currently use the WRA mechanism.

As of December 31, 2019, WICA surcharges for Connecticut Water and Avon Water were 3.24% and 9.31%, respectively. HVWC does not currently have an approved WICA surcharge. On January 28, 2020, Connecticut Water filed a WICA application representing an additional 2.6% surcharge, for a cumulative WICA surcharge of 5.84%. Additionally, on February 7, 2020, Connecticut Water filed its annual WICA reconciliation which called for a 0.09% reduction of the WICA surcharge. If approved as filed, Connecticut Water will begin to charge customers a cumulative WICA surcharge of 5.75% on April 1, 2020.

Connecticut Water and HVWC’s allowed revenues, as approved by PURA during each company’s last general rate case and including subsequently approved WICA surcharges for Connecticut Water, were approximately $18,588 for the period from October 9, 2019, through December 31, 2019. Through the normal billing, for the period from October 9, 2019 through December 31, 2019, revenues received from water and wastewater customers would have been approximately $20,428. As a result of the utilization of the WRA mechanism, Connecticut Water and HVWC recorded an approximate $1,840 reduction in revenues for the period from October 9, 2019 through December 31, 2019.

Texas Regulatory Affairs

CLWSC’s rates are subject to the economic regulation of the Public Utilities Commission of Texas (“PUCT”). The PUCT authorize rate increases after the filing of an Application for a Rate/Tariff Change. Rate cases may be filed as they become necessary, provided there is no current rate case outstanding. Further, rate cases may not be filed more frequently than once every 12 months.

As required, CLWSC submitted on January 28, 2019, its Water Pass-Through Charge (“WPC”) true-up report for the Canyon Lake area systems 2018 purchased water costs to the PUCT reflecting a change from $1.13 to $1.05 per thousand gallons. The WPC is the annual filing to change that component of CLWSC’s water rates for the changes in purchased water costs since the

last annual true-up report. This change for 2019 became effective on water bills being prepared as of February 1, 2019. Two WPC true-up reports were filed to report the year 2019 costs. The changes in the purchased water costs for the Deer Creek Ranch water system resulted in a decrease in the usage charge from $2.19 to $2.02 per thousand gallons, and an increase in the monthly base charge of $3.04 per residential account. These Deer Creek Ranch rate changes became effective October 1, 2019. The 2019 WPC true-up report for the water systems located in the Canyon Lake area resulted in a reduction of the WPC usage rate from $1.05 to $0.95 per thousand gallons which became effective on February 1, 2020.

Maine Regulatory Affairs

Maine Water’s rates, service and other matters affecting its business are subject to regulation by the Maine Public Utilities Commission (“MPUC”). As with the Connecticut regulated operations, rate relief is sought as necessary to enable the company to achieve an authorized rate of return. MPUC approves Maine Water’s rates on a division-by-division basis.

In 2015, a WRA mechanism law in Maine became available to regulated water utilities. Maine’s rate-adjustment mechanism could provide revenue stabilization in divisions with declining water consumption and Maine Water expects to request usage of this mechanism in future rate filings when consumption trends support its use.

On December 20, 2019, Maine Water filed a general a rate increase for their Skowhegan Division seeking approximately $221, or 14.7%, in additional revenue with the MPUC. A final decision from the MPUC is expected in the second quarter of 2020. On January 20, 2020, Maine Water filed Water Infrastructure Surcharge (“WISC”) applications with the MPUC in four divisions requesting an increase between 1.76% and 3.00%, representing approximately $371 in additional revenues. The WISC application was approved on February 26, 2020 and the surcharges are effective March 1, 2020.

Balancing and Memorandum Accounts

In California, the CPUC has established a balancing account mechanism for the purpose of tracking the under-collection or over-collection associated with expense changes and the revenue authorized by the CPUC to offset those expense changes. SJWC also maintains memorandum accounts to track revenue impacts due to catastrophic events, certain unforeseen water quality expenses related to new federal and state water quality standards, energy efficiency, water conservation, water tariffs, and other approved activities or as directed by the CPUC.

Balancing and memorandum accounts are recognized by SJWC 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. In addition, in the case of special revenue programs such as the Water Conservation Memorandum Account (“WCMA”) and WRA, SJWC and CTWS follow the requirements of ASC Topic 980-605-25—“Alternative Revenue Programs” in determining revenue recognition, including the requirement that such revenues will be collected within 24 months of the year-end in which the revenue is recorded. A reserve is recorded for amounts SJW Group estimates will not be collected within the 24-month period. This reserve is based on an estimate of actual usage over the recovery period, offset by applicable drought surcharges. In assessing the probability criteria for balancing and memorandum accounts between general rate cases, SJWC considers evidence that may exist prior to CPUC authorization that would satisfy ASC Topic 980 subtopic 340-25 recognition criteria. Such evidence may include regulatory rules and decisions, past practices, and other facts and circumstances that would indicate that recovery or refund is probable. When such evidence provides sufficient support, the balances are recorded in SJW Group’s consolidated financial statements.

On December 19, 2019, the CPUC denied the recovery of the 2018 WCMA in Advice Letter No. 532 and no longer approved the tracking of WCMA balances. Due to the decision, SJWC believes it no longer meets the probability criteria under ASC Topic 980-605-25 for the 2018 WCMA and has recognized a reduction to regulatory assets of $9,386 for the year ended December 31, 2019. SJWC had previously recognized regulatory assets of $9,386 due to lost revenues accumulated in the 2018 WCMA account for the year ended December 31, 2018. As of December 31, 2018, there was no reserve recorded to offset the 2018 WCMA.

As a result of the current status of the CPUC filing for the 2018 WCMA above, SJW Group also eliminated the regulatory asset balance for its 2019 WCMA as of December 31, 2019. As of December 31, 2019, $639 in lost revenues had accumulated in the 2019 WCMA.

SJWC recognized regulatory assets of $1,182 due to lost revenues accumulated in the 2017 WCMA account which represented the relief of the prior year reserve of $1,169 and interest earned on the balance during the year ended December 31, 2018. The prior year reserve represented the estimated amount that may not be collected within the 24-month period defined in the guidance. These amounts have been recorded in the 2017 WCMA balance shown in the table below for the year ended December 31, 2018. As of December 31, 2018, there was no reserve balance netted from the balance below.

A cost of capital memorandum account was approved by the CPUC on March 14, 2018. The account tracks the difference between current water rates and the lower rates adopted in the cost of capital decision issued on March 22, 2018. SJWC

recorded a regulatory liability of $1,379 in the cost of capital memorandum account for the year ended December 31, 2018 with a corresponding reduction to revenue. The amount has been reflected in the 2018 cost of capital memorandum account balance shown in the table below.

The CPUC directed SJWC to establish a memorandum account to capture all of the impacts of the Tax Act including the benefit of the reduction in the federal statutory income tax rate from 35% to 21% on its regulated revenue requirement. The CPUC has indicated that the net benefit from implementing the new law should ultimately be passed on to ratepayers. The benefits associated with regulatory activities is expected to flow back to customers as directed by the CPUC, with no impact to net income.  Per Advice Letter 522A filed with the CPUC, the benefit of the reduction in the federal statutory income tax rate from 35% to 21% were reflected in the customer bills effective July 1, 2018.  As such, the tax memorandum account only includes the benefit of the reduction in the federal statutory income tax rate through June 30, 2018. The other impacts of the Tax Act were recorded in the tax memorandum account for the entire year. Accordingly, SJWC recorded a regulatory liability of $6,504 in the tax memorandum account for the for the year ended December 31, 2018 with a corresponding reduction to revenue. The amount has been reflected in the tax memorandum account balance shown in the table below. Refunds for the tax memorandum account began on January 27, 2020.

In 2018, SJWC re-evaluated the accounting for cost-recovery balancing and memorandum accounts under the new revenue recognition guidance, ASU 2014-09, “Revenue from Contracts with Customers.” Prior to adoption, SJWC recorded cost-recovery accounts as a component of revenue. Upon adoption of ASU 2014-09, SJWC began recording such balances as capitalized costs until recovery is approved by the CPUC. The change is reflected in the cost-recovery balancing and memorandum accounts as shown in the table below.

SJWC met the recognition requirements for certain of its balancing and memorandum accounts and certain amounts subject to balancing and memorandum accounts and recorded revenue and regulatory assets as follows:

	For the year ended December 31, 2019
	Beginning Balance			Regulatory Asset Increase (Decrease)		Refunds (Collections) Adjustments		Surcharge Offset and Other	Ending Balance
Revenue accounts:
2014 - 2017 WCMA	$	7,750		—		(7,042	)	—	708
2018 WCMA	9,386			(9,386	)	—		—	—
2012 General Rate Case true-up	11,328			96		(10,672	)	—	752
Cost of capital memorandum accounts	(1,523		)	(30	)	—		—	(1,553	)
Tax memorandum account	(6,504		)	(139	)	—		—	(6,643	)
All others	5,112			4,475		(4,791	)	—	4,796
Total revenue accounts	25,549			(4,984	)	(22,505	)	—	(1,940	)
Cost-recovery accounts:
Water supply costs	9,617			207		(5,496	)	—	4,328
Pension	(1,843		)	745		3,547		—	2,449
All others	1,090			10		(654	)	—	446
Total cost-recovery accounts	8,864			962		(2,603	)	—	7,223
Total	$	34,413		(4,022	)	(25,108	)	—	5,283

	For the year ended December 31, 2018
	Beginning Balance			Regulatory Asset Increase (Decrease)		Refunds (Collections) Adjustments		Surcharge Offset and Other	Ending Balance
Revenue accounts:
2014 - 2017 WCMA	$	6,680		1,066		4		—	7,750
2018 WCMA	—			9,386		—		—	9,386
2012 General Rate Case true-up	11,319			—		9		—	11,328
Cost of capital memorandum accounts	(144		)	(1,379	)	—		—	(1,523	)
Tax memorandum account	—			(6,504	)	—		—	(6,504	)
All others	3,850			1,258		4		—	5,112
Total revenue accounts	21,705			3,827		17		—	25,549
Cost-recovery accounts:
Water supply costs	8,679			939		(1	)	—	9,617
Pension	(2,459		)	614		2		—	(1,843	)
All others	—			1,090		—		—	1,090
Total cost-recovery accounts	6,220			2,643		1		—	8,864
Total	$	27,925		6,470		18		—	34,413

	For the year ended December 31, 2017
	Beginning Balance			Regulatory Asset Increase (Decrease)	Refunds (Collections) Adjustments		Surcharge Offset and Other		Ending Balance
Revenue accounts:
2014 - 2017 WCMA	$	1,589		17,288	(4,704	)	(7,493	)	6,680
2012 General Rate Case true-up	20,682			—	(9,363	)	—		11,319
Cost of capital memorandum accounts	(817		)	—	673		—		(144	)
Drought surcharges	(7,688		)	—	(765	)	8,453		—
Cost-recovery accounts	3,181			3,815	(776	)	—		6,220
All others	8,962			1,084	(6,271	)	75		3,850
Total	$	25,909		22,187	(21,206	)	1,035		27,925

As of December 31, 2019, the total balance in SJWC’s balancing and memorandum accounts combined, including interest, that has not been recorded into the financial statements was a net under-collection of $1,428.

On December 28, 2018, SJWC’s GRC with the CPUC was approved with new rates effective on January 1, 2019. As part of the GRC decision, $27,045 of balancing and memorandum accounts were also approved for recovery over a 12-month period at $0.5894 per centum cubic feet surcharge effective on January 1, 2019. For the year ended December 31, 2019, SJWC collected $25,108 in surcharges for the approved recovery.

All balancing accounts and memorandum-type accounts not included for recovery or refund in the current general rate case will be reviewed by the CPUC in SJWC’s next general rate case or at the time an individual account reaches a threshold of 2% of authorized revenue, whichever occurs first.

Regulatory Assets and Liabilities

Generally accepted accounting principles for water utilities include the recognition of regulatory assets and liabilities as permitted by ASC Topic 980. In accordance with ASC Topic 980, Water Utility Services, to the extent applicable, records deferred costs and credits on the balance sheet as regulatory assets and liabilities when it is probable that these costs and credits will be recognized in the ratemaking process in a period different from when the costs and credits are incurred. Accounting for such costs and credits is based on management’s judgment and prior historical ratemaking practices, and it occurs when management determines that it is probable that these costs and credits will be recognized in the future revenue of Water Utility Services through the ratemaking process. The regulatory assets and liabilities recorded by Water Utility Services primarily relate to the recognition of deferred income taxes for ratemaking versus tax accounting purposes, balancing and memorandum

accounts, debt premiums related to business combinations, postretirement pension benefits, medical costs, accrued benefits for vacation and asset retirement obligations that have not yet been passed through in rates. For Connecticut and Maine water utility services, regulatory assets and liabilities also include deferred revenues associated with the WRA regulatory mechanism (see discussion in Regulatory and Rates Regulation section above). The company adjusts the related asset and liabilities for these items through its regulatory asset and liability accounts at year-end, except for certain postretirement benefit costs and balancing and memorandum accounts which are adjusted monthly. The company expects to recover regulatory assets related to plant depreciation income tax temporary differences over the average lives of the plant assets of between 5 to 75 years.

Rate-regulated enterprises are required to charge a regulatory asset to earnings if and when that asset no longer meets the criteria for being recorded as a regulatory asset. SJW Group continually evaluates the recoverability of regulatory assets by assessing whether the amortization of the balance over the remaining life can be recovered through expected and undiscounted future cash flows.

Regulatory assets and liabilities are comprised of the following as of December 31:

	2019		2018
Regulatory assets:
Income tax temporary differences, net	$	2,433	—
Postretirement pensions and other medical benefits	73,525		66,233
Business combinations debt premium, net	25,020		—
Balancing and memorandum accounts, net	5,283		34,413
WRA	9,108		—
Other, net	5,048		2,979
Total regulatory assets, net in Consolidated Balance Sheets	120,417		103,625
Less: current regulatory asset, net	6,472		26,910
Total regulatory assets, net, less current portion	$	113,945	76,715
Regulatory liability:
Income tax temporary differences, net	$	—	59,149
Total regulatory liability in Consolidated Balance Sheets	$	—	59,149

Income Taxes

On December 22, 2017, the Tax Act was signed into law. Among other things, the Tax Act lowers the corporate tax rate to 21% from the maximum rate of 35%, effective for tax years including or commencing January 1, 2018. See also Note 5, “Income Taxes”.

Income taxes are accounted for using the asset and liability method. Deferred tax assets and liabilities are recognized for the effect of temporary differences between financial and tax reporting. Deferred tax assets and liabilities are measured using current tax rates in effect. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the period that includes the enactment date.

To the extent permitted by the regulators, investment tax credits resulting from utility plant additions are deferred and amortized over the estimated useful lives of the related property.

Advances for Construction and Contributions in Aid of Construction

In California, advances for construction received after 1981 are primarily refunded ratably over 40 years. In Connecticut and Maine, advances for construction are refunded as services are connected to the main, over periods not exceeding 15 years. Estimated refunds for the next five years and thereafter are shown below:

	Estimated Refunds
2020	$	2,890
2021	2,890
2022	2,890
2023	2,878
2024	2,799
Thereafter	49,631

As of December 31, 2019, advances for construction was $112,339 of which $21,463 was related to non-refundable advances for construction and $26,898 was related to advances which are refunded based on service connections made.

Contributions in aid of construction represent funds received from developers that are not refundable under applicable regulations. Depreciation applicable to utility plant constructed with these contributions is charged to contributions in aid of construction.

Customer advances and contributions in aid of construction received subsequent to 1986 and prior to June 12, 1996 generally must be included in federal taxable income, except for CTWS. Taxes paid relating to advances and contributions are recorded as deferred tax assets for financial reporting purposes and are amortized over 40 years for advances and over the tax depreciable life of the related asset for contributions. Receipts subsequent to June 12, 1996 are generally exempt from federal taxable income, unless specifically prescribed under treasury regulations, including CTWS.

Advances and contributions received subsequent to 1991 and prior to 1997 are included in state taxable income, except for CTWS.

Asset Retirement Obligation

SJW Group’s asset retirement obligation is recorded as a liability included in other non-current liabilities. It reflects principally the retirement costs of wells and other anticipated clean-up costs, which by law, must be remediated upon retirement. Retirement costs have historically been recovered through rates at the time of retirement. As a result, the liability is offset by a regulatory asset.

As of December 31, 2019 and 2018, the asset retirement obligation is as follows:

	2019			2018
Retirement obligation	$	4,803		4,803
Discount rate	6		%	6	%
Regulatory asset, present value, recorded as a liability	$	942		942

Revenue

SJW Group recognizes revenue in accordance with ASC Topic 606 - “Revenue from Contracts with Customers.” In accordance with Topic 606, management has determined that the company has principally four categories of revenues. The first category, revenue from contracts with customers, represents metered revenue of Water Utility Services which includes billings to customers based on meter readings plus an estimate of water used between the customers’ last meter reading and the end of the accounting period. SJW Group satisfies its performance obligation upon delivery of water to the customer at which time the customer consumes the benefits provided by the company. The customer is typically billed on a quarterly or bi-monthly basis after water delivery has occurred. The customer is charged both a service charge which is based upon meter size and covers a portion of the fixed costs of furnishing water to the customer and a consumption charge based on actual water usage. Unbilled revenue from the last meter reading date to the end of the accounting period is estimated based on the most recent usage patterns, production records and the effective tariff rates. As the company has the right to bill for services that it has provided, SJW Group estimates the dollar value of deliveries during the unbilled period and recognizes the associated revenue. Actual results could differ from those estimates, which may result in an adjustment to revenue when billed in a subsequent period. The second category, rental income, represents lease rental income from SJW Land Company and Chester Realty, Inc. tenants. The tenants pay monthly in accordance with lease agreements and SJW Group recognizes the income ratably over the lease term as this is the most representative of the pattern in which the benefit is expected to be derived from SJW Group’s underlying asset.

The third and fourth revenue categories are other balancing and memorandum accounts and alternative revenue programs. Both are scoped out of Topic 606 and are accounted for under FASB ASC Topic 980 - “Regulated Operations.” Balancing and memorandum accounts are recognized by SJWC 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. In addition, in the case of special revenue programs, SJWC, Connecticut Water, and HVWC follow the requirements of ASC Topic 980-605-25, “Alternative Revenue Programs” in determining revenue recognition, including the requirement that such revenues will be collected within 24 months of the year-end in which the revenue is recorded. A reserve is recorded for amounts SJW Group estimates will not be collected within the 24-month period. This reserve is based on an estimate of actual usage over the recovery period, offset by applicable drought surcharges. In assessing the probability criteria for balancing and memorandum accounts between general rate cases, SJWC considers evidence that may exist prior to CPUC authorization that would satisfy ASC Topic 980 subtopic 340-25 recognition criteria. Such evidence may include regulatory rules and decisions, past practices, and other facts and circumstances that would indicate that recovery or refund is probable. When such evidence provides sufficient support, the balances are recorded in SJW Group’s financial statements.

To encourage conservation, SJWC received approval from the CPUC to implement a Mandatory Conservation Revenue Adjustment Memorandum Account in 2014. This account was subsequently replaced with a WCMA. The WCMA allowed SJWC to track lost revenue, net of related water costs, associated with reduced sales due to water conservation and associated calls for water use reductions. SJWC recorded the lost revenue captured in the WCMA regulatory accounts once the revenue recognition requirements of FASB ASC Topic 980 - “Regulated Operations,” subtopic 605-25 were met. In December 2019, CPUC denied SJWC’s request in Advice Letter No. 532 to recover the 2018 balances of WCMA and was ordered to remove the WCMA accounts from the preliminary statement book. As a result of the decision, during the year ended December 31, 2019, SJWC wrote off a total balance of $9,386 related to 2018 lost revenue and $639 related to 2019 lost revenue that was recorded in the 2018 and 2019 WCMA accounts, respectively. For further discussion, please see “Balancing and Memorandum Accounts” in Note 1.

The major streams of revenue for SJW Group are as follows:

	2019			2018		2017
Revenue from contracts with customers	$	447,720		389,302		381,777
Alternative revenue programs, net	(18,232		)	10,456		12,584
Other balancing and memorandum accounts revenue, net (1)	(14,403		)	(7,541	)	(10,838	)
Rental income	5,397			5,482		5,702
	$	420,482		397,699		389,225

___________________________________

(1) For year ended December 31, 2019 and 2018, $962 and $2,643, respectively, of amounts related to cost-recovery balancing accounts which upon adoption of Topic 606 are recorded as capitalized costs rather than revenue until recovery is approved by the CPUC. Prior to adoption of Topic 606, these amounts were recorded as revenue. For further discussion, please see “Balancing and Memorandum Accounts” above.

Revenue also includes a surcharge collected from regulated customers that is paid to the CPUC. This surcharge is recorded both in operating revenues and administrative and general expenses. For the years ended December 31, 2019, 2018 and 2017, the surcharge was $4,955, $5,013 and $5,017, respectively.

Share-Based Compensation

SJW Group calculates the fair value of service-based and performance-based restricted stock awards based on the grant date fair market value of the company’s stock price reduced by the present value of the dividends expected to be declared on outstanding shares.

SJW Group utilizes the Monte Carlo valuation model, which requires the use of subjective assumptions, to compute the fair value of market-vesting restricted stock units.

The compensation cost for service-based restricted stock awards are charged to income on a straight-line basis over the requisite service period, which is the vesting period. For performance-based stock awards, compensation expense is charged to income on a straight-line basis over the requisite service period based on expected attainment of performance targets. Changes in the estimates of the expected attainment of performance targets will result in a change in the number of shares that are expected to vest which may cause a cumulative catch up for the amount of share-based compensation expense during each reporting period in which such estimates are altered. Forfeitures are accounted for as they occur.

Maintenance Expense

Planned major maintenance projects are charged to expense as incurred.

Earnings per Share

Basic earnings per share is calculated using income available to common stockholders, divided by the weighted average number of shares outstanding during the year. The two-class method in computing basic earnings per share is not used because the number of participating securities as defined in FASB ASC Topic 260—“Earnings Per Share” is not significant. The two-class method is an earnings allocation formula that determines earnings per share for each class of common stock and participating security. Diluted earnings per share is calculated using income available to common stockholders divided by the weighted average number of shares of common stock including both shares outstanding and shares potentially issuable in connection with deferred restricted common stock awards under SJW Group’s Long-Term Incentive Plan and shares potentially issuable under the Employee Stock Purchase Plans. Restricted common stock units of 27,082, 5,551 and 4,474 as of December 31, 2019, 2018 and 2017, respectively, were excluded from the dilutive earnings per share calculation as their effect would have been anti-dilutive.

XML

Contingencies

12 Months Ended

Dec. 31, 2019

Legal Proceedings [Abstract]

Contingencies

Contingencies

Class Action Suits Related to the merger with CTWS

On June 14, 2018, certain shareholders of CTWS (the “Plaintiffs”) filed two nearly identical class-action complaints in Connecticut state court against the CTWS board of directors, SJW Group, Eric W. Thornburg, Chairman, President and Chief Executive Officer of SJW Group, and CTWS (the “Defendants”). The complaints, as amended on September 18, 2018 and September 20, 2018, allege that the CTWS board breached its fiduciary duties in connection with the Merger, that CTWS’s preliminary proxy statement, filed with the SEC on August 20, 2018, omitted certain material information and that SJW Group and Mr. Thornburg aided and abetted the alleged breaches by the CTWS board of directors. Among other remedies, the actions sought to recover rescissory and other damages and attorney’s fees and costs. SJW Group believed the claims in these complaints were without merit and vigorously defended against such complaints. The parties to the lawsuits agreed in principle to settle the lawsuits in exchange for the issuance of additional disclosures by CTWS. Pursuant to the agreements to settle the lawsuits, the Plaintiffs reserved the right to seek a mootness fee from CTWS. The parties moved to stay proceedings, other than fee-related proceedings, until the closing of the merger with CTWS, and the court initially granted the parties’ motion to stay on November 14, 2018. The initial stay of proceedings had expired on February 28, 2019 and after multiple motions by the parties and granting of extensions, the stay of the proceedings continued until November 11, 2019. On November 20, 2018, the Plaintiffs filed an opening brief in support of their mootness fee demand of $1,500. The merger with CTWS closed on October

9, 2019, and pursuant to the agreement in principle to settle the litigation, the complaints would be dismissed after the closing. On November 12, 2019, the Defendants filed an opposition to the Plaintiffs’ fee demand.  On November 27, 2019, the Plaintiffs filed a reply brief in further support of their mootness fee demand. On January 8, 2020, the court entered an order dismissing Plaintiffs’ complaints. On January 10, 2020, the parties entered into an agreement pursuant to which the Defendants would pay a mootness fee amount of $325 in exchange for the release of all of the Plaintiffs’ claims.

Billing Practice OII with CPUC

On September 14, 2018, the CPUC issued OII No. 18-09-003 to which SJWC was named as Respondent. The OII will determine whether the company unlawfully overcharged customers over a 30-year period by failing to pro-rate service charges when increases occurred during a billing period, and whether the company double-billed service charges during one billing period when allegedly switching from billing such charges in advance to billing in arrears. By a decision adopted November 29, 2018, in SJWC’s then-pending GRC, the CPUC approved a settlement to resolve the alleged overcharging issue for the period since June 2011 by requiring customer credits to customers totaling $2,020. That amount was refunded to customers pursuant to SJWC’s Advice Letter No. 530, effective February 8, 2019. See discussion on the matter in Note 1, “Regulatory Rate Filings.” On July 24, 2019, SJWC and CPED jointly filed a motion for CPUC approval of a Settlement Agreement (“Agreement”) over SJWC’s past customer billing practices. The Agreement requires the company to pay approximately $2,100 in additional customer refunds, consisting of $1,757 for refunds during the period from 1987 to 2011 and $350 in customer credits to low income water customers, and invest $5,000 in utility plant that is not allowed an investment return or rate recovery. SJWC recorded the $2,100 customer credit expense as an offset to revenues during the second quarter of 2019. The $5,000 commitment to invest in utility plant will be recognized as plant in service on the company’s financial statements once invested. A CPUC Presiding Officer’s Decision approved the Agreement in December 2019, but an appeal was filed in January 2020 by a group of SJWC customers. On February 27, 2020, the CPUC adopted a modified version of the Agreement, which found the appeal to be without merit and approved the Agreement. The CPUC’s adopted decision is scheduled to become final on March 28, 2020.

SJW Group is subject to ordinary routine litigation incidental to its business. There are no pending legal proceedings to which SJW Group or any of its subsidiaries is a party, or to which any of its properties is the subject, that are expected to have a material effect on SJW Group’s business, financial position, results of operations or cash flows.

XML

Consolidated Statements of Comprehensive Income (Parenthetical) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Income Statement [Abstract]
Unrealized loss on investment, taxes	$ 97	$ 0	$ 466
Other Comprehensive Income (Loss), Pension and Other Postretirement Benefit Plans, Plan Amendments, Tax Effect	$ 22	$ 0	$ 0

XML

Document and Entity Information Document - USD ($)
$ in Millions

12 Months Ended

Dec. 31, 2019

Feb. 24, 2020

Jun. 30, 2019

Entity [Abstract]

Document Fiscal Period Focus

FY

Entity Common Stock, Shares Outstanding

28,493,151

Title of 12(b) Security

Common Stock, par value $0.001 per share

Entity Incorporation, State or Country Code

DE

Document Transition Report

false

Document Annual Report

true

Entity Central Index Key

0000766829

Current Fiscal Year End Date

--12-31

Document Fiscal Year Focus

2019

Amendment Flag

false

Document Type

10-K

Document Period End Date

Dec. 31, 2019

Entity File Number

001-8966

Entity Registrant Name

SJW GROUP

Entity Tax Identification Number

77-0066628

Entity Address, Address Line One

110 West Taylor Street,

Entity Address, City or Town

San Jose,

Entity Address, Country

CA

Entity Address, Postal Zip Code

95110

City Area Code

(408)

Local Phone Number

279-7800

Trading Symbol

SJW

Security Exchange Name

NYSE

Entity Well-known Seasoned Issuer

Yes

Entity Voluntary Filers

No

Entity Current Reporting Status

Yes

Entity Interactive Data Current

Yes

Entity Filer Category

Large Accelerated Filer

Entity Small Business

false

Entity Emerging Growth Company

false

Entity Shell Company

false

Entity Public Float

$ 1,586

Documents Incorporated by Reference [Text Block]

Portions of the registrant’s Proxy Statement relating to the registrant’s Annual Meeting of Stockholders, to be held on April 29, 2020, are incorporated by reference into Part III of this Form 10-K where indicated.