CALIFORNIA WATER SERVICE GROUP

Previous wording

This quarterly report, including all documents incorporated by reference, contains forward-looking statements within the meaning established by the Private Securities Litigation Reform Act of 1995 (the PSLRA). The forward-looking statements are intended to qualify under provisions of the federal securities laws for “safe harbor” treatment established by the PSLRA. Forward-looking statements in this quarterly report are based on currently available information, expectations, estimates, assumptions and projections, and our management’s beliefs, assumptions, judgments and expectations about us, the water utility industry and general economic conditions. These statements are not statements of historical fact. When used in our documents, statements that are not historical in nature, including words like “will,” “would,” “expects,” “intends,” “plans,” “believes,” “may,” “could,” “estimates,” “assumes,” “anticipates,” “projects,” “progress,” “predicts,” “hopes,” “targets,” “forecasts,” “should,” “seeks,” “indicates,” or variations of these words or similar expressions are intended to identify forward-looking statements. Examples of forward-looking statements in this quarterly report include, but are not limited to, statements describing our intention, indication or expectation regarding our financial performance, dividends or targeted payout ratio, our expectations, anticipations or beliefs regarding governmental, legislative, judicial, administrative or regulatory timelines, regulatory compliance, decisions, approvals, authorizations, requirements or other actions, the anticipated closing and timing of acquisition of Nexus Water Group’s (Nexus) Nevada and Oregon systems, and the remaining membership interests in BVRT Utility Holding Company LLC (BVRT) and expected benefits resulting from such transactions, rate amounts, cost recovery or refunds, expected impact of certain per- and polyfluoroalkyl substances (PFAS) regulations, our expected or estimated revenue, our intentions regarding recovery billing, our expectations regarding regulatory asset and operating revenue recognition, estimates of, or expectations regarding, capital expenditures, funding needs or other capital requirements, obligations, contingencies or commitments, our expectations regarding water sources, our beliefs regarding adequacy of water supplies, our anticipation regarding renewing water supply contracts and estimated water prices, estimates and assumptions relating to our significant accounting policies, such as deferred revenue or assets or refund of advances, our expectations or assumptions regarding employee benefit plans and stock-based compensation and estimated contributions to our pension plans and other postretirement benefit plans, our estimated annual effective tax rate and expectations regarding tax benefits, our intentions regarding use of net proceeds from any future equity or debt issuances or borrowings, our expectations, intentions or anticipations regarding our …

Excerpt shortened here; the source contains the full paragraph.

Current wording

This quarterly report, including all documents incorporated by reference, contains forward-looking statements within the meaning established by the Private Securities Litigation Reform Act of 1995 (the PSLRA). The forward-looking statements are intended to qualify under provisions of the federal securities laws for “safe harbor” treatment established by the PSLRA. Forward-looking statements in this quarterly report are based on currently available information, expectations, estimates, assumptions and projections, and our management’s beliefs, assumptions, judgments and expectations about us, the water utility industry and general economic conditions. These statements are not statements of historical fact. When used in our documents, statements that are not historical in nature, including words like “will,” “would,” “expects,” “intends,” “plans,” “believes,” “may,” “could,” “estimates,” “assumes,” “anticipates,” “projects,” “progress,” “predicts,” “hopes,” “targets,” “forecasts,” “should,” “seeks,” “indicates,” or variations of these words or similar expressions are intended to identify forward-looking statements. Examples of forward-looking statements in this quarterly report include, but are not limited to, statements describing our intention, indication or expectation regarding our financial performance, dividends or targeted payout ratio, our expectations, anticipations or beliefs regarding governmental, legislative, judicial, administrative or regulatory timelines, regulatory compliance, decisions, approvals, authorizations, requirements or other actions, the anticipated closing and timing of acquisition of Nexus Water Group’s (Nexus) Nevada and Oregon systems, and the remaining membership interests in BVRT Utility Holding Company LLC (BVRT) and expected benefits resulting from such transactions, rate amounts, cost recovery or refunds, expected impact of certain per- and polyfluoroalkyl substances (PFAS) regulations, our expected or estimated revenue, our intentions regarding recovery billing, our expectations regarding regulatory asset and operating revenue recognition, estimates of, or expectations regarding, capital expenditures, funding needs or other capital requirements, obligations, contingencies or commitments, our expectations regarding water sources, our beliefs regarding adequacy of water supplies, our anticipation regarding renewing water supply contracts and estimated water prices, estimates and assumptions relating to our significant accounting policies, such as deferred revenue or assets or refund of advances, our expectations or assumptions regarding employee benefit plans and stock-based compensation and estimated contributions to our pension plans and other postretirement benefit plans, our estimated annual effective tax rate and expectations regarding tax benefits, our intentions regarding use of net proceeds from any future equity or debt issuances or borrowings, our ability to complete the issuance of the notes and bonds …

Excerpt shortened here; the source contains the full paragraph.

Previous wording

Factors which may cause actual results to be different than those expected or anticipated include, but are not limited to:

Current wording

Factors which may cause actual results or outcomes to be different than those expected or anticipated include, but are not limited to:

Previous wording

•the impact of stagnating or worsening business and economic conditions, including inflationary pressures, general economic slowdown or a recession, changes in tariff policy, the interest rate environment, changes in monetary policy, adverse capital markets activity or macroeconomic conditions as a result of geopolitical conflicts, including ongoing conflicts in the Middle East, and the prospect of shutdowns of the U.S. federal government;

Current wording

•the impact of stagnating or worsening business and economic conditions, including inflationary pressures, general economic slowdown or a recession, changes in tariff policy, the interest rate environment, changes in monetary policy, adverse capital markets activity or macroeconomic conditions as a result of geopolitical conflicts, including ongoing conflicts in Ukraine and the Middle East, and the prospect of shutdowns of the U.S. federal government;

Previous wording

For the six months ended June 30, 2026, there were no material changes in the methodology for computing critical accounting estimates, no additional accounting estimates met the standards for critical accounting policies, and there were no material changes to the important assumptions underlying the critical accounting estimates.

Current wording

For the nine months ended September 30, 2026, there were no material changes in the methodology for computing critical accounting estimates, no additional accounting estimates met the standards for critical accounting policies, and there were no material changes to the important assumptions underlying the critical accounting estimates.

Previous wording

Net income attributable to California Water Service Group for the three months ended June 30, 2026 was $56.5 million or $0.93 earnings per diluted common share, compared to net income of $42.2 million or $0.71 earnings per diluted common share for the three months ended June 30, 2025. The $14.3 million increase in net income was due to an increase in operating revenue of $43.6 million primarily as a result of the cumulative adjustment for the impacts of California Water Service Company’s (Cal Water) general rate case (GRC) filed on July 8, 2024 (2024 CA GRC), retroactive to January 1, 2026 and rate increases. The operating revenue increase was partially offset by an increase in operating expenses of $24.6 million. The operating expense increase was primarily due to increases in water production costs of $6.3 million, administrative and general expense of $2.9 million, other operations expense of $13.4 million, and income tax expense of $7.0 million. These operating expense increases were partially offset by a decrease in depreciation and amortization expenses of $6.5 million. Additionally, net other income decreased by $1.5 million and net interest expense increased by $3.2 million.

Current wording

Net income attributable to California Water Service Group for the three months ended September 30, 2026 was $65.4 million or $1.05 earnings per diluted common share, compared to net income of $61.2 million or $1.03 earnings per diluted common share for the three months ended September 30, 2025. The $4.2 million increase in net income was due to an increase in operating revenue of $21.0 million primarily due to rate increases and new customers, partially offset by a decrease in customer usage. The operating revenue increase was partially offset by an increase in operating expenses of $8.9 million. The operating expense increase was primarily due to increases in other operations expense of $4.1 million, operating income tax expense of $7.1 million, and property and other taxes of $1.3 million. These operating expense increases were partially offset by decreases in administrative and general expense of $1.2 million and depreciation and amortization expenses of $1.4 million. Additionally, net other income decreased by $6.0 million and net interest expense increased by $1.8 million.

Previous wording

Net income attributable to California Water Service Group for the six months ended June 30, 2026 was $60.5 million or $1.01 earnings per diluted common share, compared to net income of $55.5 million or $0.93 earnings per diluted common share for the six months ended June 30, 2025. The $5.0 million increase in net income was due to an increase in operating revenue of $54.3 million primarily as a result of the cumulative adjustment for the impacts of the 2024 CA GRC, retroactive to January 1, 2026 and rate increases. The operating revenue increase was partially offset by an increase in operating expenses of $39.3 million. The operating expense increase was primarily due to increases in water production costs of $14.7 million, administrative and general expense of $2.4 million, other operations expense of $15.8 million, and income tax expense of $6.0 million. These operating expense increases were partially offset by a decrease in depreciation and amortization expenses of $2.5 million. Additionally, net other income decreased by $3.5 million and net interest expense increased by $6.1 million.

Current wording

Net income attributable to California Water Service Group for the nine months ended September 30, 2026 was $125.9 million or $2.07 earnings per diluted common share, compared to net income of $116.7 million or $1.96 earnings per diluted common share for the nine months ended September 30, 2025. The $9.2 million increase in net income was due to an increase in operating revenue of $75.1 million primarily as a result of the cumulative adjustment for the impacts of the 2024 CA GRC, retroactive to January 1, 2026, and rate increases and new customers, partially offset by a decrease in customer usage. The operating revenue increase was partially offset by an increase in operating expenses of $48.2 million. The operating expense increase was primarily due to increases in water production costs of $14.1 million, other operations expense of $19.9 million, operating income tax expense of $13.1 million and property and other taxes of $3.4 million. These operating expense increases were partially offset by a decrease in depreciation and amortization expenses of $3.9 million. Additionally, net other income decreased by $9.5 million and net interest expense increased by $8.0 million.

Previous wording

For the three months ended June 30, 2026, operating revenue increased $43.6 million, or 16.5%, to $308.6 million as compared to $265.0 million for the three months ended June 30, 2025.

Current wording

For the three months ended September 30, 2026, operating revenue increased $21.0 million, or 6.7%, to $332.2 million as compared to $311.2 million for the three months ended September 30, 2025.

Previous wording

For the six months ended June 30, 2026, operating revenue increased $54.3 million, or 11.6%, to $523.2 million as compared to $468.9 million for the six months ended June 30, 2025.

Current wording

For the nine months ended September 30, 2026, operating revenue increased $75.1 million, or 9.6%, to $855.3 million as compared to $780.2 million for the nine months ended September 30, 2025.

Previous wording

The net change due to rate changes, M-WRAM, and other for the three months ended June 30, 2026 was primarily due to rate increases of $11.6 million. For the six months ended June 30, 2026, the net change due to rate changes, M-WRAM, and other was primarily due to rate increases of $23.3 million and an increase in accrued and unbilled revenue of $3.9 million.

Current wording

The net change due to rate changes, new customers, and other for the three months ended September 30, 2026 was primarily due to rate increases and new customers of $22.1 million and the recognition of Drought Response Memorandum Account (DREMA) related revenue of $3.9 million (see “DREMA” in Regulatory Matters below for more details). For the nine months ended September 30, 2026, the net change due to rate changes, new customers, and other was primarily due to rate increases and new customers of $51.9 million and the recognition of DREMA related revenue of $3.9 million.

Previous wording

Due to the delay in the resolution of the 2024 CA GRC, the CPUC authorized Cal Water to track in an IRMA the variances between actual customer billings and those that would have been billed assuming the 2024 CA GRC had been implemented on January 1, 2026. Such variances are recorded as regulatory balancing account revenue. The 2024 CA GRC was approved in April of 2026 and final rates for the 2024 CA GRC were not implemented as of June 30, 2026; as a result, Cal Water recorded IRMA revenue of $15.3 million in the second quarter of 2026 of which $9.2 million was attributable to the first quarter of 2026.

Current wording

Due to the delay in the resolution of the 2024 CA GRC, the CPUC authorized Cal Water to track in an IRMA the variances between actual customer billings and those that would have been billed assuming the 2024 CA GRC had been implemented on January 1, 2026. Such variances are recorded as regulatory balancing account revenue. The 2024 CA GRC was approved in April of 2026 and final rates for the 2024 CA GRC were implemented in the second half of 2026; as a result, Cal Water recorded IRMA revenue for the periods in which the 2024 CA GRC was yet to be implemented.

Previous wording

Deferred revenue consists of amounts that are expected to be collected from customers beyond 24 months following the end of the accounting period in which the sales transaction occurred. Deferred revenue for the three and six months ended June 30, 2026 decreased due to changes in the amount expected to be collected beyond 24 months as new surcharges have been implemented to collect previously deferred balances.

Current wording

Deferred revenue consists of amounts that are expected to be collected from customers beyond 24 months following the end of the accounting period in which the sales transaction occurred. Deferred revenue for the nine months ended September 30, 2026 was recognized due to changes in the amount expected to be collected beyond 24 months.

Previous wording

For the three months ended June 30, 2026, total operating expenses increased $24.6 million, or 11.5%, to $237.7 million, as compared to $213.1 million for the three months ended June 30, 2025.

Current wording

For the three months ended September 30, 2026, total operating expenses increased $8.9 million, or 3.7%, to $249.5 million, as compared to $240.6 million for the three months ended September 30, 2025.

Previous wording

For the six months ended June 30, 2026, total operating expenses increased $39.3 million, or 10.0%, to $434.1 million, as compared to $394.8 million for the six months ended June 30, 2025.

Current wording

For the nine months ended September 30, 2026, total operating expenses increased $48.2 million, or 7.6%, to $683.6 million, as compared to $635.4 million for the nine months ended September 30, 2025.

Previous wording

Water production costs increased $6.3 million, or 7.4%, for the three months ended June 30, 2026 as compared to the same period in 2025 primarily due to an increase in wholesale rates.

Current wording

Water production costs increased $14.1 million, or 5.6%, for the nine months ended September 30, 2026 as compared to the same period in 2025, primarily due to an increase in wholesale rates, partially offset by a decrease in customer usage.

Previous wording

Administrative and general expenses increased $2.9 million for the three months ended June 30, 2026 as compared to the same period in 2025. The increase was primarily due to a $1.6 million increase in consulting services and a $1.7 million increase in other general corporate expenses.

Current wording

Administrative and general expenses decreased $1.2 million for the three months ended September 30, 2026 as compared to the same period in 2025. The decrease was primarily due to a $1.0 million decrease in employee related costs and a $0.6 million reduction related to the recovery of previously incurred Drought Memorandum Account (DRMA) costs (see “DRMA” in Regulatory Matters below for more details). These decreases were partially offset by a $0.5 million increase in other general corporate expenses.

Previous wording

Administrative and general expenses increased $2.4 million for the six months ended June 30, 2026 as compared to the same period in 2025. The increase was primarily due to a $3.5 million increase in consulting services and a $1.3 million increase in other general corporate expenses. These increases were partially offset by a $2.6 million decrease in employee related costs.

Current wording

Administrative and general expenses increased $1.2 million for the nine months ended September 30, 2026 as compared to the same period in 2025. The increase was primarily due to a $3.5 million increase in consulting services and a $1.8 million increase in other general corporate expenses. These increases were partially offset by a $3.4 million decrease in employee related costs and a $0.6 million reduction related to the recovery of previously incurred DRMA costs.

Previous wording

Other operations expenses increased $15.8 million for the six months ended June 30, 2026 as compared to the same period in 2025. The increase was primarily due to the recognition of $8.0 million of costs associated with recognized deferred revenue, an increase of $2.6 million in conservation program expenses, an increase of $1.3 million in software expenses, an increase of $1.0 million in labor expense, and an increase of $0.5 million in water treatment expenses.

Current wording

Other operations expenses increased $19.9 million for the nine months ended September 30, 2026 as compared to the same period in 2025. The increase was primarily due to the recognition of $8.1 million of costs associated with recognized deferred revenue, an increase of $5.5 million in conservation program expenses, an increase of $2.0 million in water transmission and distribution costs, and an increase of $1.5 million in labor expense. These increases were partially offset by a $2.3 million reduction related to the recovery of previously incurred PFAS MA costs and a $1.1 million reduction related to the recovery of previously incurred DRMA costs.

Previous wording

Depreciation and amortization expense decreased $6.5 million and $2.5 million for the three and six months ended June 30, 2026, respectively, as compared to the same periods in 2025. The decreases were primarily due to lower depreciation rates in California, which were approved in the 2024 CA GRC.

Current wording

Depreciation and amortization expense decreased $1.4 million and $3.9 million for the three and nine months ended September 30, 2026, respectively, as compared to the same periods in 2025. The decreases were primarily due to lower depreciation rates in California, which were approved in the 2024 CA GRC.

Previous wording

Income tax expense increased $7.0 million and $6.0 million for the three and six months ended June 30, 2026, respectively, as compared to the same periods in 2025. The increases were primarily due to increases in the effective tax rate due to reductions in Tax Cuts and Jobs Act refunds of excess deferred federal income taxes and increases in pre-tax operating income, which resulted from the 2024 CA GRC decision in the second quarter of 2026.

Current wording

Operating income tax expense increased $7.1 million and $13.1 million for the three and nine months ended September 30, 2026, respectively, as compared to the same periods in 2025. The increases were primarily due to increases in the effective tax rate due to reductions in Tax Cuts and Jobs Act refunds of excess deferred federal income taxes and increases in pre-tax operating income, which primarily resulted from the 2024 CA GRC decision in the second quarter of 2026.

Previous wording

Net other income decreased $3.5 million for the six months ended June 30, 2026, as compared to the same period in 2025. The decrease was primarily due to a $3.1 million reduction in other components of net periodic benefit credit and an increase of $2.7 million in acquisition-related expenses. These decreases in net other income were partially offset by a $0.9 million gain associated with our non-qualified benefit plan investments and a $0.6 million gain associated with our Company-owned life insurance.

Current wording

Net other income decreased $6.0 million for the three months ended September 30, 2026, as compared to the same period in 2025. The decrease was primarily due to a $3.9 million reduction associated with our non-qualified benefit plan investment gains, a $1.5 million reduction in other components of net periodic benefit credit, and an increase of $1.4 million in acquisition-related expenses.

Previous wording

Net other income decreased $1.5 million for the three months ended June 30, 2026, as compared to the same period in 2025. The decrease was primarily due to a $2.3 million reduction in other components of net periodic benefit credit and an increase of $1.4 million in acquisition-related expenses. These decreases in net other income were partially offset by a $1.5 million gain associated with our non-qualified benefit plan investments and a $0.6 million gain associated with our Company-owned life insurance.

Current wording

Net other income decreased $9.5 million for the nine months ended September 30, 2026, as compared to the same period in 2025. The decrease was primarily due to a $4.7 million reduction in other components of net periodic benefit credit, an increase of $4.1 million in acquisition-related expenses and a $3.0 million reduction associated with our non-qualified benefit plan investment gains. The decreases in net other income were partially offset by a $0.6 million gain associated with Company-owned life insurance policies.

Previous wording

Net interest expense increased $3.2 million and $6.1 million for the three and six months ended June 30, 2026, respectively, as compared to the same periods in 2025. The increases were primarily due to higher average outstanding borrowings partially offset by lower interest rates.

Current wording

Net interest expense increased $1.8 million and $8.0 million for the three and nine months ended September 30, 2026, respectively, as compared to the same periods in 2025. The increases were primarily due to higher average outstanding borrowings, partially offset by lower interest rates.

Previous wording

The California Public Utilities Commission (CPUC) approved a decision on April 30, 2026 in the 2024 CA GRC (Decision 26-04-045) affecting its Class A districts in California (consisting of all regulated systems except Grand Oaks, a small Class D system). The decision marked the end of an extensive review of Cal Water’s water system improvement plans, costs, and rates. The decision as issued adopts a revised version of the proposed decision issued on April 29, 2026, to change rates to increase 2026 revenues by approximately $90.5 million retroactive to January 1, 2026. It also potentially increases revenues by approximately $43.2 million for 2027 and $48.9 million for 2028, subject to the CPUC’s earnings test and inflationary adjustments.

Current wording

The California Public Utilities Commission (CPUC) approved a decision on April 30, 2026 in the 2024 CA GRC (Decision 26-04-045) affecting Cal Water’s Class A districts in California (consisting of all regulated systems except Grand Oaks, a small Class D system). The decision marked the end of an extensive review of Cal Water’s water system improvement plans, costs, and rates. The decision, as issued, adopts a revised version of the proposed decision issued on April 29, 2026, to change rates to increase 2026 revenues by approximately $90.5 million retroactive to January 1, 2026. It also potentially increases revenues by approximately $43.2 million for 2027 and $48.9 million for 2028, subject to the CPUC’s earnings test and inflationary adjustments.

Previous wording

The decision authorizes Cal Water to invest approximately $1.45 billion from 2024 through 2027 to upgrade infrastructure, such as water quality projects to protect customers from existing and newly regulated contaminants; pipes and other infrastructure to keep pumping and delivering water reliably; equipment to keep water flowing during power outages and shutoffs; cyber and physical security improvements to protect employees, customers, and facilities; and water supply initiatives to secure long-term sustainability of water sources. It also authorizes up to $229 million of infrastructure projects that may be submitted for recovery via the CPUC’s advice letter process.

Current wording

The decision authorizes Cal Water to invest approximately $1.45 billion from 2024 through 2027 to upgrade infrastructure, such as water quality projects to help protect customers from existing and newly regulated contaminants; pipes and other infrastructure to keep pumping and delivering water reliably; equipment to keep water flowing during power outages and shutoffs; cyber and physical security improvements to help protect employees, customers, and facilities; and water supply initiatives to secure long-term sustainability of water sources. It also authorizes up to $229.0 million of infrastructure projects that may be submitted for recovery via the CPUC’s advice letter process.

Previous wording

The decision also authorizes key revenue stabilization mechanisms, including continuation of the M-WRAM, a higher percentage of revenue collected in fixed charges, and a new annual Sales Reconciliation Mechanism. In addition, it includes provisions that allow for recovery of certain costs through balancing accounts and other regulatory mechanisms designed to mitigate volatility in customer usage and uncertain costs.

Current wording

The decision also authorizes key revenue stabilization mechanisms, including continuation of the Monterey-Style Revenue Adjustment Mechanism (M-WRAM), a higher percentage of revenue collected in fixed charges, and reinstates the annual Sales Reconciliation Mechanism. In addition, it includes provisions that allow for recovery of certain costs through balancing accounts and other regulatory mechanisms designed to mitigate volatility in customer usage and uncertain costs.

Previous wording

In March and May of 2026, Cal Water also submitted rate base offset advice letters requesting revenue increases of $1.5 million and $9.9 million, respectively, for additional capital projects completed in its Class A water systems. Cal Water implemented new rates incorporating all the items discussed above (GRC revenue increases and various offsets) on July 1, 2026 for most of its ratemaking areas, and expects to implement new rates on August 1, 2026 for a small subset of its ratemaking areas.

Current wording

In March and May of 2026, Cal Water also submitted rate base offset advice letters requesting revenue increases of $1.5 million and $9.9 million, respectively, for additional capital projects completed in its Class A water systems. Cal Water implemented new rates incorporating all the items discussed above (GRC revenue increases and various offsets) on July 1, 2026 for most of its ratemaking areas, and implemented new rates on August 1, 2026 and October 1, 2026 for a small subset of its ratemaking areas.

Previous wording

In June of 2025, Cal Water filed a motion requesting authority to increase rates by inflation on January 1, 2026 (interim rates) and for the establishment of an IRMA in the event the CPUC did not issue a final decision for the 2024 CA GRC in time for new rates to be implemented on January 1, 2026. In October of 2025, the CPUC granted Cal Water’s motion for interim rates and the establishment of the IRMA. In November of 2025, Cal Water filed an advice letter implementing a three percent increase in interim rates for most districts, and creation of the IRMA, as of January 1, 2026. The IRMA tracks the difference between interim rates and the final rates that were approved pursuant to the CPUC’s final decision on the 2024 CA GRC.

Current wording

In June of 2025, Cal Water filed a motion requesting authority to increase rates by inflation on January 1, 2026 (interim rates) and for the establishment of an IRMA in the event the CPUC did not issue a final decision for the 2024 CA GRC in time for new rates to be implemented on January 1, 2026. In October of 2025, the CPUC granted Cal Water’s motion for interim rates and the establishment of the IRMA. In November of 2025, Cal Water filed an advice letter implementing a three percent increase in interim rates for most districts, and creation of the IRMA, effective as of January 1, 2026. The IRMA tracks the difference between interim rates and the final rates that were approved pursuant to the CPUC’s final decision on the 2024 CA GRC during the period in which final rates are yet to be implemented. The 2024 CA GRC was approved in April of 2026 and final rates based on the 2024 CA GRC were implemented in the second half of 2026.

Previous wording

The 2024 CA GRC was approved in April of 2026 and rates based on the 2024 CA GRC were first implemented in most districts as of July 1, 2026; as a result, Cal Water calculated and recorded a net regulatory asset of $15.3 million and a corresponding increase to revenue for the difference between final rates and interim rates for the first six months of 2026. Cal Water also recorded a regulatory liability of $1.3 million and a corresponding increase to regulatory assets for Customer Assistance Program and Rate Support Fund program credits that would have been given to customers had the rate case been approved on time.

Current wording

In September of 2026, Cal Water submitted an advice letter requesting approval to recover a net $14.2 million tracked in the IRMA. The net balance included $15.7 million to be recovered for the difference between final rates and interim rates. This difference was recorded as a net regulatory asset with a corresponding change to revenue. The net recovery also included $1.5 million to be refunded for Rate Support Fund and Customer Assistance Program credits that would have been given to customers had the rate case been approved on time. This difference was recorded as a net regulatory liability and does not impact revenue. The advice letter was approved and the new surcharges/surcredits were implemented on October 1, 2026. The surcharges and surcredits are generally being billed/refunded over 12 months.

Previous wording

In June of 2026, Cal Water submitted an advice letter requesting surcharges to bill for the M-WRAM related undercollections for 2025 for its regulated districts with tiered residential rates. The advice letter was approved and $26.1 million is being recovered from customers in the form of 12- and 24-month surcharges. The new rates were implemented on July 1, 2026. These new surcharges are in addition to surcharges authorized in prior years which have not yet expired.

Current wording

In June of 2026, Cal Water submitted an advice letter requesting surcharges to bill for the M-WRAM related undercollections for 2025 for its regulated districts with tiered residential rates. The advice letter was approved and $26.1 million is being recovered from customers in the form of 12- and 24-month surcharges. The new rates were implemented on July 1, 2026. These new surcharges are in addition to surcharges authorized in prior years that have not yet expired.

Previous wording

In May of 2026, Cal Water submitted an advice letter to amortize the CEBA, HCBA and PCBA from the 2021 CA GRC that tracked the difference between the costs authorized in customer rates and actual costs incurred for the period of 2023-2025. For the CEBA, $4.8 million is expected to be refunded to customers in the form of one-time or 12-month surcredits as actual conservation program costs during 2023-2025 were lower than authorized costs in customer rates. For the HCBA, $4.2 million is expected to be refunded to customers in the form of one-time or 12-month surcredits as actual employee and retiree medical costs during 2023-2025 were lower than authorized costs in customer rates. For the PCBA, $17.9 million is expected to be refunded to customers in the form of one-time or 12-month surcredits as actual costs for employee pension benefits during 2023-2025 were lower than adopted costs in customer rates. The new credits for these accounts were implemented on July 1, 2026.

Current wording

In May of 2026, Cal Water submitted an advice letter and was approved to amortize the CEBA, HCBA and PCBA from the 2021 CA GRC that tracked the difference between the costs authorized in customer rates and actual costs incurred for the period of 2023-2025. For the CEBA, $4.8 million is being refunded to customers in the form of one-time or 12-month surcredits as actual conservation program costs during 2023-2025 were lower than authorized costs in customer rates. For the HCBA, $4.2 million is being refunded to customers in the form of one-time or 12-month surcredits as actual employee and retiree medical costs during 2023-2025 were lower than authorized costs in customer rates. For the PCBA, $17.9 million is being refunded to customers in the form of one-time or 12-month surcredits as actual costs for employee pension benefits during 2023-2025 were lower than adopted costs in customer rates. The new credits for these accounts were implemented on July 1, 2026.

Previous wording

Washington Water Service Company (Washington Water) – 2025 East Pierce and Legacy Water Systems General Rate Case

Current wording

Washington Water Service Company (Washington Water) – 2025 East Pierce and Legacy Water Systems GRC

Previous wording

On September 25, 2025, Washington Water filed a tariff update with the Washington Utilities and Transportation Commission (UTC) for the East Pierce and Legacy water systems to increase revenues by $4.9 million. The general rate increase includes recovery of expenses and capital expenditures. A settlement with UTC staff and the Washington Public Counsel was reached and filed before the UTC in May of 2026. A final decision is expected to be implemented in the second half of 2026.

Current wording

In September of 2025, Washington Water filed a tariff update with the Washington Utilities and Transportation Commission for the East Pierce and Legacy water systems to increase revenues by $4.9 million. The general rate increase includes recovery of expenses and capital expenditures. In the third quarter of 2026, a decision was issued authorizing a revenue increase of $4.1 million. The new base rates were effective on October 1, 2026.

Previous wording

Hawaii Water Service Company (Hawaii Water) – 2025 Kapalua General Rate Case and 2026 Request for Water Production Regulatory Asset

Current wording

Hawaii Water Service Company (Hawaii Water) – 2025 Kapalua GRC and 2026 Request for Water Production Regulatory Asset

Previous wording

In November of 2025, Hawaii Water filed a rate case with the State of Hawaii Public Utilities Commission (HPUC) to increase revenue in its Kapalua water and wastewater systems by $2.2 million. The request seeks to recover increases in purchased water costs, higher operating expenses, and the cost of completed capital investments. The new rates, if approved, are expected to be effective in the fourth quarter of 2026.

Current wording

In November of 2025, Hawaii Water filed a rate case with the State of Hawaii Public Utilities Commission (HPUC) to increase revenue in its Kapalua water and wastewater systems by $2.2 million. The request seeks to recover increases in purchased water costs, higher operating expenses, and the cost of completed capital investments. In October of 2026, a final decision was issued to increase water and wastewater revenues by a combined $1.9 million. The new rates were effective on October 21, 2026.

Previous wording

In June of 2024, BVRT filed a general rate case for 5 utilities with the Public Utility Commission of Texas (PUCT). Consumer advocates reviewed and filed their reports in April and May of 2025, and BVRT filed a rebuttal in June of 2025. A comprehensive settlement was reached and the initial phase of the new rates was implemented on July 25, 2025. The final PUCT approval of the settlement agreement is pending.

Current wording

In June of 2024, BVRT filed a GRC for 5 utilities with the Public Utility Commission of Texas (PUCT). Consumer advocates reviewed the filing and submitted reports in April and May of 2025, and BVRT filed its rebuttal testimony in June of 2025. The initial phase of the interim rates was implemented on July 25, 2025, and the second phase of the interim rates was implemented on October 1, 2026. Subsequently, a comprehensive settlement agreement was reached, establishing the framework for the final rates. The final PUCT approval of the settlement agreement is pending.

Previous wording

In February of 2022, Camino Real Utility filed a new wastewater Certificate of Convenience and Necessity and Sale, Transfer, or Merger application with the PUCT to transfer an existing sewer service area and establish a new sewer service area that initially covers 6,216 acres in Caldwell and Travis Counties. PUCT has set a year-end 2026 schedule to complete the application.

Current wording

In February of 2022, Camino Real Utility filed a new wastewater CCN and Sale, Transfer, or Merger application with the PUCT to transfer an existing sewer service area and establish a new sewer service area in Caldwell and Travis Counties. PUCT has set a year-end 2026 schedule to complete the application.

Previous wording

On March 6, 2026, a change of control application was filed with the PUCT to acquire the remaining membership interests of BVRT. On July 2, 2026, the ALJ deemed the application administratively complete and established a procedural schedule for continued processing of the application.

Current wording

On March 6, 2026, a change of control application was filed with the PUCT to acquire the remaining membership interests of BVRT. On October 7, 2026, the PUCT issued a draft preliminary order. The Texas Office of Public Utility Counsel has requested a hearing on the application which should be scheduled shortly. The final PUCT approval of the transaction is expected in early 2027.

Previous wording

On April 2, 2026, we filed a change of control application for the purchase of 100% of the equity interest in Nexus’s water systems in Oregon with the Oregon Public Utility Commission (OPUC). Regulatory approval is a required closing condition for the acquisition.

Current wording

On April 2, 2026, we filed a change of control application for the purchase of 100% of the equity interest in Nexus’s water systems in Oregon with the Oregon Public Utility Commission (OPUC). Regulatory approval is a required closing condition for the acquisition. On October 27, 2026, the OPUC approved our change of control application and we expect to close the acquisition before the end of 2026.

Previous wording

On April 10, 2026, we filed a change of control application for the purchase of 100% of the equity interest in Nexus’s water and wastewater systems in Nevada with the Public Utilities Commission of Nevada (PUCN). Regulatory approval is a required closing condition for the acquisition.

Current wording

On April 10, 2026, we filed a change of control application for the purchase of 100% of the equity interest in Nexus’s water and wastewater systems in Nevada with the Public Utilities Commission of Nevada (PUCN). Regulatory approval is a required closing condition for the acquisition. On August 11, 2026, the PUCN issued an order authorizing the transfer of control, and we expect to close the acquisition before the end of 2026.

Previous wording

During the six months ended June 30, 2026, we generated cash flow from operations of $113.0 million compared to $87.4 million for the same period in 2025. The increase in the first six months of 2026 as compared to the same period in 2025 was primarily due to an increase in cash collections in the first six months of 2026 as compared to 2025 due to an increase in customer rates. Cash generated by operations varies during the year due to customer billings, and timing of collections and contributions to our benefit plans.

Current wording

During the nine months ended September 30, 2026, we generated cash flow from operations of $262.2 million, compared to $254.7 million for the same period in 2025. The increase in the first nine months of 2026 as compared to the same period in 2025, was primarily due to an increase in cash collections due to an increase in customer rates. Cash generated by operations varies during the year primarily due to customer billings and timing of collections.