SAN DIMAS, Calif.--(BUSINESS WIRE)--Dec. 3, 2018--
American States Water Company (NYSE: AWR) announced that on November 28,
2018, its regulated utility subsidiary Golden State Water Company
(GSWC), on behalf of its Bear Valley Electric Service (BVES) division,
and the Public Advocates Office at the California Public Utilities
Commission (CPUC) filed a joint motion to adopt a settlement agreement
between GSWC and the Public Advocates Office in connection with the
electric utility general rate case. GSWC had filed a general rate case
application in May 2017 for BVES to determine new rates for the years
2018 – 2021. A decision in this case is expected in 2019 and when
approved by the CPUC, the new rates will be retroactive to January 1,
2018.
The proposed settlement agreement, if approved by the CPUC, resolves all
the issues in the electric general rate case application and among other
things (i) agrees to extend the rate cycle by one year and, therefore,
will set new rates over five years beginning in 2018 through 2022,
(ii) adopts an electric gross margin for 2018 of $22.5 million (derived
by subtracting total supply costs adopted in the settlement agreement
from the adopted revenue requirement), which is an increase of
approximately $2.0 million compared to the 2017 adopted electric gross
margin (adjusted for tax reform), (iii) authorizes BVES to construct all
the capital projects requested in its application and increased for the
addition of a fifth year in the rate cycle, which are dedicated to
improving system safety and reliability and total approximately
$44 million over the 5-year rate cycle, (iv) incorporates a previous
stipulation in the case, which authorizes a new return on equity for
BVES of 9.60% and adopts the capital structure and debt cost approved by
the CPUC in March 2018 in connection with GSWC's water segment cost of
capital proceeding, and (v) approves recovery of certain expenses
incurred in prior years that were being tracked in a memorandum account.
In addition, in accordance with the settlement between GSWC and the
Public Advocates Office, the adopted electric gross margin will increase
by $1.2 million for each of the years 2019 and 2020, by $1.1 million in
2021, and by $1.0 million in 2022. The rate increases for 2019 – 2022
are not subject to an earnings test.
Because of the delay in finalizing the electric general rate case,
year-to-date 2018 billed electric revenues have been based on 2017
adopted rates, pending a final decision by the CPUC in this rate case
application. As a result of all the factors discussed above, earnings
per share at AWR’s electric utility segment for the nine months ended
September 30, 2018 would have been higher by approximately $0.03 per
share from our reported results had the new rates in the settlement
agreement been approved by the CPUC prior to the third quarter of 2018.
Because the new rates are retroactive to January 1, 2018, this
cumulative impact is expected to be recorded at the time a decision is
issued by the CPUC.
Forward-Looking Statements
Certain matters discussed in this news release with regard to the
company’s expectations may be forward-looking statements that involve
risks and uncertainties. The assumptions and risk factors that could
cause actual results to differ materially include those described in the
company’s most recent Form 10-Q and Form 10-K filed with the Securities
and Exchange Commission.
About American States Water Company
American States Water Company is the parent of Golden State Water
Company and American States Utility Services, Inc. Through its utility
subsidiary, Golden State Water Company, AWR provides water service to
approximately 260,000 customers located throughout 10 counties in
Northern, Coastal and Southern California. The company also distributes
electricity to approximately 24,000 customers in the City of Big Bear
Lake and surrounding areas in San Bernardino County, California. Through
its contracted services subsidiary, American States Utility Services,
Inc., the company provides operations, maintenance and construction
management services for water distribution and wastewater collection and
treatment facilities located on military bases throughout the country
under 50-year privatization contracts with the U.S. government.
American States Water Company has paid dividends to shareholders every
year since 1931, increasing the dividends received by shareholders each
calendar year for 64 consecutive years, which places it in an exclusive
group of companies on the New York Stock Exchange that have achieved
that result.
View source version on businesswire.com: https://www.businesswire.com/news/home/20181203006004/en/
Source: American States Water Company
Eva G. Tang
Senior Vice President-Finance, Chief Financial Officer,
Corporate
Secretary and Treasurer
(909) 394-3600, ext. 707