California Water Service Group Completes Purchase of Kukui’ula South Shore Community Services’ Wastewater System

Rhea-AI Summary

Hawaii Water Service, a subsidiary of California Water Service Group (NYSE: CWT), has completed the acquisition of Kukui'ula South Shore Community Services' (KSSCS) wastewater system assets in southeast Kauai. The collection-only wastewater utility currently serves approximately 440 residential, commercial, and resort customers, with potential expansion to serve up to 1,500 connections upon completion of a planned resort buildout.

The system connects to the Poipu Water Reclamation Facility, which Hawaii Water acquired through HOH Utilities in late 2023. The purchase, approved by the Hawaii Public Utilities Commission in September 2024, expands Hawaii Water's presence on The Garden Isle, where it already serves customers in Poipu and Koloa, among other locations across Hawaii.

Positive

• Expansion of customer base by 440 connections with potential growth to 1,500
• Strategic acquisition complementing previous Poipu Water Reclamation Facility purchase
• Regulatory approval obtained from Hawaii Public Utilities Commission

Negative

• None.

Insights

Financial Analyst

This acquisition of KSSCS's wastewater system represents a strategic expansion of Hawaii Water's footprint in Kauai. The system currently serves 440 customers but has significant growth potential with capacity for up to 1,500 connections upon resort buildout completion. This acquisition complements the company's previous purchase of HOH Utilities' Poipu Water Reclamation Facility in 2023, creating operational synergies since KSSCS discharges to this facility. The deal strengthens CWT's regulated utility business model and provides a predictable revenue stream with growth potential. While the purchase price wasn't disclosed, regulated wastewater acquisitions typically provide stable returns on investment through rate base additions. The expansion aligns with CWT's strategy of growing its Hawaiian operations, which now serve over 6,500 customers across multiple islands.

Environmental Services Expert

The integration of KSSCS's wastewater system with Hawaii Water's existing infrastructure, particularly the Poipu Water Reclamation Facility, creates a more efficient and environmentally sustainable operation. The company's commitment to infrastructure investment will be important for maintaining system reliability and environmental compliance in this sensitive island ecosystem. The planned resort buildout capacity increase to 1,500 connections will require careful environmental management and infrastructure scaling. This vertical integration of collection and treatment facilities allows for better control over the entire wastewater management process, potentially reducing environmental risks and improving operational efficiency.

SAN JOSE, Calif., Dec. 05, 2024 (GLOBE NEWSWIRE) -- Expanding its operations on The Garden Isle, California Water Service Group (NYSE: CWT) subsidiary Hawaii Water Service (Hawaii Water) finalized the acquisition of Kukui’ula South Shore Community Services’ (KSSCS) wastewater system assets yesterday.

Hawaii Water will now own and manage the collection-only wastewater utility, which currently serves about 440 residential, commercial, and resort customers. The system, which is located in southeast Kauai, is expected to be able to serve up to 1,500 connections upon the completion of a planned resort buildout. Wastewater from KSSCS is discharged to the Poipu Water Reclamation Facility, which Hawaii Water acquired in its purchase of HOH Utilities at the end of 2023.

Hawaii Water plans to invest in the local wastewater infrastructure going forward to help keep the system safe and reliable for customers’ needs and protect the environment. The purchase was approved by the Hawaii Public Utilities Commission in September 2024.

“We look forward to serving KSSCS customers and are dedicated not only to providing them the same safe, reliable service we have been committed to delivering since we began operating on the islands in 2003, but also to being a responsible steward of the environment,” said Marty Kropelnicki, Group Chairman and CEO. “We also appreciate the KSSCS team for its trust in us to serve its customers and its efforts to help provide a smooth transition.”

In addition to the new KSSCS customers, Hawaii Water currently provides water and/or wastewater utility services to more than 6,500 customers—including a number of large resorts and condominium complexes—in the communities of Ka’anapali, Pukalani, and Kapalua on Maui; Kalaeloa on Oahu; North Kona and Waikoloa on the Kohala Coast of the Big Island; and Poipu and Koloa on Kauai.

About California Water Service Group
California Water Service Group (NYSE: CWT) is the largest regulated water utility in the western United States. It provides high-quality, reliable water and/or wastewater services to more than 2.1 million people in California, Hawaii, New Mexico, Washington, and Texas through its regulated subsidiaries, California Water Service, Hawaii Water Service, New Mexico Water Service, and Washington Water Service, and its utility holding company, Texas Water Service. 

Group’s purpose is to enhance the quality of life for customers, communities, employees, and stockholders. To do so, it invests responsibly in water and wastewater infrastructure, sustainability initiatives, and community well-being. The company’s 1,200+ employees live by a set of strong core values and share a commitment to protecting the planet, caring for people, and operating with the utmost integrity. The company has been named one of “America’s Most Responsible Companies” and the “World’s Most Trustworthy Companies” by Newsweek, a Top Workplace, and a Great Place to Work®.  More information is available at www.calwatergroup.com.

This news release contains forward-looking statements within the meaning established by the Private Securities Litigation Reform Act of 1995 (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 news release 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, commits or variations of these words or similar expressions are intended to identify forward-looking statements. Examples of forward-looking statements in this news release include, but are not limited to, statements describing the expected benefits resulting from the KSSCS acquisition and Hawaii Water’s investment plans. Forward-looking statements are not guarantees of future performance. They are based on numerous assumptions that we believe are reasonable but are subject to uncertainty and risks. Actual results may vary materially from what is contained in a forward-looking statement. Factors that may cause actual results to be different than those expected or anticipated include, but are not limited to: ability to integrate the business and operate the KSSCS system in an effective and accretive manner; governmental and regulatory commissions' decisions; consequences of eminent domain actions relating to our water systems; changes in regulatory commissions' policies and procedures; the outcome and timeliness of regulatory commissions' actions concerning rate relief and other actions; changes in water quality standards; changes in environmental compliance and water quality requirements; electric power interruptions; the impact of opposition to rate increases; our ability to recover costs; availability of water supplies; issues with the implementation, maintenance or security of our information technology systems; civil disturbances or terrorist threats or acts; the adequacy of our efforts to mitigate physical and cyber security risks and threats; the ability of our enterprise risk management processes to identify or address risks adequately; changes in customer water use patterns and the effects of conservation; the impact of weather, climate change, natural disasters, and actual or threatened public health emergencies; the impact of market conditions and volatility on unrealized gains or losses on our operating results; risks associated with expanding our business and operations geographically; and other risks and unforeseen events described in our Securities and Exchange Commission (SEC) filings. In light of these risks, uncertainties and assumptions, investors are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date of this news release. When considering forward-looking statements, you should keep in mind the cautionary statements included in this paragraph, as well as in our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, and other reports filed from time-to-time with the SEC. We are not under any obligation, and we expressly disclaim any obligation to update or alter any forward-looking statements, whether as a result of new information, future events or otherwise.

Media Contact
Yvonne Kingman
ykingman@calwater.com
310-257-1434

FAQ

How many customers will CWT serve through the newly acquired KSSCS wastewater system?

The KSSCS wastewater system currently serves about 440 residential, commercial, and resort customers, with potential to serve up to 1,500 connections upon completion of a planned resort buildout.

When did Hawaii Water Service receive regulatory approval for the KSSCS acquisition?

The Hawaii Public Utilities Commission approved the purchase in September 2024.

Where is the newly acquired KSSCS wastewater system located?

The KSSCS wastewater system is located in southeast Kauai, Hawaii, and connects to the Poipu Water Reclamation Facility.