Hawaii Public Utilities Commission Issues General Rate Case Decision for Hawaii Water Service’s Kapalua Water and Wastewater Systems

The approved settlement recognizes $5.86 million in completed improvements to Kapalua’s water and wastewater infrastructure.

Rhea-AI Summary

California Water Service Group (CWT) subsidiary Hawaii Water Service secured approval to increase annual revenue by about $1.94 million for its Kapalua systems.

The Hawaii Public Utilities Commission adopted a settlement with the Consumer Advocate covering nearly $1.47 million for water and more than $469,000 for wastewater. The decision recognizes $5.86 million in completed capital improvements and higher operating costs, including about $1.7 million annually for purchased water. Those purchased water costs pass directly to customers dollar for dollar. New rates take effect in October 2026, marking the systems’ first general rate increase since Hawaii Water acquired them in 2021.

Positive

• Minor point. Forward-looking: it has not happened yet and may not happen.Approved rates allow about $1.94 million more annual revenue, effective October 2026.
• Minor pointCompleted infrastructure improvements of $5.86 million are recognized in the rate decision.
• Minor pointPurchased water costs pass directly to customers on a dollar-for-dollar basis.

Negative

• Minor pointHigher operating expenses include about $1.7 million annually for purchased potable and non-potable water.
• Minor pointOperating costs also reflect increased labor costs and inflation.

Key Figures

Annual revenue increase: about $1.94 million annually Water system revenue increase: nearly $1.47 million Wastewater system revenue increase: more than $469,000 +2 more

Annual revenue increase

about $1.94 million annually

Kapalua water and wastewater systems

Water system revenue increase

nearly $1.47 million

Share of the Kapalua rate increase

Wastewater system revenue increase

more than $469,000

Share of the Kapalua rate increase

Recognized capital improvements

$5.86 million

Investments in the Kapalua systems

Purchased water costs

about $1.7 million annually

Potable and non-potable water costs

Key Terms

general rate case, settlement agreement, potable water, non-potable water

4 terms

general rate case regulatory

"General Rate Case Decision for Hawaii Water Service’s Kapalua"

A general rate case is a formal regulatory proceeding where a public utility asks a government agency for permission to change the prices charged to customers. It matters to investors because the outcome determines the company’s allowed revenue and profit margin—similar to a landlord getting approval to raise rent—which directly affects future cash flow, dividend capacity and the valuation of the utility’s stock or bonds.

settlement agreement regulatory

"adopted a settlement agreement reflecting Hawaii Water’s investments"

A settlement agreement is a legally binding deal where two sides resolve a dispute—often a lawsuit—by agreeing on terms such as payments, actions, or changes in behavior instead of continuing the case to trial. For investors it matters because settlements can create immediate costs, limit future liabilities or risks, and change a company's cash flow, reputation, or ongoing obligations much like paying a negotiated bill to avoid a lengthy, uncertain fight.

potable water technical

"about $1.7 million annually for purchased potable and non-potable water"

Potable water is water that is safe for people to drink and use for cooking, meaning it meets health and safety standards to avoid illness. For investors, access to potable water affects a company’s operating costs, regulatory compliance, asset value and community reputation—similar to how a reliable power supply keeps a factory running, clean drinking water is a basic necessity that can influence profitability, risk and long‑term viability.

non-potable water technical

"about $1.7 million annually for purchased potable and non-potable water"

Water that is not safe to drink or cook with but can be used for other uses such as irrigation, industrial cooling, toilet flushing, or firefighting. Think of it like water that’s fine for watering a garden or running equipment but not for drinking; it often comes from treated wastewater, captured rain, or process streams. It matters to investors because its availability, treatment requirements, and regulation affect operating costs, capital needs, compliance risk, and the value of properties or facilities.

AI-generated analysis. How Rhea-AI works. Not financial advice.

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Decision Allows Recovery for Investments Made to Allow for Safe and Reliable Service

WAIKOLOA, Hawaii, Oct. 15, 2026 (GLOBE NEWSWIRE) -- The Hawaii Public Utilities Commission (HPUC) has adopted a settlement agreement reflecting Hawaii Water Service’s (Hawaii Water) investments to help keep its Kapalua water and wastewater systems safe and reliable, while addressing higher operating and purchased water costs. The decision enables the California Water Service Group (NYSE: CWT) subsidiary to increase annual revenue by about $1.94 million and adjusts rates accordingly.

The revenue increase, which is based on a settlement reached between Hawaii Water and the Consumer Advocate, includes nearly $1.47 million for the water system and more than $469,000 for the wastewater system. It recognizes $5.86 million in capital improvements that Hawaii Water has made to enhance local water quality, system reliability, and sustainability.

Among the infrastructure improvements made in the Kapalua systems, Hawaii Water:

• Upgraded critical potable water storage facilities to improve supply reliability.
• Replaced aging valves to improve system reliability and control.
• Replaced backup generators to help maintain water pressure during power interruptions and strengthen fire protection.
• Upgraded the sewer pump station serving the D.L. Fleming State Beach Park with surface-serviceable pumps and aboveground controls to help improve access, response time, reliability, and efficiency.
• Replaced lift station and sump pumps to reduce the potential for future wastewater system leaks.
  
  

The increase also acknowledges higher operating expenses, including about $1.7 million annually for purchased potable and non-potable water, increased labor costs, and the effects of inflation. Purchased water costs are passed directly to customers on a dollar-for-dollar basis.

“Since acquiring the Kapalua systems, we have invested strategically to allow us to provide safe and reliable water and wastewater services for our local customers,” said Marty Kropelnicki, Chairman and CEO. “We have also worked hard to control expenses to keep service affordable while protecting the environment—an increasingly urgent priority amid Maui’s recent drought conditions.”

This is the first general rate increase for the Kapalua systems since Hawaii Water acquired them in 2021. New rates become effective this month.

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 2.2 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, TWSC, Inc. (Texas Water Service). This year, the company commemorates a century of 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 nearly 1,300 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 USA 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 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 potential timing for the increase in Hawaii Water’s rates to become effective and plans for related cash receipts. Forward-looking statements are not guarantees of future performance. They are based on numerous assumptions that we believe are reasonable, but they are open to a wide range of uncertainties and business risks. Consequently, actual results or outcomes may vary materially from what is contained in a forward-looking statement. Factors that may cause actual results or outcomes to be different than those expected or anticipated include, but are not limited to those described under the section entitled "Risk Factors" and elsewhere in our most recent Annual Report on Form 10-K, our subsequent Quarterly Reports on Form 10-Q and our other Securities and Exchange Commission 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. 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

AI-generated questions and answers. How Rhea-AI works. Not financial advice.

How much additional revenue did Hawaii Water receive approval for in the Kapalua rate case?

The decision allows about $1.94 million in additional annual revenue, including nearly $1.47 million for the water system and more than $469,000 for the wastewater system. New rates become effective in October 2026.

What Kapalua infrastructure improvements were covered by Hawaii Water’s rate decision?

The decision recognizes $5.86 million in completed capital improvements. Work included upgrades to potable water storage facilities, replacement of aging valves and backup generators, upgrades to the sewer pump station serving D.L. Fleming State Beach Park, and replacement of lift station and sump pumps.