Washington Water Service Proposes Rate Adjustment for Investments Made in Local Systems to Help Maintain Safe and Reliable Service

Rhea-AI Summary

Washington Water Service, a subsidiary of California Water Service Group (NYSE: CWT), has filed a rate adjustment request with the Washington Utilities and Transportation Commission to recover $14.9 million in infrastructure investments and increased operating costs.

The company has made significant infrastructure improvements including installation of 14,200 feet of water mains across multiple systems, new treatment facilities for removing contaminants, booster pump station upgrades, and implementation of remote monitoring systems. The rate increase also covers higher operating expenses, materials costs, and compliance with new PFAS testing regulations.

If approved, the new rates could take effect as early as November 15, 2025.

Positive

• Comprehensive infrastructure improvements across multiple water systems to enhance reliability and fire protection
• Installation of new treatment facilities to remove harmful contaminants (lead, copper, arsenic, iron, and manganese)
• Implementation of modern remote monitoring systems in multiple service areas
• Proactive compliance with new federal PFAS testing regulations

Negative

• Proposed $14.9 million rate increase will raise costs for customers
• Higher operating expenses and material costs being passed on to consumers
• Increased depreciation expenses due to newly installed facilities

Insights

Utilities Regulatory Analyst

Washington Water's $14.9M rate adjustment request reflects necessary infrastructure investments and increased costs, with potentially positive revenue implications if approved.

Washington Water Service, a subsidiary of California Water Service Group (CWT), has filed a $14.9 million rate adjustment request with the Washington Utilities and Transportation Commission. This filing represents a standard regulatory process for recovering capital investments and increased operating expenses - a critical mechanism for water utilities to maintain financial health while fulfilling infrastructure obligations.

The comprehensive infrastructure improvements detailed in the filing are strategically targeted across multiple service areas. The company has installed over 14,200 feet of water main across six different systems, which addresses aging infrastructure concerns while enhancing service reliability and fire protection capabilities. The water treatment facility upgrades to remove contaminants (lead, copper, arsenic, iron, and manganese) demonstrate compliance with increasingly stringent water quality standards.

Particularly noteworthy is the deployment of SCADA (Supervisory Control and Data Acquisition) monitoring systems across five service areas. These investments reflect a forward-looking approach to system management, as remote monitoring typically reduces response times to system issues, minimizes water loss, and improves operational efficiency through data-driven decision making.

The rate case also factors in higher operating expenses including materials, equipment, and labor - common industry-wide challenges in the current economic environment. The specific inclusion of PFAS testing costs highlights the company's response to evolving regulatory requirements, as these "forever chemicals" face increasing scrutiny from health authorities.

If approved as filed, the new rates could take effect by November 15, 2025, providing a relatively quick timeline for revenue realization. This rate case follows the typical regulatory compact model where utilities make prudent investments first, then seek recovery through regulated rates, balancing shareholder returns with customer affordability.

GIG HARBOR, Wash., Sept. 30, 2025 (GLOBE NEWSWIRE) -- California Water Service Group (NYSE: CWT) subsidiary Washington Water Service (Washington Water) has filed a request with the Washington Utilities and Transportation Commission (UTC) to increase water rates to recover $14.9 million in costs it has incurred to fund the improvement and maintenance of its local water systems as well as increased expenses over the last two years.

Some of the major investments made in Washington Water’s service areas include:

• Installing 1,000 feet of water main in the Minterbrook system; 700 feet of main in Sunshine Acres; 2,500 feet of main in the Ranch Acres Shores system; 2,000 feet of main in Cedar Grove; 1,000 feet of main in Evergreen Shores; and 7,000 feet of main in the Southwood system to improve reliability and fire protection, and reduce potential leaks.
• Installing treatment facilities to remove lead and copper in the Heritage Row system, arsenic in the Quistorff system, and iron and manganese in the Southwood system.
• Conducting booster pump station upgrades in the Rosario, Cedar Crest, Artondale, Southwood, Olympic Mall, and Driftwood Valley systems.
• Deploying Supervisory Control and Data Acquisition remote system monitoring in the Sunshine Acres, Rosario, Mirrormont, Palmer Lake, and Southwood systems.
• Installing a new booster pumping facility to increase reliability and capacity in the Lost Creek zone of the Southwood system.
  
  

Additionally, the proposed water rate increase accounts for costs incurred due to higher operating expenses, such as cost increases in materials and equipment; depreciation expense due to the addition of newly installed facilities; and increased labor costs. It also accounts for costs incurred for testing for the presence of per- and polyfluoroalkyl substances (PFAS) in accordance with new federal regulations, and other efforts related to PFAS regulatory compliance.

“We take our responsibility to provide our Washington Water customers safe, clean, reliable water at affordable rates seriously, and the upgrades we have made over the past two years are critical to continuing to deliver on this commitment,” said Marty Kropelnicki, Chairman and CEO. “At the same time, we work diligently to control expenses and keep water service affordable in the face of increasingly stringent federal and state water quality standards and rising costs.”

If approved as filed, new rates could become effective as early as Nov. 15, 2025.

About California Water Service Group

California Water Service Group (NYSE: CWT) is the largest regulated water utility operating exclusively 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 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 one of 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 Washington Water's request to increase water rates and, if approved, the potential timing for such rates to become effective. 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

How much is Washington Water Service requesting for its rate adjustment in 2025?

Washington Water Service is requesting to recover $14.9 million in costs for system improvements and increased operating expenses.

When will CWT's Washington Water Service new rates take effect?

If approved as filed, the new rates could become effective as early as November 15, 2025.

What infrastructure improvements has Washington Water Service made to justify the rate increase?

The company has installed 14,200 feet of water mains, new treatment facilities for contaminant removal, booster pump station upgrades, and remote monitoring systems across multiple service areas.

Why is Washington Water Service (CWT subsidiary) increasing its water rates?

The rate increase is to recover costs of infrastructure improvements, higher operating expenses, increased material and equipment costs, and compliance with new federal PFAS testing regulations.

What contaminants will the new treatment facilities address in Washington Water's systems?

The new treatment facilities will remove lead and copper in Heritage Row, arsenic in Quistorff, and iron and manganese in the Southwood system.