Cal Water receives authorization to recover $5.4 million in higher electricity costs from 2001

California Water Service Group (Cal Water) has received authorization from the California Public Utilities Commission (Commission) to recover $5.4 million in higher costs, primarily due to increases in power rates, incurred in eight of its operating districts prior to November 29, 2001; the $5.4 million will be recovered over the next 12 to 24 months through surcharges on ratepayer bills.


SAN JOSE, Calif., May 12, 2003 -- California Water Service Group (Cal Water) has received authorization from the California Public Utilities Commission (Commission) to recover $5.4 million in higher costs, primarily due to increases in power rates, incurred in eight of its operating districts prior to November 29, 2001; the $5.4 million will be recovered over the next 12 to 24 months through surcharges on ratepayer bills.

For two decades, water utilities were allowed to recover significant increases in certain unpredictable and uncontrollable costs, such as the costs of purchased water and electricity used to operate wells and pumps. These costs had been tracked in balancing accounts and recovered in customers' water rates. On November 29, 2001, the Commission abruptly changed its procedure and suspended balancing accounts.

The Commission's current decision allows Cal Water to recover balancing accounts existing for eight districts at the time of the change in procedure, much of which results from an overall 48% increase in electricity costs that became effective in 2001. It also defers balancing account recovery for four other districts to the General Rate Case process. Balancing account-related decisions for remaining districts are expected to result in a net ratepayer refund in the range of $200,000 to $300,000. The actual net effect will be determined by future Commission decisions.

California Water Service Group is the parent company of California Water Service Company, Washington Water Service Company, New Mexico Water Service Company, Hawaii Water Service Company, and CWS Utility Services. The subsidiaries provide regulated and non-regulated water service to over 1.7 million people in 98 communities. The Company's common stock trades on the New York Stock Exchange under the symbol "CWT."

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