California Water Service Group’s regulated subsidiary, Cal Water, received approval from the California Public Utilities Commission on December 29 2025 to implement a 3 % interim rate increase effective January 1 2026. The adjustment applies to most of Cal Water’s service districts, with a few districts exempted or receiving a different percentage, and is designed to bridge the funding gap while the 2024 General Rate Case (GRC) and Infrastructure Improvement Plan remain under review.
The interim rate is a standard CPUC tool used when a final rate case decision is delayed beyond the date new rates would normally take effect. By authorizing the 3 % increase, the commission allows Cal Water to continue investing in critical infrastructure—such as water‑line replacements, treatment‑plant upgrades, and PFAS‑compliance equipment—without waiting for the 18‑month GRC review to conclude. The company’s 2024 GRC filing proposed more than $1.6 billion of capital spending for 2025‑2027, and Cal Water’s actual capital expenditures for the nine months ending September 30 2025 were $364.7 million, up from $332.2 million in the same period a year earlier.
Management explained that the rate case delay is largely due to the size and complexity of the proposed investments, which require extensive engineering studies and stakeholder engagement. “The interim rates will help mitigate the impacts of the delayed recovery while also enabling us to continue making important infrastructure improvements to keep the water we deliver safe, clean, and reliable,” said CEO Martin A. Kropelnicki.
The 3 % increase is expected to raise average residential bills by roughly $10–$15 per month, depending on the district, and will be subject to refund or adjustment once the final GRC decision is issued. The interim rate also signals the CPUC’s willingness to support utilities’ capital needs during prolonged rate‑case timelines, a precedent that could reduce future delays and improve earnings predictability for Cal Water.
With the interim rate in place, Cal Water can maintain its planned $450‑$550 million capital spend for 2025 and beyond, ensuring that essential upgrades—particularly those related to PFAS compliance, which could add an estimated 25 % increase in customer bills over the GRC period—are funded without compromising service quality.
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