CPUC grants California Water’s request to postpone cost of capital application

The California Public Utilities Commission has granted the request of California Water Service (CWT) and three other utilities to postpone their Cost of Capital applications from May 1, 2025 to May 1, 2026. The decision effectively maintains the current 10.27% return on equity and 4.23% cost of debt for Cal Water, with a capital structure of 53.40% common equity and 46.60% long-term debt, and an authorized rate of return of 7.46%. The CPUC also reauthorized the Water Cost of Capital Mechanism. Among other provisions, the WCCM automatically adjusts the rate of return when the Moody’s Utilities Bond Index fluctuates between Cost of Capital applications. The ROE will remain 10.27% through Dec. 31, 2026, unless the WCCM is triggered when next measured on Sept. 30, 2025. If a change in the ROE is required, it would become effective on Jan. 1, 2026.