What changed in this filing

/stocks — the workspaceLOADING

Item 1. Business

2021-03-01 compared with 2020-03-02 · 253 added, 150 removed, 228 unchanged (64% of the section changed)

10 unchanged sentences

As part of the merger transaction between SJW Group and CTWS on October 9, 2019, CTWS became a wholly-owned subsidiary of SJWNE LLC.

CTWS is a holding company with six wholly-owned subsidiaries.

The Connecticut Water Company (“Connecticut Water”), The Heritage Village Water Company (“HVWC”), The Avon Water Company (“Avon Water”) and The Maine Water Company (“Maine Water”) are public utilities in the business of providing water service to approximately 137,000 connections that serve a population of approximately 480,000 people in 80 municipalities throughout Connecticut and Maine and more than 3,000 wastewater connections in Southbury, Connecticut.

CTWS is a holding company with four wholly-owned subsidiaries.

The Connecticut Water Company (“Connecticut Water”) and The Maine Water Company (“Maine Water”) are public utilities in the business of providing water service to approximately 139,000 connections that serve a population of approximately 485,000 people in 81 municipalities throughout Connecticut and Maine and more than 3,000 wastewater connections in Southbury, Connecticut.

The remaining two subsidiaries are Chester Realty, Inc., a real estate company in Connecticut, and New England Water Utility Services, Inc.

(“NEWUS”), which provides contract water and sewer operations and other water related services.

Effective September 30, 2020, The Heritage Village Water Company (“HVWC”) and The Avon Water Company (“Avon Water”) merged into Connecticut Water after receiving merger approval from the Connecticut Public Utilities Regulatory Authority (“PURA”).

Prior to the merger, HVWC and Avon Water were subsidiaries of CTWS.

• SJWTX, Inc.

was incorporated in the state of Texas in 2005.

3 unchanged sentences

has a 25% interest in Acequia Water Supply Corporation (“Acequia”).

The water supply corporation has been determined to be a variable interest entity within the scope of Financial Accounting Standards Board (“FASB”) Accounting Standard Codification (“ASC”) Topic 810, “Consolidation” with SJWTX, Inc.

Acequia has been determined to be a variable interest entity within the scope of Financial Accounting Standards Board (“FASB”) Accounting Standard Codification (“ASC”) Topic 810, “Consolidation” with SJWTX, Inc.

as the primary beneficiary.

3 unchanged sentences

SJW Land also has a 70% limited partnership interest in 444 West Santa Clara Street, L.P.

The partnership owned a commercial building in California which was sold by the partnership on April 6, 2017.

See Note 1 of “Notes to Consolidated Financial Statements” for discussion of the sales transaction.

Texas Water Alliance Limited (“TWA”), was previously a wholly owned subsidiary of SJW Group undertaking activities to develop a water supply project in Texas.

On November 16, 2017, SJW Group sold all of its equity interest in TWA to Guadalupe-Blanco River Authority (“GBRA”) for $31.0 million.

See Note 1 of “Notes to Consolidated Financial Statements” for a more detailed discussion of the sales transaction.

Together, SJWC, Connecticut Water, CLWSC, Maine Water, HVWC, Avon Water, NEWUS and TWA (through the date of sale in 2017), are referred to as “Water Utility Services.”

The partnership owned a commercial building in California which was sold by the partnership in 2017.

See Note 1 of “Notes to Consolidated Financial Statements” for a discussion of the sales transaction.

Together, SJWC, Connecticut Water, CLWSC, Maine Water and NEWUS, are referred to as “Water Utility Services.”

SJW Land Company and its consolidated variable interest entity, 444 West Santa Clara Street, L.P.

which operated a commercial building rental, and Chester Realty, Inc.

and Chester Realty, Inc.

are collectively referred to as “Real Estate Services.”

SJW Group and CTWS Merger

On October 9, 2019, SJW Group completed its previously announced acquisition of CTWS pursuant to the terms of the Second Amended and Restated Agreement and Plan of Merger, dated as of August 5, 2018, by and among SJW Group, Hydro Sub, Inc., a Connecticut corporation and a wholly-owned subsidiary of SJW Group, and CTWS.

On October 9, 2019, SJW Group completed its previously announced acquisition of CTWS pursuant to the terms of the Second Amended and Restated Agreement and Plan of Merger, dated August 5, 2018, by and among SJW Group, Hydro Sub, Inc., a Connecticut corporation and a wholly-owned subsidiary of SJW Group, and CTWS.

SJW Group acquired all of the outstanding stock of CTWS for $70.00 per share in cash (without interest and less any applicable withholding taxes).

The total cash purchase price is approximately $838.5 million , less cash received of $3.0 million , and approximately $6.4 million related to outstanding awards of restricted stock units and deferred share units assumed in connection with the CTWS merger.

SJW Group financed the acquisition with net proceeds from its December 2018 sale of 7,762,000 common equity shares of

approximately $411.1 million , and the October 2019 issuance of $427.4 million in new fixed rate term loans.

The total cash purchase price was approximately $838.5 million, less cash received of $3.0 million, and approximately $6.4 million related to outstanding awards of restricted stock units and deferred share units assumed in connection with the CTWS merger.

SJW Group financed the acquisition with net proceeds from its December 2018 sale of 7,762,000 shares of common stock of approximately $411.1 million, and its October 2019 issuance of $427.4 million in new fixed rate term loans.

SJW Group raised an additional $18.5 million in the debt financing to partially finance transaction costs incurred in connection with the CTWS acquisition.

Along with the acquisition debt financing, SJW Group raised $60.0 million of new proceeds used to partially refinance certain CTWS short-term borrowings on its existing lines of credit after the CTWS acquisition closed.

SJW Group raised an additional $60.0 million through debt financing to partially refinance certain CTWS short-term borrowings on its existing lines of credit after the CTWS acquisition closed.

Regulation and Rates

8 unchanged sentences

Pursuant to Section 792.5 of the California Public Utilities Code, a balancing account must be maintained for each expense item for which such revenue offsets have been authorized.

Memorandum accounts track revenue impacts due to catastrophic events, certain unforeseen water quality expenses related to new federal and state water quality standards, energy efficiency, water conservation during periods of mandated water restrictions, water tariffs and other approved activities or as directed by the CPUC such as the memorandum account for the Tax Cuts and Jobs Act (H.R.

1) (the “Tax Act”).

The purpose of balancing and memorandum accounts is to track the under-collection or over-collection associated with such expense changes and activities.

On January 4, 2018, SJWC filed General Rate Case Application No.

18-01-004 (“GRC”) with the CPUC requesting authority for an increase of revenue of $34.3 million , or 9.76% , in 2019, $14.2 million , or 3.7% , in 2020 and $20.6 million , or 5.17% , in 2021.

Among other things, the application also included requests to recover $20.7 million from balancing and memorandum accounts, the establishment of a Water Revenue Adjustment Mechanism and Sales Reconciliation Mechanism (“WRAM/SRM”), and a shift to greater revenue collection in the service charge.

On June 28, 2018, the CPUC issued an order in the case identifying the issues to be considered, including whether the proposed merger between SJW Group and CTWS will have any ratemaking impact on the customers of SJWC (see discussion on the merger with CTWS at Note 12).

This consideration was subsequently removed from the GRC to be considered in an Order Instituting Investigation (“OII”) on the proposed merger issued on July 20, 2018, see below for further discussion.

On August 10, 2018, SJWC and the Office of Ratepayer Advocates filed a joint motion for partial settlement (“Settlement”) of the GRC with the CPUC, resolving all issues in the GRC with the exception of authorization of a WRAM/SRM and the recovery of the balance in the Hydro Generation Research, Development and Demonstration Memorandum Account, such issues being subsequently contested in legal briefs.

The Settlement also lowered authorized sales to a level that aligns more closely with current actual consumption.

In addition, it allowed for a shift in cost recovery allowing 40% of total revenue to be collected through the fixed charge.

On October 16, 2018, the CPUC issued a Proposed Decision adopting the Settlement in part, without any impact on the proposed revenue requirement outlined in the Settlement, and delaying ruling on the contested issues in order to allow the Settlement rates to become effective January 1, 2019.

On December 4, 2018, the CPUC issued Decision 18-11-025 authorizing new rates for 2019.

Accordingly, SJWC filed Advice Letter No.

528/528A on December 7, 2018, requesting authorization to increase revenue requirement by $16.4 million or 4.55% in 2019 and to implement surcharges to recover $27.0 million of under-collections from memorandum and balancing accounts.

This was approved on December 28, 2018, and new rates became effective January 1, 2019.

On July 20, 2018, the CPUC issued an Order Instituting Investigation (“OII”) No.

The purpose of balancing and memorandum accounts is to track the under-collection or over-collection associated with such expense changes and activities for future recovery considerations.

On July 20, 2018, the California Public Utilities Commission (“CPUC”) issued an Order Instituting Investigation (“OII”) No.

18-07-007 concerning SJW Group’s then proposed merger with CTWS.

2 unchanged sentences

A Public Participation Hearing was held on January 31, 2019.

On March 4, 2019, the CPUC suspended this proceeding due to SJW Group’s announcement of its intention to file a new merger approval application with the Connecticut Public Utilities Regulatory Authority (“PURA”).

On March 4, 2019, the CPUC suspended this proceeding due to SJW Group’s announcement of its intention to file a new merger approval application with the PURA.

On April 3, 2019, SJW Group and CTWS jointly filed a new merger application with PURA.

After securing the required approvals from both PURA and the Maine Public Utilities Commission (“MPUC”), SJW Group announced the close of the merger on October 9, 2019, and notified the CPUC accordingly.

In January 2017, a SJWC customer inquired about the company’s billing practice as it related to the proration of service charges in billing cycles where a rate change occurred.

On June 22, 2017, SJWC was served with Complaint 17-06-009 regarding its billing practice for service charge rate changes.

The billing issue was made a part of SJWC’s GRC proceeding and a settlement agreement was reached with the Office of Ratepayer Advocates (now the Public Advocates Office) on May 23, 2018, limiting the duration from which to calculate customer refunds from June 1, 2011, through December 31, 2016.

Accordingly, SJWC provided an additional reserve to cover the remaining period covered by the settlement.

In accordance with Decision 18-11-025 for the GRC, SJWC filed Advice Letter No.

530 proposing total refunds of $2.0 million for the period from June 1, 2011 through December 31, 2016.

This advice letter became effective February 8, 2019, and refunds were completed by mid-May 2019.

On April 22, 2019, the CPUC dismissed Complaint 17-07-009 citing the relief provided in Advice Letter No.

530 and the current OII on this matter (see below for further discussion).

The Complainant filed an appeal with the CPUC to dispute the dismissal.

This appeal was rejected and the Complaint was dismissed via CPUC Decision No.

19-09-040 on September 24, 2019.

On August 31, 2020, the CPUC issued Decision 20-08-036 dismissing the OII and closing the proceeding.

On September 14, 2018, the CPUC issued OII No.

18-09-003 to which SJWC was named as Respondent.

The OII will determine whether the company unlawfully overcharged customers over a 30-year period by failing to pro-rate service charges when increases occurred during a billing period, and whether the company double-billed service charges during one billing period when allegedly switching from billing such charges in advance to billing in arrears.

18-09-003 to which SJWC was named as a Respondent.

The OII was to determine whether the company unlawfully overcharged customers over a 30-year period by failing to pro-rate service charges when increases occurred during a billing period, and whether the company double-billed service charges during one billing period when allegedly switching from billing such charges in advance to billing in arrears.

The OII resulted from a report by the CPUC’s Consumer Protection and Enforcement Division (“CPED”), dated August 16, 2018, recommending an investigation into SJWC’s billing practice.

6 unchanged sentences

The Agreement requires the company to pay approximately $2.1 million in customer credits, consisting of $1.8 million for refunds during the period from 1987 to 2011 and an additional $0.4 million in customer credits to low-income water customers, and invest $5.0 million in utility plant that is not allowed an investment return or rate recovery.

SJWC has recorded the $2.1 million customer credit expense as an offset to revenues in the accompanying December 31, 2019, Consolidated Statements of Comprehensive Income.

The $5.0 million commitment to invest in utility plant will be recognized as plant in service on the SJWC’s financial statements once invested.

The Agreement is subject to final approval by the CPUC.

The Agreement was subject to final approval by the CPUC.

A CPUC Presiding Officer’s Decision approved the Agreement in December 2019, but an appeal was filed in January 2020 by a group of SJWC customers.

A final CPUC decision approving the Settlement and dismissing the appeal was approved on February 27, 2020.

On February 28, 2019, SJWC filed Advice Letter No.

531 with the CPUC requesting to adjust the Utilities Reimbursement Account User Fees as directed by CPUC Resolution M-4839.

The reimbursement fee was reduced from 1.4% to 1.23% .

This request was approved and the new fee became effective on April 1, 2019.

On March 29, 2019, SJWC filed Advice Letter No.

532 with the CPUC requesting authorization to recover its balance in its 2018 Water Conservation Memorandum Account (“WCMA”) for the period of January 1, 2018, through December 31, 2018.

On December 19, 2019, the CPUC denied the recovery via Resolution W-5210 citing the elimination of mandatory conservation requirements.

During the year ended December 31, 2019, SJWC recorded a reduction of balancing and memorandum accounts of $9.4 million with an offset to revenues for the 2018 WCMA and reversed revenues of $0.6 million recorded in the 2019 WCMA balance.

On June 19, 2019, the CPUC issued its final decision resolving the remaining issues in SJWC’s GRC.

Decision 19-06-010 denied the establishment of a WRAM/SRM and authorized the recovery of the Hydro Generation Research, Development and Demonstration Memorandum Account balance of $1.2 million .

A final CPUC decision approving the Agreement and dismissing the appeal was approved on February 27, 2020, and concluded this proceeding.

Advice Letter No.

545 was filed on March 13, 2020, requesting authorization to provide refunds to customers.

For a typical residential customer with a 3/4-inch meter, the one-time refund was $5.52.

This advice letter was approved effective April 12, 2020, and SJWC completed issuing refunds in mid-June 2020.

On June 19, 2019, the CPUC issued its final decision resolving the remaining issues in SJWC’s general rate case for 2019.

Decision 19-06-010 denied the establishment of a Water Revenue Adjustment Mechanism (“WRAM”) / Sales Reconciliation

Mechanism (“SRM”) and authorized the recovery of the Hydro Generation Research, Development and Demonstration Memorandum Account balance as of September 30, 2016.

SJWC filed Advice Letter No.

534 on August 1, 2019, to recover this amount via a surcharge over a three-year period.

The CPUC rejected the advice letter on October 10, 2019, citing an error and recommended a correction and a new filing for recovery.

SJWC has made a filing to correct the record and is awaiting the CPUC’s decision.

A new advice letter for recovery is anticipated to be filed in the first quarter of 2020 pending the decision.

On August 30, 2019, SJWC filed Advice Letter No.

535 with the CPUC requesting authorization to increase the total 2019 authorized revenue requirements by $0.7 million or 0.17% for plant additions related to the Montevina Water Treatment Plant Upgrade Project in 2018.

This advice letter became effective on September 29, 2019.

534 on August 1, 2019, to recover the $1.24 million Hydro Generation Memorandum Account balance as of September 30, 2017, via a surcharge over a three-year period.

The CPUC rejected the advice letter on October 10, 2019, citing an error in the name of the memorandum account and recommended a correction and a new filing for recovery.

SJWC filed to correct the record and received the CPUC’s decision on April 10, 2020.

Advice Letter 548 was filed on April 24, 2020, requesting recovery of $1.22 million via a 36-month surcharge.

The adjustment in the memorandum account balance reflected project costs incurred after September 30, 2016, which are not allowable per Decision 19-06-010.

Per Resolution W-5228 approved on August 27, 2020 by the CPUC, further adjustments were made to the memorandum account balance resulting in an approved recovery of $1.22 million which was recognized in the company’s regulatory assets as of September 30, 2020.

The recovery was approved in Advice Letter 548A effective August 31, 2020.

SJWC filed Advice Letter No.

537 with the CPUC requesting authorization to refund the balance in its 2018 Tax Accounting Memorandum Account as required by the GRC decision on October 18, 2019.

537 with the CPUC requesting authorization to refund the balance in its 2018 Tax Accounting Memorandum Account as required by the general rate case decision on October 18, 2019.

On December 3, 2019, Advice Letter 537-A was filed to refund the balance via a one-time surcredit.

For a typical residential customer with a 3/4-inch meter, the one-time

refund will be $20.84 .

This advice letter was approved effective January 1, 2020, and refunds to customers began on January 27, 2020.

For a typical residential customer with a 3/4-inch meter, the one-time refund was $20.84 per customer.

This advice letter was approved effective January 21, 2020, and refunds to customers began and completed in January 2020.

SJWC filed Advice Letter No.

541 on November 20, 2019, with the CPUC requesting authorization to increase revenue requirement by $8.6 million or 2.28% in 2020 for the first escalation year authorized in our 2018 General Rate Case Decision 18-011-025 which established rates for 2019, 2020, and 2021.

541 on November 20, 2019, with the CPUC requesting authorization to increase its revenue requirement by $8.6 million or 2.28% in 2020 for the first escalation year authorized in our 2018 General Rate Case Decision 18-011-025 which established rates for 2019, 2020, and 2021.

This advice letter was approved on December 26, 2019, and new rates became effective January 1, 2020.

1 unchanged sentence

19-12-002 with the CPUC requesting approval for cost recovery to deploy Advanced Metering Infrastructure throughout its service area.

The application seeks revenue increases of $2.3 million or 0.61% in 2021, $4.0 million or 1.04% in 2022, and $2.5 million or 0.65% in 2023, and $0.3 million or 0.09% in 2024 based on current rates in effect.

A decision from the CPUC is anticipated in the fourth quarter of 2020.

On January 22, 2020, SJWC, along with California-American Water Company, California Water Service Company, and Golden State Water Company, filed a joint request for a one-year deferment on the Cost of Capital filings which would otherwise be due on May 1, 2020.

The application seeks revenue increases of $2.3 million or 0.61% in 2021, $4.0 million or 1.04% in 2022, $2.5 million or 0.65% in 2023, and $0.3 million or 0.09% in 2024 based on current rates in effect.

A decision from the CPUC is anticipated in 2021.

On January 22, 2020, SJWC, along with three other California water utilities, filed a joint request for a one-year deferment on the Cost of Capital filings which would otherwise be due on May 1, 2020.

Postponing the filing one year would alleviate administrative processing costs on the utilities as well as the CPUC staff, and provide relief for both CPUC and utility resources already strained by numerous other proceedings.

The request was conditioned on no changes to the current Water Cost of Capital Mechanism in place during the one-year deferment.

On March 11, 2020, the CPUC approved the request.

On March 17, 2020, the CPUC ordered its regulated water utilities to halt customer disconnection activities in connection with the COVID-19 pandemic.

On April 2, 2020, Governor Gavin Newsom issued Executive Order N-42-20 suspending customer disconnection activities until further notice.

On April 16, 2020, the CPUC issued Resolution M-4842 directing utilities to implement emergency customer protections to assist customers such as waiving reconnection deposits, offering payment arrangements, and suspending disconnections for nonpayment.

This resolution is effective for up to one year, or April 15, 2021, with the option to extend.

On February 11, 2021, the CPUC approved extending customer protections required in Resolution M-4842 through June 30, 2021, through approval of Resolution M-4849 .

The resolution also requires water utilities to develop a transition plan regarding shutoffs and terminations with customers once the moratorium ends.

SJWC is currently working on such plan.

On March 19, 2020, SJWC filed Advice Letter 546 to extend customer protections listed in the company’s Disaster Relief Customer Protections and Outreach Plan as required by the CPUC in response to the COVID-19 pandemic.

The filing also activated SJWC’s Catastrophic Event Memorandum Account (“CEMA”) to track costs related to SJWC’s response which includes labor and materials, anticipated increase in bad debt from the suspension of shutoffs for non-payment, waived deposits and reconnection fees, and divergence from actual versus authorized usage.

The customer protections and CEMA were approved effective March 4, 2020.

SJWC anticipates requesting recovery of the COVID-19 pandemic response costs in a future general rate case or other filings.

On April 10, 2020, SJWC filed Application No.

20-04-009 seeking authorization to issue $300 million in new debt and $50 million in new equity.

A final decision authorizing our financing application was approved on November 19, 2020.

SJWC filed Advice Letter No.

552 with the CPUC requesting authorization to establish a Polyfluoroalkyl Substances Memorandum Account (“PFAS MA”) on August 18, 2020.

The advice letter was approved retroactive to March 1, 2019.

SJWC will track in this account incremental expenses related to PFAS monitoring, sampling, and customer outreach activities for potential future recovery.

SJWC filed Advice Letter 556 on November 16, 2020, with the CPUC requesting authorization to increase its revenue requirement by $11.8 million or 3.04% in 2021 for the final escalation year authorized in our 2018 General Rate Case Decision

18-011-025 which established rates for 2019, 2020, and 2021.

This advice letter was approved on December 17, 2020, and new rates became effective January 1, 2021.

On January 4, 2021, SJWC filed General Rate Case Application No.

21-01-003 requesting authority for an increase of revenue of $51.6 million or 13.35% in 2022, $16.9 million or 3.88% in 2023, and $19.2 million or 4.24% in 2024.

The application also includes requests to recover $18.5 million from balancing and memorandum accounts, authorization for a $435.0 million capital budget, further alignment between actual and authorized usage, and a shift to greater revenue collection in the service charge.

The application will undergo a year-long review process and the new rates, if approved, are expected to be effective January 1, 2022.

On January 5, 2021, SJWC, along with three other California water utilities, filed a joint request for another one-year deferment on the Cost of Capital filings which would otherwise be due on May 1, 2021.

Postponing the filing another year would alleviate administrative processing costs on the utilities as well as the CPUC staff, and provide relief for both CPUC and utility resources already strained by numerous other proceedings and COVID-19.

The request is conditioned on no changes to the current Water Cost of Capital Mechanism in place during the one-year deferment.

A CPUC decision is expected in the first quarter of 2020.

The request was denied on February 22, 2021.

Connecticut Regulatory Affairs

Connecticut Water, HVWC and Avon Water’s rates, service and other matters affecting its business are subject to regulation by the PURA.

Our Connecticut regulated operations seek rate relief as necessary to enable it to achieve an authorized rate of return.

PURA generally establishes rates in Connecticut on a company-wide basis and allows the Connecticut regulated operations to add surcharges to customers’ bills in order to recover certain costs associated with approved eligible capital projects through the Water Infrastructure Conservation Adjustment (“WICA”) in between full rate cases, as well as approved surcharges for the Water Revenue Adjustment (“WRA”).

Connecticut Water and HVWC mitigate the risk associated with changes in demand through a PURA approved WRA mechanism.

Connecticut Water’s rates, service and other matters affecting its business are subject to regulation by the PURA.

Our Connecticut regulated operations seek rate relief as necessary to achieve an authorized rate of return.

PURA allows the Connecticut regulated operations to add surcharges to customers’ bills in order to recover certain costs associated with approved eligible capital projects through the Water Infrastructure Conservation Adjustment (“WICA”) in between full rate cases, as well as approved surcharges for the Water Revenue Adjustment (“WRA”).

Connecticut Water and the HVWC division mitigate the risk associated with changes in demand through a PURA approved WRA mechanism.

The WRA is used to reconcile actual water demands with the demands projected in the most recent general rate case and allows companies to implement a surcharge or surcredit as necessary to recover the revenues approved in the general rate case.

3 unchanged sentences

Additionally, certain energy conservation projects, improvements required to comply with streamflow regulations, and improvements to acquired systems are eligible for WICA surcharges.

Avon Water does not currently use the WRA mechanism.

As of December 31, 2019 , WICA surcharges for Connecticut Water and Avon Water were 3.24% and 9.31%, respectively.

HVWC does not currently have an approved WICA surcharge.

As of December 31, 2020, WICA surcharges for Connecticut Water and the Avon Water division were 5.75% and 9.31%, respectively.

The HVWC division does not have an approved WICA surcharge.

On January 28, 2020, Connecticut Water filed a WICA application representing an additional 2.6% surcharge, for a cumulative WICA surcharge of 5.84%.

Additionally, on February 7, 2020, Connecticut Water filed its annual WICA reconciliation which called for a 0.09% reduction of the WICA surcharge.

If approved as filed, Connecticut Water will begin to charge customers a cumulative WICA surcharge of 5.75% on April 1, 2020.

Connecticut Water and HVWC’s allowed revenues, as approved by PURA during each company’s last general rate case and including subsequently approved WICA surcharges for Connecticut Water, were approximately $18.6 million for the period ended October 9, 2019 through December 31, 2019.

Through the normal billing, for the period ended October 9, 2019 through December 31, 2019, revenues received from water and wastewater customers would have been approximately $20.4 million.

As a result of the utilization of the WRA mechanism, Connecticut Water and HVWC recorded an approximate $1.8 million reduction in revenues for the period ended October 9, 2019 through December 31, 2019.

Additionally, on February 7, 2020, Connecticut Water and the Avon Water division separately filed their annual WICA reconciliations which called for 0.09% and 0.05% reductions of the WICA surcharges, respectively.

On March 25, 2020, in separate decisions, PURA approved a net cumulative 5.75% WICA surcharge for Connecticut Water and a net cumulative 9.26% WICA surcharge for the Avon Water division, both of which became effective on customers’ bills on April 1, 2020.

On October 28, 2020, Connecticut Water filed a WICA application representing an additional 1.11% surcharge or approximately $1.0 million increase in revenues, for a cumulative WICA surcharge of 6.94% which is scheduled to become effective April 1, 2021.

On March 3, 2020, Connecticut Water filed an application, Docket No.

20-03-04, with PURA to merge Avon Water and HVWC division’s with and into Connecticut Water.

The application was made to streamline borrowings, regulatory filings and internal administrative tasks associated with maintaining separate corporate entities and was approved by PURA on September 16, 2020.

The merger became effective on September 30, 2020.

After the approval and prior to the completion of the merger, the outstanding debt balances held at Avon Water and HVWC division’s were repaid in full.

The rates and applicable surcharges for the former subsidiaries remain in effect for those operating divisions until changes are approved by PURA in the next Connecticut Water general rate case, which was filed on January 15, 2021.

On January 15, 2021, Connecticut Water filed an application with PURA to amend rates for its customer, including those of former AWC and HVWC companies.

The filing requests an increase of $20.2 million in annual revenues that includes more than $265.5 million in completed infrastructure investments that are not currently in approved rates and surcharges.

The proposed increase will be applied across the company but may differ by rate divisions, meter size and between customer rate categories, i.e.

for residential, commercial, industrial, etc.

The application also reflects the costs of operating and maintaining the utility, including expenditures on power and treatment additives that have increased since the company’s last

general rate case in 2010.

PURA has 200 days from the filing to review the application, and the approved rates will go into effect soon thereafter.

On March 12, 2020, PURA issued Docket No.

20-03-15 to establish a State of Emergency Utility Shut-off Moratorium for the COVID-19 pandemic.

The moratorium ordered regulated utility companies to refrain from terminating utility service to residential customers, except for safety reasons until August 1, 2020, or until such other time as determined by the PURA.

The moratorium was extended through October 1, 2020 at which time the company was permitted to resume standard collection practices until or unless there is further action by PURA.

In the same docket, PURA directed the public service companies to offer COVID-19 payment plans for the duration of the Governor’s Emergency Order (currently through April 20, 2021), and allow customers up to 24 months for payment arrangements on their water bills.

The docket directs the public service companies to maintain a detailed record of costs incurred and revenues lost as a result of implementing its orders in the docket and allows for the establishment a regulatory asset to track incurred costs.

Approval for recovery of additional costs incurred and/or revenues lost relating to the COVID-19 pandemic would be considered for recovery in the Connecticut Water’s next general rate case proceeding.

The PURA statutes for utility regulation were amended by the legislature in October 2020, with the most notable changes that affect water companies were adjustments to extend the timelines for adjudication of various regulatory proceedings.

In particular, the following proceeding timelines were increased:

general rate case from 150 days with 30 day extension (180 days maximum) to 200 days, change in control from 120 days with 30 day extension (150 days maximum) to 200 days with an opportunity for a 30 day extension (230 days maximum), and financing from 30 days to 60 days.

In addition, there is a new requirement that any future change in control or merger approvals would require the composition of the board of directors of the holding company to include a proportional percentage of Connecticut-based directors.

The law also authorizes, but does not require, the PURA to consider adoption of a framework for performance-based regulation of private water companies.

Texas Regulatory Affairs

2 unchanged sentences

Rate cases may be filed as they become necessary, provided there is no current rate case outstanding.

Further, rate cases may not be filed more frequently than once every 12 months.

As required, CLWSC submitted on January 28, 2019, its Water Pass-Through Charge (“WPC”) true-up report for the Canyon Lake area systems 2018 purchased water costs to the PUCT reflecting a change from $1.13 to $1.05 per thousand gallons.

The WPC is the annual filing to change that component of CLWSC’s water rates for the changes in purchased water costs since the

last annual true-up report.

This change for 2019 became effective on water bills being prepared as of February 1, 2019.

Two WPC true-up reports were filed to report the year 2019 costs.

The changes in the purchased water costs for the Deer Creek Ranch water system resulted in a decrease in the usage charge from $2.19 to $2.02 per thousand gallons, and an increase in the monthly base charge of $3.04 per residential account.

These Deer Creek Ranch rate changes became effective October 1, 2019.

Furthermore, rate cases may not be filed more frequently than once every 12 months.

As required, CLWSC submitted on January 27, 2020, its Water Pass-Through Charge (“WPC”) true-up report for the Canyon Lake area systems 2019 purchased water costs.

This WPC is an annual filing to change the component of CLWSC’s water rates for changes in purchased water costs since the prior year annual true-up report.

The 2019 WPC true-up report for the water systems located in the Canyon Lake area resulted in a reduction of the WPC usage rate from $1.05 to $0.95 per thousand gallons which became effective on February 1, 2020.

The WPC filing for the Canyon Lake area was approved by the Public Utilities Commission of Texas (“PUCT”) and a new tariff with the WPC rate was issued in May 2020.

The Deer Creek Ranch water system has a separate water pass-through charge.

A WPC filing for Deer Creek Ranch is required only when there is a change in purchased water costs.

The WPC true-up report for this system was submitted December 1, 2020, which resulted in a decrease in the usage charge from $2.02 to $1.84 per thousand gallons, and an increase in the monthly base charge of $0.51 per residential account.

The Deer Creek Ranch WPC rate changes became effective October 1, 2020.

In connection with the disaster declaration in Texas, the PUCT issued Order No.

50664-106 to mitigate the impact of the COVID-19 pandemic on residential water utility customers.

CLWSC responded to this order by stopping disconnections for nonpayment of utility bills, and not charging fees for late payments.

The PUCT allowed this order to expire on June 13, 2020.

The PUCT also issued Accounting Order under No.

50664-108, which instructs utilities to record the incremental costs and lost revenues from the COVID-19 pandemic in a regulatory tracking account for future recovery.

These amounts will be considered by the PUCT for recovery during the utility’s next rate application.

Maine Regulatory Affairs

6 unchanged sentences

On December 20, 2019, Maine Water filed a general a rate increase for their Skowhegan Division seeking approximately $0.2 million, or 14.7%, in additional revenue with the MPUC.

A final decision from the MPUC is expected in the second quarter of 2020.

On June 17, 2020, the MPUC approved a general rate increase for Skowhegan Division customers allowing $0.2 million in additional revenue.

Per the MPUC decision, the increase will be implemented in two steps:

an initial 9.8% rate increase effective June 15, 2020, and a 3.51% rate increase effective July 1, 2021.

The combined rate increase is 13.31%.

On January 20, 2020, Maine Water filed WISC applications with the MPUC in four divisions requesting an increase between 1.76% and 3.00%, representing approximately $0.4 million in additional revenues.

The WISC application was approved on February 26, 2020 and the surcharges are effective March 1, 2020.

The WISC application was approved on February 26, 2020 and the surcharges were effective March 1, 2020.

On March 16, 2020, MPUC issued an emergency moratorium on utility disconnection activities in connection to the COVID-19 pandemic.

The moratorium directed public utility companies not to engage in any disconnection activities including disconnection notices for all classes of customers until further notice from MPUC.

Maine Water is tracking COVID-19 related costs for potential future recovery in rates charged to customers.

On September 17, 2020, the MPUC issued an order lifting the moratorium on utility disconnections in Maine effective November 1, 2020.

The Order requires specific notifications by utilities to their customers prior to resuming disconnection activities and requires a waiver of late payment fess for customers who enter into payment arrangements on or before December 31, 2020.

Maine Water is providing customer notices as required and resumed utility disconnections in November, 2020.

On October 9, 2020, Maine Water filed a request for approval of a special rate contract between Maine Water and the Kennebec Water District (“KWD”).

Maine Water has purchased water from KWD under a special rate contract approved by the MPUC since November 2000.

The MPUC approved the request in an Order dated January 5, 2021 that continues the existing relationship between the two water utilities and extends the agreement for an additional 20 years.

On November 23, 2020, Maine Water filed WISC applications with the MPUC in five divisions requesting an increase of between 1.1% and 5%, representing approximately $0.3 million in additional revenues.

The WISC applications were approved on December 15 and December 22, 2020 and the surcharges became effective January 1, 2021.

Please also see Item 1A, “Risk Factors,” Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and Note 1 of “Notes to Consolidated Financial Statements.”

Description of Business

The principal business of Water Utility Services consists of the production, purchase, storage, purification, distribution, wholesale, retail sale of water and wastewater services.

The principal business of Water Utility Services consists of the production, purchase, storage, purification, distribution, wholesale and retail sale of water and wastewater services.

SJWC provides water services to approximately 231,000 connections that serve approximately one million people residing in portions of the cities of San Jose and Cupertino and in the cities of Campbell, Monte Sereno, Saratoga and the Town of Los Gatos, and adjacent unincorporated territories, all in the County of Santa Clara in the State of California.

The CTWS companies provide water service to approximately 139,000 service connections that serve a population of approximately 485,000 people in 81 municipalities with a service area of approximately 269 square miles throughout Connecticut and Maine and 3,000 wastewater connections in Southbury, Connecticut.

CLWSC provides water service to approximately 18,000 connections that serve approximately 54,000 people in a service area comprising more than 246 square miles in the growing region between San Antonio and Austin, Texas.

CLWSC provides water service to approximately 20,000 connections that serve approximately 59,000 people in a service area comprising more than 247 square miles in the region between San Antonio and Austin, Texas.

Together, the Water Utility Services distribute water to customers in their respective service areas in accordance with accepted water utility methods.

SJWC, Avon Water, HVWC and Maine Water provide non-tariffed services under agreements with municipalities and other utilities.

SJWC, Connecticut Water and Maine Water provide non-tariffed services under agreements with municipalities and other utilities.

These non-tariffed services include water system operations, maintenance agreements and antenna site leases.

4 unchanged sentences

SJWC and the City of Cupertino signed an amendment to the lease agreement dated January 8, 2020.

Under the terms of the amended lease agreement, SJWC agreed to invest up to $5 million of capital improvements in the City of Cupertino’s municipal water system prior to the expiration of the lease in September 2022.

Any unspent funds at lease termination remain the property of the City of Cupertino.

NEWUS provides contracted services to water utilities in the State of Connecticut, as well as offering Linebacker® , our subscription service line protection plan for public drinking water customers.

Linebacker covers a limited amount of the cost of repairs for leaking or broken water service lines which provide drinking water to a customer’s home.

Additionally, Linebacker will repair or replace a leaking or broken water service line, curb box, curb box cover, meter pit, meter pit cover, meter pit valve plus in-home water main shut off valve before the meter.

SJW Land Company owns an undeveloped real estate property, commercial and warehouse properties in Tennessee and holds a 70% limited partnership interest in 444 West Santa Clara Street, L.P.

Under the terms of the amended lease agreement, SJWC agreed to make an additional up-front payment of $5 million that could be used to invest in capital improvements in Cupertino’s water system prior to the expiration of the lease in September 2022.

Any unspent funds at lease termination remain the property Cupertino.

NEWUS provides contracted services to water utilities in the State of Connecticut, as well as offers Linebacker® protection plans for public drinking water customers.

Linebacker plans cover a limited amount of the cost of repairs to water and wastewater service lines and in-home plumbing.

Services provided are dependent on the selected plan.

SJW Land Company owns undeveloped real estate property, commercial and warehouse properties in Tennessee and holds a 70% limited partnership interest in 444 West Santa Clara Street, L.P.

Chester Realty, Inc.

6 unchanged sentences

SJWC’s water supply consists of groundwater from wells, surface water from watershed run-off and diversion, reclaimed water, and imported water purchased from the Santa Clara Valley Water District (“Valley Water”) under the terms of a master contract with Valley Water expiring in 2051.

During non-drought years, purchased water provides approximately 40% to 50% of SJWC’s annual production.

During normal rainfall years, purchased water provides approximately 40% to 50% of SJWC’s annual production.

An additional 40% to 50% of its water supply is pumped from the underground basin which is subject to a groundwater extraction charge paid to Valley Water.

6 unchanged sentences

In the event of a power outage, SJWC believes it will be able to prevent an interruption of service to customers for a limited period by pumping water using generator power and by using purchased water from Valley Water.

In 2019, the level of water in the Santa Clara Valley groundwater basin, which is managed by the Valley Water, experienced a decrease due to a decrease in managed groundwater recharge.

As reported by Valley Water at the end of 2019, the groundwater level in the Santa Clara Plain was 4 feet lower compared to the same time in 2018, and 10 feet higher than the five-year average.

In 2020, the level of water in the Santa Clara Valley groundwater basin, which is managed by the Valley Water, experienced a decrease due to an increase in groundwater pumping by various water retailers in the region, and lower than normal local rainfall and natural recharge.

As reported by Valley Water at the end of 2020, the groundwater level in the Santa Clara Plain was 15 feet lower compared to the same time in 2019, and 14 feet lower than the five-year average.

The total groundwater storage at the end of 2020 was within Stage 1 (Normal) of the Valley Water’s Water Shortage Contingency Plan.

On January 1, 2020, Valley Water’s 10 reservoirs were 34% full with 56,644 acre-feet of water in storage.

As of December 31, 2019, SJWC’s Lake Elsman was 17.1% full with 1,050 acre-feet of water, approximately 35.1% of the five-year seasonal average.

On January 1, 2021, Valley Water’s 10 reservoirs were 13% of capacity with 22,201 acre-feet of water in storage.

As of December 31, 2020, SJWC’s Lake Elsman was 10.7% of capacity with 657 acre-feet of water, approximately 22.1% of the five-year seasonal average.

In addition, the rainfall at SJWC’s Lake Elsman was measured at 5.10 inches for the period from July 1, 2020 through December 31, 2020, which is 38.3% of the five-year average.

11 unchanged sentences

Texas Water Supply

CLWSC’s water supply consists of groundwater from wells and purchased treated and raw water from the GBRA.

CLWSC’s water supply consists of groundwater from wells and purchased treated and raw water from the Guadalupe-Blanco River Authority (“ GBRA”).

CLWSC has long-term agreements with the GBRA, which expire in 2037, 2040, 2044 and 2050.

The agreements, which are take-or-pay contracts, provide CLWSC with an aggregate of 6,900 acre-feet of water per year from Canyon Lake at prices that may be adjusted periodically by GBRA.

In 2018, CLWSC acquired raw water supply agreements with the Lower Colorado River Authority (“LCRA”) and West Travis Public Utility Agency (“WTPUA”) expiring in 2053 and 2046, respectively, to provide

for 250 acre-feet of water per year from Lake Austin and the Colorado River, respectively, at prices that may be adjusted periodically by the agencies.

CLWSC also has raw water supply agreements with the

Lower Colorado River Authority (“LCRA”) and West Travis Public Utility Agency (“WTPUA”) expiring in 2059 and 2046, respectively, to provide for 250 acre-feet of water per year from Lake Austin and the Colorado River, respectively, at prices that may be adjusted periodically by the agencies.

Maine Water Supply

7 unchanged sentences

SJWC holds the necessary franchises to provide water in portions of the cities of San Jose and Cupertino and in the cities of Campbell, Monte Sereno and Saratoga, the Town of Los Gatos and the unincorporated areas of Santa Clara County.

None of the franchises have a termination date, other than the franchise for the unincorporated areas of Santa Clara County, which terminates in June 2020.

The renewal process began in 2019 and a resolution is expected to be presented and voted on by the the County of Santa Clara in the first quarter of 2020.

The Connecticut water utility services hold the necessary franchises to provide water in portions of the towns of Ashford, Avon, Beacon Falls, Bethany, Bolton, Brooklyn, Burlington, Canton, Chester, Clinton, Colchester, Columbia, Coventry, Deep River, Durham, East Granby, East Haddam, East Hampton, East Windsor, Ellington, Enfield, Essex, Farmington, Griswold, Guilford, Hebron, Killingly, Killingworth, Lebanon, Madison, Manchester, Mansfield, Marlborough, Middlebury, Naugatuck, Old Lyme, Old Saybrook, Oxford, Plainfield, Plymouth, Portland, Prospect, Simsbury, Somers, Southbury, South Windsor, Stafford, Stonington, Suffield, Thomaston, Thompson, Tolland, Vernon, Voluntown, Waterbury, Westbrook, Willington, Windsor Locks and Woodstock.

Additionally, HVWC serves the Town of Southbury with wastewater services.

None of the franchises have a termination date, other than the franchise for the unincorporated areas of Santa Clara County, which terminates in 2035.

The Connecticut Water’s utility services hold the necessary franchises to provide water in portions of the towns of Ashford, Avon, Beacon Falls, Bethany, Bolton, Brooklyn, Burlington, Canton, Chester, Clinton, Colchester, Columbia, Coventry, Deep River, Durham, East Granby, East Haddam, East Hampton, East Windsor, Ellington, Enfield, Essex, Farmington, Griswold, Guilford, Haddam, Hebron, Killingly, Killingworth, Lebanon, Madison, Manchester, Mansfield, Marlborough, Middlebury, Naugatuck, Old Lyme, Old Saybrook, Oxford, Plainfield, Plymouth, Portland, Prospect, Simsbury, Somers, Southbury, South Windsor, Stafford, Stonington, Suffield, Thomaston, Thompson, Tolland, Vernon, Voluntown, Waterbury, Westbrook, Willington, Windsor Locks and Woodstock.

Additionally, HVWC division serves the Town of Southbury with wastewater services.

None of the franchises of the Connecticut water utility services have a termination date.

9 unchanged sentences

The regulated operations of Water Utility Services are public utilities regulated by the CPUC in California, PURA in Connecticut, PUCT in Texas and MPUC in Maine (collectively, “the Regulators”) and operate within service areas approved by the regulators.

Statutory laws provide that no other investor-owned public utility may operate in the public utilities’ service areas without first obtaining from the regulator a certificate of public convenience and necessity or similar authorization.

Statutory laws provide that no other investor-owned public utility may operate in the service area of another public utility of the same class (e.g., another water utility) without first obtaining from the regulator a certificate of public convenience and necessity or similar authorization.

Past experience shows such a certificate will be issued only after demonstrating that service in such area is inadequate.

18 unchanged sentences

Other state and local environmental regulations apply to our Water Utility Services’ operations and facilities.

These regulations relate primarily to the handling, storage and disposal of hazardous materials and discharges to the environment, including wastewater operations in the State of Connecticut.

These regulations relate primarily to the handling, storage and disposal of hazardous materials and discharges to the environment, including wastewater operations in the States of Connecticut and Texas.

SJWC began performing hazardous materials site assessments and remediation prior to the construction phase of capital projects in 2006.

1 unchanged sentence

SJWC is currently in compliance with all state and local regulations governing hazardous materials, point and non-point source discharges and the warning provisions of the California Safe Drinking Water and Toxic Enforcement Act of 1986.

CTWS and its subsidiaries are currently in compliance with all state and local regulations governing their operations.

CTWS and its subsidiaries are currently in compliance with all state and local public health and environmental regulations applicable to their operations.

Please also see Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

As of December 31, 2019 , SJW Group had 732 full-time employees, of whom 361 were SJWC employees, 214 were Connecticut Water employees, 81 were Maine Water employees, 68 were CLWSC employees, and 8 were employees of HVWC.

At SJWC, 136 were executive, administrative or supervisory personnel, and 225 were members of unions.

No employees in Connecticut Water, Maine Water, CLWSC and HVWC are represented by unions.

On November 12, 2019 and February 20, 2020, SJWC reached three-year bargaining agreements with the International Union of Operating Engineers, representing certain employees in the engineering department, and the Utility Workers of America, representing the majority of all nonadministrative employees at SJWC, respectively, covering January 1, 2020 through December 31, 2022.

Human Capital Resources

In order to continue to achieve SJW Group’s mission of delivering life sustaining, high-quality water and exceptional service to families, businesses and communities, we are committed to attract, retain and develop the highest quality talent.

We believe our employees are our most important asset.

Throughout our organizations, our employees embrace the company’s values of integrity, respect, service, compassion, trust, teamwork and transparency in everything we do.

Our employees participate in semi- annual employee engagement and satisfaction surveys providing feedback that enables the Company to continually assess and implement initiatives to enhance employee satisfaction and retention.

Our human capital measures and objectives focus on providing a safe and productive work environment that has clear positive and ethical values;

a culture that embraces diversity, respect and equity;

jobs that offer competitive wages and benefits;

and training and development opportunities that support our employees to establish and succeed in meaningful careers at SJW Group.

Basic Workforce Data

As of December 31, 2020, SJW Group had 748 full-time employees, of whom 370 were SJWC employees, 229 were Connecticut Water employees, 78 were Maine Water employees, and 71 were CLWSC employees.

At SJWC, 137 are executive, administrative or supervisory personnel, and 233 are members of unions.

On November 12, 2019 and February 20, 2020, SJWC reached three-year bargaining agreements with the International Union of Operating Engineers, representing certain employees in the engineering department, and the Utility Workers of America, representing the majority of all non-administrative employees at SJWC, respectively, covering the period from January 1, 2020 through December 31, 2022.

The agreements include a 3% wage increase in 2020, 3% in 2021 and 4% in 2022 for the union workers.

Employees working for Connecticut Water, Maine Water and CLWSC are not represented by unions.

Employee Safety and Pandemic Response

Aiming for a “zero-harm” culture, our vision is to manage health and safety performance to become a leader in the water services industry.

Protecting the health and safety of our employees is a top priority.

Recently, we expanded our safety team to include safety-focused professionals from each of our new operating utilities.

This significantly improved standardization of our employee health and safety programs, which focus on four core elements:

• Safety Leadership:

demonstrating management commitment and support, empowering local teams to be accountable for safety;

• Participation:

involving every employee in all aspects of the safety program, connecting safety initiatives to serving employees, customers, shareholders, our communities and the environment;

• Hazard Identification and Control:

inspecting workplaces, identifying hazards, implementing controls, and partnering with the front-line teams responsible for delivering reliable, clean, safe drinking water and service;

training employees on hazards and how to protect themselves.

Incident and crisis management of both known and unknown threats to employee health and safety are anticipated and planned for by our safety team.

We have implemented several management systems to plan and respond to incidents such as pandemics, wildfires, earthquakes, cyber threats and extreme weather, among others.

The goal is to safeguard our employees’ health and safety during local, national, or global incidents.

Locally, these hazards are identified by onsite inspections and from near-miss investigations.

Proactive identification of hazards keeps us one step ahead of our constantly changing workplace conditions.

During the COVID-19 pandemic, SJW Group’s primary focus has been to protect the health and safety of employees, customers and the community from the spread of the disease in the workplace, while continuing to deliver reliable, clean and safe drinking water and service.

With additional COVID-19 protections in place and beginning in March 2020, we paused all non-essential services for two months;

transitioned our office employees to company-wide remote work;

and dispatched field service employees from their homes to minimize transmission of the virus.

As the pandemic and knowledge of the virus evolved, our safety, human resources and operations teams implemented additional guidance protocols with a focus on cleaning and disinfection of facilities, vehicles, and tools;

implementing engineering and administrative control such as social distancing;

and wearing face coverings to limit the transmission of the virus.

In response to various stay-at-home government orders, we provided the flexibility to employees who are able to work from home and supported remote-working by upgrading technology infrastructure, enhancing IT capabilities and implementing processes to facilitate online and remote communications.

We are also actively monitoring all evolving federal, state and local guidance from public health authorities to ensure that our measures are in compliance with such rules and regulations.

Diversity and Inclusion

SJW Group believes that a workplace supporting diversity and inclusion not only promotes equity, teamwork, productivity and collaboration among employees, but also enables us to provide the best services to our customers, communities, and partners and enhances value for our stockholders.

We are committed to fostering and maintaining a culture of diversity and inclusion,

and we have been tracking our workforce demographics to identify employee teams, geographies, or seniority levels where hiring of minorities or specific demographic representation needs to be addressed.

In 2020, in our continued commitment to diversity, equity and inclusion, SJW Group formed a National Diversity, Equity & Inclusion (“DEI”) Council, consisting of management level and front-line employees that has the full support of our Board of Directors.

The DEI (i) supports and advocates for diversity, equity and inclusion initiatives, (ii) promotes knowledge, skills and practices that support diversity, equity and inclusion, (iii) provides a forum for consultation on diversity issues that may arise, and (iv) takes into consideration how diversity, equity and inclusion can help us serve our external stakeholders -customers, communities, stockholders and the environment.

The DEI maintains an active line of communication with our executive leadership team.

In addition, our Board of Directors has adopted policies and procedures to further our efforts to create a more diverse workforce at all levels in the organization.

For example, the Board adopted a Human Rights Policy that sets forth clear statements on our mission to create an environment where diversity, equity and inclusion are fundamental to everything we do.

Moreover, we are fully compliant with California laws that require a minimum number of female directors and a minimum number of directors from underrepresented communities on our Board of Directors.

Competitive Wage and Benefits

SJW Group’s future success is largely dependent upon our ability to attract and retain highly-skilled and qualified employees.

Our California and Connecticut subsidiaries operate in very competitive labor markets, we believe our compensation package and benefit programs allow us to recruit and retain talented and qualified personnel.

Our compensation and benefits programs include:

• Competitive employee wages that are consistent with employee roles and responsibilities, skill levels, experience, knowledge and geographic location;

• Short-term incentive compensation for management level staff aligning with company financial and operational goals targeted to our stakeholders:

customers, communities, employees and stockholders;

• Engagement of nationally, recognized outside compensation and benefits consulting firms to independently evaluate the appropriateness and effectiveness of compensation for our executive and other officers and to provide benchmarks for executive compensation as compared to peer companies;

• Alignment with stockholder value by utilizing equity awards linked to investment performance over time, as well as certain absolute financial results;

• A comprehensive annual review process pursuant to which we determine and communicate to employees annual merit increases, promotions and other changes to responsibilities and duties;

• Eligibility for all employees to participate in health insurance, dental, vision, cafeteria plans, life and disability/accident coverage, retirement plans and/or salary deferral plans, an Employee Stock Purchase Plan, paid and unpaid leaves, a commuter assistance program, professional education and training, and tuition assistance.

Community Involvement

In support of our mission to serve communities and our employees’ desire to make an impact on the communities we serve, SJW Group provides various opportunities for our employees to participate in community outreach programs such as free virtual education programs for adults, winter coat donations, a specialized in-school education course for elementary school aged children, grant programs that support firefighters as well as grants to schools in certain parts of our service territories for water bottle filling stations.

In addition, we hold community open houses, support the Happy Hollow Foundation, sponsor special events such as Thanksgiving in January, the Guadalupe River Park Conservancy Super Bowl Run, and participate in community service events such as Rebuilding Together.

Employees are further encouraged and supported in their efforts to give back to their communities through the SJWCECF.

The SJWCECF is an employee-led foundation, where employees’ tax-deductible contributions are matched by the company and distributed to organizations where employees are involved.

Executive Officers of the Registrant

The following table summarizes the name, age, offices held and business experience for each of our senior executive officers, as of March 1, 2021:

Offices and Experience

SJWC—President and Chief Operating Officer .

Gere has served as President since April 2016 and as Chief Operating Officer since April 2015.

Name Age Offices and Experience

Gere 54 SJWC—President and Chief Operating Officer .

Gere serves as President since April 2016 and as Chief Operating Officer since April 2015.

From 2013 to April 2015, Mr.

9 unchanged sentences

Gere has been with SJWC since 1995.

As of October 2019, Mr.

Gere serves as Chairman of the National Association of Water Companies (“NAWC”).

SJW Group—Chief Administrative Officer.

Johnson currently serves as the Chief Administrative Officer of SJW Group and the Senior Vice President of Administration for CTWS and its subsidiaries and Corporate Secretary of Maine Water all as of November 1, 2019.

From October 2019 to December 2020, Mr.

Gere served as Chairman of the National Association of Water Companies (“NAWC”).

Johnson 54 SJW Group—Chief Administrative Officer.

Johnson serves as the Chief Administrative Officer of SJW Group and the Senior Vice President of Administration for CTWS and its subsidiaries since November 2019.

Previously, Ms.

Johnson served as Director of Human Resources, Vice President of Human Resources and the Vice President and Corporate Secretary of CTWS from 2007, 2008, and 2010, respectively.

SJW Group—Chief Financial Officer and Treasurer.

Lynch has served as Chief Financial Officer and Treasurer since October 2010.

Johnson served as Director of Human Resources, Vice President of Human Resources and the Vice President and Corporate Secretary of CTWS and its subsidiaries from 2007, 2008, and 2010, respectively.

She served as the Corporate Secretary of Maine Water until July 2020.

Lynch 61 SJW Group—Chief Financial Officer and Treasurer.

Lynch serves as Chief Financial Officer and Treasurer since October 2010.

He is also Chief Financial Officer and Treasurer of SJWC, SJW Land Company, and SJWTX, Inc.

5 unchanged sentences

Lynch is a certified public accountant.

Suzy Papazian

SJW Group—General Counsel and Vice President.

Papazian serves as the General Counsel and Vice President for SJW Group and SJWC since January 1, 2020 and was previously the General Counsel and Corporate Secretary since April 2014.

Suzy Papazian 45 SJW Group— Senior Vice President and General Counsel.

Papazian serves as Senior Vice President and General Counsel for SJW Group and SJWC since January 1, 2021 and was previously the General Counsel and Vice President for SJW Group and SJWC since January 1, 2020.

From April 2014 through December 2019, Ms.

Papazian was the General Counsel and Corporate Secretary.

From February 2005 to April 2014, Ms.

5 unchanged sentences

She was admitted to the California State Bar in January 2000 and thereafter was an Associate Attorney at The Corporate Law Group from March 2000 until February 2005.

SJW Group—President, Chief Executive Officer and Chairman of the Board.

Thornburg has served as President and Chief Executive Officer of SJW Group and SJW Land Company and Chief Executive Officer of SJWC and SJWTX, Inc.

Thornburg 60 SJW Group—President, Chief Executive Officer and Chairman of the Board.

Thornburg serves as President and Chief Executive Officer of SJW Group and SJW Land Company and Chief Executive Officer of SJWC and SJWTX, Inc.

since November 6, 2017.

5 unchanged sentences

From July 2004 to January 2006, he served as Central Region Vice President-External Affairs for American Water Works Corporation.

SJW Group—Chief Corporate Development Officer and Integration Executive.

Walters serves as Chief Corporate Development Officer and Integration Executive of SJW Group as of November 1, 2019 and previously served as Chief Administrative Officer of SJWC since January 31, 2014.

Walters 50 SJW Group—Chief Corporate Development Officer and Integration Executive.

Walters serves as Chief Corporate Development Officer and Integration Executive of SJW Group since November 2019 and previously served as Chief Administrative Officer of SJWC since January 31, 2014.

Walters is also currently the Vice President of Business Planning of CTWS and Connecticut Water as of November 7, 2019.

1 unchanged sentence

Walters was a managing director and a senior acquisitions officer in the Infrastructure Investments Group of JP Morgan Asset Management from January 2009 to June 2013.

CTWS—President.

Westbrook has been the President of CTWS and its subsidiaries, except Maine Water, since December 2019 and President of SJWNE LLC since October 2019.

Westbrook has been Chief Executive Officer of MWC since December 2019.

Westbrook 62 CTWS—President.

Westbrook serves as the President of CTWS and its subsidiaries, except Maine Water, since December 2019 and President of SJWNE LLC since October 2019.

Westbrook has been Chief Executive Officer of Maine Water since December 2019.

Initially hired as Connecticut Water’s Manager of Source Protection, Ms.

4 unchanged sentences

The following table summarizes the name, age, offices held and business experience for our principal accounting officer, as of March 1, 2021:

Offices and Experience

SJW Group—Vice President of Finance, Controller and Assistant Treasurer.

Avila-Walker has served as Vice President of Finance, Controller and Assistant Treasurer of SJWC and SJW Group since April 2018.

Name Age Offices and Experience

Avila-Walker 57 SJW Group—Vice President of Finance, Controller and Assistant Treasurer.

Avila-Walker serves as Vice President of Finance, Controller and Assistant Treasurer of SJWC and SJW Group since April 2018.

Avila-Walker is also the Assistant Treasurer and Assistant Secretary of SJWNE LLC.

11 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business