What changed in this filing

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Item 1. Business

2025-02-28 compared with 2024-02-23 · 175 added, 146 removed, 332 unchanged (49% of the section changed)

General Development of Business

SJW Group was initially incorporated as SJW Corp.

in the state of California on February 8, 1985.

SJW Group is a holding company with four wholly owned subsidiaries:

SJW Group, a Delaware corporation, was initially incorporated as SJW Corp.

in the state of California in 1985.

SJW Group is a holding company that conducts its business through the following wholly owned subsidiaries:

• San Jose Water Company (“SJWC”), with its headquarters located at 110 West Taylor Street in San Jose, California 95110, was originally incorporated under the laws of the State of California in 1866.

As part of a reorganization on February 8, 1985, SJWC became a wholly owned subsidiary of SJW Group.

As part of a reorganization in 1985, SJWC became a wholly owned subsidiary of SJW Group.

SJWC is a public utility in the business of providing water service in the metropolitan San Jose, California area.

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As part of the merger transaction between SJW Group and Connecticut Water Service, Inc.

on October 9, 2019, Connecticut Water Service, Inc.

in 2019, Connecticut Water Service, Inc.

and its subsidiaries (“CTWS”) became a wholly owned subsidiary of SJWNE LLC.

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

• In the third quarter of 2023, the corporate reorganization of our water services organization in Texas was completed.

SJWTX Holdings, Inc.

is the holding company for SJWTX, Inc., doing business as The Texas Water Company (“TWC”), Texas Water Operation Services, LLC (“TWOS”) and Texas Water Resources, LLC (“TWR”).

• SJWTX Holdings, Inc., a Texas corporation, formed in 2021, is the holding company for SJWTX, Inc., doing business as The Texas Water Company (“TWC”), Texas Water Operation Services, LLC (“TWOS”) and Texas Water Resources, LLC (“TWR”).

TWC is a public utility in the business of providing water service in Bandera, Blanco, Comal, Hays, Kendall, Medina and Travis Counties in the growing region between San Antonio and Austin, Texas.

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• SJW Land Company was incorporated in 1985.

SJW Land Company owns undeveloped land in California and Tennessee and operates commercial buildings in Tennessee.

Together, SJWC, CWC, TWC , TWOS, TWR, MWC and NEWUS are referred to as “Water Utility Services.”

SJW Land Company and Chester Realty, Inc.

are collectively referred to as “Real Estate Services.”

SJW Land Company owns undeveloped land in California.

• National Water Utility Services, LLC (“NWU”) is the contracting entity for shared services among the SJW Group affiliates formed in 2024.

Together, SJWC, excluding the City of Cupertino (“Cupertino”) service concession arrangement operations, CWC, MWC and TWC are referred to as “Water Utility Services,” which is our single reportable segment.

Other business activities that are not separately reportable segments are SJWC’s Cupertino service concession arrangement operations, TWOS, TWR, NEWUS, SJW Land Company and Chester Realty, Inc.

and are collectively referred to as “Other Services.”

Regulation and Rates

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The rate-making process is intended to provide revenues sufficient to recover normal operating expenses, provide funds for replacement of water infrastructure and produce a fair and reasonable return on stockholder common equity.

SJW Group’s regulated operations financing activities are designed to achieve capital structures consistent with regulatory guidelines in the locations where the companies operate.

SJW Group’s regulated operations financing activities are designed to achieve capital structures consistent with regulatory guidelines in the locations

where the companies operate.

The following summarizes each state’s authorized rates and capital structure as of December 31, 2024:

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(b) The authorized capital structure and return on equity shown are those of the largest division of MWC, the Biddeford and Saco division.

Effective January 1, 2024, the Biddeford and Saco division’s authorized return on equity is 9.5% and its authorized capital structure is 49% debt and 51%

This return on equity and capital structure will be used for any future Water Infrastructure Surcharge (“WISC”) calculations for all divisions until the Commission has authorized or approved a different return on equity structure in a different proceeding.

(c) For California, the approved WCCM-adjusted return on equity is 10.01% starting January 1, 2024, less a 20 basis point reduction due to the reimplementation of the Water Conservation Memorandum Account (“WCMA”).

This return on equity and capital structure will be used for any future Water Infrastructure Surcharge (“WISC”) calculations for all divisions until the Maine Public Utilities Commission (“MPUC”) has authorized or approved a different return on equity structure in a different proceeding.

(c) For California, the approved Water Cost of Capital Mechanism (“WCCM”)-adjusted return on equity is 10.01% less a 20-basis point reduction due to the reimplementation of the Water Conservation Memorandum Account (“WCMA”).

(d) An approximation of rate base which includes net utility plant not yet included in rate base pending rate case filings and outcomes.

For California, this represents the weighted-average estimated rate base for the twelve months ended December 31, 2023.

California Regulatory Affairs

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Cost of capital adjustments are rate adjustments resulting from the CPUC’s usual tri-annual establishment of a reasonable rate of return for SJWC’s capital investments.

The purpose of an offset rate adjustment is to compensate utilities for changes in specific pre-authorized offsettable capital investments or expenses, primarily for purchased water, groundwater extraction, purchased power and pensions.

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.

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Carrying balances of the balancing and memo accounts earn a rate of return based on treasury rates.

On May 3, 2021, SJWC filed Application No.

21-05-004 requesting authority to adjust its cost of capital for the period from January 1, 2022 through December 31, 2024.

The request sought a revenue increase of $6.4 million or 1.61% in 2022.

The application also proposed a rate of return of 8.11%, an increase from 7.64%, a decrease in the average cost of debt rate from 6.20% to 5.48%, and a return on equity of 10.30%, an increase from 8.90%.

In addition, the request sought to adjust SJWC’s currently authorized capital structure of approximately 47% debt and 53% equity to approximately 45% debt and 55% equity.

Intervenors in this proceeding, namely the Public Advocates Office and Water Rate Advocates for Transparency, Equity, and Sustainability, suggested a lower return on equity while the latter has also suggested a higher cost of debt and different capital structure as part of their testimonies.

On June 29, 2023, the CPUC approved Decision No.

23-06-025 in this proceeding.

The decision authorized a rate of return of 7.28% based on a return on equity of 8.80%, a cost of debt of 5.46%, and a capital structure of approximately 45% debt and 55% equity.

The CPUC also authorized continuation of the Water Cost of Capital Mechanism (“WCCM”) in the same decision.

23-06-025 authorized a rate of return of 7.28% based on a return on equity of 8.80%, cost of debt of 5.46%, and a capital structure of approximately 45% debt and 55% equity.

The CPUC also authorized continuation of the WCCM in the same decision.

The WCCM provided for an adjustment to SJWC’s return on equity and cost of debt if the average Moody’s Aa utility bond index rate between October 1, 2021 and September 30, 2022 varies by more than 100 basis points when compared to the same period from the prior year.

The index rate difference between those periods increased 103 basis points, thereby triggering the WCCM.

Accordingly, SJWC filed a Tier 2 Advice Letter No.

598 on June 30, 2023, which was subsequently approved with an effective date of July 31, 2023.

On July 31, 2023, SJWC filed a Tier 1 Advice Letter No.

599 to implement new rates.

The new rates became effective prospectively on the date of the filing and reflected the WCCM-adjusted return on equity of 9.31%, a cost of debt of 5.26%, and an overall rate of return of 7.47%.

Accordingly, SJWC filed Advice Letter No.

601 on October 13, 2023, to inform the CPUC that the WCCM authorized in Decision No.

23-06-025 required an update to SJWC’s authorized rate of return effective January 1, 2024.

The filing requested an adjusted equity of 10.01%, a cost of debt of 5.28%, and a resulting authorized rate of return of 7.86%.

Advice Letter No.

599 was approved with an effective date of July 31, 2023.

Between October 1, 2022 and September 30, 2023, the index rate increased approximately 140 basis points, surpassing the required WCCM trigger.

On October 13, 2023, SJWC filed Advice Letter No.

601 to trigger the WCCM for 2024, which was subsequently approved with an effective date of January 1, 2024.

The approved WCCM-adjusted return on equity is 10.01% starting January 1, 2024, less a 20 basis point reduction due to the reimplementation of the WCMA.

601 was approved with an effective date of January 1, 2024.

Separate from the filing, the return on equity was further adjusted by a 20-basis point reduction for reimplementation of the WCMA resulting in an overall rate of return of 7.75%.

The CPUC approved the settlement of 2022 General Rate Case on October 6, 2022 and issued Decision No.

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605 was approved with an effective date of January 1, 2024.

On December 15, 2023, SJWC, along with three other California water utilities, filed a joint request for one-year deferment on the cost of capital filings which would otherwise be due on May 1, 2024.

Postponing the filing a 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 is conditioned on leaving the current WCCM in place such that any adjustments will be made to the respective utilities cost of capital during the one-year deferment based on the mechanism.

On December 15, 2023, 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, 2024.

Postponing the filing a year alleviates administrative processing costs on the utilities as well as the CPUC staff and provides relief for both CPUC and utility resources already strained by numerous other proceedings.

The request was conditioned on leaving the current WCCM in place such that any adjustments will be made to the respective utilities cost of capital during the one-year deferment based on the mechanism.

The request was approved on February 2, 2024.

Based on the change in the average Moody’s Aa utility bond index rate between the 12 months ended September 30, 2023 and September 30, 2024, there is no adjustment to SJWC’s cost of capital for 2025.

On January 2, 2024, SJWC filed General Rate Case Application No.

24-01-001 with the CPUC to increase rates charged for water service by $55.2 million or 11.11% in 2025, by $22 million or 3.99% in 2026, and by $25.8 million or 4.49% in 2027.

The application also includes requests to recover $23.5 million from balancing and memorandum accounts, 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, 2025.

The application proposed a $540 million three-year capital budget and also included requests to recover $23.5 million from balancing and memorandum accounts, further alignment between actual and authorized usage, and a shift to greater revenue collection in the service charge.

On June 14, 2024, SJWC notified the CPUC that it had reached an all-party settlement agreement in principle with the Public Advocates Office and Water Rate Advocates for Transparency, Equity and Sustainability, also known as WRATES, in its 2025 through 2027 general rate case application on all but two policy issues.

WRATES later notified the CPUC that it would not join in the settlement agreement on August 13, 2024.

Per the procedural ruling, the formal settlement motion and agreement between SJWC and the Public Advocates Office was submitted on August 19, 2024, and updated on September 27, 2024.

The settlement agreement provides for rate increases of $21.3 million or 3.91% in 2025, $14.4 million or 2.55% in 2026, and $17.4 million or 2.98% in 2027.

The settlement agreement also provides a three-year capital budget of $450 million and recovery of $15.8 million in memorandum and balancing accounts.

Briefs on the two policy issues were also submitted on August 19, 2024.

On December 19, 2024, the CPUC approved the settlement agreement, but denied SJWC’s request with respect to the two policy issues not resolved in the settlement agreement through Decision No.

SJWC filed Advice Letter No.

609 on May 16, 2024, to increase the authorized revenue requirement by $28.3 million, or 5.3%, to offset the increases to purchased potable water charges, the groundwater extraction fee, and purchased recycled water charges from its water wholesalers effective July 1, 2024.

Advice Letter No.

609 was approved with an effective date of July 1, 2024.

SJWC filed Advice Letter No.

610/610A on May 23, 2024, to increase the authorized revenue requirement by $0.8 million, or 0.14%, to recover revenue related to the plant additions for the Advanced Metering Infrastructure project.

Advice Letter No.

610/610A was approved with an effective date of July 1, 2024.

On December 18, 2024, 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, 2025.

The request was approved on January 14, 2025.

SJWC filed Advice Letter No.

613 on December 20, 2024, to increase authorized revenue requirement by $21.3 million, or 3.91%, and implement new water rates and recover $15.8 million in memorandum and balancing accounts in accordance with Decision No.

This filing was approved with an effective date of January 1, 2025.

Connecticut Regulatory Affairs

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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 or sur-credits for the Water Revenue Adjustment (“WRA”).

On January 25, 2023, CWC filed its 2022 WICA reconciliation with PURA.

The reconciliation, approved by PURA on March 29, 2023 and effective for 12 months beginning April 1, 2023, replaced the expiring 2021 reconciliation credit of 0.02% with a credit of 0.16%.

On January 26, 2023, CWC filed for a WICA increase of $3.3 million in annualized revenues for $27.8 million in completed projects.

PURA approved CWC’s application on March 22, 2023.

On July 27, 2023, CWC filed for a WICA increase of $1.3 million in annualized revenues for $11.5 million in completed projects.

PURA approved the application effective October 1, 2023.

On October 3, 2023, CWC filed an application with PURA in Connecticut to adjust customer rates.

The proposal requested an increase in annual revenues of approximately $21.4 million, or 18.1%, over current authorized revenues.

On June 28, 2024, PURA issued a final decision authorizing an increase in annual revenues of $6.5 million, or 5.5%, with the ability to earn additional revenue of $1.1 million through the annual WRA filing for achievement of certain performance metrics.

In addition, the decision authorized a return on equity of 9.3% on a capital structure comprised of 53% equity and 47% long term debt.

New rates became effective on July 1, 2024.

On November 14, 2023, CWC submitted an application to PURA for approval to issue unsecured notes in the amount of $25.0 million.

A decision from PURA approving the application was received on January 10, 2024.

On February 26, 2024, CWC filed its 2023 WICA reconciliation with PURA.

The reconciliation, approved by PURA on March 27, 2024 and effective for 12 months beginning April 1, 2024, replaced the expiring 2022 reconciliation credit of 0.16% with a credit of 0.13%.

The cumulative WICA surcharge as of April 1, 2024 was 7.41%, collecting $7.8 million on an annual basis.

In connection with the general rate case decision noted above, as of July 1, 2024, the base WICA surcharge was reset to zero;

however, the credit of 0.13% for 2023 reconciliation will continue to apply into 2025.

On February 28, 2024, CWC filed its 2023 WRA.

The mechanism reconciles 2023 revenues as authorized in the CWC’s most recent rate case.

The 2022 WRA, as approved by PURA on March 24, 2023 and effective for 12 months beginning on April 1, 2023, imposed a 4.97% sur-credit on customer bills to refund the 2022 revenue over-collection.

On July 27, 2023, CWC filed for a WICA increase of $1.3 million in annualized revenues for $11.5 million in completed

The 2023 WRA, as approved by PURA on March 11, 2024 and effective for 12 months beginning on April 1, 2024, imposed a 2.11% sur-credit on customer bills to refund the 2023 revenues over-collection.

On June 21, 2024, CWC submitted an application to PURA for the approval to issue unsecured notes in an amount of up to $150.0 million.

PURA approved the application on August 14, 2024.

On July 26, 2024, CWC filed for a WICA increase of $4.3 million in annualized revenue for $41.9 million in completed infrastructure projects.

PURA approved the application, and effective October 1, 2024, the cumulative WICA surcharge is 3.43%.

On October 3, 2023, CWC filed an application with PURA to adjust customer rates.

If PURA approves the request as proposed, annual revenues of CWC will increase by approximately $21.4 million or 18.1% over current authorized revenues and would be effective on or about July 1, 2024.

On November 14, 2023, CWC submitted an application to PURA for the approval to issue unsecured notes in the amount of $25.0 million.

A decision from PURA approving the application was received on January 10, 2024.

On January 28, 2025, CWC filed its 2024 WICA reconciliation with PURA.

The reconciliation, if approved, would be effective for 12 months beginning April 1, 2025, replacing the expiring 2023 reconciliation credit of $0.1 million with a credit of $2.4 million on an annual basis.

On January 28, 2025, CWC filed for a WICA increase of $1.6 million in annualized revenues for $15.7 million in completed projects.

If approved, the cumulative WICA surcharge as of April 1, 2025, will be 4.90%, collecting $6.0 million on an annual basis.

On February 24, 2025, CWC filed its 2024 WRA.

The mechanism reconciles 2024 revenues as authorized in the CWC’s most recent rate case as well as provides for recovery of certain amounts of executive compensation as the result of the achievement of performance metrics as prescribed by PURA.

The 2024 WRA, if approved by PURA, will be effective for 12 months

beginning on April 1, 2025, and will impose a 3.62% surcharge on customer bills to collect the 2024 revenue shortfall.

Texas Regulatory Affairs

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TWC has no current general rate case pending.

However, it filed its application to establish a System Improvement Charge (“SIC”) with the PUCT under Docket No.

However, it filed its application to establish a System Improvement Charge (“SIC”) with PUCT under Docket No.

54430 on December 30, 2022.

This filing will allow TWC to add certain utility plant additions made since 2020 to its rate base, thereby increasing revenue and avoiding the immediate need for a general rate case.

The SIC is projected to increase TWC’s water revenue by $1.6 million and sewer revenue by $29 thousand within one year of the approval from the PUCT.

On October 17, 2023, the PUCT found the application administratively complete.

Once the PUCT files the final order approving the SIC, TWC will be required to file a general rate case within four years.

TWC will incrementally increase its SIC annually until its next rate case.

TWC expects to receive the final order during the first quarter of 2024.

Notwithstanding the SIC filing, TWC will continue to file its annual adjustments for the Water Pass-through Charges (“WPC”) for Canyon Lake, Deer Creek and Kendall West customers.

SIC filings are used to include certain utility plant additions made from 2020 to present in its rate base, thereby increasing revenue and avoiding the immediate need for a general rate case.

On March 21, 2024, the PUCT filed the final order approving TWC’s request to implement its SIC which applies to certain customers.

As a result of this final order, the SIC is projected to increase TWC’s water revenue by $1.6 million and sewer revenue by $28 thousand within one year of the approval.

On September 12, 2024, TWC filed its application to amend its SIC with the PUCT under Docket No.

Its amended SIC will apply to all customers and seeks to increase its annual water revenue by $3.9 million and its annual sewer revenue by $0.2 million, in addition to the original SIC filed with the PUCT under Docket No.

54430 on December 30, 2022.

On October 14, 2024, the PUCT notified TWC that the filing was administratively complete in order to establish a procedural schedule.

TWC expects to receive the final approval from the PUCT in the first half of 2025.

Additionally, TWC is required to file a general rate case on or before March 21, 2028.

Notwithstanding any SIC filing, TWC will continue to file its annual adjustments for the Water Pass-through Charges (“WPC”) for Canyon Lake, Deer Creek, Kendall West, Clear Water Estates, and Saddleridge customers.

All water supply cost increases are recoverable when the next annual WPC adjustment for each system is filed.

On April 10, 2023, TWC filed an application with the PUCT to acquire the Elm Ridge water system that serves 21 residential customers.

TWC has asked for filed rate doctrine treatment, which allows the acquiring utility’s current rates to be applied at the time of acquisition.

TWC has asked to acquire the Elm Ridge customers using TWC’s existing rate.

On December 12, 2023, the Administrative Law Judge filed Order No.

11, which allowed TWC to proceed and the acquisition closed on January 26, 2024.

The final order, which transfers the Certificate of Convenience and Necessity (“CCN”) and allows filed rate doctrine, is expected to be approved during the second quarter of 2024.

On July 23, 2024, the PUCT filed the final approval which allowed TWC to charge its existing rates to customers of Elm Ridge.

On July 24, 2023, the PUCT approved TWC's application to acquire KT Water Development Ltd.

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On August 14, 2023, TWC closed on the acquisition.

The PUCT's final decision that transfers the CCN to TWC is expected in the first quarter of 2024, which is when we anticipate approval of our request for fair market value and filed rate doctrine treatment.

On March 7, 2024, the PUCT filed the final order which transferred the Certificate of Convenience and Necessity to TWC, approved the fair market value, and allowed TWC to charge its existing rates to the customers of KT Water Development.

On January 5, 2024, TWC filed an application with the PUCT to acquire the 3009 Water Company LLC water system that serves approximately 270 residential connections.

TWC requested fair market value and filed rate doctrine treatment which allows the acquiring utility’s current rates to be applied at the time of acquisition.

TWC expects to receive approval to close on the acquisition during the third quarter of 2024.

TWC received the PUCT’s approval to proceed with the transaction.

However, on February 24, 2025, TWC terminated the agreement since the seller was not able to meet the requirements of the related purchase and sale agreement.

Maine Regulatory Affairs

MWC’s rates, service and other matters affecting its business are subject to regulation by the Maine Public Utilities Commission (“MPUC”).

MWC’s rates, service and other matters affecting its business are subject to regulation by the MPUC.

MPUC approves rates on a division-by-division basis in Maine and allows MWC to add surcharges to customers’ bills in order to recover certain costs associated with capital projects through the WISC in between general rate cases.

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As part of the stipulated agreement, MWC agreed to file a final phase of the rate case by April 1, 2023.

Step 3 of the planned multi-year rate filings for the Saco River Drinking Water Resource Center was filed in accordance with the Commission order on March 31, 2023.

Step 3 of the planned multi-year rate filings for the Saco River Drinking Water Resource Center was filed in accordance with the MPUC order on March 31, 2023.

The filing requested an increase in revenue requirement of $2.9 million or 19.9% and requested that the increase be implemented over two years with a 12% increase effective July 1, 2023 followed by a 9% increase effective July 1, 2024 with a slight decrease in year three to reach the overall 19.9% requested.

On August 25, 2023, the Commission issued an order granting a temporary rate increase of $1.5 million or 10% while the case and the company’s full request are litigated.

The company reached a settlement agreement with staff and the Office of the Public Advocate and filed a stipulated settlement agreement with the MPUC on December 22, 2023.

On August 25, 2023, the MPUC issued an order granting a temporary rate increase of $1.5 million or 10% while the case and the company’s full request are litigated.

The company reached a settlement agreement with MPUC and the Office of the Public Advocate and filed a stipulated settlement agreement with the MPUC on December 22, 2023.

The commission approved the stipulation in deliberations on January 5, 2024 with a rate effective date of January 1, 2024.

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The Biddeford and Saco division’s increase in rates is based on an authorized return on equity of 9.5% along with a capital structure of 49% debt and 51% equity.

This return on equity and capital

structure will be used for any future WISC calculations for all divisions until the Commission has authorized or approved a different return on equity structure in a different proceeding.

On February 28, 2022, MWC filed requests for general rate increases in the Camden-Rockland, Freeport, Millinocket and Oakland Divisions.

On February 2, 2023, MWC received final decisions from the MPUC on four general rate cases filed in 2022.

The rate increases are retroactively effective for January 1, 2023 and authorize a $0.7 million increase in annual revenues.

On June 30, 2023, MWC filed a Water Infrastructure Surcharge for the Camden-Rockland division.

The requested surcharge is 2.34% or $0.2 million.

The Commission is expected to issue a decision regarding the surcharge in the first quarter of 2024.

This return on equity and capital structure will be used for any future WISC calculations for all divisions until the MPUC has authorized or approved a different return on equity structure in a different proceeding.

During the year ended December 31, 2024, MPUC issued orders approving surcharges for the Camden-Rockland, Freeport, Oakland and Millinocket divisions that in aggregate represent annual revenue increases of $0.3 million.

On October 25, 2024, MWC filed an application with MPUC to adjust customer rates in the Camden Rockland division.

The proposal requested an increase in annual revenues of approximately $1.1 million, or 15.9%, over current authorized revenues.

A decision is expected in the second quarter of 2025.

On December 31, 2024, MWC filed for a unified tariff across its 10 separate rate divisions.

A decision in this case is expected in the fourth quarter of 2025.

Please also see Item 1A , “Risk Factors,” Item 7 , “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and Note 3 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 and retail sale of water and wastewater services.

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

SJWC provides water services to approximately 232,000 connections that serve approximately one million people over 140 square miles residing in portions of the cities of San Jose and Cupertino and in the cities of Campbell, Monte Sereno, Saratoga and in 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 141,000 service connections that serve a population of approximately 461,000 people in 81 municipalities with a service area of approximately 272 square miles throughout Connecticut and Maine and 3,000 wastewater connections in Southbury, Connecticut.

The CTWS companies provide water service to approximately 142,000 service connections that serve a population of approximately 463,000 people in 81 municipalities with a service area of approximately 275 square miles throughout Connecticut and Maine and approximately 3,000 wastewater connections in Southbury, Connecticut.

TWC provides water service to approximately 29,000 service connections that serve approximately 88,000 people in a service area comprising more than 271 square miles in the region between San Antonio and Austin, Texas and approximately 1,000 wastewater connections.

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

In addition, in October 1997, SJWC commenced operation of the City of Cupertino municipal water system under a 25-year lease which was due to expire in September of 2022 and was amended on January 8, 2020.

SJWC operates the Cupertino municipal water system under a service concession arrangement.

The system is adjacent to the SJWC service area and has approximately 4,700 service connections.

Under the terms of the lease, SJWC assumed responsibility for all maintenance and operating costs of the system, while receiving all payments for water service.

SJWC paid an upfront $6.8 million concession fee and an additional $5.0 million in capital improvements to the City of Cupertino.

On February 25, 2022, SJWC received a letter from the City of Cupertino exercising their option to extend the term of the lease an additional two years through October 1, 2024.

SJWC paid an additional $1.6 million concession fee.

The total concession fees paid for the agreement are being amortized over the contract term including the extension.

The original agreement commenced in October 1997 and expired on September 30, 2024.

Effective October 2024, SJWC entered into a new 12-year agreement with Cupertino subject to an additional term of eight years if agreed to by the parties.

SJWC paid an upfront concession fee of $22.1 million in 2024 and agreed to pay, beginning in 2024, an annual investment rent of $1.8 million, subject to adjustment each year based on a specified construction cost index.

Under the terms of the agreement, SJWC assumes responsibility for all maintenance and operating costs of the system, while receiving all payments for water service.

CTWS provides contracted services to water utilities, as well as offers Linebacker® protection plans for public drinking water customers in the states of Connecticut and Maine.

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Services provided are dependent on the selected plan.

SJW Land Company owns undeveloped real estate property in California and Tennessee, as well as commercial and warehouse properties in Tennessee.

SJW Land Company owns undeveloped real estate property in California.

SJW Land Company previously owned commercial and warehouse properties in Tennessee, which were sold in 2024.

Chester Realty, Inc.

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The opposite is also true where water production expenses decrease in wet years.

In both instances, the impacts of surface water, purchased water, groundwater extraction, and purchased power expenses are now tracked in SJWC’s Full Cost Balancing Account authorized in the 2022 GRC Decision.

In both instances, the impacts of surface water, purchased water, groundwater extraction, and purchased power expenses are tracked in SJWC’s Full Cost Balancing Account (“FCBA”) authorized by the CPUC for cost recovery.

The pumps and motors at SJWC’s groundwater production facilities are propelled by electric power.

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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 2023, the level of water in the Santa Clara Valley groundwater basin, which is managed by Valley Water, experienced an increase in most areas due to seasonal recovery, an increase in managed recharge operations, and a decrease in groundwater pumping by various water retailers in the region.

As reported by Valley Water at the end of 2023, the groundwater level in the Santa Clara Plain was 17 feet higher compared to the same time in 2022.

In 2024, the level of water in the Santa Clara Valley groundwater basin, which is managed by Valley Water, experienced a decrease in most areas due to a decrease in managed recharge operations and a decline in natural recharge associated with less rainfall compared to 2023.

As reported by Valley Water at the end of 2024, the groundwater level in the Santa Clara Plain was eight feet lower compared to the same time in 2023.

The total groundwater storage at the end of 2024 was within Stage 1 (Normal) of the Valley Water’s Water Shortage Contingency Plan.

On January 1, 2025, Valley Water’s 10 reservoirs were 51% of restricted capacity with 10.4 billion gallons of water in storage.

As of December 31, 2023, SJWC’s Lake Elsman was 55.7% of capacity with 11.2 billion gallons of water, 179.3% of the five-year seasonal average.

As of December 31, 2024, SJWC’s Lake Elsman was 54.2% of capacity with 1.1 billion gallons of water, approximately 145.6% of the five-year seasonal average.

In addition, the rainfall at SJWC’s Lake Elsman was measured at 15.11 inches for the period from July 1, 2024 through December 31, 2024, which is 79.2% of the five-year average.

SJWC’s Montevina Water Treatment Plant treated 3.3 billion gallons of water in 2024, which is 132.2% of the five-year average.

SJWC’s Saratoga Water Treatment Plant treated 0.1 billion gallons of water in 2023, which is 73.3% of the five-year average.

SJWC’s Saratoga Water Treatment Plant remained offline in 2024 for regulatory improvements.

SJWC believes that its various sources of water supply will be sufficient to meet customer demand in 2025.

On April 11, 2023, Valley Water rescinded its water shortage emergency and 15% mandatory conservation target.

Valley Water also established a 15% voluntary call for conservation and retained certain watering and water waste rules in recognition of precipitation volatility and reduced local storage.

On the same day, SJWC ended its Mandatory Conservation Plan, which included drought allocations and surcharges, and lowered its drought response from Stage 3 to Stage 1.

California faces long-term water supply challenges.

SJWC actively works with Valley Water to meet the challenges by continuing to educate customers on responsible water use practices and conducting long-range water supply planning.

Valley Water's 15% voluntary call for conservation and certain watering and water waste rules established in 2023, are still in place for 2025.

The call for continued conservation is due to a major storage reservoir currently offline for seismic retrofits.

Connecticut Water Supply

CWC’s water sources vary among the individual systems, but overall, approximately 60% of the total dependable yield comes from surface water supplies and 40% from wells.

In addition, CWC has water supply agreements to supplement its water supply with the South Central Connecticut Regional Water Authority and The Metropolitan District that expire 2058 and 2053, respectively.

In addition, CWC has water supply agreements to supplement its water supply with the South Central Connecticut Regional Water Authority (“RWA”) and The Metropolitan District (“MDC”) that expire 2058 and 2053, respectively.

CWC believes that it will be able to meet customer demand for 2025 with its existing water supply which consists of groundwater from wells, surface water in reservoirs and purchased water treated by neighboring water utilities.

Texas Water Supply

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The agreements, which are take-or-pay contracts, provide TWC with an aggregate of 7,602 acre-feet of water per year from Canyon Lake at prices that may be adjusted periodically by GBRA.

TWC 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 350 acre-feet of water per year from Lake Austin and the Colorado River, respectively, at prices that may be adjusted periodically by the agencies.

TWC also has raw water supply agreements with the Lower Colorado River Authority (“LCRA”) and West Travis County Public Utility Agency (“WTCPUA”) expiring in 2059 and 2046, respectively, to provide for 350 acre-feet of water per year from Lake Austin and the Colorado River, respectively, at prices that may be adjusted periodically by the agencies.

Forty active production wells located in a Comal Trinity Groundwater Conservation District, a regulated portion of the Trinity aquifer, are charged a groundwater pump tax based upon usage.

In August 2023, SJWTX Holdings Inc.’s unregulated subsidiary, TWR, acquired eight wells and the water rights of KT Water Resources LLC (“KTR”).

TWC expects to meet customer demand for 2025 with TWC’s water supply which consists of groundwater from wells, surface water and purchased treated and raw water from the GBRA, based on current conditions.

In August 2023, SJWTX Holdings Inc.’s unregulated subsidiary, TWR, acquired eight wells and the associated water rights of KT Water Resources LLC (“KTR”).

During the third quarter of 2024, TWC purchased these assets from TWR for use in utility operations.

Accordingly, SJW Group reclassified $28.4 million related to indefinite-lived water rights from other intangible assets to utility plant intangible assets and $11.7 million from nonutility property to utility plant.

These wells have been projected to yield an additional 6,000 acre-feet per year or more.

Development of the KT Water System continues.

The Texas service area is currently experiencing drought conditions that result in water usage restrictions for customers .

Significant future capital investment of transmission main and storage facilities in addition to developing additional supply sources is planned for 2025 and beyond.

Maine Water Supply

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MWC has a water supply agreement with the Kennebec Water District expiring in 2040.

MWC believes that it will be able to meet customer demand for 2025 with its existing water supply which consists of groundwater from wells, surface water in reservoirs and purchased water treated by neighboring water utilities.

MWC relies on legislatively granted water rights in order to serve customers.

In some instances, these rights were granted to predecessor water companies specially chartered by the Maine legislature many decades ago, with those entities later having

been merged into MWC.

In some instances, these rights were granted to predecessor water companies specially chartered by the Maine legislature many decades ago, with those entities later having been merged into MWC.

The legislation incorporating these predecessor water companies did not address whether chartered rights may be transferred to another entity without special legislative action.

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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.

California law also provides that whenever a public agency constructs facilities to extend utility service to the service area of a privately-owned public utility, like SJWC, such an act constitutes the taking of property and is conditioned upon payment of just compensation to the private utility.

Under the California law, municipalities, water districts and other public agencies have been authorized to engage in the ownership and operation of water systems.

Such agencies are empowered to condemn properties operated by privately-owned public utilities upon payment of just compensation and are further authorized to issue bonds (including revenue bonds) for the purpose of acquiring or constructing water systems.

Under Connecticut law, any condemnation of water utility property by a municipality or any unit of state government requires the payment of just compensation for the taking.

Further, any condemnation of utility land by a state department, institution or agency (including a municipality) requires the approval of the PURA.

Under Texas law, municipalities, water districts and other public agencies are authorized to engage in the ownership and operation of water systems.

Such entities are empowered to acquire property, whether public or private, real or personal, by the

exercise of the right of eminent domain, which entails payment to the owner of just compensation for the property taken.

However, under current case law those entities may not exercise that right of eminent domain to take the entire operation of an investor-owned utility.

Under Maine law, municipalities-individually and collectively, consumer-owned and standard water districts, and other public agencies are authorized to engage in the ownership and operation of water systems.

Such entities may acquire the real and personal property of a privately-owned water company, and take over the company’s operations, by exercising the power of eminent domain.

In such a taking, the acquiring entity must furnish the condemnee just compensation.

To the company’s knowledge, no municipality, water district or other public agency has any pending proceeding to condemn any part of its existing water systems.

The company is also unaware of any eminent domain proceeding to take any of its property or operations.

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

The laws of the states in which Water Utility Services provide regulated services generally provide that municipalities, water districts, and/or other public agencies of state governments (each, a “Public Agency”) are authorized to engage in the ownership and operation of water systems.

Such Public Agencies are empowered, under certain circumstances, to condemn properties, and/or exercise the right of eminent domain on property operated by privately owned public utilities, upon payment of just

compensation.

Furthermore, under California law, Public Agencies are authorized to issue bonds (including revenue bonds) for the purpose of acquiring or constructing water systems.

Under Connecticut law, any condemnation of water utility property by a Public Agency requires the approval of the PURA and under current Texas case law, a Public Agency may not exercise that right of eminent domain to take the entire operation of an investor-owned utility.

To the company’s knowledge, no Public Agency has any pending proceeding to condemn any part of its existing water systems, nor to exercise any eminent domain proceeding to take any of its property or operations.

Environmental Matters

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The site assessments are performed to remove any legacy materials and to obtain site closures from the Santa Clara County Department of Environmental Health under its Voluntary Cleanup Program.

In April 2024, the EPA issued new national primary drinking water regulations for six PFAS.

The regulations impose maximum contaminant levels and monitoring requirements for the nation’s water systems for six PFAS chemicals under the Safe Drinking Water Act.

The final regulation requires water systems to comply with PFAS monitoring and reporting requirements by 2027, and to comply with the maximum contaminant levels by 2029.

SJW Group estimates capital expenditures of approximately $300 million for PFAS treatment based on finalized maximum contaminant levels.

Water Utility Services is currently in compliance with all state and local public health and environmental regulations applicable to their operations.

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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;

a culture that encourages high performance, respect for each other, and celebrates diversity;

jobs that offer fair wages as benchmarked to the markets that we live and work in;

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Additionally, the company provides ongoing opportunities for employee recognition from peers and leaders and also administers an employee engagement and satisfaction survey twice per year.

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 enhance 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 2021, CEO Eric Thornburg signed on to the CEO Action for Diversity & Inclusion™ CEO pledge, which outlines a specific set of actions the signatory CEOs will take to cultivate a trusting environment where all ideas are welcomed, and employees feel comfortable and empowered to have discussions about diversity and inclusion.

The Company’s Diversity, Equity and Inclusion Council (the “Council”) is comprised of employee volunteers from all four subsidiaries representing the communities we serve.

Since inception, the Council has implemented several impactful initiatives including ongoing education and communications utilizing numerous platforms, providing unconscious bias training, and creating opportunities for all employees to celebrate and support cultural days of personal significance in their communities.

During the year ended December 31, 2023, our workforce comprised of:

Percentage of Workforce

Hispanic or Latino 21 %

Not Hispanic or Latino 79 %

2 or More Races 4 %

Black or African American 3 %

American Indian or Alaska Native 1 %

Native Hawaiian or Other Pacific Islander 1 %

Other/Not Reported 21 %

We work to ensure training and development opportunities are available so that all employees can establish and succeed in meaningful careers at SJW Group.

Community Involvement

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SJW Group provides various opportunities for our employees to participate in outreach programs from free virtual education programs for adults, employee-led courses for elementary school aged children, winter coat donation drives, environmental cleanups, community events, and grant programs supporting schools and fire departments.

In addition, each of our subsidiaries supports their communities through charitable donations or sponsorships with a focus on the communities served.

The Force for Good Foundation, established in 2024, is a non-consolidated not-for-profit corporation funded by SJW Group that plans to make contributions to selected charitable organizations with a focus on the communities served.

SJWC and CWC also have matching donations for certain programs to further promote our employees’ involvement in their communities.

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Our California and Connecticut subsidiaries operate in particularly competitive labor markets;

we believe our compensation package and benefit programs allow us to recruit and retain talented and qualified personnel.

we believe our compensation

package and benefit programs allow us to recruit and retain talented and qualified personnel.

Our compensation and benefits programs include:

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Brown was an associate at two Silicon Valley law firms and is a member of the State Bar of California.

Douwe Busschops

44 SJW Group—Chief Information Officer.

Busschops serves as Chief Information Officer of SJW Group, SJWC, and CWC since December 2024.

Previously, Mr.

Busschops served as Vice President and Chief Information Officer for the Municipal Water division of Veolia North America from 2022 to 2024.

Prior to this, Mr.

Busschops held senior roles at SUEZ Water North America since 2013, including Vice President of Customer Experience.

Busschops served as the Chairman of the Customer Experience Committee for the National Association of Water Companies from 2020 to 2021 .

Hauk 54 SJW Group—Chief Operating Officer.

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Johnson also serves as Senior Vice President of Administration for CTWS and certain of its subsidiaries since November 2019.

Johnson also serves as Senior Vice President and Chief Administrative Officer of TWC, and as Senior Vice President of Administration for CWC and MWC, since April 2023.

Johnson also serves as Senior Vice President and Chief Administrative Officer of SJWC and TWC, and as Senior Vice President of Administration for CWC and MWC, since April 2023.

Previously, Ms.

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

Tanya Moniz-Witten

53 SJWC—President.

Moniz-Witten serves as President of SJWC since March 2024.

Prior to joining SJWC, Ms.

Moniz-Witten served as the Vice President, Electric Distribution Field Operations (New England) of National Grid from January 2021 to March 2024.

Prior to joining National Grid, Ms.

Moniz-Witten served in various roles at Pacific Gas and Electric Company, including up to Senior Director of Electric Distribution Field Operations (Bay / Central Region) from October 2019 to January 2021.

Patla 57 CTWS—President.

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Thornburg serves as President and Chief Executive Officer of SJW Group and SJW Land Company, and Chief Executive Officer of SJWC and TWC since November 2017.

He has served as the Chair of the Board of Directors of SJW Group, SJWC, SJW Land Company and TWC since April 25, 2018 and Chair of the Board of Directors of SJWNE LLC, CTWS and its subsidiaries since October 9, 2019.

Thornburg serves as Chair of the Board of Directors of SJW Group, SJWC, SJW Land Company, and TWC since April 2018, and Chair of the Board of Directors of SJWNE LLC, and CTWS and its subsidiaries since October 2019.

Prior to joining SJW Group, Mr.

Thornburg served as President and Chief Executive Officer of CTWS since 2006, and Chair of the Board of CTWS since 2007.

Thornburg served as President and Chief Executive Officer of CTWS from 2006 until 2017, and Chair of the Board of CTWS from 2008 to 2017.

Thornburg served as President of Missouri-American Water, a subsidiary of American Water Works Corporation from 2000 to 2004.

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

From July 2004 to January 2006, Mr.

Thornburg served as Central Region Vice President-External Affairs for American Water Works Corporation.

Walters 54 SJW Group—Chief Financial Officer and Treasurer.

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Walters also serves as Chief Financial Officer of CTWS and its subsidiaries since April 2023.

Walters served as Chief Corporate Development Officer and Integration Executive of SJW Group from November 2019 until January 2022 and previously served as Chief Administrative Officer of SJWC since January 31, 2014.

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

Walters served as Chief Corporate Development Officer and Integration Executive of SJW Group from November 2019 until January 2022, and previously served as Chief Administrative Officer of SJWC from January 2014 until January 2019.

Walters also served as the Vice President of Business Planning of CWC and CTWS from November 2019 until January 2022.

Prior to joining SJWC in 2014, Mr.

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Name Age Offices and Experience

Zerhouni 48 SJW Group—Senior Vice President of Finance, Principal Accounting Officer.

Zerhouni serves as Senior Vice President of Finance, Principal Accounting Officer of SJW Group, SJWC, CTWS and TWC, since January 2023, and CWC and MWC, since January 2024.

Prior to joining SJW Group, Mr.

Zerhouni was the Chief Financial Officer of Veolia Utility Parent, Inc.

(“VUP”) from October 2022 to January 2023 which is part of the North American business of Veolia Group, a rate-regulated water and wastewater company.

Previously, Mr.

Zerhouni was Vice President/Controller and Chief Accounting Officer of VUP from December 2018 to September 2022.

Zerhouni served in various roles of increasing responsibility up to Senior Manager in the audit practice of PricewaterhouseCoopers LLP from December 2004 to December 2018.

Zerhouni is a certified public accountant.

54 SJW Group—Chief Accounting Officer, Principal Accounting Officer.

Kelly serves as Chief Accounting Officer and Principal Accounting Officer of SJW Group, and Chief Accounting Officer of SJWC, CTWS, TWC, CWC, and MWC since November 2024.

Prior to joining SJW Group, Ms.

Kelly was Executive Vice President Finance and Chief Financial Officer of American Electric Power (“AEP”) from November 2022 to September 2023, one of the nation’s largest pure play electric companies.

From December 2014 to November 2022, Ms.

Kelly served in various roles of increasing responsibility at UGI Corporation and its subsidiaries, a natural gas, propane, and electric power distribution company.

Kelly also previously served as Vice President Finance and Chief Financial Officer, AmeriGas Propane, a UGI subsidiary.

Available Information

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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