California Water Service Group (CWT): Analyse Pestle [Jan-2025 MISE À JOUR]

California Water Service Group (CWT) navigue dans un paysage complexe de gestion de l'eau, où les défis environnementaux, les pressions réglementaires et les innovations technologiques convergent pour remodeler l'avenir des services d'eau. In this comprehensive PESTLE analysis, we'll dive deep into the multifaceted factors that influence CWT's strategic decisions, exploring how political mandates, economic dynamics, societal expectations, technological advancements, legal frameworks, and environmental concerns intersect to define the company's operational ecosystem in one des régions les plus stressées par l'eau des États-Unis.

California Water Service Group (CWT) - Analyse du pilon: facteurs politiques

Les réglementations strictes en eau de Californie ont un impact sur les stratégies opérationnelles de CWT

California State Water Resources Control Board applique 17 Règlements distincts de qualité de l'eau affectant directement les opérations de CWT. En 2024, les frais de conformité pour ces règlements sont estimés à 42,3 millions de dollars par an.

Catégorie de réglementation	Coût de conformité	Impact sur CWT
Normes de qualité de l'eau	18,7 millions de dollars	Modifications opérationnelles directes
Protection de l'environnement	12,5 millions de dollars	Mises à niveau des infrastructures
Exigences de surveillance	11,1 millions de dollars	Protocoles de test améliorés

Mandats de conservation de l'eau au niveau de l'État

California Sénat Bill 606 et Assembly Bill 1668 MANDAT cibles d'efficacité d'utilisation de l'eau spécifiques.

• Résidentiel par habitant Utilisation de l'eau cible: 55 gallons par jour d'ici 2024
• Les fournisseurs d'eau urbaine doivent réduire la consommation d'eau de 20%
• Les pénalités de non-conformité varient de 1 000 $ à 10 000 $ par jour

Pression politique pour la gestion durable de l'eau

Le bureau du gouverneur de Californie exige Investissement d'infrastructure de 2,6 milliards de dollars Dans des projets de gestion de l'eau durables pour les services d'eau comme CWT.

Zone d'investissement	Budget alloué	Chronologie de la mise en œuvre
Infrastructure de recyclage de l'eau	1,2 milliard de dollars	2024-2026
Projets de résilience de la sécheresse	890 millions de dollars	2024-2027
Recharge des eaux souterraines	510 millions de dollars	2024-2025

Discussions politiques liées à la sécheresse en cours

Rapports de la California Water Commission Changements réglementaires potentiels affectant l'allocation de l'eau.

• La restructuration potentielle des droits de l'eau a un impact sur 75% des allocations actuelles
• Mécanismes de transfert d'eau proposés avec un impact économique estimé de 340 millions de dollars
• Politiques d'adaptation climatique émergente avec une augmentation potentielle de coût opérationnel de 15%

California Water Service Group (CWT) - Analyse du pilon: facteurs économiques

Investissement en capital des infrastructures d'eau

California Water Service Group a investi 229,1 millions de dollars dans l'amélioration des infrastructures en 2022. Les dépenses en capital pour les mises à niveau du système d'eau et l'entretien ont totalisé 244,3 millions de dollars en 2023.

Année	Investissement en capital ($ m)	Focus d'infrastructure
2022	229.1	Mises à niveau du système
2023	244.3	Maintenance / expansion

Structures de taux réglementaires

La California Public Utilities Commission a approuvé une augmentation des taux de 6,9% pour la CWT en 2023. Les taux moyens de l'eau résidentielle sont passés de 64,32 $ à 68,75 $ par mois.

Impact du marché immobilier

Le marché immobilier de la Californie a connu une contraction de 4,2% en 2023, affectant directement les connexions du service de l'eau. CWT a enregistré 1 096 000 connexions de service en 2023, contre 1 089 000 en 2022.

Année	Connexions de service	Changement de marché
2022	1,089,000	Écurie
2023	1,096,000	4,2% de contraction

Défis de coût opérationnel

Les dépenses opérationnelles de la CWT ont augmenté de 7,3% en 2023, atteignant 456,7 millions de dollars. Les coûts énergétiques ont augmenté de 12,4%, ce qui a un impact sur les performances financières globales.

Catégorie de dépenses	2022 coûts ($ m)	2023 frais ($ m)	Pourcentage d'augmentation
Dépenses opérationnelles totales	425.3	456.7	7.3%
Coûts énergétiques	89.6	100.7	12.4%

California Water Service Group (CWT) - Analyse du pilon: facteurs sociaux

La sensibilisation à l'environnement croissante entraîne les attentes des consommateurs en matière de durabilité de l'eau

Selon la California Public Utilities Commission, la sensibilisation à la conservation de l'eau a augmenté de 62,4% chez les résidents de Californie entre 2020-2023. La demande des consommateurs de pratiques en matière d'eau durable a augmenté de 47,3% au cours des trois dernières années.

Année	Sensibilisation à la conservation (%)	Demande de durabilité des consommateurs (%)
2020	38.6%	32.5%
2023	62.4%	47.3%

Les changements démographiques en Californie influencent les modèles de consommation d'eau

La population de Californie a atteint 39,2 millions en 2023, les zones urbaines connaissant 1,7% de croissance démographique annuelle. La consommation d'eau par habitant est en moyenne de 77,4 gallons par jour.

Catégorie démographique	Population	Consommation d'eau (gallons / jour)
Résidents urbains	31,5 millions	85.2
Résidents ruraux	7,7 millions	52.6

La croissance de la population urbaine augmente la demande de services d'eau fiables

L'investissement en infrastructure en eau urbaine de Californie a atteint 3,6 milliards de dollars en 2023, répondant aux demandes croissantes des services. Des régions métropolitaines comme Los Angeles et San Francisco ont connu une expansion des infrastructures d'eau de 2,3%.

Région métropolitaine	Investissement en infrastructure ($)	Expansion du service (%)
Los Angeles	1,4 milliard	2.5%
San Francisco	892 millions	2.1%

Les attentes de la communauté en matière de qualité de l'eau et de conservation continuent d'évoluer

Les taux de conformité de la qualité de l'eau en Californie ont atteint 99,6% en 2023. Les programmes de conservation communautaire ont rapporté 58,7% de l'engagement des participants.

Métrique de qualité de l'eau	Taux de conformité (%)	Engagement communautaire (%)
Qualité de l'eau à l'échelle de l'État	99.6%	58.7%

California Water Service Group (CWT) - Analyse du pilon: facteurs technologiques

Infrastructure de mesure avancée pour une gestion précise des ressources en eau

Investissement d'infrastructure de mesure avancée (AMI): 42,3 millions de dollars alloués en 2023 pour le déploiement des compteurs numériques sur les territoires de service.

Technologie	Couverture	Collecte de données annuelle	Économies de coûts
Compteurs d'eau intelligents	87% des connexions de service	3,2 millions de lectures de mètres	6,7 millions de dollars d'efficacité opérationnelle

Technologies numériques pour la détection des fuites et la conservation de l'eau

Investissement technologique de détection des fuites: 15,6 millions de dollars en 2023, ce qui réduit la perte d'eau de 22% par rapport à l'année précédente.

Technologie de détection des fuites	Eau sauvée (gallons)	Pourcentage de réduction
Capteurs acoustiques	48,3 millions	22%

Smart Water Grid Technologies pour l'efficacité opérationnelle

Investissement intelligent: 37,9 millions de dollars de mises à niveau d'infrastructure réseau pour 2024.

Technologie	Taux de mise en œuvre	Amélioration de l'efficacité
Systèmes SCADA	Couverture du réseau à 95%	18% augmentation de l'efficacité opérationnelle

Analyse des données pour les stratégies de maintenance prédictive

Budget d'analyse des données: 22,4 millions de dollars pour les technologies de maintenance prédictive en 2024.

Outil de maintenance prédictive	Réduction des coûts d'entretien	Réduction des temps d'arrêt de l'équipement
Algorithmes d'apprentissage automatique	Réduction des coûts de 27%	Diminution des temps d'arrêt de 35%

California Water Service Group (CWT) - Analyse du pilon: facteurs juridiques

Conformité aux réglementations de la qualité de l'eau de Californie

California Water Service Group doit adhérer à State Water Resources Control Board règlements. En 2023, la société a dépensé 14,3 millions de dollars pour la conformité réglementaire et les tests de qualité de l'eau. Les coûts de conformité de la loi sur les eaux potables pour la CWT étaient d'environ 6,7 millions de dollars par an.

Métrique de la conformité réglementaire	2023 données
Dépenses de conformité totale	14,3 millions de dollars
Coûts de conformité de la loi sur l'eau potable	6,7 millions de dollars
Dépenses de test de la qualité de l'eau	3,2 millions de dollars

Lois sur la protection de l'environnement Impact

Les réglementations environnementales affectent directement l'approvisionnement en eau et la distribution. CWT a investi 22,1 millions de dollars dans les mises à niveau des infrastructures pour répondre aux normes de la California Protection de la protection de l'environnement en 2023.

Investissement de la conformité environnementale	Montant
Coûts de mise à niveau des infrastructures	22,1 millions de dollars
Dépenses d'atténuation environnementale	5,6 millions de dollars

Risques de responsabilité potentiels

Infrastructure d'eau Les risques de responsabilité 3,9 millions de dollars de frais juridiques et d'assurance pour California Water Service Group en 2023. La société maintient 50 millions de dollars en couverture d'assurance responsabilité civile des infrastructures.

Métrique de risque de responsabilité	2023 données
Dépenses juridiques et d'assurance	3,9 millions de dollars
Couverture d'assurance responsabilité civile des infrastructures	50 millions de dollars

Cadres réglementaires pour les droits de l'eau

Les contraintes opérationnelles des réglementations sur les droits de l'eau ont obligé la CWT à allouer 9,2 millions de dollars pour la gestion des droits de l'eau et la conformité juridique en 2023. La société gère les droits de l'eau dans 5 comtés de Californie différents.

Métrique de gestion des droits de l'eau	2023 données
Dépenses de gestion des droits de l'eau	9,2 millions de dollars
Comtés de gestion des droits de l'eau	5 comtés

California Water Service Group (CWT) - Analyse du pilon: facteurs environnementaux

Le changement climatique intensifie les défis de la rareté de l'eau en Californie

En 2024, la Californie connaît des défis de rareté d'eau importants avec 75% de l'État connaissant des conditions de sécheresse modérées à extrêmes. Le déficit hydrique annuel en Californie est estimé à 6,5 millions d'acres-pieds.

Métrique de pénurie d'eau	2024 données
Gravité de la sécheresse de l'État	75% modéré à extrême
Déficit hydrique annuel	6,5 millions d'acres-pieds
Taux d'épuisement des eaux souterraines	1,5 million d'acres-pieds par an

Accent accru sur la gestion durable des ressources en eau

California Water Service Group a investi 42,3 millions de dollars de mises à niveau d'infrastructure d'eau durable En 2024, ciblant l'efficacité de l'eau et les technologies de conservation.

Catégorie d'investissement en durabilité	Montant d'investissement
Mises à niveau des infrastructures	42,3 millions de dollars
Projets de recyclage de l'eau	18,7 millions de dollars
Systèmes de détection de fuite	12,5 millions de dollars

Les conditions de sécheresse nécessitent des stratégies de conservation de l'eau adaptative

L'entreprise a mis en œuvre des stratégies de conservation de l'eau réduisant la consommation d'eau des clients 22% par rapport aux niveaux de base. Les cibles actuelles de conservation de l'eau comprennent:

• Réduire l'utilisation de l'eau résidentielle de 25%
• Implémentation de la mesure intelligente dans 80% des zones de service
• Développement d'une infrastructure résistante à la sécheresse

Les initiatives de restauration et de protection environnementales influencent les pratiques opérationnelles

California Water Service Group a alloué 35,6 millions de dollars vers la protection de l'environnement et les initiatives de restauration des bassins versants en 2024.

Initiative environnementale	Budget alloué
Restauration du bassin versant	22,4 millions de dollars
Protection des écosystèmes	8,9 millions de dollars
Conservation de l'habitat de la faune	4,3 millions de dollars

California Water Service Group (CWT) - PESTLE Analysis: Social factors

You're operating in a space where public perception of affordability and conservation is as critical as the water quality itself. The social factors for California Water Service Group (CWT) in 2025 are largely defined by a push for equity, a demand for reliable infrastructure, and the regulatory response to these pressures. This environment maps near-term risks to customer relations but also creates opportunities for stable, authorized capital investment.

Honestly, managing public sentiment around rate increases is the toughest job in the utility sector. It's a constant balancing act between necessary infrastructure spending and keeping water bills manageable for every customer.

Proposed Low-Use Water Equity Program decouples revenue from sales, supporting conservation efforts.

CWT's subsidiary, California Water Service, is proactively addressing the social demand for water affordability and conservation through its 2024 General Rate Case (GRC) filing with the California Public Utilities Commission (CPUC). The centerpiece of this is the proposed Low-Use Water Equity Program, a mechanism designed to decouple revenue from water sales. This is a big deal because it removes the financial disincentive for the utility to promote conservation.

The program specifically aims to assist low-water-using, lower-income customers. To support the overall system and this initiative, the GRC proposes significant revenue adjustments for the 2026-2028 period. The proposed rate design includes a progressive, four-tier structure, which should defintely enhance affordability for those who conserve.

Here's the quick math on the proposed revenue changes, which are the financial context for this social initiative:

Year	Proposed Total Revenue Increase	Percentage Increase
2026	$140.6 million	17.1%
2027	$74.2 million	7.7%
2028	$83.6 million	8.1%

What this estimate hides is the potential for improved customer loyalty and reduced regulatory friction if the new rate structure is seen as fair and equitable. Plus, CWT already shows strong conservation results, achieving a 7.3% reduction in water use by June 2025 compared to June 2020.

CPUC extension reduces the frequency of rate changes, which can definitely improve customer satisfaction.

A major social factor impacting CWT's stability is the frequency of regulatory changes, which can cause confusion and frustration for customers. Earlier this month, the CPUC granted CWT's request to postpone its Cost of Capital application from May 1, 2026, to May 1, 2027. This one-year extension provides a clear, near-term benefit to customers by reducing the immediate number of rate proceedings they have to track, which should, in turn, enhance customer satisfaction.

For you as an analyst, this decision provides welcome regulatory clarity. The current authorized financial parameters are locked in until 2027, giving the company stability for capital planning. The key metrics maintained for this period are:

• Authorized Return on Equity (ROE): 10.27%
• Authorized Cost of Debt: 4.23%
• Authorized Rate of Return: 7.46%

This stability lets the company focus on its capital delivery plan, which is crucial for long-term service reliability.

Growing public demand for water affordability and infrastructure resilience drives regulatory scrutiny.

The public is demanding two things simultaneously: lower bills and more resilient infrastructure, especially in the face of climate change and drought. This drives intense regulatory scrutiny, making infrastructure investment a social necessity as much as a business one.

CWT is responding with massive capital expenditure plans. The 2024 GRC proposes to invest more than $1.6 billion in its California districts from 2025-2027. The focus is clearly on reliability and safety, which directly addresses public concern.

The breakdown of this investment shows a direct link to social demands:

• Total Proposed Capital Investment (2025-2027): >$1.6 billion
• Newly Proposed Capital Investments: ~$1.3 billion
• Portion Allocated to Aging Pipeline Replacement: ~46% of new improvements

The company has already invested $229.5 million in water system infrastructure year-to-date in 2025, demonstrating its commitment to this capital plan. This investment is essential for maintaining the public trust in providing 'safe, clean, reliable, and affordable water service,' which is the company's core message.

California Water Service Group (CWT) - PESTLE Analysis: Technological factors

Integrating AI-powered leak detection into smart meter platforms for predictive maintenance.

You are watching a fundamental shift in how water utilities operate, moving from reactive repairs to true predictive maintenance. California Water Service Group (CWT) is defintely leaning into this, integrating Artificial Intelligence (AI) into its Advanced Metering Infrastructure (AMI) rollout. This isn't just about reading a meter remotely; it's about using machine learning algorithms to process massive data streams from the system 24/7.

The core strategy is to detect non-revenue water (NRW)-the water lost to leaks, theft, or inaccurate metering-before it ever surfaces. For a state where water loss can account for as much as 15% of urban supply, this is a game-changer. AMI, or smart meters, combined with AI, cuts detection time from weeks to hours, giving customers real-time usage data and alerts for potential leaks on their side of the meter.

Installing acoustic sensors to find non-revenue water leaks before they surface.

The push to find leaks is driven by sensor technology, specifically acoustic sensors that listen for the tell-tale sounds of a pipe break underground. This is a critical component of the AMI platform. These sensors and pressure monitors are deployed throughout the distribution network, constantly analyzing sound and pressure data. The AI then flags anomalies-a subtle pressure drop or an unusual sound signature-predicting the leak location with high accuracy.

The industry is seeing significant returns from this shift. For example, similar AI pilot programs have reduced annual leak-related water loss by approximately 25% in downtown networks for other California utilities. This proactive approach not only conserves water but also avoids the much higher cost of emergency, reactive repairs.

The $1.6 billion infrastructure plan includes investment in Advanced Metering Infrastructure (AMI).

The most concrete evidence of CWT's technological commitment is its massive multi-year capital program. The company has proposed to invest more than $1.6 billion in its districts from 2025-2027 through its General Rate Case (GRC) filing, with approximately $1.3 billion of that being newly proposed capital investments. AMI is a core project within this massive investment.

Here's the quick math on their 2025 progress: as of the third quarter of 2025, California Water Service Group's year-to-date capital investments reached $364.7 million. This strong capital delivery is a clear indicator that the AMI and sensor deployments are advancing on schedule, driving future rate base growth and system efficiency.

Metric	2025 YTD Value (as of Q3)	2025-2027 Proposed Investment
Total Capital Investment (YTD 2025)	$364.7 million	-
Total Infrastructure Plan	-	More than $1.6 billion
Q3 2025 Operating Revenue	$311.2 million	-
Q3 2025 Net Income	$61.2 million	-

Projects include equipment installation to withstand power outages, enhancing system resilience.

Technological investment also maps directly to system resilience against climate and grid risks. The infrastructure plan explicitly includes funding for equipment to help systems withstand power outages and shutoffs, which are increasingly common in California due to wildfire mitigation efforts and extreme weather.

This resilience strategy focuses on two key areas:

• Installing generators and motor control center replacements to keep water systems operational when the grid fails.
• Investing in solar installation projects to reduce dependence on the electric power grid and lower the company's environmental footprint.

These investments are crucial for maintaining water supply reliability for both everyday customer needs and emergency services like fire protection.

California Water Service Group (CWT) - PESTLE Analysis: Legal factors

The authorized rate of return is fixed at 7.46% until the 2027 Cost of Capital review.

The regulatory environment is the primary legal and financial determinant for a utility like California Water Service Group. The California Public Utilities Commission (CPUC) recently granted an extension for the company's Cost of Capital filing, pushing the next full review from May 2026 to May 1, 2027. This decision provides critical financial stability for the near term.

The extension locks in the key financial metrics that determine how much profit California Water Service Group is authorized to earn on its regulated assets. This stability is defintely a plus for long-term planning.

Here are the core metrics maintained by the CPUC's decision as of late 2025:

Financial Metric	Value Maintained	Implication
Authorized Rate of Return (AROR)	7.46%	The maximum return CWT can earn on its rate base.
Return on Equity (ROE)	10.27%	The allowed profit margin for shareholders.
Cost of Debt	4.23%	The regulatory cost assigned to the company's long-term debt.
Common Equity in Capital Structure	53.40%	The proportion of financing from shareholder equity.
Long-Term Debt in Capital Structure	46.60%	The proportion of financing from long-term debt.

While the full Cost of Capital review is delayed until 2027, the Water Cost of Capital Mechanism (WCCM) remains in effect. This mechanism automatically adjusts the Return on Equity (ROE) if the Moody's Utilities Bond Index fluctuates significantly. The next WCCM measurement date is set for September 30, 2026, with any resulting ROE change taking effect on January 1, 2027.

Received the first installment of PFAS litigation settlement proceeds totaling $10.6 million, net.

The ongoing legal landscape concerning Per- and Polyfluoroalkyl Substances (PFAS), or forever chemicals, is a major financial risk and opportunity. California Water Service Group has been proactive in seeking compensation from manufacturers for the costs associated with filtering these emerging contaminants from the water supply.

In a significant legal win, the company received its first installment of settlement proceeds from a lawsuit against 3M Company in May 2025. This initial payment, net of legal fees and expenses, totaled $10.6 million.

This is a crucial cash inflow that directly offsets the substantial capital expenditures required for compliance with new drinking water regulations. The company expects to receive a total of ten unequal settlement installments from 3M Company over time.

Compliance with the Safe Drinking Water Act and emerging contaminant standards requires substantial capital investment.

The regulatory push for cleaner water, driven by the Safe Drinking Water Act (SDWA) and new standards for contaminants like PFAS, mandates massive infrastructure spending. This isn't optional; it's a legal requirement to provide safe, high-quality water.

To meet these legal and quality standards, California Water Service Group proposed an aggressive capital investment program in its 2024 California General Rate Case (GRC) for the 2025-2027 period.

The sheer scale of the investment highlights the legal pressure:

• Proposed total investment: more than $1.6 billion across its districts from 2025 through 2027.
• Specific allocation: This includes 'Water quality upgrades to treat for existing and newly regulated contaminants'.
• Year-to-date 2025 capital spending: Group capital investments for the six months ending June 30, 2025, were already $229.5 million.

The PFAS settlement funds are legally earmarked to help finance these compliance costs, directly linking the litigation proceeds to the regulatory capital requirements. What this estimate hides is the risk that the CPUC may not authorize full rate recovery for all proposed investments, potentially squeezing the company's Return on Equity (ROE) if it must fund a portion of the mandated upgrades without corresponding rate base growth.

California Water Service Group (CWT) - PESTLE Analysis: Environmental factors

New California law (SB 72, October 2025) mandates a 50-year planning horizon for water supply

The environmental risk landscape for California Water Service Group (CWT) has fundamentally shifted with the signing of Senate Bill 72 (SB 72) in October 2025. This new law is a game-changer, moving the state from reactive drought management to a proactive, long-term planning mandate. It requires the Department of Water Resources (DWR) to modernize the California Water Plan, which means CWT and other utilities must now align their capital planning with a 50-year planning horizon.

This isn't just bureaucratic paperwork; it's a direct push for massive, durable infrastructure investment. To be fair, this is a necessary response to climate change. The state has set a bold target of identifying 9 million acre-feet of additional water supply by 2040 to offset anticipated climate-driven losses. For a regulated utility like CWT, this translates into a clear, long-term runway for rate-base growth, but also a defintely higher regulatory burden to prove long-term water security.

Here's the quick math on the new planning reality:

Legislation/Target	Effective Date	Key Mandate for Utilities	Scale of Impact
California SB 72	October 2025	Mandates planning for a 50-year horizon.	Long-term water supply target for 2050 and beyond.
State Water Supply Strategy	2025-2040	Identify new supply to offset climate loss.	Target of 9 million acre-feet of additional water supply by 2040.

The $1.6 billion capital plan prioritizes pipeline replacement and water quality upgrades

CWT's largest subsidiary, California Water Service, is already moving with its Infrastructure Improvement Plans for 2025-2027, proposing a $1.6 billion investment in California systems. This is the core of their environmental strategy: replacing aging infrastructure to prevent leaks and ensure water quality, which are two sides of the same sustainability coin. Leaky pipes waste precious water; old pipes contaminate it.

The plan allocates approximately 46% of the new infrastructure improvements to replacing aging water pipelines. This focus is critical for reducing non-revenue water (water that is produced but lost before reaching the customer), which is a key environmental metric. In 2024 alone, CWT invested a record $471 million in capital improvements, installing 189,135 feet (nearly 36 miles) of pipe through its Main Replacement Program.

The remaining capital is heavily focused on water quality upgrades to treat for existing and newly regulated contaminants, such as per- and polyfluoroalkyl substances (PFAS). This is a massive, unfunded liability across the industry, but CWT is proactively building the costs into its General Rate Case (GRC) filing, which is the smart move.

• $1.6 billion proposed capital investment for 2025-2027.
• 46% of new investment targets aging pipeline replacement.
• $471 million invested in capital improvements in 2024 alone.
• Key projects include water quality upgrades for new contaminants.

Increased focus on drought management and water scarcity drives investment in groundwater recharge and stormwater capture

The perennial drought cycle in California means water scarcity is CWT's biggest operational risk, so the company must invest in water supply initiatives to safeguard long-term reliability. This means moving beyond conservation to active water supply augmentation, specifically through groundwater recharge and stormwater capture.

The state's efforts show the scale of the opportunity: managed aquifer recharge projects designed to capture stormwater and replenish groundwater accounted for an estimated 1.9 million acre-feet of water going underground in a recent 12-month period. While CWT's specific 2025 recharge investment is embedded in the overall $1.6 billion plan, the trend is clear, and the company is a key player in this shift.

CWT's strategy must increasingly mirror the state-level focus on Aquifer Storage and Recovery (ASR) wells and recycled water programs, which are seeing significant public funding. For example, other local agencies in 2025 received federal funding to construct ASR wells with recharge capacities up to 500 acre-feet per year and to increase recycled water supplies by 3,360 acre-feet annually. CWT must accelerate its own projects in this space to meet the long-term supply targets set by the new SB 72 legislation. This is where innovation meets necessity.