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A light
in the dark
California Water
Service Group
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Our Service
Areas
17
Board of
Directors
18
Corporate
Officers
01
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A Light in
the Dark
Corporate
Information
09
20
Letter to
Stockholders
ESG
Summary
13
Eight-Year
Financial Review
14
CWT 20-Year
Total Return on
Investment
California Water Service Group (NYSE: CWT) is the third-largest
publicly traded water utility in the United States, providing
high-quality water and wastewater services to more than two
million people through four regulated subsidiaries: California
Water Service (Cal Water), Hawaii Water Service (Hawaii Water),
New Mexico Water Service (New Mexico Water), and Washington
Water Service (Washington Water).
We are committed to improving the quality of life for our
customers, communities, employees, and stockholders. We do
this by living our core values and delivering on our promise to
provide quality, service, and value.
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“Only in
the darkness
can you see
the stars.”
Martin Luther King, Jr.
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Keeping our light
shining bright
During a public health crisis, having a
safe, reliable water supply is essential. As the
coronavirus pandemic emerged, we knew our
efforts to keep our employees protected,
supported, and informed would be critical to
the safety of our communities.
Putting safety first We retained a highly respected infectious disease expert to guide us in our efforts to keep
employees safe. We closed our lobbies to walk-in traffic and provided masks, gloves, and other personal
protective equipment to all staff. We made hand sanitizer and disinfectant wipes available; enhanced cleaning
of our facilities; screened employees’ temperatures; and offered flexible work arrangements. To keep indoor air
safe, we installed large-scale High Efficiency Particulate Air (HEPA) purifiers throughout our office facilities. And
we secured additional fleet vehicles so crews would not have to ride together to job sites.
Providing strong support Knowing the significant impact COVID-19 could have on our employees, we
provided them with up to 15 additional sick days for COVID-19-related absences, including those necessitated by
school and day care closures. We also addressed the emotional toll the pandemic was taking on employees by
providing support through our professional phone counseling service and our confidential peer-to-peer support
team. We even distributed industrial-sized toilet paper rolls when supplies on the shelves were scarce.
Keeping everyone informed During this time of heightened stress and uncertainty, we made information-
sharing a priority. In addition to providing frequent updates from the Centers for Disease Control and
Prevention and other government entities, we held daily management briefings from our Emergency
Operations Center and weekly all-employee calls with our CEO, who often invited special guest experts to
share the latest information and answer questions. The purpose of all of these efforts was to keep our employees
safe, healthy, and informed so they could continue to provide an essential service to our customers.
“ We want to thank you for continuing to deliver safe, clean
water to us, even during this COVID-19 emergency. It is a
big deal, and we appreciate your hard work … please know we
think of you every time we turn on our faucets.”
Susan W., Bear Gulch District Customer From Portola Valley
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Being a
bright spot in our
communities
Needless to say, 2020 was a tough year for charitable
organizations, many of which struggled to meet growing
demand in the face of the pandemic and California
wildfires. Despite the crippling uncertainty of the times,
we knew this was no time to pull back on our
stockholder-funded charitable giving.
Stepping up to meet new challenges For starters, we introduced an employee matching
campaign, which resulted in gifts of almost $90,000 to charitable organizations responding
to the health crisis in all four of our states. These included Meals on Wheels throughout our
service areas, food banks, community foundations, and even the Restaurant Workers’
Community Foundation.
We also doubled down on contributions to our community partners. We helped Visalia
Emergency Aid provide meals to an additional 1,710 families. We partnered with our old friend
the Oroville Salvation Army to feed those forced to evacuate by Butte County wildfires. And,
in a new partnership, we supported the San Mateo Child Care Fund in its efforts to keep small
daycare centers safely open to serve children of essential workers.
Keeping our commitments We also continued our ongoing philanthropic programs,
granting $148,500 to firefighting agencies to purchase life-saving gear and equipment,
awarding $80,000 in college and trade school scholarships to students in our service
areas, and honoring elementary school classrooms participating in our H2O Challenge
water conservation contest.
“ Cal Water’s support has repeatedly played a key role in Visalia Emergency Aid’s
success. There is no way to fully express our gratitude for your partnership.”
Executive Director Mary Jennings
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Providing a
ray of light to our
customers
Last year brought dark days and unprecedented
challenges to our customers. What better time for
us to do what we have set out to do since 1926 —
make life better for those we serve? By giving
customers one less thing to worry about, we
provided a ray of light in the dark.
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Responding to unparalleled times In the early days of the pandemic, we recognized how critical it was for our
customers to have an uninterrupted supply of clean water for their hygiene and safety. So before government
officials and regulators required it, we ceased shutting people off for non- payment and other collection
activities. We also took the unprecedented step of requesting that the California Public Utilities Commission
delay scheduled rate increases for our largest subsidiary until 2021.
Providing financial assistance As the days of stay-at-home orders continued and more and more jobs were
lost, we knew we needed to take further action. Using our stockholder-funded hardship grant program, we
forgave more than $400,000 in overdue balances for customers whose accounts became delinquent after the
shut-down began. We reached out to customers whose payments had become overdue and offered to make
delayed payment arrangements, in an effort to prevent growing, unmanageable balances in the future. We also
proactively added more than 10,000 newly qualified customers to our Low-Income Rate Assistance Program.
Finding innovative solutions To keep customer bills as low as possible, we turned to water conservation.
The result: a new, innovative Smart Landscape Tune-Up program that provides financial assistance to customers
who can’t afford to repair irrigation system leaks. It’s a win-win for customers and the environment, preventing both
large bill balances and water waste.
Thanks to voluntary pay reductions taken in 2021 by our Officers and Board, we expect
to have an additional $600,000 to help customers in need this year.
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Over the last decade, we have invested more than $2 billion
to replace and upgrade water system infrastructure in order
to provide a reliable supply of safe water.
Increasing reliability by replacing water lines As part of our Main Replacement Program, we invested
$94 million to replace 169,000 feet of aging water pipes in 2020. Using a systematic approach, we prioritize
these projects based on an analysis of each pipe’s leak history and its proximity to sensitive ecosystems. In
one of the few silver linings of the past year, stay-at-home orders enabled us to accelerate and complete
construction with minimal impact on our neighbors.
Preparing for wildfires and power outages Wildfires are becoming increasingly damaging, particularly in
California. In the past years, they’ve even encroached into our urban service areas. Although we were mostly
spared in 2020, we continue to invest in wildfire preparation projects. That means making investments in the water
infrastructure—pipes, pumps, and valves—needed to produce a more robust water flow in the highest risk zones.
A related risk is posed by Public Safety Power Shutdowns, which occur when the electric utility interrupts power
to avoid having its equipment spark fires. The challenge? Every water utility needs electricity to get the water
from the source to the tap. That’s why one of our top priorities has been expanding our fleet of portable electric
generators that can be deployed to any of our service areas.
Investing in water safety State and federal governments are working through the process of setting
enforceable standards for per- and polyfluoroalkyl substances (PFAS). However, in California —where we have
detected PFAS in 51 of the 484 wells we've tested — we are taking action. Existing regulation allows us to operate
these wells as long as we notify our customers that PFAS have been detected. But we have made the decision to
either take the wells out of service or install treatment to remove PFAS. We've completed two treatment facilities
to date and plan to construct three more in 2021.
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Shining a light
to the future
In the darkest days of 2020, many people just
wanted to hunker down safely with their families.
But for us, there could be no sheltering in place. We
had to be out in our communities, making improvements
to our water systems, ensuring they would remain
safe and reliable for customers and firefighters
alike, both now and in the future.
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to our stockholders
2020 was a year of unprecedented adversity.
We were challenged by a global pandemic,
racial injustice, civil unrest, wildfires,
and a deeply divisive election.
Through it all, we kept going, showing up
day after day to ensure that our customers
and communities continued to receive
a safe, reliable water supply.
But we did more than just show up—
we were a light in the dark.
The previous pages feature some of our efforts to brighten
the lives of our employees, customers, and communities.
Here, we focus on other 2020 highlights that will both contribute
to our success and challenge us in the future.
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We continued to grow in 2020
In addition to the 743 new connections added organically
through main extensions and growth in existing service areas,
we signed agreements to purchase assets and provide water
and wastewater service to 3,915 new customers in Hawaii and
New Mexico.
Through these agreements, we will provide water service to
80 customers previously served by Valencia Mesa Water in
Los Lunas, New Mexico, and 1,850 customers previously served
by Animas Valley Land & Water in northwest New Mexico. We
will also provide wastewater service to 1,600 customers in
Keauhou on the island of Hawaii.
In addition, we completed our acquisition and integration of
Rainier View Water, serving 18,500 connections in Washington.
We expect 2021 to be another good year for growth as we
pursue a number of acquisitions in our business development
pipeline.
2018 California general rate case was favorable,
but 2021 filing will be a challenge
As we announced in early December, the California Public
Utilities Commission (Commission) issued a decision in our
2018 Infrastructure Improvement Plan/General Rate Case
(IIP/GRC). We viewed the outcome favorably, as it authorizes
the Company’s largest subsidiary, California Water Service
(Cal Water), to invest $828 million in water system infrastructure
through 2021. It also allows Cal Water to keep balancing
accounts related to decoupling water sales from revenues
through 2022.
In a separate 2020 decision, however, the Commission
determined that we cannot use our existing mechanism to
decouple sales from revenues in our next IIP/GRC. We
advocated strongly against this decision, because we believe
it will hamper the state’s ability to respond to droughts,
hinder our water conservation efforts, and increase costs for
customers using small amounts of water, who also tend to have
lower incomes.
So we are thinking outside the box as we plan for our 2021
IIP/GRC filing to propose a rate structure that seeks to protect
low-income customers, incentivize conservation, and maintain
our financial stability. Two factors will be critical to our success:
taking a very sophisticated approach to water sales forecasting,
and predicting and planning for events that could impact our
use of the lowest cost sources of water.
COVID resulted in past-due balances,
and customers will need help
As outlined earlier in this report, we stepped up early in the
pandemic and, before we were required to do so, ceased all
collections activities, including shutting off service for non-
payment. As a result, the percentage of customers with past-
due balances on their bills at the end of 2020 was 24% higher
than at the end of 2019.
Many customers accumulated significant balances during the
pandemic. The question is, how can we help them without
overburdening other customers or our stockholders? We
believe the answer lies in aggressive pursuit of relief funds.
As of this writing, our national industry association, the
National Association of Water Companies, is working with
the Department of Health and Human Services regarding its
distribution of federal relief funds for water and wastewater
bills. And our state industry association, the California Water
Association, is advocating for our vulnerable customers at the
state level.
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Financial Highlights
Dollars in thousands, except per common share data
Year ended December 31
2020
2019
2018
20171
2016
Market price at year end
$54.03
$51.56
$47.66
$45.35
$33.90
Book value per share
$18.30
$16.07
$15.19
$14.56
$13.75
Earnings per share (diluted) $1.97
$1.31
$1.36
$1.52
$1.01
Dividend per share
$0.850
$0.790
$0.750
$0.720
$0.690
Operating revenue
$794,307 $714,557 $698,196 $676,113 $609,370
Net income
$96,831
$63,116
$65,584
$72,940
$48,675
1The 2017 reported financial data was adjusted to reflect an immaterial computational error
that resulted in an understatement of operating revenue, net income, and earnings per share.
We are also collaborating with the California Public Utilities Commission on
ways we can help customers with past-due accounts while still ensuring
that our bills reflect the actual cost of providing service. One way, for
example, would be to offer longer-term payment programs with incentives
for participation.
expanded service hours and new service channels. Each of our districts
remains prepared to serve customers locally and in person should the
need arise. Following our announcement of this plan in November 2020,
we worked with our union to address the impacts of the plan on employees
and customers. In March 2021, we signed a Letter of Understanding, and are
moving forward together to increase efficiency and improve service.
COVID accelerated changing customer
behaviors, and we are responding
Before the pandemic forced us to close our customer lobbies, the number
of people paying their bills in person was trending downward as customers
steadily migrated to faster, more convenient payment channels. Our analysis
shows that since we closed our customer lobbies, 98.8% of the customers
who formerly paid their bills in person have adopted new payment methods.
And in a study conducted at the end of the year, we learned that very few
customers had any intention of resuming in-person payments.
In response, we developed a plan to transition customer service activities
to four regional customer service centers. At these centers, elite teams of
customer service professionals will provide enhanced services, including
We made significant progress on our environmental,
social, and governance (ESG) efforts
In 2020, we conducted an in-depth materiality assessment to identify and
prioritize the ESG topics most relevant to our internal and external partners.
After a rigorous process of researching and benchmarking, mapping topics
across our business processes, conducting internal and external interviews,
analyzing external sources, and scoring and validating results, we prioritized
our top ESG topics. This process will inform our ESG strategy, reporting, and
resource allocation going forward.
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martin a. kropelnicki
President and Chief Executive Officer
peter c. nelson
Chairman of the Board
We also produced an Environmental, Social, and Governance Report that aligns with the Sustainability
Accounting Standards Board (SASB) Water Utilities & Services Industry Standards and references Global
Reporting Initiative (GRI) Standards. A summary is included at the back of this report, and the full report may
be accessed at www.calwatergroup.com/esg2020.
In addition to completing the materiality assessment and upgrading our report to align with SASB and GRI, we
established a new Water Resource Sustainability Department and completed the first phase of a water resource
monitoring and adaptation plan, both of which will better enable us to address the risks posed by climate
change. Our efforts to further mature our climate change strategy will be guided by the framework from the
Task Force on Climate Related Financial Disclosures (TCFD).
Additionally, in late February, our Board of Directors adopted four new policies: Environmental Sustainability;
Diversity, Equality, and Inclusion; Political Engagement; and Human Rights. We will develop a plan to train
employees on them prior to year end. In 2021, we will continue to refine our ESG strategy, data collection, and
reporting.
Officer changes
Finally, we are pleased to report that in 2020, the Board of Directors promoted Shannon Dean to Vice President,
Customer Service & Chief Citizenship Officer, Michael Luu to Vice President, Information Technology & Chief Risk
Officer, Michael Mares to Vice President, Operations, and Michelle Mortensen to Vice President, Corporate
Secretary. These changes decidedly strengthen our officer leadership team.
As we look back on what was the darkest year in many of our lives, we take pride in the light our Company
provided to its employees, customers, communities, and stockholders. As we look ahead, we fervently hope
for health, prosperity, civility, and justice for all in 2021 and beyond.
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eight-year
financial review
Summary of operations
Operating revenue 1
Operating expenses 1,2
Interest expense, other income and expenses, net 2
Net income 1
Common share data
Earnings per share (diluted) 1
Dividend declared
Dividend payout ratio
Book value
Market price at year end
Common shares outstanding at year end (in thousands)
Return on average common stockholders’ equity
Long-term debt interest coverage
Balance sheet data
Net utility plant
Total assets
2020 2019
2018 2017 2016 2015 2014 2013
Dollars in thousands, except per common share and other data
$794,307
$657,641
$39,835
$96,831
$714,557
$698,196
$676,113
$609,370
$588,368
$597,499
$584,103
$615,145
$587,656
$569,030
$526,734
$506,803
$508,631
$500,518
$36,296
$63,116
$44,956
$65,584
$34,143
$72,940
$33,961
$48,675
$36,548
$45,017
$32,130
$56,738
$36,331
$47,254
$1.97
$0.850
43%
$18.30
$54.03
50,334
11.4%
3.87
$1.31
$0.790
60%
$16.07
$51.56
48,532
8.4%
3.10
$1.36
$0.750
55%
$15.19
$47.66
48,065
9.2%
3.57
$1.52
$0.720
47%
$14.56
$45.35
48,012
10.7%
4.58
$1.01
$0.690
68%
$13.75
$33.90
47,965
7.5%
3.45
$0.94
$0.670
71%
$13.41
$23.27
47,875
7.1%
3.67
$1.19
$0.650
55%
$13.11
$24.61
47,806
9.3%
4.29
$1.02
$0.640
63%
$12.54
$23.07
47,741
8.8%
3.42
$2,650,558
$2,406,370
$2,232,723
$2,047,965
$1,859,277
$1,701,768
$1,590,431
$1,515,831
$3,394,248
$3,111,308
$2,837,704
$2,744,710
$2,411,745
$2,241,253
$2,182,711
$1,954,741
Long-term debt, including current portion
$786,227
$808,622
$814,938
$531,713
$557,953
$514,045
$421,200
$428,936
Capitalization ratios:
Common stockholders’ equity
Long-term debt
Other data
Water production (in million gallons)
Customers at year end, including Hawthorne and Commerce
New customers added
Operating revenue per customer
Utility plant per customer
Employees at year end
54.0%
46.0%
49.10%
50.90%
47.3%
52.7%
56.8%
43.2%
54.2%
45.8%
55.5%
44.5%
59.8%
40.2%
58.3%
41.7%
110,742
543,000
22,400
$1,463
$7,165
1,192
104,735
520,600
3,100
$1,373
$6,820
1,207
107,589
517,500
3,200
$1,349
$6,240
1,184
104,986
514,300
2,800
$1,315
$5,775
1,176
99,096
98,899
511,500
509,000
2,500
$1,191
$5,312
1,163
2,900
$1,156
$4,925
1,155
118,282
506,100
3,200
$1,181
$4,628
1,105
126,363
502,900
2,200
$1,161
$4,401
1,125
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1 The 2017 reported financial data was adjusted to reflect an immaterial computational error that resulted in an understatement of operating revenue, operating expenses, net income, and earnings per share.
2 The eight-year financial review for 2017, 2016, 2015, 2014, and 2013 reflect the retrospective adoption of new pension accounting requirements (ASU 2017-07). The Company adopted this guidance on January 1, 2018.
The eight-year financial review for 2015, 2014, and 2013 reflect the retrospective adoption of ASU 2015-03, which requires that debt issuance costs be presented in the balance sheet as a direct deduction from the
carrying amount of that debt liability. The Company adopted this guidance on January 1, 2016.
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cwt 20-year total
return on investments
S&P 500
CWT
On $100-stock purchase on December 31,
1999, with dividends reinvested
2
3
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0
1
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1
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communities and
customer connections
Washington
36,600
Serving more than 425 neighborhoods and
small communities in the counties
of Clallam, Jefferson, Kitsap, Mason, Pierce,
King, San Juan, and Thurston.
Hawaii
5,300
Serving the communities of Ka`anapali,
Pukalani, Waikoloa, North Kona Coast,
Kohala Coast, and Kalaeloa on the islands
of Maui, Hawaii, and Oahu.
New
Mexico
8,500
Serving the communities of Meadow Lake,
Cypress Gardens, Rio Communities,
Rio Del Oro, Elephant Butte, Sandia Knolls,
Indian Hills, Woodland Hills, Squaw Valley,
and Cedar Crest in the counties of Sierra,
Valencia, Torrance, and Bernalillo.
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California
492,600
Los Angeles
County Region
25,700
Palos Verdes Estates,
Rancho Palos Verdes,
Rolling Hills, Rolling Hills
Estates, Fremont Valley,
Lake Hughes, Lancaster,
and Leona Valley
Livermore
18,900
Los Altos
19,000
Portions of Cupertino,
Los Altos Hills,
Mountain View, and
Sunnyvale
Marysville
3,800
Salinas Valley
31,600
Salinas and King City
Oroville
3,700
Selma
6,500
Stockton
44,800
Visalia
46,700
Westlake
7,100
Westlake Village
and a portion of
Thousand Oaks
Willows
2,400
Bakersfield
73,500
Bay Area Region
56,000
South San Francisco,
Colma, Broadmoor,
San Mateo, San Carlos,
Lucerne, Duncans Mills,
Guerneville, Dillon Beach,
Noel Heights, and
portions of Santa Rosa
Bear Gulch
19,000
Atherton, Woodside,
Portola Valley, and a
portion of Menlo Park
Chico
30,800
Hamilton City
Dixon
3,100
Dominguez
34,300
Carson and portions
of Compton, Harbor
City, Long Beach,
Los Angeles County,
and Torrance
East Los Angeles
26,900
Portions of Montebello,
Commerce, Monterey
Park, and Vernon
Hawthorne
and Commerce
7,700
Operation and
maintenance agreements
Hermosa-
Redondo
27,100
Hermosa Beach,
Redondo Beach, and
a portion of Torrance
Kern River Valley
4,000
Bodfish, Kernville,
Lakeland, Mountain
Shadows, Onyx, Squirrel
Valley, South Lake,
and Wofford Heights
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board of directors
Gregory E. Aliff
Former Vice Chairman and
Senior Partner of U.S. Energy &
Resources, Deloitte LLP
Director since 2015. Chair of the Audit
Committee. Member of the Enterprise
Risk Management, Safety, and
Security Committee.
Terry P. Bayer
Former Chief Operating Officer,
Molina Healthcare Inc.
Director since 2014. Chair of the Finance
and Capital Investment Committee. Member
of the Audit Committee and the Organization
and Compensation Committee.
Shelly M. Esque
Former Vice President and
Global Director of Corporate
Affairs, Intel Corporation
Director since 2018. Member of
the Enterprise Risk Management,
Safety, and Security Committee and
the Nominating and Corporate
Governance Committee.
Thomas M. Krummel, M.D.
Emile Homan Professor
and Chair Emeritus, Surgery
Department, Stanford
University School of Medicine
Director since 2010. Chair of
the Organization and Compensation
Committee. Member of the Nominating
and Corporate Governance Committee.
Scott L. Morris
Chairman,
Avista Corporation
Director since 2019. Member of
the Enterprise Risk Management,
Safety, and Security Committee
and the Organization and
Compensation Committee.
Peter C. Nelson
Chairman of the Board of
California Water Service Group
Director since 1996.
Lester A. Snow
Former Director of the
California Department of
Water Resources
Director since 2011. Chair of the
Enterprise Risk Management, Safety,
and Security Committee. Member of
the Finance and Capital Investment
Committee and the Organization and
Compensation Committee.
Martin A. Kropelnicki
President and Chief
Executive Officer of California
Water Service Group
Director since 2013.
Richard P. Magnuson
Private Venture Capitalist
and Lead Director of California
Water Service Group
Director since 1996. Chair of the
Nominating and Corporate Governance
Committee. Member of the Audit
Committee and the Finance
and Capital Investment Committee.
Patricia K. Wagner
Former Group President, U.S.
Utilities, Sempra Energy
Director since 2019. Member
of the Audit Committee and the
Nominating and Corporate
Governance Committee.
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Carol M. Pottenger
Principal and Owner of
CMP Global, LLC, and Retired
U.S. Navy Vice Admiral
Director since 2017. Vice Chair of
the Enterprise Risk Management, Safety,
and Security Committee. Member of the
Finance and Capital Investment Committee
and the Nominating and Corporate
Governance Committee.
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corporate officers
Shannon C. Dean
Vice President,
Customer Service &
Chief Citizenship Officer
Robert J. Kuta
Vice President,
Engineering & Chief Water
Quality & Environmental
Compliance Officer
Lynne P. McGhee
Vice President,
General Counsel
David B. Healey
Vice President &
Corporate Controller
Michael B. Luu
Vice President,
Information Technology &
Chief Risk Officer
Greg A. Milleman
Vice President,
California Rates
Martin A. Kropelnicki
President &
Chief Executive Officer
Michael S. Mares
Vice President,
Operations
Michelle R. Mortensen
Vice President,
Corporate Secretary
Elissa Y. Ouyang
Chief Procurement &
Lead Continuous
Improvement Officer
Todd K. Peters
Chief Engineering Officer
Gerald A. Simon
Vice President,
Chief Safety, Security,
and Emergency
Preparedness Officer
Thomas F. Smegal, III
Vice President,
Chief Financial Officer &
Treasurer
Paul G. Townsley
Vice President, Corporate
Development & Chief
Regulatory Officer
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Ronald D. Webb
Vice President,
Human Resources
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corporate information
Computershare
investor services
462 South 4th Street, Suite 1600
Louisville, Kentucky 40202
Bond registrar
U.S. Bank Trust, N.A.
One California Street
San Francisco, California 94111
415.273.4580
Executive office and
stockholder information
California Water Service Group
Attn: Stockholder Relations
1720 North First Street
San Jose, California 95112
408.367.8200 or 800.750.8200
www.calwatergroup.com
Annual meeting
The Annual Meeting of
Stockholders will be held online
on Wednesday, May 26, 2021, at
9:30 am PT. Details of the business
to be transacted during the meeting
will be contained in the proxy
material, which will be mailed to
stockholders on or about
April 14, 2021.
To transfer stock
A change of ownership of shares (such as when stock is sold or gifted or
when owners are deleted from or added to stock certificates) requires a transfer
of stock. To transfer stock, the owner must complete the assignment on the
back of the certificate and sign it exactly as his or her name appears on the
front. This signature must be guaranteed by an eligible guarantor institution
(banks, stockbrokers, savings and loan associations, and credit unions with
membership in approved signature medallion programs) pursuant to SEC Rule
17Ad-15. A notary’s acknowledgment is not acceptable. This certificate should
then be sent to Computershare Investor Services (Computershare) by registered
or certified mail with complete transfer instructions. Alternatively, the Direct
Registration System can be utilized, which allows electronic share transactions
between your broker or dealer and Computershare.
Anticipated dividend dates for 2021
Quarter
First
Second
Third
Fourth
Declaration
Record Date
Payment Date
January 27
February 8
February 19
April 28
July 28
May 10
August 9
May 21
August 20
October 27
November 8
November 19
Annual report for 2020 on Form 10-K
A copy of the Company’s annual report for 2020 filed with the Securities and
Exchange Commission (SEC) on Form 10-K is available and can be obtained
by any stockholder at no charge upon written request to the Company. The
Company’s filings with the SEC can be viewed via the link to the SEC’s EDGAR
system on the Company’s website.
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A new day
for ESG
California Water
Service Group
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It’s the dawn of a new day
in Environmental, Social, and
Governance (ESG) performance
and reporting at California
Water Service Group. In
this summary, we look back at
highlights for 2020 and
forward to the journey ahead.
For the full Environmental,
Social, and Governance Report, please visit
www.calwatergroup.com/esg2020
From the
CEO
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Why ESG
matters
2018 2019 2020
34.6% 34.5% 39.9%
169,161 GJ 156,107 GJ 198,256 GJ
electricity usage through
renewable sources
The 2020 increase in use of electricity from renewable
sources is due to higher availability from our electric
utilities. Although we are committed to minimizing our
carbon footprint, our ability to make investments to reduce
our emissions is limited because such investments must
be supported by our regulators, the state public utilities
commissions. As we mature our climate change strategy,
we will focus on what we can control and advocate for
meaningful progress from our regulators.
As a company, “doing the right thing” has always been in our DNA. We strive
to make the world a better place and take pride in our long-standing efforts
to provide safe water at affordable rates, plan for our customers’ future
water needs, be responsible stewards of the environment, give back to our
communities, have the best trained employees, and maintain the highest
ethical standards. This commitment is distilled in our shared purpose, which
is to enhance the quality of life for our customers, communities, employees,
and stockholders.
We are building on that strong foundation, sharpening our focus on ESG and
reporting in a way that is intended to meet the expectations of our customers,
regulators, stockholders and other partners. It’s a new day for ESG, and we
look forward to evolving and maturing our program over the next several years.
40
35
We are sharpening our focus on our ESG program because we believe that
managing and addressing environmental, social, and governance risks is
critical to the long-term sustainability of our business. As a provider of a
precious and finite natural resource, we understand our responsibility to
minimize our impact on the environment and prepare for the inevitable and
significant effects of climate change. We recognize the importance of making
water affordable and accessible to all we serve despite the rising cost of
delivering a reliable supply that meets increasingly stringent standards. And
at a time when society is wrestling with complex issues like racial injustice,
we must ensure that our company is a place where everyone feels valued
and has an opportunity to succeed.
30
10
15
20
25
0
5
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3
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9
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Our vision
and strategy
We are building an ESG program that plays a very real part in helping us achieve our purpose of enhancing the
quality of life for those we serve, both now and into the future. Our strategy is simple: We focus our efforts on the
ESG topics that are most relevant to our business. We set measurable, time-bound goals related to those topics.
We measure and report our progress on achieving those goals. And we weave ESG considerations into the
decisions we make. We are organizing internally and collaborating externally to execute this strategy.
Key
achievements
in 2020
It goes without saying that 2020 was a year of unprecedented challenges. The global pandemic put our emergency
response capabilities to the test, and we passed with flying colors. On previous pages we highlight the extraordinary
measures we took to keep our employees healthy and support our customers through a profoundly dark and
challenging time. We also showcase our efforts to make critical improvements to our infrastructure in order to
continue to provide a safe, reliable, and affordable water supply to customers in the future.
Here, we focus on 2020 efforts to improve our ESG program and reporting. A key first step in the process was
partnering with a third party to conduct a materiality assessment to determine the highest priority ESG topics to our
internal and external stakeholders. After a rigorous process that included research and benchmarking, value chain
mapping, stakeholder engagement, scoring, and validation with our leadership team, we identified our top ESG
topics. Highlights related to the top five—Water Quality and Customer Safety; Water Supply Management, Reliability,
and Resilience; Emergency Preparedness and Response; Water Affordability and Access; and Water System
Efficiency and Conservation—are provided below.
(For the full report covering all relevant ESG topics, please visit www.calwatergroup.com/esg2020.)
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about our 2020 esg report
Although our 2020 report marks the fourth year of our review of ESG activities, it is the
first time our disclosures align with the Sustainability Accounting Standards Board (SASB)
Water Utilities & Services Industry Standards and reference Global Reporting Initiative (GRI)
Standards. The full report covers our 2020 activities related to:
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> Climate change,
energy, and
emissions
> Water supply
management,
reliability, and
resilience
> Water system
efficiency
and conservation
> Environmental
management
and compliance
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> Corporate
governance
> Ethics
> Public policy
and political
involvement
> Responsible
sourcing
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> Community support
> Stakeholder
engagement and
public participation
> Emergency preparedness
and response
> Drinking water quality
and customer safety
> Water affordability
and access
> Cybersecurity and
data privacy
> Customer service
> Diversity, inclusion,
and equality
> Talent attraction
and retention
> Training and
development
> Workplace health
and safety
> Compensation,
benefits, and
employee well-being
> Labor relations
and management
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Addressing
climate change
One issue that cuts across many of our high-priority ESG topics is climate change. Climate change is a risk that has
been identified through our Enterprise Risk Management and is overseen by me and our Board of Directors. In 2020,
in order to bolster our efforts to understand and address the risks posed by climate change, we established a Water
Resource Sustainability Department that combines employees from water supply and demand management. The new
team reports to our Chief Citizenship Officer, a new position tasked with leading future ESG efforts.
We also completed the first phase of a Climate Change Water Resources Monitoring and Adaptation Plan, which,
when completed, will enable us to develop adaptation strategies based upon the vulnerability and risks of projected
climate change impacts to our facilities, infrastructure, and water sources. This adaptation plan builds upon the climate
change study we completed in 2016.
Looking to 2021
and beyond
Having identified our top ESG priorities and produced our first report that aligns with recognized frameworks,
we are now at a point where we can identify opportunities to strengthen our ESG performance. Working with
our Board of Directors, we will establish a formal ESG vision and governance structure to drive improvement.
We will set goals and key performance metrics related to our highest priority ESG topics. We will continue to align
our disclosures with the Sustainability Accounting Standards Board (SASB) Water Utilities & Services Industry
Standards or other appropriate framework. And, most importantly, we will advance our efforts on understanding and
addressing the risks associated with climate change and reporting our progress based on the recommendations of
the Task Force on Climate-related Financial Disclosures (TCFD). We will include updates on these efforts in our next
annual Environment, Social, and Governance Report.
martin a. kropelnicki
President and Chief Executive Officer
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Top
ESG
priorities
Quality and
customer safety
Our absolute highest priority is protecting customer health and safety by providing water that meets or
surpasses stringent water quality standards. One of our five strategic corporate goals is to meet every water
quality standard, every day, in every system. It is so important to us that our executive and management
incentive compensation is tied to our performance in meeting both primary and secondary water quality
standards. In 2020, we had zero primary water quality violations, zero secondary water quality violations,
and four non-health-based, procedural violations.
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In 2020, 97% of our
employees completed
emergency response
training.
Our 2020 water
conservation rebates
and other programs will
save an estimated
472 million gallons over
their lifetime.
We had zero interruptions
in water service due to
public safety power shutoffs,
due in part to the 12 new
generators we added
in 2020.
$11
million
We currently have 102,389
customers enrolled in
our low-income customer
assistance program, and
we provided $11 million
in discounts through this
program in 2020.
240
We met or surpassed 240
water quality standards.
70,000
We collected 70,000 water
samples throughout our water
systems for testing.
400,000
We conducted 400,000
water quality tests.
140
We tested for over
140 contaminants.
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Supply
management
reliability, and
resilience
In light of the effects of climate change on future water supplies, it is little wonder that internal and external
stakeholders ranked water supply, management, reliability, and resilience so highly as an ESG priority. We recognize
that the sustainability of our business is directly tied to the sustainability of our water supply, and our focus on
resiliency is critical.
In addition to our efforts to study and prepare for climate change, we began development of our first Water Supply
Reliability Plans for our districts in 2020. These plans, in conjunction with our Urban Water Management Plans
and Conservation Master Plans, describe and evaluate sources of supply, efficient uses, reclamation, and demand
management activities. Another important facet of water supply reliability planning is ensuring that we design our
infrastructure wisely and make the investments necessary for it to operate reliably now and in the future.
In 2020, we invested $298.7 million in our water systems.
Emergency
preparedness
and response
It is our mission to provide a safe, reliable water supply to our customers and communities, even in times of emergency.
We are compliant with the National Incident Management System and the Standardized Emergency Management
System, and our emergency response program utilizes the Incident Command System in conformance with the
Emergency Preparedness Standards of the Office of Homeland Security. We stood up our longest-running Emergency
Operations Center at the beginning of the coronavirus pandemic. Thanks to our early and ongoing efforts, we
continued to meet customers’ needs, even when our staffing levels were reduced.
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Affordability
and access
Water is a basic human need, and we recognize the importance of affordability and access. This is an ongoing
challenge, as the costs of delivering a reliable supply of safe water continue to rise. To achieve affordability, we focus
on operating as efficiently as possible and making prudent and responsible investments in our water infrastructure.
On an ongoing basis, we offer a low-income assistance program to qualified customers, as well as flexible payment
arrangements, payment extensions, and stockholder-funded hardship grants. Also, in a program unique to California
Water Service, we have a Rate Support Fund that subsidizes rates in smaller systems where the costs of providing
water service are higher.
During the pandemic, we were among the first to cease all collections activities on customers’ past due accounts,
doing so before required by government and regulatory bodies. We used our stockholder-funded hardship grant
program to forgive more than $400,000 in overdue balances and continued to offer assistance to customers affected
by the pandemic. When the pandemic ends, a number of customers will have accumulated significant balances; we
are currently working with regulators on a plan to help these customers without unfairly burdening others.
Efficiency and
conservation
Another way to improve affordability and help the environment is to help customers conserve water, and we offer
a range of programs to promote end-use efficiency. For example, in 2020, we launched the new smart landscape
tune-up program, whereby we evaluate customers’ irrigation systems and then have our contractors address system
leaks and inefficiencies at no cost to the customers. This program, which targets low-income customers, reduces
water waste and promotes affordability by eliminating leaks that customers cannot afford to fix themselves. Thanks
to this program and many others, in 2020, all 24 of our California service areas achieved the 20% reduction targets
set by the State Water Resources Control Board.
It’s equally important that we maintain efficient water systems and minimize water lost through leaks. The most
important way we do this is by responsibly maintaining and upgrading our infrastructure. Our Enterprise Asset
Management applications and practices help us extract the maximum use from our infrastructure while proactively
upgrading any components that may become unreliable or more expensive to repair in the future.
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Learn
about all of
our relevant
ESG topics
Please see the full Environmental,
Social, and Governance Report at
www.calwatergroup.com/esg2020
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focus
letter
LETTER
FINANCIAL REVIEW
financial review
SERVICE AREAS
service areas
DIRECTORS
directors
™
1720 North First Street
San Jose, California 95112-4508
Phone: 408.367.8200
www.calwatergroup.com
NYSE: CWT
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