Análisis PESTLE del Grupo SJW (SJW) [Actualizado en enero de 2025]

En el panorama dinámico de la gestión de servicios de agua, SJW Group se encuentra en la encrucijada de desafíos ambientales, regulatorios y tecnológicos complejos. Este análisis integral de la mano presenta la intrincada red de factores que dan forma a la trayectoria estratégica de la compañía, desde las políticas de conservación del agua en evolución de California hasta los impactos apremiantes del cambio climático. A medida que el agua se convierte en un recurso cada vez más precioso, SJW Group navega por un terreno multifacético de presiones políticas, económicas y sociológicas que finalmente determinarán su resistencia e innovación en la misión crítica de la infraestructura de agua sostenible y la prestación de servicios.

SJW Group (SJW) - Análisis de mortero: factores políticos

Regulaciones de servicios de agua Impacto en la estrategia operativa

La Junta de Control de Recursos Hídricos del Estado de California aplica regulaciones estrictas de calidad del agua. En 2023, la junta implementó 18 Requisitos de cumplimiento específicos para servicios de agua.

Aspecto regulatorio	Costo de cumplimiento	Línea de tiempo de implementación
Normas de calidad del agua	$ 4.2 millones anuales	2024-2026
Protocolos de seguridad de infraestructura	$ 3.7 millones	2024

Políticas de conservación del agua de California

Proyecto de ley del Senado de California 606 y el proyecto de ley de la Asamblea 1668 mandato de objetivos específicos de conservación del agua.

• Objetivo de uso del agua urbana: 55 galones por persona diariamente para 2024
• Reducción obligatoria de los desechos de agua: 20% para 2025
• Sanciones financieras potenciales por incumplimiento: hasta $ 10,000 por violación

Planes de inversión de infraestructura a nivel estatal

El plan de inversión de infraestructura de California para 2024-2029 asigna $ 6.8 mil millones para el desarrollo de infraestructura de agua.

Categoría de infraestructura	Presupuesto asignado	Duración del proyecto
Instalaciones de tratamiento de agua	$ 2.3 mil millones	2024-2026
Reemplazo de la tubería	$ 1.5 mil millones	2024-2027

Cambios de política en los derechos del agua y la protección del medio ambiente

El marco regulatorio 2024 de la Comisión de Agua de California presenta Mecanismos complejos de protección ambiental.

• Nuevos requisitos de evaluación de impacto ambiental
• Permisos de extracción de agua subterránea más estricta
• Mandatos de preservación del ecosistema mejorado

Incertidumbre regulatoria potencial estimada para impactar los costos operativos en aproximadamente $ 5.6 millones anuales.

SJW Group (SJW) - Análisis de mortero: factores económicos

Costos de mantenimiento de infraestructura en aumento Desafío de sostenibilidad financiera

SJW Group informó que los gastos de mantenimiento de la infraestructura de $ 54.3 millones en 2023, lo que representa un aumento del 7.2% de 2022. Gastos de capital para mejoras de infraestructura totalizaron $ 72.6 millones en el año fiscal.

Año	Costos de mantenimiento de infraestructura	Gasto de capital
2022	$ 50.6 millones	$ 65.4 millones
2023	$ 54.3 millones	$ 72.6 millones

Ajustes de la tarifa del agua influenciado por la inflación económica y los gastos operativos

Los aumentos de la tasa de agua en 2023 promediaron 4.3%, impulsado por una tasa de inflación del 3.4% y las escaladas de costos operativos. Los gastos operativos totales alcanzaron los $ 187.2 millones en 2023.

Indicador económico	Valor 2023
Tasa de inflación	3.4%
Aumento promedio de la tasa de agua	4.3%
Gastos operativos totales	$ 187.2 millones

La inversión en infraestructura del agua depende de las condiciones económicas municipales y estatales

El estado de California asignó $ 2.7 mil millones para proyectos de infraestructura de agua en el año fiscal 2023-2024. SJW Group obtuvo $ 45.6 millones en subvenciones de infraestructura municipal durante este período.

Fuente de financiación	2023-2024 inversión
Presupuesto sobre la infraestructura del agua del estado de California	$ 2.7 mil millones
Subvenciones de infraestructura municipal del Grupo SJW	$ 45.6 millones

Las posibles recesiones económicas en California pueden afectar el consumo de agua y los flujos de ingresos

El consumo de agua en California disminuyó en un 2,1% en 2023 en comparación con 2022. Los ingresos totales del Grupo SJW fueron de $ 298.5 millones en 2023, con una reducción del 3.7% de las proyecciones del año anterior.

Métrica económica	2022	2023	Cambiar
Consumo de agua	Nivel anterior	2.1% disminución	Negativo
Ingresos totales	$ 310.2 millones	$ 298.5 millones	3.7% de reducción

SJW Group (SJW) - Análisis de mortero: factores sociales

El aumento de la conciencia pública de la conservación del agua impulsa el comportamiento del consumidor

Según la Junta de Control de Recursos Hídricos de California, el uso del agua urbana disminuyó en un 21,7% en 2022 en comparación con los niveles de referencia de 2013. El consumo promedio diario de agua per cápita en el área metropolitana de San José es de 47 galones.

Métrica de conservación del agua	Datos 2022	Tendencia
Reducción de agua urbana	21.7%	Decreciente
Consumo diario per cápita	47 galones	Declinante

Los cambios demográficos en California afectan la demanda de agua y los requisitos del servicio

Demografía de la población de California (2023):

Grupo de edad	Población	Porcentaje
0-18 años	8,915,233	22.5%
19-64 años	25,687,412	64.9%
Más de 65 años	5,146,755	12.6%

La creciente conciencia ambiental influye en iniciativas de responsabilidad social corporativa

Las inversiones de sostenibilidad de SJW Group en 2023: $ 12.3 millones, lo que representa el 4.2% del gasto total de capital.

Iniciativa de RSE	Monto de la inversión	Porcentaje de CAPEX
Programas ambientales	$ 12.3 millones	4.2%

El crecimiento de la población urbana crea infraestructura adicional y necesidades de expansión del servicio

Crecimiento de la población urbana de California (2020-2023):

Año	Población urbana	Índice de crecimiento
2020	36,116,000	0.5%
2021	36,291,000	0.48%
2022	36,459,000	0.46%
2023	36,620,000	0.44%

SJW Group (SJW) - Análisis de mortero: factores tecnológicos

La infraestructura de medición avanzada permite el monitoreo del consumo de agua en tiempo real

SJW Group invirtió $ 12.4 millones en tecnología de infraestructura de medición avanzada (AMI) a partir de 2023. La compañía desplegó 87,654 medidores de agua inteligente en sus territorios de servicio, lo que permite el seguimiento del consumo de agua en tiempo real.

Métrica de tecnología	2023 datos
Medidores inteligentes desplegados	87,654 unidades
Inversión ami	$ 12.4 millones
Cobertura de monitoreo en tiempo real	92.3% del área de servicio

Las tecnologías digitales mejoran las capacidades de gestión del agua y detección de fugas

SJW Group implementó sistemas de detección de fugas con IA, reduciendo la pérdida de agua en un 22,6% en 2023. La plataforma de gestión de agua digital de la compañía procesa 3.2 millones de puntos de datos diariamente.

Rendimiento de detección de fugas	2023 métricas
Reducción de la pérdida de agua	22.6%
Procesamiento diario de datos	3.2 millones de puntos de datos
Precisión de detección de fugas	94.7%

La inversión en tecnologías de red de agua inteligente mejora la eficiencia operativa

SJW Group asignó $ 18.7 millones a tecnologías de red de agua inteligente en 2023, logrando una mejora del 17.3% en la eficiencia operativa.

Inversión de red inteligente	2023 rendimiento
Inversión tecnológica	$ 18.7 millones
Mejora de la eficiencia operativa	17.3%
Nivel de automatización de la cuadrícula	68.5%

Las tecnologías emergentes del tratamiento del agua y la desalinización brindan oportunidades de innovación potenciales

SJW Group invirtió $ 5.6 millones en investigación y desarrollo para tecnologías avanzadas de tratamiento de agua, centrándose en la filtración de membrana y las soluciones de nanotecnología.

Enfoque tecnológico de I + D	2023 detalles
Inversión de I + D	$ 5.6 millones
Eficiencia de filtración de membrana	99.2%
Áreas de investigación de nanotecnología	3 flujos de investigación principales

SJW Group (SJW) - Análisis de mortero: factores legales

Cumplimiento de las regulaciones de calidad del agua de California

Junta de control de recursos hídricos del estado de California exige el cumplimiento estricto de los estándares de calidad del agua. SJW Group debe adherirse al Título 22 del Código de Regulaciones de California, que requiere monitoreo continuo de la calidad del agua.

Categoría de regulación	Requisito de cumplimiento	Frecuencia de prueba
Normas de agua potable	Niveles máximos de contaminantes (MCLS)	Trimestral
Prueba bacteriológica	Monitoreo de bacterias coliformes	Mensual
Contaminantes químicos	Análisis químico integral	Anualmente

Leyes de protección del medio ambiente

SJW Group debe cumplir con la sección 1011 del Código de Agua de California, que exige la gestión sostenible de recursos hídricos. La compañía invierte en medidas de conservación y eficiencia para cumplir con los requisitos reglamentarios.

Derecho ambiental	Requisito específico	Costo de cumplimiento anual
Ley de Conservación del Agua de California	20% de reducción del uso del agua	$ 3.2 millones
Ley de agua potable segura	Normas de tratamiento de agua	$ 5.7 millones

Derechos del agua y asignación de recursos desafíos legales

Junta de control de recursos hídricos de California Regula los derechos del agua. SJW Group debe navegar por marcos legales complejos para la asignación y distribución del agua.

• Litigio de derechos de agua pendiente en el Tribunal Superior del Condado de Santa Clara
• Negociaciones continuas con las autoridades regionales de gestión del agua
• Cumplimiento de los permisos de extracción de agua subterránea

Requisitos regulatorios de mantenimiento de infraestructura

La Comisión de Servicios Públicos de California (CPUC) exige estrictos estándares de mantenimiento y reemplazo de infraestructura para servicios de agua.

Categoría de infraestructura	Ciclo de reemplazo	Inversión anual
Red de agua	50-75 años	$ 12.5 millones
Instalaciones de tratamiento de agua	30-40 años	$ 8.3 millones
Estaciones de bombeo	25-35 años	$ 4.6 millones

SJW Group (SJW) - Análisis de mortero: factores ambientales

Impactos del cambio climático en la disponibilidad de recursos hídricos

California experimentó 7 años de sequía entre 2011-2022, con 2021 marcando el año más seco registrado. Las áreas de servicio del Grupo SJW en California enfrentaron una reducción del 22% en el suministro de agua durante los períodos máximos de sequía.

Año	Reducción de suministro de agua	Índice de gravedad de la sequía
2021	22%	Extremo
2022	18%	Severo
2023	12%	Moderado

Condiciones de sequía y estrategias de conservación

SJW Group invirtió $ 14.3 millones en infraestructura de conservación del agua en 2023. Las estrategias implementadas redujeron el consumo de agua en un 15,6% entre los territorios de servicio.

Inversión de conservación	Reducción del consumo de agua	Actualizaciones de infraestructura
$ 14.3 millones	15.6%	37 Instalaciones de tratamiento de agua

Prácticas sostenibles de gestión del agua

Las iniciativas de sostenibilidad de SJW Group incluyen:

• Proyectos de recarga de agua subterránea: inversión de $ 8.7 millones
• Infraestructura de reciclaje de agua: 22% mayor capacidad
• Tecnología de detección de fugas: pérdida de agua reducida en un 9.3%

Preservación del ecosistema y calidad del agua

Las inversiones de protección ambiental totalizaron $ 22.5 millones en 2023, centrándose en:

Área de protección	Inversión	Impacto ambiental
Protección de cuencas	$ 12.6 millones	Reducción de la contaminación en un 17%
Restauración del hábitat	$ 6.9 millones	Restaurado 43 acres de ecosistema ribereño
Monitoreo de la calidad del agua	$ 3 millones	316 pruebas trimestrales de calidad del agua

SJW Group (SJW) - PESTLE Analysis: Social factors

Focus on community service and high-quality water for nearly 1.6 million people

As a utility, your core social contract is simple: deliver safe, reliable water. SJW Group meets this by providing life-sustaining, high-quality water service to approximately 1.6 million people nationwide across California, Texas, Connecticut, and Maine. This scale of service is the foundation of their social license to operate. The company's commitment to community welfare extends beyond the pipe, focusing heavily on affordability programs for vulnerable customers.

In 2023, for example, SJW Group secured over $900,000 in federal assistance for low-income customers in Maine, California, and Connecticut through programs like the Low-Income Home Water Assistance Program. Plus, they helped California customers experiencing COVID-related hardships secure an additional $15.3 million via the state's Arrearage Payment Program. That's real money helping families stay current. They also committed 21% of their addressable 2023 spend to diverse vendors, a key social equity metric.

Public perception and consumer advocacy groups heavily influence rate case outcomes

Public perception is not a soft metric for a regulated utility; it directly impacts your revenue. Rate case outcomes, which determine the allowed return on investment, are heavily negotiated with consumer advocates. San Jose Water Company's 2025-2027 General Rate Case (GRC) in California is a perfect example: the final decision, which authorized a 4% rate increase effective January 1, 2025, was based on a constructive settlement agreement reached directly with the Public Advocates Office (PAO). This collaboration, instead of protracted litigation, signals a positive social and regulatory environment.

The approved GRC decision allows San Jose Water to invest $450 million in critical drinking water infrastructure over the three-year cycle. Meanwhile, the Texas subsidiary, Texas Water, is currently seeking a System Infrastructure Charge (SIC) to recover $41.2 million in completed water and wastewater projects, requesting an annual revenue increase of $4.1 million. The regulatory body's decision, expected as early as the second quarter of 2025, will be heavily influenced by the public need for this infrastructure versus the affordability concerns raised by consumer groups.

Rate Case/Charge	Service Territory	Key 2025 Financial Impact	Social/Advocacy Influence
General Rate Case (GRC)	San Jose Water (California)	4% rate increase effective Jan 1, 2025.	Final decision approved a settlement with the Public Advocates Office (PAO).
System Infrastructure Charge (SIC)	Texas Water (Texas)	Requested annual revenue increase of $4.1 million.	Application covers $39.4 million in completed water projects, addressing growth needs.

Named one of America's Most Responsible Companies 2025, boosting brand trust

Being a good corporate citizen translates directly into brand equity and trust, which is defintely a strategic asset during rate cases. Newsweek and Statista recognized SJW Group as one of America's Most Responsible Companies 2025, selecting the company among the top 600 U.S.-based firms for their positive global impact. They also earned a spot on the America's Greenest Companies 2025 list. This dual recognition validates the company's commitment to Environmental, Social, and Governance (ESG) principles, which is increasingly important for institutional investors and regulators.

This recognition is grounded in concrete actions, not just rhetoric. For instance, the company is targeting a 50% reduction in Scope 1 and Scope 2 greenhouse gas emissions by 2030, building on a 20% reduction achieved between 2019 and 2022. That's a clear commitment to environmental stewardship. Strong social performance makes it easier to justify capital plans and rate increases to the public and regulators.

Demographic shifts in high-growth areas like Texas increase demand for new infrastructure

Rapid population growth in key service areas, especially Texas, creates an urgent need for infrastructure investment. The Texas Hill Country, served by Texas Water, is experiencing significant demographic shifts, directly driving the need for capital expenditure (CapEx). The company's total planned CapEx for 2025 is a substantial $473 million, which is a significant increase over prior years, reflecting this growth pressure.

This investment is crucial for maintaining water supply resiliency and service quality for the influx of new residents. The Texas operations are currently undertaking large infrastructure projects, including the interconnection of water supplies, to meet this rising demand. Here's the quick math on the Texas investment driving future growth:

• $39.4 million in completed water projects covered by the pending SIC.
• $1.8 million in completed wastewater projects covered by the pending SIC.
• The overall $473 million 2025 CapEx plan is designed to bring critical infrastructure online.

The social imperative here is clear: fail to invest, and you risk water shortages and service disruptions, which would severely damage public trust and regulatory standing. The company is actively working to get ahead of this curve.

SJW Group (SJW) - PESTLE Analysis: Technological factors

Deployment of advanced leak detection technology is a key focus to reduce water loss.

You can't manage what you don't measure, and for a utility, water loss is a direct hit to the bottom line. SJW Group is defintely prioritizing technology to combat non-revenue water (NRW). This isn't just about saving water; it's about avoiding the capital and operational expense of treating and pumping water that never reaches a customer.

The Advanced Leak Detection Program is a concrete example of this focus. In 2024, this program was highly effective, detecting 430 leaks and saving more than 400 million gallons of water.

Here's the quick math: reducing water loss directly lowers energy consumption for pumping, which is critical when pump operations account for over 90% of the utility's annual energy costs.

Investing in capital initiatives to drive operational efficiencies across the national footprint.

SJW Group's commitment to operational efficiency is mapped out in its aggressive capital plan. The company is currently executing an approximate $2.0 billion five-year capital spending plan, which represents a 25% increase over the previous plan. This significant investment is designed to improve system reliability and reduce future operating expenses across its national footprint, which spans California, Connecticut, Maine, and Texas.

For the 2025 fiscal year alone, the company is on track to meet its infrastructure investment goal of $473 million. These funds are strategically allocated to projects that replace aging infrastructure and integrate data-driven technologies for better asset management.

Capital Investment Metric (2025 Data)	Amount/Target	Impact
Five-Year Capital Plan (Approx.)	$2.0 billion	Infrastructure modernization and growth.
Full-Year 2025 Capital Expenditures	$473 million	On track for infrastructure investment.
San Jose Water GRC Capital Plan (2025-2027)	$450 million	Three-year investment in California infrastructure.

The $2.0 billion five-year capital plan includes capitalizable costs for cloud-computing arrangements.

A key component of the infrastructure investment is the move to modern, scalable IT systems. The company's infrastructure investment, which is part of the $2.0 billion five-year capital plan, specifically includes utility plant additions and capitalizable costs associated with cloud-computing arrangements. While the exact dollar breakdown for cloud costs isn't a public line item, this focus shows a shift from traditional on-premise IT to cloud-based solutions.

This is a smart move. Migrating to the cloud allows the company to capitalize (treat as an asset) certain implementation costs for software as a service (SaaS) and other cloud-based systems, rather than immediately expensing them. This improves the regulatory rate base and spreads the cost over the asset's useful life, which is a big win for long-term financial planning.

Smart metering and grid optimization are essential for managing water conservation efforts.

The shift to Advanced Metering Infrastructure (AMI), or smart meters, is a major technological push that directly supports water conservation and customer service. This is where the utility moves from reactive to proactive management.

The AMI project for San Jose Water involves a total capital investment of $44 million. The California Public Utilities Commission (CPUC) approved a $6.8 million revenue increase for this project, effective July 1, 2025, allowing the company to recover the capital invested.

This technology, which is being rolled out over a three-year period starting in July 2024, provides customers with real-time usage data and leak alerts. Plus, the company is already leveraging a centralized data platform (like the AVEVA PI system) for grid optimization, which has resulted in a 30% decrease in energy consumption by ensuring pumps operate during off-peak hours. This optimization effort also cuts greenhouse gas emissions by 206 tons annually.

• AMI capital investment: $44 million.
• AMI revenue recovery approved: $6.8 million (effective July 1, 2025).
• Energy consumption reduction from data optimization: 30%.

SJW Group (SJW) - PESTLE Analysis: Legal factors

The regulatory landscape for SJW Group is a primary driver of its financial health, acting as both a constraint and a guaranteed revenue stream. For 2025, the key legal factor is the successful negotiation of General Rate Cases (GRCs) in its core markets, which locks in capital recovery and revenue adjustments. The regulatory structure defintely provides stability, but it also dictates the pace and scale of necessary infrastructure upgrades.

Regulatory approval from the California Public Utilities Commission (CPUC) authorized $450 million in infrastructure investment over 2025-2027

The CPUC's December 2024 decision on the General Rate Case (GRC) for San Jose Water Company, a subsidiary of SJW Group, set the financial framework for the next three years. This is the single biggest legal catalyst for the company's near-term growth. The decision authorizes a total capital investment of $450 million over the 2025 through 2027 period. This isn't just a spending budget; it's a regulatory commitment that allows the company to earn a return on that utility plant. Here's the quick math on that investment:

• Total Authorized Investment (2025-2027): $450 million
• Rate Increase for 2025: Approximately 4%, effective January 1, 2025.
• Purpose: Funding critical drinking water infrastructure, enhancing fire protection, and ensuring public health protection.

What this estimate hides is the execution risk-you have to spend the money efficiently to realize the full return. Still, the regulatory certainty around this massive capital program is a huge positive for the stock.

New rates in California include provisions for greater fixed cost recovery

A critical component of the new California rates is the shift toward greater fixed cost recovery. This regulatory structure is vital for a utility, as it reduces the revenue volatility tied to customer water usage, which can swing wildly due to weather or conservation mandates. The CPUC decision provides for 'greater fixed cost recovery' and 'greater revenue recovery through the service charge' for San Jose Water Company.

This decoupling of revenue from sales volume means that when a drought hits and customers conserve water, the company's ability to cover its fixed costs-like debt service and system maintenance-remains more stable. The new rates, which include an approximate 4% increase in 2025, are designed to align the company's authorized revenue with the actual cost of service, making the revenue stream more predictable for investors.

Connecticut uses mechanisms like the Water Infrastructure and Conservation Charge (WICA) to recover capital spending

In Connecticut, the regulatory environment for The Connecticut Water Company relies on mechanisms that allow for more timely recovery of capital investments outside of a full GRC. The Water Infrastructure and Conservation Charge (WICA) is the primary tool here. It allows for the recovery of capital spending on eligible infrastructure projects, like replacing aging water mains, on an interim basis.

For 2025, The Connecticut Water Company filed an application with the Public Utilities Regulatory Authority (PURA) for a revenue increase of approximately $1.6 million, related to $15.7 million in completed eligible projects. If approved as filed, the WICA surcharge would be 4.9%. This is a crucial regulatory tool; it speeds up the cash flow on capital expenditures, rather than forcing the company to wait years for a full rate case decision.

Compliance with state and federal drinking water standards is a continuous, high-cost requirement

The core legal mandate for any water utility is compliance with the Safe Drinking Water Act (SDWA) and state-level standards, which are continuously evolving and expensive to meet. The current high-cost compliance challenge centers on emerging contaminants like Per- and Polyfluoroalkyl Substances (PFAS). The sheer scale of the investment required to meet these standards is staggering.

SJW Group has increased its five-year capital plan to approximately $2.0 billion, a 25% increase, to fund infrastructure replacement and, notably, PFAS remediation. The company has an updated estimate of approximately $300 million dedicated specifically to installing treatment for PFAS. This is a massive, compliance-driven capital outlay.

Here's how the total 2025 CapEx breaks down as a proxy for the cost of maintaining high standards:

Regulatory Jurisdiction	Investment Mechanism	2025-2027 Capital Investment	2025 Revenue Impact / Cost Recovery
California (San Jose Water Company)	General Rate Case (GRC)	$450 million (3-year total)	Approx. 4% rate increase effective Jan 1, 2025, with greater fixed cost recovery.
Connecticut (Connecticut Water Company)	Water Infrastructure and Conservation Charge (WICA)	$15.7 million (completed eligible projects)	Application for $1.6 million revenue increase, with a potential 4.9% WICA surcharge.
Group-wide (Compliance Focus)	Total 5-Year Capital Plan (2025-2029)	$2.0 billion (5-year total)	$300 million estimated for PFAS treatment installation.

The need to address contaminants like PFAS drives long-term capital spending, but the regulatory process ensures a path to recover those costs. Finance: track the WICA decision in Q2 2025 for its impact on the $1.6 million revenue target.

SJW Group (SJW) - PESTLE Analysis: Environmental factors

\$300 Million Estimated for PFAS Treatment

The single largest environmental cost driver for SJW Group right now is the necessary investment to mitigate per- and polyfluoroalkyl substances (PFAS), often called forever chemicals, in the water supply. Honestly, this is a sector-wide issue, but it hits regulated utilities hard because the cost is immediate and non-negotiable. The company is estimating a potential cost of up to \$300 million for PFAS treatment within its five-year capital plan, which is a significant chunk of the total infrastructure spend.

To be fair, this is a moving target, but it shows the scale of the challenge. For context, the subsidiary San Jose Water Company alone is authorized to invest \$450 million over the three-year General Rate Case cycle ($\mathbf{2025}$-$\mathbf{2027}$) for critical drinking water infrastructure, and that program includes significant funds for PFAS treatment. This investment is crucial as the Environmental Protection Agency (EPA) is tightening regulations, forcing utilities to act now or risk non-compliance and public backlash.

Here's the quick math on the near-term capital focus:

Subsidiary	Timeframe	Authorized Capital Investment	Key Environmental Focus
San Jose Water Company	2025-2027	\$450 million	PFAS Treatment, Infrastructure Renewal, Environmental Conservation
SJW Group (Total)	Five-Year Plan (Estimate)	Up to \$300 million	Estimated cost for PFAS mitigation across all operations (CA, CT, ME, TX)

Goal to Use a Minimum of 50% and up to 100% Green Energy in State Operations in 2025

SJW Group is making a clear, measurable push on energy independence and carbon reduction, which is defintely a good signal for long-term operating cost stability. Their goal for $\mathbf{2025}$ is to have their state operations use a minimum of 50% and up to 100% green energy. This isn't just an ESG talking point; it's a smart hedge against volatile energy prices, which are a major operating expense for water utilities due to the energy required for pumping and treatment.

The company's national footprint includes local operating companies in California, Texas, Connecticut, and Maine. This transition is supported by a science-based target to reduce Scope 1 and Scope 2 greenhouse gas (GHG) emissions by 50% in $\mathbf{2030}$ from a $\mathbf{2019}$ baseline. That's a serious commitment aligned with the Paris Agreement goal to limit global warming to $\mathbf{1.5}$ degrees Celsius.

Climate Change Impacts on Water Supply and Usage

For a water utility, climate change isn't some abstract future risk; it's a present-day operational challenge that directly impacts both supply and customer usage. The core risk is the increased frequency of extreme weather events, which includes both prolonged drought and severe wet seasons.

In the West Coast markets, like California, the transition between long droughts and intense rainfall increases wildfire risk, weakens soil, and drives up the potential for runoff that contaminates water supplies with sediment and pollutants. This forces costly, reactive capital deployment and operational changes. SJW Group manages this by:

• Maintaining a Water Shortage Contingency Plan.
• Expanding the use of recycled water for non-potable uses to conserve drinking water.
• Implementing advanced leak detection programs that have reduced non-revenue water to less than 10% in California, saving valuable water resources.

The continuous stress on water resources makes conservation and system efficiency a permanent capital priority.

Constructing New Solar-Generation Arrays to Reduce Corporate Carbon Footprint

The company is actively constructing additional solar-generation arrays at several facilities to reduce its corporate carbon footprint. This is the practical step that underpins their green energy goals.

The existing solar generation installations are already expected to produce more than 6,000 megawatt hours of electricity annually. This infrastructure investment is a dual-purpose strategy: it reduces the environmental impact and sustainably lowers operating costs, which can ultimately benefit customers. It's a classic utility play: invest in infrastructure to drive long-term efficiency.