SJW Group (SJW): Analyse Pestle [Jan-2025 MISE À JOUR]

Dans le paysage dynamique de la gestion des services publics de l'eau, SJW Group se tient à la carrefour des défis environnementaux, réglementaires et technologiques complexes. Cette analyse complète du pilon dévoile le réseau complexe de facteurs qui façonnent la trajectoire stratégique de l'entreprise, des politiques de conservation de l'eau en évolution de la Californie aux impacts urgents du changement climatique. Alors que l'eau devient une ressource de plus en plus précieuse, le groupe SJW navigue sur un terrain à multiples facettes de pressions politiques, économiques et sociologiques qui détermineront finalement sa résilience et son innovation dans la mission critique des infrastructures d'eau durables et de la prestation de services.

SJW Group (SJW) - Analyse du pilon: facteurs politiques

Règlement sur les services publics de l'eau Impact sur la stratégie opérationnelle

California State Water Resources Control Board Board applique des réglementations strictes sur la qualité de l'eau. En 2023, le conseil a mis en œuvre 18 Exigences de conformité spécifiques pour les services d'eau.

Aspect réglementaire	Coût de conformité	Chronologie de la mise en œuvre
Normes de qualité de l'eau	4,2 millions de dollars par an	2024-2026
Protocoles de sécurité des infrastructures	3,7 millions de dollars	2024

Politiques de conservation de l'eau de la Californie

Le projet de loi 606 du Sénat de Californie et le projet de loi de l'Assemblée 1668 obligent des cibles spécifiques de conservation de l'eau.

• Target d'utilisation de l'eau urbaine: 55 gallons par personne par jour d'ici 2024
• Réduction obligatoire des déchets d'eau: 20% d'ici 2025
• Pénalités financières potentielles pour la non-conformité: jusqu'à 10 000 $ par violation

Plans d'investissement dans l'infrastructure au niveau de l'État

California Infrastructure Investment Plan pour le 2024-2029 ALLOCATE 6,8 milliards de dollars pour le développement des infrastructures aquatiques.

Catégorie d'infrastructure	Budget alloué	Durée du projet
Installations de traitement de l'eau	2,3 milliards de dollars	2024-2026
Remplacement du pipeline	1,5 milliard de dollars	2024-2027

Changements de politique dans les droits de l'eau et la protection de l'environnement

Le cadre réglementaire de la California Water Commission introduit Mécanismes complexes de protection de l'environnement.

• Nouvelles exigences d'évaluation de l'impact environnemental
• Permis d'extraction des eaux souterraines plus strictes
• MANDATS DE PRÉservation des écosystèmes améliorés

L'incertitude réglementaire potentielle estimée pour avoir un impact sur les coûts opérationnels approximativement 5,6 millions de dollars par an.

SJW Group (SJW) - Analyse du pilon: facteurs économiques

Les coûts de maintenance des infrastructures croissants remettent en question la durabilité financière

SJW Group a déclaré des frais de maintenance des infrastructures de 54,3 millions de dollars en 2023, ce qui représente une augmentation de 7,2% par rapport à 2022. Les dépenses en capital pour les améliorations des infrastructures ont totalisé 72,6 millions de dollars au cours de l'exercice.

Année	Coûts de maintenance des infrastructures	Dépenses en capital
2022	50,6 millions de dollars	65,4 millions de dollars
2023	54,3 millions de dollars	72,6 millions de dollars

Ajustements de taux d'eau influencés par l'inflation économique et les dépenses opérationnelles

L'augmentation du taux d'eau en 2023 était en moyenne de 4,3%, entraînée par un taux d'inflation de 3,4% et une escalade des coûts opérationnels. Les dépenses opérationnelles totales ont atteint 187,2 millions de dollars en 2023.

Indicateur économique	Valeur 2023
Taux d'inflation	3.4%
Augmentation moyenne du taux d'eau	4.3%
Dépenses opérationnelles totales	187,2 millions de dollars

Investissement dans les infrastructures hydrauliques dépendant des conditions économiques municipales et étatiques

L'État de Californie a alloué 2,7 milliards de dollars pour les projets d'infrastructures aquatiques en 2023-2024 pour l'exercice. Le groupe SJW a obtenu 45,6 millions de dollars de subventions d'infrastructures municipales au cours de cette période.

Source de financement	2023-2024 Investissement
Budget des infrastructures d'eau de l'État de Californie	2,7 milliards de dollars
Groupe d'infrastructures municipales du groupe SJW	45,6 millions de dollars

Les ralentissements économiques potentiels en Californie peuvent avoir un impact sur la consommation d'eau et les sources de revenus

La consommation d'eau en Californie a diminué de 2,1% en 2023 par rapport à 2022. Le chiffre d'affaires total du groupe SJW était de 298,5 millions de dollars en 2023, avec une réduction de 3,7% par rapport aux projections de l'année précédente.

Métrique économique	2022	2023	Changement
Consommation d'eau	Niveau précédent	2,1% de diminution	Négatif
Revenus totaux	310,2 millions de dollars	298,5 millions de dollars	Réduction de 3,7%

SJW Group (SJW) - Analyse du pilon: facteurs sociaux

L'augmentation de la sensibilisation du public à la conservation de l'eau entraîne le comportement des consommateurs

Selon le California Water Resources Control Board, l'utilisation de l'eau urbaine a diminué de 21,7% en 2022 par rapport aux niveaux de base de 2013. La consommation d'eau quotidienne moyenne par habitant dans la région métropolitaine de San Jose est de 47 gallons.

Métrique de conservation de l'eau	2022 données	S'orienter
Réduction de l'eau urbaine	21.7%	Diminution
Consommation quotidienne par habitant	47 gallons	Déclinant

Les changements démographiques en Californie affectent la demande en eau et les exigences de service

California Population démographie (2023):

Groupe d'âge	Population	Pourcentage
0-18 ans	8,915,233	22.5%
19-64 ans	25,687,412	64.9%
65 ans et plus	5,146,755	12.6%

La conscience environnementale croissante influence les initiatives de responsabilité sociale des entreprises

Investissements en durabilité du groupe SJW en 2023: 12,3 millions de dollars, ce qui représente 4,2% du total des dépenses en capital.

Initiative RSE	Montant d'investissement	Pourcentage de CAPEX
Programmes environnementaux	12,3 millions de dollars	4.2%

La croissance de la population urbaine crée des besoins supplémentaires sur les infrastructures et l'expansion des services

California Urban Urban Population Growth (2020-2023):

Année	Population urbaine	Taux de croissance
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) - Analyse du pilon: facteurs technologiques

L'infrastructure de mesure avancée permet une surveillance de la consommation d'eau en temps réel

SJW Group a investi 12,4 millions de dollars dans la technologie avancée des infrastructures d'infrastructure (AMI) en 2023. La société a déployé 87 654 compteurs d'eau intelligents sur ses territoires de service, permettant le suivi de la consommation d'eau en temps réel.

Métrique technologique	2023 données
Compteurs intelligents déployés	87 654 unités
Investissement AMI	12,4 millions de dollars
Couverture de surveillance en temps réel	92,3% de la zone de service

Les technologies numériques améliorent la gestion de l'eau et les capacités de détection des fuites

Le groupe SJW a mis en place des systèmes de détection de fuites alimentés par l'IA, réduisant la perte d'eau de 22,6% en 2023. La plate-forme numérique de gestion de l'eau de l'entreprise traite 3,2 millions de points de données par jour.

Performance de détection des fuites	2023 métriques
Réduction de la perte d'eau	22.6%
Traitement quotidien des données	3,2 millions de points de données
Précision de détection des fuites	94.7%

L'investissement dans Smart Water Grid Technologies améliore l'efficacité opérationnelle

Le groupe SJW a alloué 18,7 millions de dollars aux technologies de réseau d'eau intelligente en 2023, ce qui a obtenu une amélioration de 17,3% de l'efficacité opérationnelle.

Investissement de grille intelligente	Performance de 2023
Investissement technologique	18,7 millions de dollars
Amélioration de l'efficacité opérationnelle	17.3%
Niveau d'automatisation de la grille	68.5%

Les technologies émergentes de traitement de l'eau et de dessalement offrent des opportunités d'innovation potentielles

SJW Group a investi 5,6 millions de dollars dans la recherche et le développement pour les technologies avancées de traitement de l'eau, en se concentrant sur les solutions de filtration membranaire et de nanotechnologie.

Focus de R&D technologique	2023 Détails
Investissement en R&D	5,6 millions de dollars
Efficacité de filtration membranaire	99.2%
Domaines de recherche en nanotechnologie	3 Streams de recherche primaires

SJW Group (SJW) - Analyse du pilon: facteurs juridiques

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

California State Water Resources Control Board mandater une conformité stricte aux normes de qualité de l'eau. Le groupe SJW doit adhérer au titre 22 du California Code of Regulations, qui nécessite une surveillance continue de la qualité de l'eau.

Catégorie de réglementation	Exigence de conformité	Fréquence des tests
Normes d'eau potable	Niveaux de contaminants maximaux (MCLS)	Trimestriel
Test bactériologique	Surveillance des bactéries coliformes	Mensuel
Contaminants chimiques	Analyse chimique complète	Annuellement

Lois sur la protection de l'environnement

Le groupe SJW doit se conformer à la section 1011 du California Water Code, qui exige la gestion durable des ressources en eau. La société investit dans des mesures de conservation et d'efficacité pour répondre aux exigences réglementaires.

Droit de l'environnement	Exigence spécifique	Coût annuel de conformité
California Water Conservation Act	Réduction à 20% d'eau	3,2 millions de dollars
Acte de l'eau potable	Normes de traitement de l'eau	5,7 millions de dollars

Conteste juridique des droits de l'eau et des ressources

California Water Resources Control Board réglemente les droits de l'eau. Le groupe SJW doit naviguer dans des cadres juridiques complexes pour l'allocation et la distribution de l'eau.

• Construction des droits de l'eau en instance devant la Cour supérieure du comté de Santa Clara
• Négociations en cours avec les autorités régionales de gestion de l'eau
• Conformité aux permis d'extraction des eaux souterraines

Exigences réglementaires de la maintenance des infrastructures

La California Public Utilities Commission (CPUC) oblige les normes strictes de maintenance des infrastructures et de remplacement pour les services publics de l'eau.

Catégorie d'infrastructure	Cycle de remplacement	Investissement annuel
MAINS DE L'EAU	50-75 ans	12,5 millions de dollars
Installations de traitement de l'eau	30-40 ans	8,3 millions de dollars
Stations de pompage	25-35 ans	4,6 millions de dollars

SJW Group (SJW) - Analyse du pilon: facteurs environnementaux

Les effets du changement climatique sur la disponibilité des ressources en eau

La Californie a connu 7 années de sécheresse entre 2011 et 2022, 2021 marquant l'année la plus sèche jamais enregistrée. Les zones de service du groupe SJW en Californie ont connu une réduction de 22% de l'approvisionnement en eau pendant les périodes de sécheresse de pointe.

Année	Réduction de l'approvisionnement en eau	Indice de gravité de la sécheresse
2021	22%	Extrême
2022	18%	Grave
2023	12%	Modéré

Conditions de sécheresse et stratégies de conservation

SJW Group a investi 14,3 millions de dollars dans l'infrastructure de conservation de l'eau en 2023. Les stratégies ont mis en œuvre la consommation d'eau de 15,6% entre les territoires de service.

Investissement de conservation	Réduction de la consommation d'eau	Mises à niveau des infrastructures
14,3 millions de dollars	15.6%	37 installations de traitement de l'eau

Pratiques de gestion durable de l'eau

Les initiatives de durabilité du groupe SJW comprennent:

• Projets de recharge des eaux souterraines: 8,7 millions de dollars d'investissement
• Infrastructure de recyclage de l'eau: 22% de capacité
• Technologie de détection des fuites: réduction de la perte d'eau de 9,3%

Conservation des écosystèmes et qualité de l'eau

Les investissements en protection de l'environnement ont totalisé 22,5 millions de dollars en 2023, en se concentrant sur:

Zone de protection	Investissement	Impact environnemental
Protection des bassins versants	12,6 millions de dollars	Réduction de la contamination de 17%
Restauration de l'habitat	6,9 millions de dollars	Restauré 43 acres d'écosystème riverain
Surveillance de la qualité de l'eau	3 millions de dollars	316 tests trimestriels de qualité de l'eau

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.