Grupo SJW (SJW): Análise de Pestle [Jan-2025 Atualizado]

No cenário dinâmico do gerenciamento de utilidades de água, o SJW Group fica na encruzilhada de desafios ambientais, regulatórios e tecnológicos complexos. Esta análise abrangente de pestles revela a intrincada rede de fatores que moldam a trajetória estratégica da empresa, das políticas de conservação de água em evolução da Califórnia até os impactos prementes das mudanças climáticas. À medida que a água se torna um recurso cada vez mais precioso, o SJW Group navega em um terreno multifacetado de pressões políticas, econômicas e sociológicas que acabarão por determinar sua resiliência e inovação na missão crítica de infraestrutura de água sustentável e prestação de serviços.

Grupo SJW (SJW) - Análise de Pestle: Fatores Políticos

Regulamentos de utilidade de água impactam a estratégia operacional

O Conselho de Controle de Recursos Hídricos do Estado da Califórnia impõe rigorosas regulamentos de qualidade da água. Em 2023, o conselho implementou 18 requisitos específicos de conformidade para utilitários de água.

Aspecto regulatório	Custo de conformidade	Linha do tempo da implementação
Padrões de qualidade da água	US $ 4,2 milhões anualmente	2024-2026
Protocolos de segurança de infraestrutura	US $ 3,7 milhões	2024

Políticas de conservação de água da Califórnia

Lei 606 do Senado da Califórnia e Projeto de Lei 1668 exigem metas específicas de conservação de água.

• Alvo de uso da água urbana: 55 galões por pessoa diariamente até 2024
• Redução obrigatória do desperdício de água: 20% até 2025
• Penalidades financeiras potenciais por não conformidade: até US $ 10.000 por violação

Planos de investimento em infraestrutura em nível estadual

Plano de Investimento de Infraestrutura da Califórnia para 2024-2029 ALOCATOS US $ 6,8 bilhões para desenvolvimento de infraestrutura aquática.

Categoria de infraestrutura	Orçamento alocado	Duração do projeto
Instalações de tratamento de água	US $ 2,3 bilhões	2024-2026
Substituição de pipeline	US $ 1,5 bilhão	2024-2027

Mudanças políticas nos direitos da água e proteção ambiental

A estrutura regulatória de 2024 da Comissão de Água da Califórnia apresenta mecanismos complexos de proteção ambiental.

• Novos requisitos de avaliação de impacto ambiental
• Permissões de extração de água subterrânea mais rigorosas
• Mandatos aprimorados de preservação do ecossistema

Potencial incerteza regulatória estimada para impactar os custos operacionais por aproximadamente US $ 5,6 milhões anualmente.

Grupo SJW (SJW) - Análise de Pestle: Fatores Econômicos

Custos de manutenção de infraestrutura crescente desafiam a sustentabilidade financeira

O SJW Group relatou despesas de manutenção de infraestrutura de US $ 54,3 milhões em 2023, representando um aumento de 7,2% em relação a 2022. As despesas de capital para atualizações de infraestrutura totalizaram US $ 72,6 milhões no ano fiscal.

Ano	Custos de manutenção de infraestrutura	Gasto de capital
2022	US $ 50,6 milhões	US $ 65,4 milhões
2023	US $ 54,3 milhões	US $ 72,6 milhões

Ajustes da taxa de água influenciados pela inflação econômica e despesas operacionais

A taxa de água aumenta em 2023 em média de 4,3%, impulsionada pela taxa de inflação de 3,4% e por escaladas de custos operacionais. As despesas operacionais totais atingiram US $ 187,2 milhões em 2023.

Indicador econômico	2023 valor
Taxa de inflação	3.4%
Aumento médio da taxa de água	4.3%
Despesas operacionais totais	US $ 187,2 milhões

Investimento em infraestrutura de água dependente de condições econômicas municipais e estaduais

O Estado da Califórnia alocou US $ 2,7 bilhões em projetos de infraestrutura de água em 2023-2024 ano fiscal. O SJW Group garantiu US $ 45,6 milhões em subsídios de infraestrutura municipal durante esse período.

Fonte de financiamento	2023-2024 Investimento
Orçamento de infraestrutura de água do estado da Califórnia	US $ 2,7 bilhões
SJW GROUP MUNICIPAL Infrastructure Subsídios	US $ 45,6 milhões

As possíveis crises econômicas na Califórnia podem afetar o consumo de água e os fluxos de receita

O consumo de água na Califórnia diminuiu 2,1% em 2023 em comparação com 2022. A receita total do SJW Group foi de US $ 298,5 milhões em 2023, com uma redução de 3,7% das projeções do ano anterior.

Métrica econômica	2022	2023	Mudar
Consumo de água	Nível anterior	2,1% diminuição	Negativo
Receita total	US $ 310,2 milhões	US $ 298,5 milhões	Redução de 3,7%

Grupo SJW (SJW) - Análise de Pestle: Fatores sociais

O aumento da conscientização do público sobre a conservação da água impulsiona o comportamento do consumidor

De acordo com o Conselho de Controle de Recursos Hídricos da Califórnia, o uso da água urbana diminuiu 21,7% em 2022 em comparação com os níveis de linha de base de 2013. O consumo médio de água diária per capita na área metropolitana de San Jose é de 47 galões.

Métrica de conservação de água	2022 dados	Tendência
Redução de água urbana	21.7%	Diminuindo
Consumo diário per capita	47 galões	Declinando

Mudanças demográficas na Califórnia afetam a demanda de água e os requisitos de serviço

Demografia populacional da Califórnia (2023):

Faixa etária	População	Percentagem
0-18 anos	8,915,233	22.5%
19-64 anos	25,687,412	64.9%
65 anos ou mais	5,146,755	12.6%

A crescente consciência ambiental influencia iniciativas de responsabilidade social corporativa

Investimentos de sustentabilidade do SJW Group em 2023: US $ 12,3 milhões, representando 4,2% do gasto total de capital.

Iniciativa de RSE	Valor do investimento	Porcentagem de Capex
Programas ambientais	US $ 12,3 milhões	4.2%

O crescimento da população urbana cria necessidades adicionais de infraestrutura e expansão de serviços

Crescimento da população urbana da Califórnia (2020-2023):

Ano	População urbana	Taxa de crescimento
2020	36,116,000	0.5%
2021	36,291,000	0.48%
2022	36,459,000	0.46%
2023	36,620,000	0.44%

Grupo SJW (SJW) - Análise de pilão: Fatores tecnológicos

A infraestrutura avançada de medição permite o monitoramento do consumo de água em tempo real

O SJW Group investiu US $ 12,4 milhões em tecnologia de infraestrutura de medição avançada (AMI) a partir de 2023. A Companhia implantou 87.654 metros de água inteligentes em seus territórios de serviço, permitindo o rastreamento de consumo de água em tempo real.

Métrica de tecnologia	2023 dados
Medidores inteligentes implantados	87.654 unidades
Investimento da AMI	US $ 12,4 milhões
Cobertura de monitoramento em tempo real	92,3% da área de serviço

Tecnologias digitais melhoram as capacidades de gerenciamento de água e detecção de vazamentos

O SJW Group implementou sistemas de detecção de vazamentos a IA, reduzindo a perda de água em 22,6% em 2023. A plataforma de gerenciamento de água digital da empresa processa 3,2 milhões de pontos de dados diariamente.

Desempenho de detecção de vazamento	2023 Métricas
Redução da perda de água	22.6%
Processamento de dados diários	3,2 milhões de pontos de dados
Precisão da detecção de vazamentos	94.7%

O investimento em tecnologias de grade de água inteligente aumenta a eficiência operacional

O SJW Group alocou US $ 18,7 milhões para as tecnologias de rede de água inteligentes em 2023, alcançando uma melhoria de 17,3% na eficiência operacional.

Investimento de grade inteligente	2023 desempenho
Investimento em tecnologia	US $ 18,7 milhões
Melhoria da eficiência operacional	17.3%
Nível de automação da grade	68.5%

Tecnologias emergentes de tratamento de água e dessalinização oferece possíveis oportunidades de inovação

O SJW Group investiu US $ 5,6 milhões em pesquisa e desenvolvimento para tecnologias avançadas de tratamento de água, concentrando -se em soluções de filtração de membrana e nanotecnologia.

Tecnologia de P&D Focus	2023 Detalhes
Investimento em P&D	US $ 5,6 milhões
Eficiência de filtração da membrana	99.2%
Áreas de pesquisa de nanotecnologia	3 fluxos de pesquisa primária

Grupo SJW (SJW) - Análise de Pestle: Fatores Legais

Conformidade com os regulamentos de qualidade da água da Califórnia

Conselho de Controle de Recursos Hídricos do Estado da Califórnia exige a conformidade estrita com os padrões de qualidade da água. O SJW Group deve aderir ao Título 22 do Código de Regulamentos da Califórnia, que requer monitoramento contínuo da qualidade da água.

Categoria de regulamentação	Requisito de conformidade	Frequência de teste
Padrões de água potável	Níveis máximos de contaminantes (MCLs)	Trimestral
Testes bacteriológicos	Monitoramento de bactérias coliformes	Mensal
Contaminantes químicos	Análise química abrangente	Anualmente

Leis de proteção ambiental

O SJW Group deve cumprir a seção 1011 do Código da Água da Califórnia, que exige gerenciamento sustentável de recursos hídricos. A Companhia investe em medidas de conservação e eficiência para atender aos requisitos regulatórios.

Lei Ambiental	Requisito específico	Custo anual de conformidade
Lei da Conservação de Água da Califórnia	20% de redução do uso de água	US $ 3,2 milhões
Lei de água potável segura	Padrões de tratamento de água	US $ 5,7 milhões

Direitos da água e desafios legais de alocação de recursos

Conselho de Controle de Recursos Hídricos da Califórnia regula os direitos da água. O Grupo SJW deve navegar em estruturas legais complexas para alocação e distribuição de água.

• Litígio dos direitos à água pendente no Tribunal Superior do Condado de Santa Clara
• Negociações em andamento com as autoridades regionais de gestão de água
• Conformidade com as licenças de extração de água subterrânea

Requisitos regulatórios de manutenção de infraestrutura

A Comissão de Serviços Públicos da Califórnia (CPUC) exige rigorosos padrões de manutenção de infraestrutura e reposição para concessionárias de água.

Categoria de infraestrutura	Ciclo de reposição	Investimento anual
Rede de água	50-75 anos	US $ 12,5 milhões
Instalações de tratamento de água	30-40 anos	US $ 8,3 milhões
Estações de bombeamento	25-35 anos	US $ 4,6 milhões

Grupo SJW (SJW) - Análise de Pestle: Fatores Ambientais

Impactos das mudanças climáticas na disponibilidade de recursos hídricos

A Califórnia experimentou 7 anos de seca entre 2011-2022, com 2021 marcando o ano mais seco já registrado. As áreas de serviço do SJW Group na Califórnia enfrentaram uma redução de 22% no suprimento de água durante os períodos de pico de seca.

Ano	Redução do abastecimento de água	ÍNDICE DE RUSTRIDADE DE SECLHAÇÃO
2021	22%	Extremo
2022	18%	Forte
2023	12%	Moderado

Condições de seca e estratégias de conservação

O SJW Group investiu US $ 14,3 milhões em infraestrutura de conservação de água em 2023. As estratégias implementadas reduziram o consumo de água em 15,6% em territórios de serviço.

Investimento em conservação	Redução do consumo de água	Atualizações de infraestrutura
US $ 14,3 milhões	15.6%	37 instalações de tratamento de água

Práticas sustentáveis ​​de gerenciamento de água

As iniciativas de sustentabilidade do SJW Group incluem:

• Projetos de recarga de água subterrânea: US $ 8,7 milhões de investimentos
• Infraestrutura de reciclagem de água: 22% aumentou a capacidade
• Tecnologia de detecção de vazamentos: perda de água reduzida em 9,3%

Preservação do ecossistema e qualidade da água

Os investimentos em proteção ambiental totalizaram US $ 22,5 milhões em 2023, com foco em:

Área de proteção	Investimento	Impacto ambiental
Proteção da bacia hidrográfica	US $ 12,6 milhões	Contaminação reduzida em 17%
Restauração do habitat	US $ 6,9 milhões	Restaurado 43 acres de ecossistema ribeirinho
Monitoramento da qualidade da água	US $ 3 milhões	316 testes trimestrais de qualidade da água

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.