Climate Change and Water Resource Sustainability Report

Analysis underscores need for ongoing infrastructure investments and stakeholder collaboration

Cal Water released an Executive Summary of findings of its Climate Change Risk Assessment and Adaptation Framework (Climate Report) today. The report, prepared in conjunction with independent consultant ICF, identifies and prioritizes climate-driven risks to Cal Water’s facilities, operations, and water supply portfolio, and underscores the need for ongoing infrastructure investment and collaboration.

“We are seeing the impacts of climate change on our communities, and we have been taking steps to mitigate, manage, and adapt to it,” said Marty Kropelnicki, Cal Water President and CEO. “We’re sharing findings of our analysis as we move forward with our environmental, social, and governance (ESG) commitments to work with community leaders and partners to address this business and societal imperative.”

In 2016, Cal Water completed its first study to understand the impacts of climate change on its water sources. In 2020, the company began updating and expanding this work, resulting in the release of select findings from the Climate Report. As a result of its work with ICF, Cal Water has established a foundational framework to develop adaptation strategies designed to reduce the impact of climate change on its operations and better position the utility to meet customers’ ongoing needs amid a changing environment. Additionally, Cal Water has already begun to address climate change risks through continued infrastructure investments. This includes:

• Wildfire preparation—Infrastructure projects and upgrades to increase reliability in the event of a wildfire and help prevent the loss of power at key facilities, along with protections for worker safety;
• Treatment plant analysis—Systematic review of climate change-driven risks to treatment plants caused by fires, droughts, intense rainstorms, or excessive agricultural nutrient loads; and
• Long-term demand model update—Improvements in modeling for more effective management of water resources, including addition of evapotranspiration, and updates of climate projection inputs.

“This framework will be foundational to our efforts to invest in the sustainability and resiliency of our business, so that we ensure that we can meet the needs of our customers well into the future,” Kropelnicki said.

In addition to the framework, Cal Water plans to re-evaluate climate vulnerability and risk on a regular, periodic basis and consider ways to further integrate district-specific climate projections into supply reliability.

This news release contains forward-looking statements within the meaning established by the Private Securities Litigation Reform Act of 1995 (“Act”). The forward-looking statements are intended to qualify under provisions of the federal securities laws for “safe harbor” treatment established by the Act. Forward-looking statements are based on currently available information, expectations, estimates, assumptions and projections, and management’s judgment about the Company, the water utility industry and general economic conditions. Such words as will, would, expects, intends, plans, believes, estimates, assumes, anticipates, projects, predicts, forecasts or variations of such words or similar expressions are intended to identify forward-looking statements. The forward-looking statements are not guarantees of future performance. They are subject to uncertainty and changes in circumstances. Actual results may vary materially from what is contained in a forward-looking statement. Factors that may cause a result different than expected or anticipated include, but are not limited to: natural disasters, public health crises, pandemics, epidemics or outbreaks of a contagious disease, such as the outbreak of coronavirus (or COVID‐19), governmental and regulatory commissions’ decisions, including decisions on our GRC and on proper disposition of property; consequences of eminent domain actions relating to our water systems; changes in regulatory commissions’ policies and procedures; the timeliness of regulatory commissions’ actions concerning rate relief and other actions; changes in water quality standards; changes in environmental compliance and water quality requirements; electric power interruptions; housing and customer growth trends; the impact of opposition to rate increases; our ability to recover costs; availability of water supplies; issues with the implementation, maintenance or security of our information technology systems; civil disturbances or terrorist threats or acts; the adequacy of our efforts to mitigate physical and cyber security risks and threats and the impact of climate change on our business; the ability of our enterprise risk management processes to identify or address risks adequately; labor relations matters as we negotiate with unions; changes in customer water use patterns and the effects of conservation; the impact of weather, climate, natural disasters, and diseases on water quality, water availability, water sales and operating results, and the adequacy of our emergency preparedness; and, other risks and unforeseen events. When considering forward-looking statements, you should keep in mind the cautionary statements included in this paragraph, as well as the annual 10-K, Quarterly 10-Q, and other reports filed from time-to-time with the Securities and Exchange Commission (SEC). The Company assumes no obligation to provide public updates of forward-looking statements.