Employee Benefit Plans:

The components of net periodic benefit costs, before allocation to the overhead pool, for Registrant’s pension plan, postretirement plan and SERP for the three and six months ended June 30, 2017 and 2016 are as follows:



	For The Three Months Ended June 30,
	Pension Benefits						Other Postretirement Benefits						SERP
(dollars in thousands)	2017			2016			2017			2016			2017		2016
Components of Net Periodic Benefits Cost:
Service cost	$	1,249		$	1,316		$	59		$	68		$	232	$	200
Interest cost	1,985			2,026			85			97			223		186
Expected return on plan assets	(2,240		)	(2,460		)	(122		)	(122		)	—		—
Amortization of prior service cost (benefit)	—			12			—			(9		)	3		6
Amortization of actuarial (gain) loss	253			329			(170		)	(150		)	194		73
Net periodic pension cost under accounting standards	1,247			1,223			(148		)	(116		)	652		465
Regulatory adjustment — deferred	92			64			—			—			—		—
Total expense recognized, before surcharges and allocation to overhead pool	$	1,339		$	1,287		$	(148	)	$	(116	)	$	652	$	465



	For The Six Months Ended June 30,
	Pension Benefits						Other Postretirement Benefits						SERP
(dollars in thousands)	2017			2016			2017			2016			2017		2016
Components of Net Periodic Benefits Cost:
Service cost	$	2,500		$	2,548		$	118		$	136		$	464	$	400
Interest cost	3,952			3,956			170			194			446		372
Expected return on plan assets	(4,850		)	(4,920		)	(244		)	(244		)	—		—
Amortization of prior service cost (benefit)	—			24			—			(18		)	6		12
Amortization of actuarial (gain) loss	462			456			(340		)	(300		)	388		146
Net periodic pension cost under accounting standards	2,064			2,064			(296		)	(232		)	1,304		930
Regulatory adjustment — deferred	525			423			—			—			—		—
Total expense recognized, before surcharges and allocation to overhead pool	$	2,589		$	2,487		$	(296	)	$	(232	)	$	1,304	$	930

Registrant expects to contribute $6.5 million to its pension plan during 2017.

Regulatory Adjustment:

As authorized by the CPUC in the most recent water and electric general rate case decisions, GSWC utilizes two-way balancing accounts for its water and electric regions and the general office to track differences between the forecasted annual pension expenses in rates or expected to be in rates and the actual annual expense recorded by GSWC in accordance with the accounting guidance for pension costs. As of June 30, 2017, GSWC had a total $259,000 net under-collection in the two-way pension balancing accounts included as part of the pension regulatory asset (Note 2).