Summary of Significant Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2018

The major components of depreciable plant and equipment as of December 31, 2018 and 2017 are as follows:



	2018		2017
Equipment	$	335,358	307,938
Transmission and distribution	1,375,821		1,295,690
Office buildings and other structures	121,872		110,600
Total depreciable plant and equipment	$	1,833,051	1,714,228

Depreciation is computed using the straight-line method over the estimated remaining service lives of groups of assets, ranging from 5 to 75 years. The estimated service lives of depreciable plant and equipment are as follows:



	Useful Lives
Equipment	5 to 35 years
Transmission and distribution plant	35 to 75 years
Office buildings and other structures	7 to 50 years

Schedule of Real Estate Investments

The major components of real estate investments as of December 31, 2018 and 2017 are as follows:



	2018		2017
Land	$	13,262	13,262
Buildings and improvements	43,074		42,951
Total real estate investment	$	56,336	56,213

Schedule of Future Minimum Rental Payments for Operating Leases

The following schedule shows the future minimum rental payments to be received from third parties under operating leases that have remaining noncancelable lease terms in excess of one year as of December 31, 2018:



Year ending December 31:	Rental Revenue
2019	$	4,432
2020	4,513
2021	2,644
2022	1,184
2023	1,198
Thereafter	5,565

Schedule of Balancing and Memorandum Accounts

San Jose Water Company met the recognition requirements for certain of its balancing and memorandum accounts and certain amounts subject to balancing and memorandum accounts and recorded revenue and regulatory assets as follows:



	For the year ended December 31, 2018
	Beginning Balance			Regulatory Asset Increase (Decrease)		Refunds (Collections) Adjustments		Surcharge Offset and Other	Ending Balance

Revenue accounts:
2014 - 2016 WCMA	191			(116	)	4		—	79
2017 WCMA	6,489			1,182		—		—	7,671
2018 WCMA	—			9,386		—		—	9,386
2012 General Rate Case true-up	11,319			—		9		—	11,328
2015 General Rate Case true-up	115			—		3		—	118
Cost of capital memorandum accounts	(144		)	(1,379	)	—		—	(1,523	)
Tax memorandum account	—			(6,504	)	—		—	(6,504	)
All others	3,735			1,258		1		—	4,994
Total revenue accounts	$	21,705		3,827		17		—	25,549

Cost-recovery accounts:
Water supply costs	8,679			939		(1	)	—	9,617
Pension	(2,459		)	614		2		—	(1,843	)
All others	—			1,090		—		—	1,090
Total cost-recovery accounts	$	6,220		2,643		1		—	8,864

Total	$	27,925		6,470		18		—	34,413



	For the year ended December 31, 2017
	Beginning Balance			Regulatory Asset Increase (Decrease)	Refunds (Collections) Adjustments		Surcharge Offset and Other		Ending Balance

Revenue accounts:
2014 - 2016 WCMA	1,589			4,758	(4,704	)	(1,452	)	191
2017 WCMA	—			12,530	—		(6,041	)	6,489
2012 General Rate Case true-up	20,682			—	(9,363	)	—		11,319
2015 General Rate Case true-up	5,528			—	(5,413	)	—		115
Cost of capital memorandum accounts	(817		)	—	673		—		(144	)
Drought surcharges	(7,688		)	—	(765	)	8,453		—
Cost-recovery accounts	3,181			3,815	(776	)	—		6,220
All others	3,434			1,084	(858	)	75		3,735

Total	$	25,909		22,187	(21,206	)	1,035		27,925



	For the year ended December 31, 2016
	Beginning Balance			Regulatory Asset Increase (Decrease)	Refunds (Collections) Adjustments		Surcharge Offset and Other		Ending Balance

Revenue accounts:
2014 - 2016 WCMA	8,316			17,107	(7,126	)	(16,708	)	1,589
2012 General Rate Case true-up	33,070			—	(12,388	)	—		20,682
2015 General Rate Case true-up	—			8,767	(3,239	)	—		5,528
Cost of capital memorandum accounts	(1,440		)	3	620		—		(817	)
Drought surcharges	(359		)	—	(24,037	)	16,708		(7,688	)
Cost-recovery accounts	2,219			2,740	(1,778	)	—		3,181
All others	3,400			1,270	(1,236	)	—		3,434

Total	$	45,206		29,887	(49,184	)	—		25,909

Schedule of Regulatory Assets and Liabilities

Regulatory assets and liabilities are comprised of the following as of December 31:



	2018		2017
Regulatory assets:
Postretirement pensions and other medical benefits	$	66,233	$	68,556
Balancing and memorandum accounts, net	34,413		27,925
Other, net	2,979		3,073
Total regulatory assets, net in Consolidated Balance Sheets	$	103,625	99,554
Less: current regulatory asset, net	26,910		—
Total regulatory assets, net, less current portion	$	76,715	99,554

Regulatory liability:
Income tax temporary differences, net	$	59,149	62,476
Total regulatory liability in Consolidated Balance Sheets	$	59,149	62,476

Schedule of Estimated Refunds of Advances for Construction and Contributions in Aid of Construction

Estimated refunds for the next five years and thereafter are shown below:



	Estimated Refunds
2019	$	2,818
2020	2,818
2021	2,818
2022	2,818
2023	2,806
Thereafter	51,257

Schedule of Asset Retirement Obligations

December 31, 2018 and 2017, the asset retirement obligation is as follows:



	2018			2017
Retirement obligation	$	4,803		5,231
Discount rate	6		%	6	%
Regulatory asset, present value, recorded as a liability	$	942		1,184

Disaggregation of Revenue

The major streams of revenue for SJW Group are as follows:



	2018		2017			2016
Revenue from contracts with customers	389,302		$	381,777		328,249
Alternative revenue programs, net - WCMA	10,456		12,584			9,981
Other balancing and memorandum accounts revenue, net (1)	(7,541	)	(10,838		)	(5,241	)
Rental income	5,482		5,702			6,717
	397,699		$	389,225		339,706

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(1) For year ended December 31, 2018, $2,643 of amounts related to cost-recovery balancing accounts which upon adoption of Topic 606 are recorded as capitalized costs rather than revenue until recovery is approved by the CPUC. Prior to adoption of Topic 606, these amounts were recorded as revenue. For further discussion, please see “Balancing and Memorandum Accounts” above.