Regulatory Matters (Tables)

12 Months Ended

Dec. 31, 2022

Regulatory assets, net are comprised of the following as of December 31:


	2022		2021
Regulatory assets:
Income tax temporary differences, net (a)	$	43,434	22,420
Postretirement pensions and other medical benefits	31,493		62,197
Business combinations debt premium	17,396		19,937
Balancing and memorandum accounts, net	45,769		38,334
WRA (b)	(4,488)		2,588
Other, net (c)	9,739		9,145
Total regulatory assets, net	143,343		154,621
Less: current regulatory asset, net	16,068		2,629
Total regulatory assets, net, less current portion	$	127,275	151,992

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(a)The company expects to recover regulatory assets related to plant depreciation income tax temporary differences over the average lives of the plant assets of between 5 to 75 years.

(b)WRA is a Connecticut Water decoupling mechanism that qualifies as an alternative revenue program. It is used to reconcile actual water demands with the demands projected in the most recent general rate case and allows companies to implement a surcharge or surcredit as necessary to recover the revenues approved in the general rate case.

(c)Other, net includes other regulatory mechanisms, accrued benefits for vacation, and asset retirement obligations that have not yet been passed through in rates.

Schedule of Public Utilities General Disclosures

SJWC met the recognition requirements for certain of its balancing and memorandum accounts and certain amounts subject to balancing and memorandum accounts and recorded regulatory assets, net, as follows:


	For the year ended December 31, 2022
	Beginning Balance		Regulatory Asset Increase (Decrease)	Refunds (Collections) Adjustments	Ending Balance
Revenue accounts:
Monterey Water Revenue Adjustment Mechanism (“MWRAM”)	$	16,866	6,089	(12,091)	10,864
WCMA (a)	3,534		4,041	(12,614)	(5,039)
Cost of capital memorandum accounts	(1,563)		(28)	1,416	(175)
2022 GRC interim memorandum account	—		20,650	—	20,650
All others	(386)		2,034	795	2,443
Total revenue accounts	18,451		32,786	(22,494)	28,743

Cost-recovery accounts:
Water supply costs	10,545		3,830	(4,502)	9,873
Pension	4,941		(249)	(1,857)	2,835
PRVMA (b)	707		9	(365)	351
CEMA (c)	3,245		240	—	3,485
All others	445		1,830	(1,793)	482
Total cost-recovery accounts	19,883		5,660	(8,517)	17,026

Total	$	38,334	38,446	(31,011)	45,769


	For the year ended December 31, 2021
	Beginning Balance		Regulatory Asset Increase (Decrease)	Refunds (Collections) Adjustments	Ending Balance
Revenue accounts:
MWRAM	$	12,077	4,788	1	16,866
WCMA (a)	666		3,243	(375)	3,534
Cost of capital memorandum accounts	(1,561)		(2)	—	(1,563)
All others	(1,139)		750	3	(386)
Total revenue accounts	10,043		8,779	(371)	18,451

Cost-recovery accounts:
Water supply costs	8,123		2,421	1	10,545
Pension	3,478		1,464	(1)	4,941
PRVMA (b)	1,108		1	(402)	707
CEMA (c)	2,266		979	—	3,245
All others	445		—	—	445
Total cost-recovery accounts	15,420		4,865	(402)	19,883

Total	$	25,463	13,644	(773)	38,334

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(a)In 2021, with the declaration of a drought emergency and conservation mandates in California by Governor Gavin Newsom and Valley Water, SJWC obtained approval to reestablish a WCMA effective July 20, 2021. Drought surcharges collected are used to offset the revenue losses tracked in the WCMA. For the year ended December 31, 2022 and 2021, SJWC recognized $4,041 and $3,243, respectively, in lost revenues accumulated in the WCMA. Effective on November 11, 2022, the CPUC approved the refund of the net WCMA balance of $20,474 to customers.

(b)On August 27, 2020, the Hydro Generation Research, Development and Demonstration Memorandum Account (“PRVMA”) costs of $1,219 were approved for recovery by the CPUC.

(c)On March 4, 2020, the California Governor declared a State of Emergency related to COVID-19. In response, the CPUC ordered its regulated water utilities to implement emergency customer protections in accordance with the Company’s Disaster Relief Customer Protections and Outreach Plan, including waiving reconnection deposits, offering payment arrangements, suspending water service disconnections due to non-payment and requiring water utilities to develop a transition plan regarding shutoffs and terminations with customers once the moratorium ends. The customer

protections extended through to February 1, 2022. CPUC authorized water utilities to activate a COVID-19 Catastrophic Event Memorandum Account (“CEMA") in order to track savings and costs related to SJWC’s response, which includes labor and materials, increases in bad debt from the suspension of shutoffs for non-payment, waived deposits and reconnection fees, and divergence from actual versus authorized usage. The CEMA was activated for SJWC through the filing of Advice Letter No. 546 on March 19, 2020. SJWC anticipates requesting recovery of the COVID-19 pandemic response costs in a future general rate case or other filings. SJWC has determined that future recovery of the account is probable and recognized a regulatory asset of $240 and $979 in the years ended December 31, 2022 and 2021, respectively.