This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

American States Water Company Announces Approval Of Golden State Water's Cost Of Capital Application By The California Public Utilities Commission (CPUC)

American States Water Company (NYSE:AWR) announced today that the California Public Utilities Commission ("CPUC") has approved the Cost of Capital application filed by its wholly-owned subsidiary Golden State Water Company ("GSWC") for its authorized cost of capital for 2012 through 2014.

This decision approves and authorizes GSWC a Return on Equity ("ROE") of 9.99% and a rate-making capital structure of 55% equity and 45% debt. The weighted cost of capital (rate of return on ratebase) of 8.64% includes the most recent embedded debt cost. This rate of return authorized by the CPUC will be implemented into water rates on a company-wide basis retroactive to January 1, 2012.

Robert J. Sprowls, President and CEO of AWR and GSWC said "We are pleased with the CPUC’s approval of our cost of capital filing and believe this is a fair resolution for our shareholders and customers. The revised cost of capital includes achieved lower debt costs which will be reflected in customers’ rates, and the combination of a higher equity ratio in GSWC's capital structure and a slightly lower allowed return on equity provides an opportunity for GSWC to earn an adequate return.”

Sprowls added, “GSWC has invested approximately $225 million in its distribution infrastructure over the past three years and plans to continue making significant investments in the future. We are pleased that the CPUC recognizes that California's investor-owned water utilities require a fair return in order to finance these investments."

Among other things, this decision maintains the automatic adjustment mechanism called the Water Cost of Capital Mechanism, previously adopted by the CPUC, to adjust the ROE and rate of return on ratebase between cost of capital proceedings. Rates to customers will be adjusted only if there is a positive or negative change of more than 100 basis points in the average of the Moody's Aa utility bond rate as measured over the period October 1 through September 30. If the average interest rate changes by over 100 basis points from the benchmark, the ROE will be adjusted by one half of the difference.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
AAPL $93.99 0.31%
FB $102.01 0.10%
GOOG $682.40 -0.10%
TSLA $151.04 0.38%
YHOO $27.04 1.05%


Chart of I:DJI
DOW 15,973.84 +313.66 2.00%
S&P 500 1,864.78 +35.70 1.95%
NASDAQ 4,337.5120 +70.6750 1.66%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs