Agreement related to ‘generational investment’ of $60 million drinking water treatment facility

SJW Group (NYSE: SJW) today announced that a stipulation agreement (settlement agreement) between its Maine subsidiary, The Maine Water Company, and the Office of Public Advocate has been approved by the Maine Public Utilities Commission. The agreement stems from a general rate application linked to the company’s $60 million investment in a new drinking water treatment facility to serve Biddeford-Saco division customers.

“The approval of the stipulation agreement is a direct result of the commitment of Maine Water employees and leaders to serve customers and the environment,” stated SJW Group Chair and President Eric W. Thornburg. “We are committed to providing quality water service for current and future generations, and our team was able to mitigate the rate impact of this generational investment while seizing the opportunity to deliver significant environmental benefits.”

The approved agreement authorizes an increase in annual revenues of $6.3 million in the Biddeford-Saco division beginning on July 1, 2022, and sets a 9.7% return on equity to be applied across all of Maine Water’s divisions until amended in a future rate case. Maine Water recently filed rate applications in its Camden-Rockland, Freeport, Milliocket and Oakland divisions that if approved as filed, would increase annual revenues by approximately $530,000. The Biddeford-Saco and four recently filed cases combined represent about 85% of the total customers served by the company.

The rate proceeding finalized by this settlement agreement was the second step in a three-step process to incrementally increase rates over three years for the new treatment facility, which is replacing a plant built in 1884 and is believed to be one of the oldest in the nation. The third step will be a future rate filing to account for the actual operating costs of the new facility.

Rick Knowlton, president of Maine Water, stated, “Mainers have a long heritage of appreciating and protecting our natural environment. In addition to continuing our commitment to protect the Saco River, the new treatment facility project includes a number of features that reflect our commitment to ESG and specifically the environment. We have set aside 250 acres of land near the facility as protected open space and conducted wetland restoration on the property. We have executed agreements for the installation of a solar photo voltaic array that will offset 100% of the energy needs of the new facility and are working on plans for a pollinator garden and a trail for passive recreation.” Knowlton added that the new facility was designed using the Envision Framework. Envision was developed in joint collaboration between the Zofnass Program for Sustainable Infrastructure at the Harvard University Graduate School of Design and the Institute for Sustainable Infrastructure.

The new treatment facility is expected to go online this spring and will serve more than 16,000 customers in southern Maine. A decision on the four recently filed rate applications is expected in 3Q.

About The Maine Water Company

Maine Water is a wholly owned subsidiary of SJW Group’s New England subsidiary, Connecticut Water Service, Inc. Maine Water and its predecessor companies have been serving customers in the state of Maine since 1880. The company provides water service to a population of more than 80,000 in 21 communities across Maine.

About SJW Group

SJW Group is among the largest investor-owned pure play water and wastewater utilities in the United States, providing life-sustaining and high-quality water service to nearly 1.5 million people. SJW Group’s locally led and operated water utilities — San Jose Water Company in California, Connecticut Water Company in Connecticut, Maine Water Company in Maine and SJWTX Inc. (dba Canyon Lake Water Service Company) in Texas — possess the financial strength, operational expertise and technological innovation to deliver outstanding service to customers, safeguard the environment and provide opportunities to employees. SJW Group remains focused on investing in its operations, remaining actively engaged in its local communities and delivering continued sustainable value to its shareholders. For more information about SJW Group, please visit www.sjwgroup.com.

Forward-Looking Statements

This release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, as amended. Some of these forward-looking statements can be identified by the use of forward-looking words such as “believes,” “expects,” “may,” “will,” “should,” “seeks,” “approximately,” “intends,” “plans,” “estimates,” “projects,” “strategy,” or “anticipates,” or the negative of those words or other comparable terminology. These forward-looking statements are only predictions and are subject to risks, uncertainties, and assumptions that are difficult to predict.

These forward-looking statements involve a number of risks, uncertainties and assumptions including, but not limited to, the following factors: (1) the effect of water, utility, environmental and other governmental policies and regulations, including actions concerning rates, authorized return on equity, authorized capital structures, capital expenditures and other decisions; (2) changes in demand for water and other services; (3) the impact of the Coronavirus (“COVID-19”) pandemic on our business operation and financial results; (4) unanticipated weather conditions and changes in seasonality including those affecting water supply and customer usage; (5) climate change and the effects thereof; (6) unexpected costs, charges or expenses; (7) our ability to successfully evaluate investments in new business and growth initiatives; (8) contamination of our water supplies and damage or failure of our water equipment and infrastructure; (9) the risk of work stoppages, strikes and other labor-related actions; (10) catastrophic events such as fires, earthquakes, explosions, floods, ice storms, tornadoes, hurricanes, terrorist acts, physical attacks, cyber-attacks, epidemic, or similar occurrences; (11) changes in general economic, political, business and financial market conditions; (12) the ability to obtain financing on favorable terms, which can be affected by various factors, including credit ratings, changes in interest rates, compliance with regulatory requirements, compliance with the terms and conditions of our outstanding indebtedness, and general market and economic conditions; and (13) legislative and general market and economic developments. The risks, uncertainties and other factors may cause the actual results, performance or achievements of SJW Group to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements.

Results for a quarter are not indicative of results for a full year due to seasonality and other factors. Other factors that may cause actual results, performance or achievements to materially differ are described in SJW Group’s most recent Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K filed with the SEC. Forward-looking statements are not guarantees of performance, and speak only as of the date made. SJW Group undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.

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