California Water Service Group’s ( CWT Quick Quote CWT - Free Report) subsidiary California Water Service received an approval from The California Public Utilities Commission (CPUC) to buy the water and wastewater systems to serve the Preserve (a mixed-use community) at Millerton, and provide regulated water and wastewater service. Subject to certain closing conditions, the deal is likely to be complete after the residents occupy the area in 2022. Initiatives to Strengthen Operations
In July, the California Water Service unit filed an application with the CPUC, seeking an approval for the 2022-2024 infrastructure improvement program, which also contains new rate designs. Per this petition, the company aims to invest $1.02 billion in the aforesaid time period. In May, the utility’s other arm Texas Water Service announced that it now owns 54% of BVRT Utility Holding Company while another unit Hawaii Water Service closed the buyout of Kapalua Water Company and Kapalua Waste Treatment Company. In June, the Hawaiian subsidiary signed an agreement to acquire the assets of HOH Utilities Company.
The company is not only boosting its operations via inorganic activities but is also resorting to organic prospects. In July, it retired its old elevated water tank worth 100,000 gallon capacity from service, replacing it with a more reliable and economical pressure system to increase the water level and regulate water pressure. In the same month, it initiated a water main replacement project in central Los Altos. Such strategic actions to upgrade its infrastructure are likely to boost its customer base in the future, by increasing the resilience and reliability of its operations. After investing $298.7 million in 2020, the utility spent $138.5 million in the first six months of 2021. The company reaffirmed its 2021 capex estimates within $270-$300 million range. Investments in Water Space
Delay in revamping the pipelines could result in loss of water on a daily basis while pipeline breaks might increase the possibility of potable water contamination. Per the Water and Wastewater Equipment Manufacturers Association, an estimated investment worth $750 billion is necessary to meet demand over the next 20 years.
The aging U.S. water and wastewater infrastructure requires bulk expenditure to ensure 24x7 supply of drinkable water and continuous wastewater services. Hence, large water utilities are actively investing heavy capital in enhancing their quality of services. American Water Works Company ( AWK Quick Quote AWK - Free Report) has plans to invest $10.4 billion in the 2021-2025 time period and $22-$25 billion in the next decade. Middlesex Water Company ( MSEX Quick Quote MSEX - Free Report) has plans to invest $314 million during the 2021-2023 time period to strengthen its water and wastewater infrastructure. Another water utility Essential Utilities ( WTRG Quick Quote WTRG - Free Report) aims to spend $3 billion through 2023 to fortify operations and efficiently serve its expanding customer base. Zacks Rank & Price Performance
Shares of this currently Zacks Rank #2 (Buy) utility have gained 6.5% in the past six months, outperforming the
industry’s rise of 5.2%. You can see . the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here Six Months Price Performance Image Source: Zacks Investment Research