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California Water (CWT) Provides Recycled Water to Tesoro Viejo

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California Water Service Group’s (CWT - Free Report) subsidiary California Water Service started providing recycled water to a community located in the south-eastern Madera County named Tesoro Viejo Master Mutual Water Company for landscaping and agricultural needs. At present, it provides 40,000 gallons of recycled water in a day and it is expanding its volume with the increasing occupancy of homes in the community.

It operates and maintains the community’s water systems including wastewater, recycled water and the one needed for agricultural purposes. Also, the unit is responsible for all capital projects to improve and expand the existing water systems. This move marks the company’s another effort to ensure continuous supply of safe, reliable and sustainable services for its customers. Recycling of water is part of water conservation measures and it will assist in preserving and protecting water resources.

California Water Service is efficiently managing the upgrade and maintenance work of its aging infrastructure and is making systematic investments to fortify its infrastructure. 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 the $270-$300 million range.

Investments in Water Space

The U.S. water infrastructure, which includes more than 2.2 million miles of pipelines, is aging and needs major repair and upkeep to provide proper services. Per the findings of the American Society of Civil Engineers, water main breaks occur every two minutes in the United States due to wearing away of the existing water infrastructure. Pipeline cracks induce wastage of 6 billion gallons of potable water each day and add to the loss of water utility operators. Along with increasing the cost of water services, it exposes water to the possibility of contamination.

Per the U.S. Environmental Protection Agency, an estimated $750-billion investment is necessary to sustain and expand drinking water as well as wastewater services to meet demand over the next two decades. Thus, the industry requires bulk expenditure to ensure 24x7 supply of drinkable water and continuous wastewater services.

Hence, large water utilities are actively investing in enhancing their quality of services. American Water Works Company (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 - Free Report) has plans to invest $314 million during the 2021-2023 time period to strengthen its water and wastewater infrastructure. Another water utility American States Water Company (AWR - Free Report) expects to spend in the range of $125-$135 million for the current year on regulated utilities.

Price Performance

Shares of the utility have gained 39.6% in the past year, outperforming the industry’s rise of 21.5%.

One Year Price Performance

Zacks Investment Research
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Zacks Rank

The company has a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.