SAN JOSE, Calif., Oct. 4, 2002 -- Moody's Investors Service Friday announced its decision to place California Water Service Company's debt rating on review for possible downgrade as a result of delayed rate relief from the California Public Utilities Commission and ongoing capital spending requirements.
California Water Service Co. (Cal Water) is the largest subsidiary of California Water Service Group.
Cal Water currently has a Moody's debt rating of Aa3, the highest in the water industry. Moody's decision on whether to change the debt rating will be driven by Cal Water's cash flow, future financing plans, and rate case decisions expected from the California Public Utilities Commission in the fourth quarter of 2002.
"We certainly understand Moody's decision to review our debt rating, but we hope that our efforts to respond to a difficult regulatory climate and our achievements in the area of expense control will enable us to keep our Aa3 rating," said Chief Financial Officer Gerald F. Feeney.
According to Feeney, the passage of Assembly Bill 2838 is extraordinarily good news for all regulated water utilities in California. AB 2838 authorizes water utilities to increase rates at levels based on inflation if the California Public Utilities Commission does not meet the deadlines set forth in its Rate Case Plan.
The company will provide more information on AB 2838, signed into law by Governor Davis earlier this week, in an upcoming news release.
California Water Service Group is the parent company of California Water Service Company, Washington Water Service Company, New Mexico Water Service Company, and CWS Utility Services.
The subsidiaries provide regulated and non-regulated water service to over 1.7 million people in 98 communities. The Company's common stock trades on the New York Stock Exchange under the symbol "CWT".
Additional information is available at the Company's web site at www.calwater.com.
Source: California Water Service Group
