Cal Water signs 20-year solar power purchase agreement

SAN JOSE, Calif. - California Water Service (Cal Water), a $2.7 billion utility company currently trading at $45.13, has entered into a 20-year power purchase agreement with EDPR NA Distributed Generation LLC for a 2.35-megawatt solar photovoltaic array at its Northeast Bakersfield Treatment Plant, according to a press release statement. According to InvestingPro analysis, the company has maintained dividend payments for 55 consecutive years, with a current yield of 2.63%.

The solar installation is expected to generate approximately 3,800 megawatt-hours of renewable energy annually. Cal Water anticipates the system will reduce grid energy costs by about $1.7 million over the term of the agreement, based on current electric rates for customers in the Bakersfield District. This cost-saving initiative comes as the company generates annual revenues of $970 million, with a gross profit margin of 54.5%.

Cal Water, the largest subsidiary of California Water Service Group (NYSE:CWT), serves more than 2.1 million people across California through 499,400 service connections. InvestingPro data reveals that CWT has raised its dividend for 32 consecutive years, demonstrating strong financial stability. Discover 10+ additional exclusive insights and detailed financial analysis in the Pro Research Report, available with an InvestingPro subscription.

"At Cal Water, we are dedicated to being a responsible environmental steward, and partnering with EDPR NA DG will help us reduce traditional power costs, reach our science-aligned greenhouse gas emissions reduction targets, and increase sustainability," said Marty Kropelnicki, California Water Service Group Chairman and CEO.

EDPR NA Distributed Generation is a subsidiary of EDP Renewables North America LLC. The company currently has an operating capacity of 337 megawatts across 545 active sites.

The partnership aims to reduce Cal Water’s environmental footprint while providing lower-cost energy and helping to maintain affordable water costs for customers in one of its largest service areas.

In other recent news, California Water Service Group reported its first-quarter earnings for 2025, exceeding analysts’ expectations with an earnings per share of $0.22 against the forecasted $0.16. However, the company’s revenue came in at $203.97 million, slightly below the anticipated $207.6 million. In a strategic move, California Water Service has entered into agreements to acquire the water utility assets of Casa Loma Water Company and Palm Mutual Water Company, pending regulatory approval. These acquisitions are aimed at expanding Cal Water’s service areas and improving infrastructure.

Additionally, California Water Service Group announced a $350 million equity distribution agreement with several financial institutions. This agreement allows for the sale of its common stock through an at-the-market equity program. The program involves prominent financial entities like Robert W. Baird & Co., BofA Securities, and Morgan Stanley, among others. These developments reflect the company’s ongoing efforts to enhance its financial and operational capabilities.

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