Global Water Resources seeks rate hike in 2025

PHOENIX, AZ - Global Water Resources, Inc. (GWRS), a water supply company with a market capitalization of $273 million and an impressive 74% gross profit margin according to InvestingPro, has announced its intention to file a rate case for two of its utilities, GW-Santa Cruz Water Company, Inc. and GW-Palo Verde Utilities Company, Inc., with the Arizona Corporation Commission ( ACC (NSE:ACC)). The company has demonstrated consistent shareholder returns, having raised its dividend for nine consecutive years. This filing, which is part of the company’s preparation for a rate case in 2025, aims to implement a moderate increase in rates over a two-year period starting around mid-2026.

The proposed rate adjustments would result in an approximate 11% increase in the total median monthly aggregate bill for customers of GW-Santa Cruz and GW-Palo Verde, based on current rates. The increase is intended to address matters related to the company’s Southwest Plant, including the recovery of investment and premature revenue collection.

It’s important to note that these projected rate increases are preliminary and could change as the company finalizes its rate case schedule and submits its application. The outcome of the rate case is uncertain, and the ACC’s final decision could differ from the company’s request. The ACC has the authority to approve, deny, or modify the proposed rate increases and could potentially order a decrease in future rates.

This news comes directly from a recent SEC filing, where the company also provided cautionary notes regarding forward-looking statements. These statements involve assumptions, risks, uncertainties, and other factors that could cause actual results to differ materially from expectations. The company highlighted that the forward-looking statements, which include anticipated rate case filings and expected actions by the ACC, should not be relied upon unduly.

Global Water Resources has made it clear that it does not plan to update any forward-looking statements publicly, except as required by law, whether due to new information, future developments, or otherwise. This announcement is based on the company’s current expectations and may change as the rate case progresses and as further decisions by the ACC are made. Currently trading near its 52-week low, InvestingPro’s Fair Value analysis suggests the stock is overvalued at current levels. Investors can access the comprehensive Pro Research Report, available for GWRS and 1,400+ other US stocks, for detailed financial analysis and expert insights.

In other recent news, Global Water Resources, Inc. has been in the headlines for two significant developments. The water resource management company has reached a settlement agreement that could potentially increase annual revenue by $1.1 million, subject to approval by the Arizona Corporation Commission. The agreement, related to the company’s subsidiary GW-Farmers, includes a rate increase implemented in stages and a provision for deferring the recovery of a $3 million acquisition premium.

Simultaneously, Global Water Resources has updated its executive compensation structure, entering into new employment agreements with its top executives. The agreements, which take effect from January 1, 2025, involve President and CEO Ron Fleming, CFO Michael J. Liebman, and COO Christopher D. Krygier. Their annual base salaries will see an increase, and they are also eligible for annual incentive compensation and restricted stock grants.

These are recent developments for the company, with the final decision on the rate increase resting with the ACC following an upcoming hearing. The updated executive compensation details are based on a recent SEC filing and are subject to annual review and adjustment by the company’s board.

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