California Water Service Group
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The number of customers in
2005 increased by 5,846, or 1.2%, from 2004 levels. This increase
includes 645 customers in New Mexico, 37 customers in Hawaii, 296
customers in Washington, and 4,868 additional customers in California.
Approximately 350, 270, and 169 were added through acquisitions in New
Mexico, California, and Washington, respectively, with the remaining new
customers resulting from growth in existing service areas. In 2004,
customer growth was 6,733, which included approximately 1,700 new
customers added through an acquisition in New Mexico. Water Production Expenses Water production expenses, which consist of purchased water, purchased power, and pump taxes, comprise the largest segment of total operating expenses. Water production costs accounted for 41.2%, 43.5%, and 44.2% of total operating costs in 2005, 2004, and 2003, respectively. The rates charged for wholesale water supplies, electricity, and pump taxes are established by various public agencies. As such, these rates are beyond our control. The table below provides the amount of increases (decreases), and percentage changes in water production costs during the past two years: |
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| Two of the principal factors affecting water production expenses are the amount of water produced and the source of the water. Generally, water from wells costs less than water purchased from wholesale suppliers. The table below provides the amounts, percentage change, and source mix for the respective years: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Purchased water expenses are
affected by changes in quantities purchased, upplier prices, and
cost differences between wholesale suppliers. For 2005, the $2.2 million
decrease in purchased water costs is due to a 4% decrease in quantities
purchased, partially offset by overall higher wholesale water rates. On
an overall blended basis, wholesale water rates increased 1.4% on a
cost-per-million-gallon basis. In 2004, purchased water expenses
included an additional adjustment of $0.9 million, which related to the
settlement of a meter malfunction issue in the Stockton district.
Purchased power expenses are affected by the quantity of water pumped
from wells and moved through the distribution system, rates charged by
electric utility companies, and rate structures applied to usage during
peak and non-peak times of the day or season. The purchased power
expense decrease of $1.3 million was primarily due to decreased well
production. Pump taxes were the same in 2005 as in 2004, as higher rates
offset the decreased pumping. Administrative and General Expenses Administrative and general expenses include payroll related to administrative and general functions, all Company benefits charged to expense accounts, insurance expenses, legal fees, audit fees, regulatory utility commissions’ expenses, board of directors’ fees, and general corporate expenses. |
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Download the 2005 Annual Report
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