The total return on your investment in California Water Service Group increased nearly 9% in 2006, as annual dividends increased for the 39th consecutive year to $1.15 per share (at a yield of approximately 3%)
California Public Utilities Commission sets customer rates in each of our 24 service areas on a staggered basis once every three years. As a result, under current regulatory rules, prudently incurred and reasonable increases in certain expenses, such as those associated with employee health and welfare plans and mandatory compliance with Sarbanes-Oxley (SOX) requirements, take several years to be fully reflected in rates. This delay, known in the utility industry as “regulatory lag,” affected 2006 results. The good news is that we believe that this type of expense increase will be recovered in future years in a timelier manner, thanks to the California Public Utilities Commission's adoption of the Water Action Plan.
2:00 p.m. A new homeowner turns on a faucet and finds that his water service has been started, just as Cal Water's professional customer service representative said it would. Meanwhile, employees throughout the Company are executing a four-pronged strategy that will positively affect that homeowner for years to come.