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Balancing and Memorandum Accounts
 6 Months Ended
Jun. 30, 2020
Regulated Operations [Abstract]  
BALANCING AND MEMORANDUM ACCOUNTS
Balancing and Memorandum Accounts
SJWC has established balancing accounts for the purpose of tracking the under-collection or over-collection associated with expense changes and the revenue authorized by the CPUC to offset those expense changes. SJWC also maintains memorandum accounts to track revenue impacts due to catastrophic events, certain unforeseen water quality expenses related to new federal and state water quality standards, energy efficiency, water conservation, water tariffs, and other approved activities or as directed by the CPUC. The Monterey Water Revenue Adjustment Mechanism (“WRAM”) tracks the difference between the revenue received for actual metered sales through the tiered volumetric rate and the revenue that would have been received with the same actual metered sales if a uniform rate would have been in effect.
Balancing and memorandum accounts are recognized by SJWC when it is probable that future recovery of previously incurred costs or future refunds that are to be credited to customers will occur through the ratemaking process. In addition, in the case of special revenue programs such as the Water Conservation Memorandum Account (“WCMA”) and Water Revenue Adjustment (“WRA”), SJWC and CTWS follow the requirements of ASC Topic 980-605-25—“Alternative Revenue Programs” in determining revenue recognition, including the requirement that such revenues will be collected within 24 months of the year-end in which the revenue is recorded. A reserve is recorded for amounts SJW Group estimates will not be collected within the 24-month period. This reserve is based on an estimate of actual usage over the recovery period.
In assessing the probability criteria for balancing and memorandum accounts between general rate cases, SJWC considers evidence that may exist prior to CPUC authorization that would satisfy ASC Topic 980 subtopic 340-25 recognition criteria. Such evidence may include regulatory rules and decisions, past practices, and other facts and circumstances that would indicate that recovery or refund is probable. When such evidence provides sufficient support, the balances are recorded in SJW Group’s consolidated financial statements.
On December 19, 2019, the CPUC denied the recovery of the 2018 WCMA in Advice Letter No. 532 and no longer approved the tracking of WCMA balances. Due to the decision, SJWC believes WCMA tracking no longer meets the probability criteria under ASC Topic 980-605-25. For the three and six months ended June 30, 2019, SJWC recognized regulatory assets of $1,320 and $568, respectively, due to lost revenues accumulated in the 2019 WCMA account net of a reserve of $11 for the estimated amount that will not be collected within the 24-month period, as required by the guidance. 2018 WCMA activity for the three and six months ended June 30, 2019, represents interest and reserve activity on the accumulated balance. For the three and six months ended June 30, 2019, a reserve of $94 and $174, respectively, was recorded. The amounts have been reflected in the 2018 WCMA and 2019 WCMA balances shown in the table below.
 
Three months ended June 30, 2020
 
Three months ended June 30, 2019
Beginning Balance
 
Regulatory Asset Increase (Decrease)
 
Refunds (Collections) Adjustments
 
Ending Balance
 
Beginning Balance
 
Regulatory Asset Increase (Decrease)
 
Refunds (Collections) Adjustments
 
Ending Balance
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue accounts:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Monterey WRAM
$
8,958

 
1,591

 
—

 
10,549

 
$
7,878

 
2,109

 
(1,001
)
 
8,986

2014-2017 WCMA
665

 
—

 
—

 
665

 
6,912

 
—

 
(1,597
)
 
5,315

2018 WCMA
—

 
—

 
—

 
—

 
8,997

 
(39
)
 
—

 
8,958

2019 WCMA
—

 
—

 
—

 
—

 
(752
)
 
1,309

 
—

 
557

2012 General Rate Case true-up
752

 
—

 
—

 
752

 
10,152

 
—

 
(2,421
)
 
7,731

Cost of capital memorandum account
(1,558
)
 
(2
)
 
—

 
(1,560
)
 
(1,532
)
 
(8
)
 
—

 
(1,540
)
Tax memorandum account
332

 
—

 
—

 
332

 
(6,545
)
 
(40
)
 
—

 
(6,585
)
All others
(2,491
)
 
40

 
—

 
(2,451
)
 
(1,629
)
 
(78
)
 
(87
)
 
(1,794
)
Total revenue accounts
$
6,658

 
1,629

 
—

 
8,287

 
$
23,481

 
3,253

 
(5,106
)
 
21,628

Cost-recovery accounts:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Water supply costs
5,061

 
838

 
—

 
5,899

 
8,217

 
(1,058
)
 
(1,247
)
 
5,912

Pension
2,886

 
99

 
—

 
2,985

 
(1,237
)
 
199

 
805

 
(233
)
All others
443

 
1

 
—

 
444

 
1,015

 
3

 
(148
)
 
870

Total cost-recovery accounts
$
8,390

 
938

 
—

 
9,328

 
$
7,995

 
(856
)
 
(590
)
 
6,549

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total
$
15,048

 
2,567

 
—

 
17,615

 
$
31,476

 
2,397

 
(5,696
)
 
28,177

 
Six months ended June 30, 2020
 
Six months ended June 30, 2019
Beginning Balance
 
Regulatory Asset Increase (Decrease)
 
Refunds (Collections) Adjustments
 
Ending Balance
 
Beginning Balance
 
Regulatory Asset Increase (Decrease)
 
Refunds (Collections) Adjustments
 
Ending Balance
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue accounts:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Monterey WRAM
$
7,015

 
3,561

 
(27
)
 
10,549

 
$
6,847

 
3,666

 
(1,527
)
 
8,986

2014-2017 WCMA
708

 
—

 
(43
)
 
665

 
7,750

 
—

 
(2,435
)
 
5,315

2018 WCMA
—

 
—

 
—

 
—

 
9,386

 
(428
)
 
—

 
8,958

2019 WCMA
—

 
—

 
—

 
—

 
—

 
557

 
—

 
557

2012 General Rate Case true-up
752

 
—

 
—

 
752

 
11,328

 
96

 
(3,693
)
 
7,731

Cost of capital memorandum account
(1,553
)
 
(7
)
 
—

 
(1,560
)
 
(1,523
)
 
(17
)
 
—

 
(1,540
)
Tax memorandum account
(6,643
)
 
(3
)
 
6,978

 
332

 
(6,504
)
 
(81
)
 
—

 
(6,585
)
All others
(2,219
)
 
(165
)
 
(67
)
 
(2,451
)
 
(1,735
)
 
72

 
(131
)
 
(1,794
)
Total revenue accounts
$
(1,940
)
 
3,386

 
6,841

 
8,287

 
$
25,549

 
3,865

 
(7,786
)
 
21,628

Cost-recovery accounts:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Water supply costs
4,328

 
1,605

 
(34
)
 
5,899

 
9,617

 
(1,803
)
 
(1,902
)
 
5,912

Pension
2,449

 
514

 
22

 
2,985

 
(1,843
)
 
383

 
1,227

 
(233
)
All others
446

 
2

 
(4
)
 
444

 
1,090

 
6

 
(226
)
 
870

Total cost-recovery accounts
$
7,223

 
2,121

 
(16
)
 
9,328

 
$
8,864

 
(1,414
)
 
(901
)
 
6,549

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total
$
5,283

 
5,507

 
6,825

 
17,615

 
$
34,413

 
2,451

 
(8,687
)
 
28,177


As of June 30, 2020, the total balance in SJWC’s balancing and memorandum accounts combined, including interest, that has not been recorded into the financial statements was a net under-collection of $1,759. All balancing accounts and memorandum-type accounts not included for recovery or refund in the current general rate case will be reviewed by the CPUC in SJWC’s next
general rate case or at the time an individual account balance reaches a threshold of 2% of authorized revenue, whichever occurs first.