Regulatory Matters

6 Months Ended

Jun. 30, 2022

Regulatory assets, net are comprised of the following as of June 30, 2022, and December 31, 2021:


	June 30, 2022		December 31, 2021
Regulatory assets:
Income tax temporary differences, net	$	25,946	22,420
Postretirement pensions and other postretirement benefits	64,022		62,197
Business combinations debt premium, net	18,667		19,937
Balancing and memorandum accounts, net	24,772		38,334
Water Rate Adjustment	(1,176)		2,588
Other, net	9,922		9,145
Total regulatory assets, net in Condensed Consolidated Balance Sheets	142,153		154,621
Less: current regulatory assets, net	2,841		2,629
Total regulatory assets, net, less current portion	$	139,312	151,992

As of June 30, 2022, and December 31, 2021, SJW Group’s regulatory assets, net not earning a return primarily included postretirement pensions and other medical benefits unfunded amount, and business combination debt premiums, net. The total amount of regulatory assets, net not earning a return at June 30, 2022, and December 31, 2021, either by interest on the regulatory asset/liability or as a component of rate base at the allowed rate of return was $85,798 and $84,887, respectively.

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 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 (“MWRAM”) 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. The Water Conservation Memorandum Account (“WCMA”) allows SJWC to track lost revenue, net of related water costs, associated with reduced sales due to water conservation and associated calls for water use reductions. SJWC records the lost revenue captured in the WCMA balancing accounts. Drought surcharges collected will be used to offset the revenue losses tracked in the WCMA.

Balancing and memorandum accounts recorded to regulatory assets, net for the three and six months ended June 30, 2022, and 2021 as follows:


	Three months ended June 30, 2022				Three months ended June 30, 2021
	Beginning Balance		Regulatory Asset Increase (Decrease)	Refunds (Collections) Adjustments	Ending Balance	Beginning Balance		Regulatory Asset Increase (Decrease)	Refunds (Collections) Adjustments	Ending Balance
Revenue accounts:
MWRAM	$	19,060	2,036	—	21,096	$	13,853	1,424	1	15,278
WCMA	(3,061)		(1,000)	(10,900)	(14,961)	666		—	2	668
Cost of capital memorandum account	(1,564)		(4)	—	(1,568)	(1,561)		(1)	—	(1,562)
All others	(73)		490	—	417	(1,313)		147	2	(1,164)
Total revenue accounts	$	14,362	1,522	(10,900)	4,984	$	11,645	1,570	5	13,220
Cost-recovery accounts:
Water supply costs	10,789		322	—	11,111	8,910		984	1	9,895
Pension	5,006		63	—	5,069	3,844		366	—	4,210
Hydro Generation Research, Development and Demonstration Memorandum Account (“PRVMA”)	632		1	(90)	543	1,027		—	(99)	928
COVID-19 Catastrophic Event Memorandum Account (“CEMA”)	2,438		148	—	2,586	2,266		352	—	2,618
All others	573		(94)	—	479	445		1	—	446
Total cost-recovery accounts	$	19,438	440	(90)	19,788	$	16,492	1,703	(98)	18,097

Total	$	33,800	1,962	(10,990)	24,772	$	28,137	3,273	(93)	31,317


	Six months ended June 30, 2022				Six months ended June 30, 2021
	Beginning Balance		Regulatory Asset Increase (Decrease)	Refunds (Collections) Adjustments	Ending Balance	Beginning Balance		Regulatory Asset Increase (Decrease)	Refunds (Collections) Adjustments	Ending Balance
Revenue accounts:
MWRAM	$	16,866	4,229	1	21,096	$	12,077	3,200	1	15,278
WCMA	3,534		(1,100)	(17,395)	(14,961)	666		—	2	668
Cost of capital memorandum account	(1,563)		(5)	—	(1,568)	(1,561)		(1)	—	(1,562)
All others	(386)		802	1	417	(1,139)		(28)	3	(1,164)
Total revenue accounts	$	18,451	3,926	(17,393)	4,984	$	10,043	3,171	6	13,220
Cost-recovery accounts:
Water supply costs	10,545		566	—	11,111	8,123		1,771	1	9,895
Pension	4,941		128	—	5,069	3,478		732	—	4,210
PRVMA	707		2	(166)	543	1,108		—	(180)	928
CEMA	3,245		(659)	—	2,586	2,266		352	—	2,618
All others	445		34	—	479	445		1	—	446
Total cost-recovery accounts	$	19,883	71	(166)	19,788	$	15,420	2,856	(179)	18,097

Total	$	38,334	3,997	(17,559)	24,772	$	25,463	6,027	(173)	31,317

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.