Revenues

9 Months Ended

Sep. 30, 2023

Revenue from Contract with Customer [Abstract]

Revenues

Revenues

Most of Registrant’s revenues are derived from contracts with customers, including tariff-based revenues from its regulated utilities at GSWC and BVES. ASUS’s initial 15-and 50-year firm fixed-price contracts with the U.S. government are considered service concession arrangements under ASC 853, Service Concession Arrangements. Accordingly, the services under these contracts are accounted for under Topic 606—Revenue from Contracts with Customers, and the water and/or wastewater systems are not recorded as Property, Plant and Equipment on Registrant’s balance sheets.

Although GSWC and BVES have a diversified customer base of residential, commercial, industrial, and other customers, revenues derived from residential and commercial customers generally account for approximately 90% of total water and electric revenues. Most of ASUS’s revenues are derived from the U.S. government. For the three and nine months ended September 30, 2023 and 2022, disaggregated revenues from contracts with customers by segment were as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
(dollars in thousands)	2023		2022		2023		2022
Water:
Tariff-based revenues	$	102,225	$	90,998	$	301,144	$	247,108
Surcharges (cost-recovery activities)	1,107		672		1,982		2,018
Other	674		625		2,060		1,714
Water revenues from contracts with customers	104,006		92,295		305,186		250,840
WRAM under/(over)-collection (alternative revenue program)	12,225		8,504		40,665		14,721
Total water revenues (1)	116,231		100,799		345,851		265,561
Electric:
Tariff-based revenues	8,424		8,891		30,416		29,824
Surcharges (cost-recovery activities)	138		29		404		88
Electric revenues from contracts with customers	8,562		8,920		30,820		29,912
BRRAM under/(over)-collection (alternative revenue program)	394		(1)		(132)		(884)
Total electric revenues	8,956		8,919		30,688		29,028
Contracted services:
Water	16,504		16,142		58,103		43,862
Wastewater	10,005		9,124		35,877		27,710
Contracted services revenues from contracts with customers	26,509		25,266		93,980		71,572
Total AWR revenues	$	151,696	$	134,984	$	470,519	$	366,161

(1) Water revenues for the nine months ended September 30, 2023 includes approximately $30 million from the impact of retroactive new rates for the full year of 2022 as a result of the CPUC's approval of GSWC's general rate case (Note 3). Furthermore, the CPUC also issued a final decision in June 2023 on GSWC's cost of capital proceeding. As a result of the final cost of capital decision (Note 3), the nine months ended September 30, 2023 water revenues include an increase of $6.4 million, from the reversal of revenues subject to refund due to a change in estimate from what had been recorded during 2022.

The opening and closing balances of the receivable from the U.S. government, contract assets, and contract liabilities from contracts with customers, which are related entirely to ASUS, were as follows:    

(dollars in thousands)	September 30, 2023		December 31, 2022
Unbilled receivables	$	10,661	$	10,125
Receivable from the U.S. government	$	96,044	$	85,456
Contract assets	$	14,008	$	14,982
Contract liabilities	$	596	$	903

Unbilled receivables and Receivable from the U.S. government represent receivables where the right to payment is conditional only by the passage of time.

Contract Assets - Contract assets are assets of ASUS and consist of unbilled revenues recognized from work-in-progress construction projects, where the right to payment is conditional on something other than the passage of time. The classification of this asset as current or noncurrent is based on the timing of when ASUS expects to bill these amounts.

Contract Liabilities - Contract liabilities are liabilities of ASUS and consist of billings in excess of revenue recognized. The classification of this liability as current or noncurrent is based on the timing of when ASUS expects to recognize revenue. Revenues for the three and nine months ended September 30, 2023, which were included in contract liabilities at the beginning of the period were not material. Contracted services revenues recognized during the three and nine months ended September 30, 2023 from performance obligations satisfied in previous periods were also not material.

As of September 30, 2023, AWR’s aggregate remaining performance obligations, which are entirely from the contracted services segment, were $4.0 billion. ASUS expects to recognize revenue on these remaining performance obligations over the remaining term of each of the contracts, which range from 15 to 50 years. Each of the contracts with the U.S. government is subject to termination, in whole or in part, prior to the end of its contract term for convenience of the U.S. government.