GWRS · Global Water Resources, Inc.

The Settlement Agreement resolves rate case applications filed on March 5, 2025, by GW-Santa Cruz and GW-Palo Verde with the Arizona Corporation Commission, following procedural steps including consolidation, interventions, testimony filings, and settlement discussions culminating on April 28, 2026. For GW-Santa Cruz, the agreement establishes a revenue requirement of $24,480,144, reflecting agreed adjustments to test year expenses of $19,118,869 and rate base of $63,613,187, supported by a 7.49% weighted average cost of capital including 4.92% long-term debt cost. This enables infrastructure investment, including potential recovery of Plant Held for Future Use assets in the next rate case. The 7.5% bill increase for the median 3/4-inch meter customer using 5,500 gallons underscores modest customer impact while securing funding. GW-Palo Verde's bifurcation defers its rate resolution to 2027, with an interim $1.12 per customer monthly bill credit increase addressing prior premature revenue collection per Decision No. 79424, reducing annual revenue by $0.4 million until finalization. Additional terms cover AFUDC calculation without compounding, specific depreciation rates, sustainable water surcharge mechanisms, and continuation of existing tariffs. Management highlights the settlement's role in including legacy assets in base rates and progressing toward fair outcomes, though ACC approval remains uncertain, carrying execution risk for the November 1, 2026, effective date.