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TWST: We'd like to begin with a brief historical sketch of SJW and a picture of
the things you are doing at the present time.
Mr. Roth: SJW Corp. is a holding company with three subsidiaries, two of which
are involved in the regulated water utility business and one that is in the real
estate investment business. The two utilities are located in Texas and
California. San Jose Water Company is headquartered in San Jose, California, and
it serves approximately 1 million people through 225,000 connections. SJWTX
Water, Inc., is our Texas subsidiary. It serves about 20,000 people in an area
between San Antonio and Austin, Texas. The real estate development and
investment subsidiary is SJW Land Company, and it has both undeveloped and
developed properties. The developed properties are primarily income-producing
properties that are not actively managed but are triple-net leases that provide
primarily investment income. TWST: What are the main issues and challenges that lie before your water
utilities?
Mr. Roth: As with most regulated utilities, regulatory relations and recovery of
our invested capital is always an important issue for us. San Jose Water Company
is in the middle of a general rate case proceeding for the three years & 2007,
2008, and 2009. Achieving a fair rate of return on our investments and
recovering expenses necessary to serve our customers is one of our primary
challenges. We are fortunate that we don't have water quality problems like many
utilities do.
In our Texas subsidiary, water supply is an important issue because of a drought
in the area in which we operate. We continue to seek out new water supplies and
look for ways to stretch existing supplies. Of course, the burgeoning
regulations for water quality also offer a challenge, but this is not unique to
Texas. Finding additional growth areas in Texas and elsewhere are not
operational challenges, but more strategic challenges for the company.
Tickers included in this excerpt: SJW
For more information call (212) 952 7433. The
Wall Street Transcript does not endorse any of the comments made by interviewees, and does
not make stock recommendations.
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