Businessweek

SJW Corp., through its principal subsidiary, San Jose Water Company, provides water service to the greater metropolitan San Jose area. Subsidiaries San Jose Water Company is a public utility in the business of providing water service to approximately 226,000 connections that serve a population of approximately 1 million people in an area comprising approximately 138 square miles in the metropolitan San Jose, California area. SJWTX, Inc., a wholly owned subsidiary of SJW Corp., doing business as Canyon Lake Water Service Company (CLWSC), operates as a public utility in the business of providing water service. SJWTX, Inc. has a 25% interest in Acequia Water Supply Corporation. SJW Land Company, a wholly owned subsidiary of SJW Corp., owns undeveloped land in the states of California and Tennessee, owns and operates commercial buildings in the states of California, Florida, Connecticut, Texas, Arizona and Tennessee, and has a 70% limited partnership interest in 444 West Santa Clara Street, L.P. Texas Water Alliance Limited (TWA), a wholly owned subsidiary of SJW Corp., is undertaking activities that are necessary to develop a water supply project in Texas. Together, San Jose Water Company, CLWSC and TWA are referred to as ‘Water Utility Services.’ Business The principal business of Water Utility Services consists of the production, purchase, storage, purification, distribution, wholesale, and retail sale of water. San Jose Water Company serves customers in portions of the cities of Cupertino and San Jose and in the cities of Campbell, Monte Sereno, Saratoga and the Town of Los Gatos, and adjacent unincorporated territories, all in the county of Santa Clara in the State of California. CLWSC provides water service to approximately 10,000 connections that serve approximately 36,000 people in a service area comprising approximately 243 square miles in the region between San Antonio and Austin, Texas. San Jose Water Company also provides non-tariffed services under agreements with municipalities and other utilities. These non-tariffed services include water system operations, maintenance agreements and antenna leases. San Jose Water Company has operations in the City of Cupertino municipal water system under the terms of a 25-year lease. The system is adjacent to the San Jose Water Company service area and has approximately 4,500 service connections. Water Supply San Jose Water Company’s water supply consists of groundwater from wells, surface water from watershed run-off and diversion, and imported water purchased from the Santa Clara Valley Water District (SCVWD). San Jose Water Company has installed standby power generators at 32 of its strategic water production sites. As of December 31, 2011, San Jose Water Company’s Lake Elsman contained 111 million gallons. CLWSC’s water supply consists of groundwater from wells and purchased raw water from the Guadalupe-Blanco River Authority (GBRA). The agreements provide CLWSC with 6,700 acre-feet of water per year from Canyon Lake and other sources at prices to be adjusted periodically by GBRA. Franchises Franchises granted by local jurisdictions permit Water Utility Services to construct, maintain, and operate a water distribution system within the streets and other public properties of a given jurisdiction. San Jose Water Company holds the necessary franchises to provide water in portions of the cities of San Jose and Cupertino and in the cities of Campbell, Monte Sereno and Saratoga, the Town of Los Gatos and the unincorporated areas of Santa Clara County. Seasonality Water sales are seasonal in nature and influenced by weather conditions. The timing of precipitation and climatic conditions can cause seasonal water consumption by customers to vary significantly. Demand for water is lower during the cooler and rainy winter months. Demand increases in the spring when the temperature rises and rain diminishes. Regulations San Jose Water Company and CLWSC are public utilities regulated by the CPUC and TCEQ, respectively, and operate within a service area approved by the regulators. The statutory laws provide that no other i