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SJWgroup.com

Corporate Headquarters TO TAP 110 W. Taylor Street San Jose, CA 95110 1.800.250.5147 2019 Sustainability Report HUMAN RIGHT TO WATER LETTER FROM THE CEO

Whereas, SJW Group believes that every human being has the right 2019 has been a truly exciting year for SJW Group. In and consequence of failure analyses based on the asset’s to safe, clean, affordable, and accessible water adequate for human October, we completed our combination with Connecticut condition, age, presence of safety equipment, and compliance consumption, cooking, and sanitary purposes, consistent with the Water Service, Inc. forming the third largest pure play with current water quality regulations and building code United Nation’s Resolution 64/292 that recognizes the human right to investor-owned water utility based on rate base in the United requirements. We are striving for innovation in how we water and sanitation and acknowledgement that clean drinking water States. Together, we will serve more than 1.5 million people manage our assets to ensure our customers benefit from the and sanitation are essential to the realization of all human rights; with over 700 employees across California, Connecticut, most reliable infrastructure today, and a century from now. Maine and Texas. We are well positioned to deliver Whereas, the California Public Utilities Commission, The Public In California, the threat of a possible earthquake looms large significant benefits to all of our stakeholders. Utility Commission of Texas, Connecticut Public Utilities Regulatory over all of us, amid the fear of a potential water supply cutoff. Authority, and Maine Public Utilities Commission are responsible for While our company is growing, our commitment to Our customers should know that we are prepared. From ensuring that investor-owned water utilities deliver clean, safe, and sustainability remains a key part of our business ethos. using earthquake-resistant pipe to preparing back-up power reliable water to their customers at reasonable rates; SJW Group understands that all water is local and our sources for our facilities and building new reservoirs, we are environmental stewardship efforts guide everything we do. making sure our local customers are protected. Whereas, SJW Group’s mission is trusted professionals, passionate about delivering life sustaining, high quality water and exceptional In this vein, we are working to significantly reduce our carbon 2020 will be a year in which we incorporate the economies service to families and communities while protecting the environment footprint. Actively lowering our greenhouse gas (GHG) of scale realized through our CT Water combination and and providing a fair return to shareholders; emissions included changing our energy supplier to one work towards our vision of becoming a world class water and more committed to renewable energy, using biofuels in our wastewater utility company. This includes new projects and It is the policy of all SJW Group’s water utilities to provide a reliable diesel fleet, piloting electric vehicles, and looking at other opportunities, all backed by our continued focus on delivering supply of safe, clean, affordable, and accessible water adequate for operational efficiencies that save both water and energy. outstanding customer service and safe, clean water to our human consumption, cooking, and sanitary purposes in accordance many constituents. with State and Federal statutes, laws, and regulations at rates Looking towards future sustainability, we completed established by our governing Public Utility Commissions. a Tactical Asset Management Plan for nearly all of our water storage assets. Every tank and reservoir was extensively evaluated using detailed probability of failure

In Service,

Eric Thornburg President and CEO, SJW Group

SJW Group Sustainability Report 2019 | 2 SJW GROUP MISSION, VISION, BUILDING BLOCKS AND VALUES

About Us SJW Group is a publicly traded holding metropolitan area with high-quality, In October 2019, SJW Group and company headquartered in San Jose, life sustaining water with an emphasis Connecticut Water Service, Inc. SHARED MISSION STATEMENT VISION STATEMENT California. Found on the New York Stock on exceptional customer service. SJW announced the close of their merger. The combined company, SJW Group, Trusted professionals, passionate about To serve customers, communities, employees, Exchange under the symbol SJW, the also provides services to other utilities is the third-largest investor-owned delivering life sustaining, high-quality water and shareholders, and the environment at world company also owns SJW Land Company. including operations and maintenance, pure play water and wastewater utility exceptional service to families and communities class levels. SJW Group’s locally led and operated billing, and backflow testing. By sharing based on rate base in the United States, while protecting the environment and providing water utilities in California and Texas these services with others, we benefit serving nearly 1.5 million people across a fair return to shareholders. provide water service to over one the local community, lower the cost million people. SJW Group possesses of water operations, and improve California, Connecticut, Maine and the financial strength, operational operational efficiencies. Texas. The 2020 Sustainability Report will include information about these expertise and technological innovation SJWTX, Inc. operates in Texas as additional companies under the SJW to safeguard the environment, deliver Canyon Lake Water Service Company TRUST SERVICE Group umbrella. outstanding service to customers and (CLWSC) and Deer Creek Ranch Water provide opportunities to employees. System. Those systems serve more than Founded in 1866, San Jose Water 17,500 customer connections in the (SJW) is an industry leader in the water Canyon Lake and Deer Creek Ranch utilities sector and serves more than one communities. million people in the greater San Jose INTEGRITY RESPECT

TEAMWORK

VALUES

TRANSPARENCY COMPASSION

SJW Group Sustainability Report 2019 | 3 TABLE OF CONTENTS

01 Water ...... 5 Energy Goals ...... 18 Stewardship ...... 5 Solar Power ...... 18 SJW Supply ...... 5 Electric Vehicle Fleet ...... 19 Purchased Treated Water ...... 6 Biofuels ...... 19 SJW GROUP Groundwater ...... 6 04 Social Responsibility ...... 20 Surface Water ...... 6 Customer Focused Mission ...... 20 2020 GOALS Recycled Water ...... 6 Conservation ...... 20 Other Potential Water Supplies ...... 7 CATCH Program ...... 20 Water Source Selection ...... 7 Waterfluence ...... 21 SJW Group SJWTX Water Supply ...... 8 SJWTX Conservation Efforts ...... 21 Surface Water ...... 8 WRAP ...... 21 • Develop climate and human rights policies Population Projection and Demand ...... 8 SJW Emergency Preparedness ...... 21 Water Storage ...... 9 FirstNet ...... 22 Importance of Water Storage Management ...... 9 Partnering with the Community ...... 22 SJW Storage Optimization ...... 9 Employee Community Fund ...... 23 Water Storage Tactical Asset Management Plan ...... 9 Community Service ...... 23 • Complete the implementation of the Enterprise Water Treatment ...... 10 SJWTX Community Involvement ...... 23 Asset Management Program to further enhance Water Quality ...... 10 the sustainability of the Capital Improvement Supplier Diversity ...... 23 SJW Montevina Water Treatment Plant ...... 11 (CIP) program; provide the best value for SJW’s 05 Employees – Culture, Service and Safety ...... 24 SJWTX Canyon Lake Shores Surface Water Treatment Plant - customers into the future TCEQ Regulators Training ...... 11 Employee Opinion Survey ...... 24 • Replace 1% or about 24 miles of our transmission SJWTX Vintage Oaks Wastewater Treatment Plant ...... 11 Benefits, Employee Care and Development ...... 24 and distribution system annually Commuter Assistance Program ...... 24 Distribution ...... 12 • Develop a roadmap to reduce carbon footprint Pipeline Replacement Program ...... 12 Equal Opportunity Employer ...... 24 SJW Sustainable CIP Strategy ...... 12 Labor, Health and Safety ...... 25 • Invest a minimum of $100M in capital Labor Relations and Management ...... 25 Rate and Priority of Replacement ...... 12 improvements in 2020 Open Door Policy ...... 25 SJWTX Pipe Improvements ...... 13 Workforce Diversity & Equality ...... 25 Use of Ductile Iron Pipe ...... 13 Health & Safety Policy ...... 26 Restrained Joint Pipe ...... 14 SJWTX Managing Health & Safety ...... 26 SP3 Resin at Groundwater Stations ...... 14 Culture of Safety ...... 26 • Continue improving efficiency requirements for 02 Operations ...... 15 Continuous Improvement of Health & Safety programs .....26 outdoor water use in service agreements Energy Use ...... 15 Facility Modifications and Employee Protections ...... 26 • Establish a water loss reduction goal Pumping Energy Efficiency ...... 15 Types of Injury and Incident Rates ...... 27 Cox Station Energy Recovery ...... 15 • Invest at least $16.5 million in capital Improving Qualifications and Career Development improvements in 2020 and require developer Water Loss ...... 15 Opportunities ...... 27 funding to invest in additional pump stations and Reducing Water Loss ...... 15 Levels of training ...... 28 storage to support customer growth Acoustic Leak Detection ...... 16 New ways of learning ...... 28 • Replace 0.4 % or 2 miles of transmission and Drinking Water Discharges ...... 16 Our Ongoing Commitment ...... 28 Other Resource Efficiencies ...... 17 distribution system Advanced Metering Infrastructure ...... 17 • Develop additional water supplies either 03 Environment ...... 18 individually or as part of system acquisition SJW Carbon and Climate Initiatives ...... 18 Greenhouse Gas (GHG) Emissions ...... 18 Renewable Energy ...... 18 SJW's dam spillway at Stewardship Lake Elsman in the Santa 01 SJW strives to be an environmental Cruz Mountains. leader in the community by providing safe and reliable water to customers while protecting the environments from Water which that water is sourced. SJW is sensitive to the needs of the community and strictly comply with the letter and intent of environmental laws. A With rising temperatures, more frequent droughts and changing strong commitment to minimizing the environmental impacts of its business weather patterns, climate change is a critical issue facing water has inspired SJW in taking steps to do utilities everywhere. so, like protecting the Los Gatos Creek Watershed and maintaining diverse water sourcing.

Los Gatos Creek, within the approximately 6,000 acres of land managed by SJW FEATURE in the area LOS GATOS CREEK WATERSHED PROTECTION

To protect its surface supply sources, improve facility maintenance and land SJW facilities within the Los Gatos SJW owns, operates and maintains management under SJW’s direction. Creek Watershed include five several facilities and manages several A renewable 5-year Regional General reservoirs (impoundments), seven thousand acres of watershed lands Permit (RGP) has been negotiated intake structures, water distribution within the Los Gatos Creek Watershed. with regulatory authorities to ensure pipelines, several access roads, The Los Gatos Creek Watershed maintenance activities comply with all nearly 100 roadside culverts, and Maintenance Program (Maintenance state and federal regulations to protect approximately 6,000 acres of land. Program) is a long-term and ongoing endangered and sensitive plant and program developed to identify and animal species, as well as water quality within SJW’s watershed.

SJW and SJWTX both acknowledge these SJW Supply supplies less predictable and more Figure 1. % of SJW Water Supply challenges facing their utilities and the susceptible to extreme weather intense responsibility they hold to ensure SJW maintains a diverse water supply conditions, the proper management adequate supplies of safe drinking water portfolio and is always looking for other of a diverse water supply becomes SCVWD Surface Water for their customers in the future. SJW and opportunities to secure additional even more critical. supplies. Keeping a diverse supply Local SJW Surface SJWTX take great measures in the sourcing, Water of water allows SJW to continuously storage, treatment and distribution of their Local Groundwater water supplies to ensure they can uphold provide high-quality water to their Recycled Water their commitment to their customers and customers throughout the seasons and their responsibility to the wider community during periods of drought. As climate in the stewardship of this precious resource. change continues to make future water

SJW Group Sustainability Report 2019 | 5 Purchased Treated Water Surface Water About 50% – 55% of SJW’s total Up to 10% of SJW’s supply comes from local surface water water supply is purchased from Valley treated by the company’s Montevina and Saratoga Water Water, formerly known as the Santa Treatment Plants. SJW has been drawing water from the Los Clara Valley Water District. This Gatos Creek and local watersheds since the 1880s. SJW has purchased water is treated at one of FEATURE upgraded the collection and treatment system that draws three Valley Water-operated treatment water from this watershed and has increased the water plants located in Santa Clara County: SUSTAINABLE WATER withdrawal rights contained in the permits and licenses Rinconada, Penitencia and Santa Teresa. to approximately 11,200 acre-feet/year (over 3.6 billion About 70% of Valley Water’s source WITHDRAWAL gallons) for an average rain year (enough for about 23,000 water comes from the Delta, with the households for a year). The Sustainable Groundwater Management Act (SGMA) is remaining 30% coming from local Valley While the Montevina Water Treatment Plant primarily a California law that establishes a framework for local water Water reservoirs. serves the Los Gatos community, the Saratoga Water agencies to sustainably manage groundwater resources. Treatment Plant provides water to the Saratoga area. Similar The following link brings you to the California Department to Montevina, the Saratoga Water Treatment Plant is also of Water Resources webpage for Santa Clara Valley Water Groundwater a microfiltration membrane plant (leading edge technology District’s approved Alternative Plan for compliance with About 35% – 40% of SJW’s total water when installed in 1994) and is scheduled for an upgrade over SGMA: sgma.water.ca.gov/portal/alternative/print/18 supply comes from groundwater. the next 5 years. Groundwater is drawn from the Santa SJW obtains all its groundwater in cooperation with Clara Subbasin in the north part of groundwater management team at Valley Water from the Recycled Water Santa Clara County. The basin has a Santa Clara Plain Groundwater Basin, subject of the approved Approximately 2% of SJW’s total water supply is recycled company’s customers. It is locally available and less surface area of 225 square miles and an SGMA plan. By operating under this plan, SJW demonstrates water provided by South Bay Water Recycling (SBWR). susceptible to changes in seasonal water availability or operational storage capacity estimated that it meets the California Department of Water Resources SBWR was created in 1993 to reduce the environmental extreme conditions (like drought). Receiving recycled water to be 350,000 acre-feet. That’s enough standard for sustainable water withdrawal. impact of freshwater effluent discharge into the salt marshes is optional for the company’s customers. Participating water to supply 700,000 households for located at the south end of the San Francisco Bay, and to help customers receive it at a discount and are not subject to 1 year. Approximately half of the water to protect the endangered California clapper rail and salt voluntary and mandatory drought restrictions. All SJW in the aquifer is recharged with Delta- marsh harvest mouse. customers benefit from the use of recycled water as the supplied water, while the other half SJW has provided recycled water to its customers since amount of recycled water used reduces demand for potable comes from local runoff. 1997. Recycled water provides multiple benefits to the water gallon for gallon. SJW currently manages 90 active wells pumping from this excellent water source. During drought years or Figure 2. Recycled Water: By The Numbers emergencies, the utility may depend heavily on wells to supply water for the whole system. If the wells are not 27 MILES properly managed, it can lead to ground OF RECYCLED subsidence (sinking of the land). SJW WATER MAINS works closely with our partners at Valley 762,000,000 Water who monitor the groundwater GALLONS OF SUPPORTING THE ADDITION OF levels and subsidence to pump wells in RECYCLED WATER a sequence and manner to avoid these EACH YEAR SITES negative effects. 28 ANTICIPATED IN 2020

SJW Group Sustainability Report 2019 | 6 Other Potential Water Water Source Selection water, local groundwater is selected to As shown in figure 3, SJW serves a meet remaining consumer demands. growing population of customers in the Supplies With three sources of drinking South Bay Area. It is difficult for SJW to independently water available, SJW decides what procure new sources of water without combination of sources should be used Urban Water Management Despite the growth in population, the infrastructure needed to get at any point at time. The production, Plan water use has been fairly stable due to conservation, low flow fixtures, and the water to the utility’s service treatment and transmission of local Every five years, SJW prepares an Urban shrinking landscapes in the urban San area. However, Valley Water (SJW’s surface water is maximized due to its Water Management Plan (wuedata. Jose area. A slight increase in water use wholesale supplier) does have those high quality, low cost, and low energy water.ca.gov). Last done in 2015, this is projected in the future as additional infrastructure connections in place. SJW requirements for delivery. Imported document is a resource planning and conservation measures become more has therefore made a concerted effort surface water from Valley Water is water supply sustainability report difficult, however, meeting the needs to work with Valley Water to maximize already treated, pressurized, and ready prepared for the State of California of customers now and into the future is the diversity and reliability of the for delivery at 13 turnout connections which also includes a water loss review. part of SJW’s regular planning process. company’s water supply portfolio. For throughout SJW’s distribution system. Valley Water is also required to submit Figure 4 shows the projected water more information, see the draft Valley Imported surface water is maximized an urban water management plan that supply for our customers for each Water Supply Master Plan: https:// at the Cox Station turnout where two includes a water loss review. Copies of source of water. For example, in 2020 it www.valleywater.org/sites/default/ 54 kW hydro turbines generate energy both documents can be found at sjwater. is anticipated that SJW will have about files/Draft%20WSMP%202040%20 to help offset pumping activities. After com/environmental-stewardship. Complete_v2.pdf maximizing local and imported surface 25 billion gallons of water supplied through purchase from Valley Water.

FIGURE 3. SJW POPULATION SERVED - CURRENT AND PROJECTED

2015 2020 2025 2030 2035 2040 Population Served 982,750 1,034,396 1,087, 27 3 1,142,484 1,201,289 1,262,356

FIGURE 4. SJW PROJECTED WATER SUPPLIES (IN MILLIONS OF GALLONS)

Projected Water Supply Report to the Extent Practicable Additional 2020 2025 2030 2035 2040 Water Supply Detail on Water Supply Reasonably Reasonably Reasonably Reasonably Reasonably Available Available Available Available Available Volume Volume Volume Volume Volume Purchased or Potable Water 24,983 25,867 26,803 27,820 28,887 Imported Water

Groundwater Potable Water 17,6 48 18,273 18,934 19,651 20,405

Surface water Potable Water 3,130 3,130 3,130 3,130 3,130

Recycled Water 1,327 2,233 2,721 2,727 2,727

Total 47,144 49,561 51,648 53,390 55,213

NOTES: Projected potable water supply volumes based on a 10-year average (2006-2015) of usage by type and holding surface water constant @ 10-year average.

SJW Group Sustainability Report 2019 | 7 SJWTX Water Groundwater is primarily sourced plants, GBRA serves this subdivision from the Trinity Aquifer. Because with water from the Canyon Lake FIGURE 5. POPULATION PROJECTION

Supply groundwater is purified through natural Reservoir. Decade 2020 2030 2040 2050 2060 2070 SJWTX operates seven different processes, groundwater is only treated systems and the water source for every for disinfection purposes. The one Population Projection and Population 48,660 63,573 79,783 96,323 112,342 127,327 system varies. Between all source exception is that water from one well Demand water combinations, SJWTX provided in the Canyon Lake Shores system is The Canyon Lake area has been nearly 2 billion gallons of water to moved through a cartridge filtration experiencing exponential growth FIGURE 6. WATER DEMAND PROJECTION 17,500 connections in 2019. system in addition to being disinfected with new development. SJWTX with chlorine. reaches over four different counties: Decade 2020 2030 2040 2050 2060 2070 Surface Water Comal County, Blanco County, Hays All SJWTX systems are located in the Acre-feet 6,095 7,826 9,760 11,747 13,682 15,496 SJWTX has three Surface Water Texas Hill Country, where the rock County, and Travis County. In 2018, Treatment Plants (SWTP) that pull formation is predominately limestone. the US Census reported Hays and water from the Canyon Lake Reservoir. Because of this, the groundwater Comal Counties as being two of The SWTPs produce 55% of treated collected there has high levels of the fastest growing counties in the water for the surrounding area. Canyon minerals, making the water very hard. US. With ever-increasing growth, Lake Shores is the largest treatment To reduce mineral content groundwater SJWTX is working diligently to use plant, providing water to more than is blended with surface water from the our resources efficiently, develop 20,000 people and pulling water from treatment plants. infrastructure, and create effective the northeast area of Canyon Lake. conservation programs. The tables on Triple Peak provides water to more Purchased Water the right show population and water demand projections through 2070 than 10,000 residents and extracts Two systems in the SJWTX service as determined by the Texas Water water from the southeast area of area are supplied with purchased water. Development Board. Canyon Lake. The smallest SWTP, Sybil Water purchased from the Lower Lightfoot, extracts water from the Colorado River Authority is pulled from Guadalupe River that is connected to Lake Austin by the West Travis County the Lake. It assists Canyon Lake Shores Public Utility Agency (WTCPUA). Lake in providing water to residents that are Austin is a manmade reservoir fed by part of the Canyon Lake Shores system. the Colorado River. The WTCPUA then treats, stores, and delivers Ground Water water to the Deer Creek System. The Throughout all seven systems, Guadalupe- Blanco River Authority SJWTX has nearly 40 active wells (GBRA) Western Canyon Water Supply that produce 40% of treated water Project supplies water to the Glenwood distributed to the surrounding area. subdivision. Similar to the treatment SJWTX water treatment facility

SJW Group Sustainability Report 2019 | 8 Optimal management of water storage assets is a vital part of SJW's strategy for ensuring reliable water service to our customers. Water Storage periods. Simultaneously optimizing (repair or replacement) based on their these variables is achieved through a overall risk exposure to the utility, combination of operational intelligence Importance of Water Storage along with a customer and a cost- Management and sophisticated programming benefit evaluation to determine the within our Supervisory Control and most effective long-term solution. Water storage tanks and reservoirs Data Acquisition (SCADA) system. As In addition, SJW conducted a life are critical components of the water seasonal water demands and energy expectancy analysis as part of the distribution system, providing a usage periods shift, the Operations asset management plan to determine dependable water source for daily department updates control strategies a sustainable replacement rate and consumption and emergencies, and to accommodate changes and keep ensure the company is optimally regulating system pressures. SJW storage management optimized. managing risk across its storage assets adheres to CPUC and Division of while making capital investments at the Drinking Water (DDW) standards SJW is in the process of installing right time. Through the implementation and works with local fire jurisdictions mixers and water quality analyzers in of this planning effort, SJW will to ensure that storage assets are all of its water tanks. The mixers will continue to deliver reliable water adequately sized for supplying help maintain consistent water quality service to customers far into the future. customer demands and providing for throughout the tanks. In addition, the fire protection — even on the hottest level of disinfectants in the tanks will be days. Storage tanks and reservoirs are monitored continuously. Operators are alerted when these levels are outside of sized for all conditions, accounting for In 2019, the Asset Management population growth and emergency pre-defined limits. team won an Uptime Award storage needs in the event of pump Water Storage Tactical Asset failures, power outages, loss of for Best Reliability Engineering Management Plan imported water supplies, or reduced for Maintenance Program from water supplies in drought years. The An effective long-term asset Reliabilityweb. An international management plan for SJW’s water company also leverages analytical tools and highly competitive award, such as hydraulic and mathematical storage infrastructure is necessary to this recognition reflects the modeling to determine capacity ensure the safety and reliability of the needs in a variety of scenarios and water system for the overall benefit of team’s application of robust plan accordingly. Furthermore, staff customers, communities, employees, asset criticality analysis and risk ensures that these critical storage shareholders and the environment. framework to ensure long-term The company recently completed a assets are regularly inspected, cleaned, reliability. Past Uptime Award and evaluated for replacements, re- Tactical Asset Management Plan for winners include Mercedes coatings, retrofits and repairs. its water storage assets. Each tank and reservoir was extensively evaluated Benz, Stanford Health Care and Storage Optimization using detailed probability of failure and Bristol-Myers Squibb, to name a consequence of failure analyses based SJW’s Operations department few. Learn more at sjwater.com/ on the asset’s condition, age, presence optimizes each potable water storage of safety equipment, and compliance uptime-award. tank based on available water supply with current water quality regulations inputs. This helps to minimize water and building code requirements. Tanks residence time, reduce blending of and reservoirs were then identified source water disinfectants, and limit and prioritized for capital improvement pumping during energy intensive time Water Treatment

Water Quality The Partnership for Safe Water SJW and SJWTX conduct thousands SJW joined the Partnership for Safe Water in 2012 and has earned a of water quality tests for several Director’s Award every year since for its work in optimizing operations for hundred different parameters each the distribution system and improving water quality. Earning the prestigious year at state certified laboratories to Director’s Award requires the company to review and improve key ensure their water meets all state and operating parameters such as distribution system pressure, limit the number federal drinking water standards. In of annual pipe breaks and maintain minimum levels of disinfectant (chlorine) 2019, SJW voluntarily began to monitor in its pipes and tanks. Obtaining and maintaining the awards also requires its wells for Per- and polyfluoroalkyl perfect compliance with drinking water regulations. substances (PFAS) to further ensure the safety of its water supply. In addition, SJW routinely participates in studies sponsored by industry trade associations – such as the American Water Works Association – to evaluate contaminants of potential concern and Water Quality Inquiries Performance Goals ensure that the company is ready to To ensure that staff are aware of and respond to address these should the need arise. customer water quality inquiries in a timely fashion, the Water Quality department has worked with Customer Service and GIS groups to develop real time mapping and automated email alerts for customer complaints related to water quality. These tools allow staff to analyze and, if needed, coordinate a comprehensive response when a water quality event affects more than one customer. Goals: • Respond to water quality inquiries within 24 hours of receiving customer call. • Perform water quality investigation within 3 days of receiving customer call. • Provide written water quality investigation report Map of SJW service area showing all inquiries related to water quality and analytical results to customers within three made by a customer in August 2019. weeks of performing water quality investigation.

SJW Group Sustainability Report 2019 | 10 SJW Montevina Water SJWTX Vintage Oaks build a facility capable of treating up to As a result of these Treatment Plant Wastewater Treatment Plant 130,000 gallons of wastewater daily with no chemical disinfectant and lower SJW has two surface water treatment SJWTX’s newest plant, the Vintage efficiencies, SJWTX energy demand on a footprint of less plants (WTP) to treat surface water Oaks Wastewater Treatment Plant, than a quarter of an acre. In terms of “ was able to build a from the local watersheds. The completed its first full year of operation comparable volume, a traditional plant Montevina Water Treatment Plant in 2019. Located in Comal County, facility capable of would require at least a few acres of (Plant) is the primary supply source Texas, this new facility uses the latest space. treating up to 130,000 for the Town of Los Gatos and the technology in wastewater treatment to surrounding communities. The Plant turn the waste from over 400 homes The high-quality effluent produced gallons of wastewater was originally commissioned in 1970 into high-quality effluent. SJWTX from this plant is distributed across a daily with no chemical and could treat up to 30 million gallons opted for a progressive approach to six-acre storage pond that is seeded per day through direct filtration and construction of the onsite facility by with Bermuda grass, winter ryegrass, disinfectant and lower chlorination. In 2018, $62 million choosing to install a four-zone Ovivo and other nutrient-absorbing grasses. of upgrades were completed to the Microblox system. The effluent is sampled daily for E. coli energy demand on a and consistently returns sample results Plant, including the installation of The plant is incredibly efficient. footprint of less than a of zero. Additionally, the effluent ultrafiltration membrane technology. The treatment process utilizes must meet stringent requirements for quarter of an acre. The Montevina Water Treatment membrane bioreactors and filtration phosphorous, ammonia nitrogen, total Plant also features a state-of-the-art that together reduce the volume of suspended solids, and carbonaceous water pre-treatment system that can water trapped between solids and biochemical oxygen demand. handle rapidly changing water quality. ultimately lost in wasted sludge. The ” Because SJW has limited water storage energy demand typically associated available, it relies on watershed runoff with aeration is much lower than in during winter storms. The quality of traditional wastewater treatment the water treated is highly variable facilities because integrated diffusers and requires constant adjustment in provide oxygen as opposed to a chemical dosage to effectively remove standard blower. Also, this system uses solids and other dissolved constituents ultraviolet contact to treat for bacteria that are present in the watershed instead of needing chemical treatment. FEATURE runoff. Analyzers continuously monitor The plant’s design is such that there the chemical characteristics of the is no need to wait for solids to settle MONTEVINA WATER TREATMENT FACILITY water through the treatment processes out, making the overall treatment WINS DBIA NATIONAL MERIT AWARD: New and automatically adjust chemical time much faster than in conventional Ultrafiltration Technology Addresses Winter dosages. These automated monitoring facilities. Because settlement happens and chemical adjustments ensure that so quickly, there is also no need for a Stormwater Challenges the treatment processes only use use settling pond. Lastly, compared to more the minimum amount of chemicals conventional wastewater treatment Montevina Water Treatment Plant construction professionals, as well outstanding examples of this level required to achieve the best water plants, this system requires a much has been recognized by the Design- as academics, students and project of achievement. Of the 31 projects quality possible. smaller operational footprint, and does Build Institute of America (DBIA) with owners. Their aim is to foster chosen from across the nation, the not require additional space needed their National Merit Award in the collaboration and innovation to deliver DBIA award jurors selected Montevina for a traditional lagoon. As a result of water/wastewater category. DBIA is a some of America’s most successful for its state-of-the-art advancements in these efficiencies, SJWTX was able to national multi-disciplinary association projects. The Design-Build National stormwater treatment. Learn more at of architectural, engineering and Project Awards recognize the most sjwater.com/2019-DBIA-Award.

SJW Group Sustainability Report 2019 | 11 SJWTX Canyon Lake Shores Distribution current and future average age of to help find the complex relationships between the numerous factors. Surface Water Treatment pipe segments in the system for three These factors include quality of materials, appropriate construction Plant - TCEQ Regulators different pipe replacement rates. methods, rate of replacement in line with expected life of the asset, and Pipeline Replacement The replacement of water mains is Training Even at the current 1% annual prioritization of replacements. Through a series of iterations, the ANN Program rooted in sustainability. At the request of the Texas Commission replacement rate represented by the was “trained” until it was able to adequately replicate the number of actual on Environmental Quality (TCEQ), SJW Sustainable CIP Strategy green line on the graph, the average age recent leaks for each pipe. Once the ANN was trained, it was used to • For a mature water system such predict the future probability of failure. as SJW’s, it is appropriate to SJWTX hosted 17 state inspectors for Whether considering the choice of the system will continue to rise until replace materials and equipment a special hands-on training event at the of materials, rate of replacement, about 2075 when it will reach 59 years. commensurate with the life Canyon Lake Shores Surface Water priority of replacement or methods At that point, a substantial amount Figure 7. Average System Pipe Age vs. Pipe Replacement Rate expectancy of that asset on Treatment Plant on June 6, 2019. of construction, the most important of the transmission and distribution average. However, we don’t SJWTX’s participation was requested consideration for the SJW system will be substantially older than replace the oldest piping first due to the plant’s reputation as a Infrastructure Renewal Program its expected useful life (the average age 110 necessarily, but rather which pipe sizable and well-run facility centrally is sustainability. This can best be at which similar materials have failed in 100 is statistically likely to leak first. located in the Texas Hill Country. State seen by examining its largest annual the system). It is also the point where inspectors, charged with ensuring that infrastructure investment – renewal the maximum number of pipe leaks 90 • Prioritization of replacements water systems in the State of Texas are and replacement of its pipeline per year is expected to occur. To help by the trained artificial neural meeting all operational requirements, transmission and distribution system. preserve the integrity of the system 80 network will help to limit pipeline traveled from all over Texas to attend. with pipelines still in service beyond failures, preserving both water For many of the attendees, this training Rate and Priority of Replacement their expected useful life, a trained 70 and energy. event was an introduction to surface SJW has been annually replacing artificial neural network is used to best 60 water treatment plant operations and its aging pipes at the rate of 1%, or predict which pipes are likely to fail in facility inspections. about 24 miles, of its transmission order to thoughtfully prioritize which of 50 Weighted Pipe AgeWeighted (yrs) Working in conjunction with managers and distribution system since 2006. these pipe segments should be replaced 40 from TCEQ, SJWTX employees were The average life expectancy of all in a given year. on hand to give a tour of the plant, pipes is almost 100 years, and this Over the years, SJW’s methods for 30 answer operational questions, and corresponds to a 1% sustainable predicting the probability of pipeline run through hypothetical inspection replacement rate. The majority of failure have been enhanced and refined. 20 scenarios. Key moments in the training the distribution system was installed Early pipeline replacement programs 2118 2078 2128 2108 2018 2028 2058 2098 2068 2038 2088 2048 included a review of the chemical feed prior to the mid-1980’s, a time when considered recent leak history, pipe Year system, a tour and explanation of the cement-lined ductile iron pipe (DICL) material, fire flow deficiency and pipe plant’s two large claricones, application became the current industry standard. age as the primary considerations The materials used before DICL are of granular activated carbon, on-site for prioritization of segments for 12 Miles/yr Replacement Rate generation of sodium hypochlorite, generally more susceptible to failure by replacement. The most recent pipeline and use of online analyzers. The corrosion, impact, or pressure surges study used Artificial Neural Network 18 Miles/yr Replacement Rate SJWTX operator onsite also gave than DICL, resulting in a much shorter (ANN), a machine learning algorithm, 24 Miles/yr Replacement Rate a backwashing demonstration, average lifespan. Figure 7 depicts the talked about the use of SCADA, and performed some lab analysis in the facility’s bench lab.

SJW Group Sustainability Report 2019 | 12 In addition to the probability of failure, SJWTX also invested over $3M to DICL has many characteristics that the latest consequence of failure analysis connect its 16-inch waterline at the make it superior to other pipe types, enabled SJW to holistically assess social, Guadalupe River to the Rodeo Drive including: financial, and environmental impacts in booster station, and then from the • Made up of up to 98% recycled alignment with SJW’s mission to serve Rodeo Drive booster station to the content and is itself a completely its customers at world class levels. 12-inch waterline in the Singing Hills recyclable material Probability and consequence of failure development. In total, this project • Lower lifetime costs due to results yielded business risk exposure saw the replacement of 0.20 miles of increased flow capacity and levels for each pipe segment, providing 16-inch PVC pipe with 16-inch ductile subsequent energy savings a robust basis for the prioritization of iron pipe and the installation of three pipeline replacements. Replacements new miles of 16-inch ductile iron. The • Strong enough to withstand the at this optimal rate accounted for about new installations will improve reliability most severe conditions — from 60% of the capital expenditures in 2019. of service to one of the area’s largest high-pressure applications, heavy Through the use of these advanced neighborhoods, River Crossing, and to earth and traffic loads — in addition analytical tools, SJW has been able the City of Bulverde, by allowing more to unstable soil conditions to successfully prioritize its pipeline water to move into those areas. These • Can be easily located underground replacement program to steadily reduce improvements also create a redundant with conventional pipe locators, as its water loss since 2009. water path to these areas, allowing it is made of a metallic material and SJWTX to ensure supply when other acoustic leak sensors are better SJWTX Pipe Improvements mains have to be closed for repair or able to detect leaks In 2019, SJWTX invested $2.5M to maintenance. • Holds up well in seismic conditions, replace 2.45 miles of pipe along the FM especially in its earthquake- 306 roadway in the Canyon Lake service Use of Ductile Iron Pipe resistant form area. Another $2M will be invested in SJW’s standard for pipe replacement 2020 to complete the final two-mile is restrained-joint, zinc-coated and The cost of pipe material makes up length of pipe along this roadway. This cement-lined ductile iron pipe (DICL). about 20% of total pipe replacement multi-year project to replace 16-inch The cement lining protects the interior costs, so using this superior pipe type PVC pipe with 16-inch ductile iron of the pipe from corrosion, whereas is a small cost increment to ensure a brings about a critical upgrade to the the zinc coating and polyethylene bags longer lasting product to the benefit of SJWTX distribution system as the protect the exterior from corrosive SJW customers. former pipe was prone to large leaks. soils and other stray currents. With With this replacement, water service is these and other precautions, pipelines now more reliable and water waste from constructed according to SJW’s current leaks and breaks will be greatly reduced. specifications are expected to last at In addition, this new pipe will improve least 100 years. service to some of the farthest-reaching parts of the service area.

SJW Group Sustainability Report 2019 | 13 Restrained Joint Pipe bend a little at the joint without leaking. Resin as a potential solution to prevent The SP3 Resin does not require the plugging of the chlorine injection backwashing or replenishment, and the The water industry has a history Restrained joints resist the tendency systems. The resin does not require energy required for the SP3 system of innovation with respect to the to separate due to fluctuating pressure maintenance, is approved for drinking is much less than it was for the CO2 performance and composition of water and direction of flow. Pipes that are water treatment, and does not change system. This is an example of how SJW pipes. Pipes in the home are usually properly restrained ensure that there the chemical composition of water. The continuously looks for ways to reduce soldered together, glued together or is a much smaller chance of leakage resin acts as catalyst for the formation costs and find solutions that minimize attached with a mechanical fitting (e.g. at the joints, especially at bends and of stable, naturally occurring crystals its carbon footprint. compression or flare). The larger DICL turns. This not only reduces the chance (aragonite) that do not cause plugging used by SJW and its peers are typically of pipes failing but saves water and at the chlorine injection points. The joined together with flanges, couplings therefore energy as well. These kinds pilot was successful and all SJW or, most commonly, a bell and spigot of details are examples of how proper groundwater stations that had been arrangement called a push-on joint. engineering design helps prolong the using CO2 are now equipped with this This type of joint involves inserting the life of SJW infrastructure. catalytic resin. This simple operational normal end of a pipe (called a spigot) change is helping the company keep into the bell end of another pipe with a SP3 Resin at Groundwater its costs low by eliminating the need to gasket seal separating the pipes so that Stations purchase $80,000/year of CO2 and they have minimal or no metal-to-metal In 2018, SJW piloted the use of a reducing the labor required to maintain contact while allowing the pipes to catalytic resin called Filtersorb® SP3 the associated injection systems.

SJW takes seismic safety precautions very seriously and has undertaken a major FEATURE earthquake-resistant main replacement project in Santa Clara County. EARTHQUAKE RESISTANT PIPE

One of the greatest threats that project will also move several local large earthquakes pose in a heavily homeowners from privately run populated area is the potential cutoff well systems into the regular SJW of water supply. For this reason, the distribution system. In addition, company has constructed a major four fire hydrants will be installed, pipe replacement project on the Old contributing to increased fire Santa Cruz Highway using earthquake- protection in an area vulnerable resistant pipes and joints. to wildfires. To learn more about Besides the obvious benefit of earthquake resistant pipes, visit: increased seismic safety, the sjwater.com/earthquakepipe.

IMAGE FOR PLACEMENT ONLY

SJW Group Sustainability Report 2019 | 14 Energy Use

02 Pumping Energy Efficiency Energy efficient pumping operations have helped SJW reduce energy Operations consumption and operating costs. The Operations department has developed a time-of-use pumping strategy that load-shifts pumping activities to off- Operating a distribution system in today’s environment means peak energy usage periods. In addition, cutting-edge technology has been optimizing past practices to maximize efficiency, leveraging new deployed to continuously monitor technology to minimize water loss, maintaining the existing system pump efficiency remotely. The pump efficiency data is integrated with with a changing regulatory environment, and planning for the future. our SCADA monitoring system. This system prioritizes all available pumping inputs every twenty minutes based on efficiency, time of day, and the PG&E rate schedule, ensuring that the next most efficient pump is always selected when additional pumping is required pressure water is first passed through Water Loss SAMSARA CLOUD to meet demands. This continuous turbines that generate electricity LTE monitoring not only ensures real- before being discharged in the Reducing Water Loss time efficiency data based on current reservoirs. The slowing of the flow SJW’s water loss rate of 7.4% of operating conditions, but also provides by the turbines to generate energy total water supplied continues to labor efficiencies and reallocation of has minimal operational impact. Since outperform the average water loss in resources. their commissioning in 2011, the two SAMSARA the United States (16%¹) and is well turbines have generated a total of 1.7 below the industry average and mean Cox Station Energy Recovery gigawatt hours and saved the company INDUSTRIAL Infrastructure Leakage Index (ILI) when GATEWAY over $285,000 in energy costs while In 2011, SJW built an energy recovery compared to most water utilities in contributing to a reduction of GHG facility at its Cox Station to recover California². SJW remains committed emissions from the operation of its the energy lost during the transfer to further reducing its water loss to distribution system. of water from transmission pipes to conserve water and deliver world-class PRESSURE TANK LEVEL the Cox reservoirs. Today, the high- service to customers.

SAMSARA

VIBRATION & POWER

1 USEPA, EPA 816-F-13-002 Water Audits and Water Loss Control for Public Water Systems (2013) 2 SJW’s ILI as of 2019 was 1.47 compared with a State-wide median and mean of 2.4 and 1.9 respectively Figure 8. Pump Efficiency System (note lower number is better as this indicates the utility is closer to the theoretical minimum leakage Samsara real-time pump efficiency and condition monitoring solution. index). See WSO/Cavanaugh, Water Loss Technical Assistance Program Final Report (2018)

SJW Group Sustainability Report 2019 | 15 To this end, SJW has become one of Every year, a water loss audit is risk for workers, less disruptions for during flushing operations, the wattles makes it easier for keep water both clean and within the industry leaders in proactive leak conducted in accordance with customers, lower repair costs, and allowing it to replenish the aquifer workers to handle and saves fuel by the distribution system, SJW could detection. Proactive leak detection, American Water Works Association reduced water loss. SJW’s acoustic leak from which it came. Flows from the eliminating the need to transport continue flushing during drought including acoustic leak detection, is guidelines. This audit is submitted to detection program commenced in 2017 wells that exceed the percolation heavier conventional gravel bags. periods and minimize water losses. part of SJW’s water management the State of California and is available and has proactively saved many millions rates are filtered prior to being The zero-discharge flushing system • Spearheading the revision of the program — intended to decrease non- to the public. of gallons of water since it began. discharged to a storm water drain. saves SJW and its customers 36,000 California-Nevada AWWA Section revenue water (which includes leaks, gallons of water per mile of pipe • Implementing the use of a non- BMP for Drinking Water Releases fire hydrant flow, stolen water, and Acoustic Leak Detection Drinking Water Discharges flushed, with 6.5 million gallons toxic polymer to clean water Manual. The updated manual was meter inaccuracies) and minimize real saved for the 180 miles flushed in The acoustic leak detection program SJW has been a leader in California in pumped from trenches during approved by the Section this year. water losses in the system. Water pipe 2018. To enhance the company’s uses sophisticated sensors placed on developing Best Management Practices pipe repairs. The polymer is The manual is a reflection of water breaks are clear examples of reported fire hydrants to find leaks in the water (BMPs) for discharging drinking water derived from crab shells and is industry ingenuity and hard work in ability to understand water quality leaks in which, because surfacing water distribution system. These sensors to the environment. SJW’s leadership very effective in separating the developing practices that minimize in the service area, the Water is visible, actions are promptly taken. monitor sounds within the water role in developing and implementing dirt from the water discharged to its operational impacts on the Quality and IT departments have However, small pipe leaks or leaks at system and identify acoustic anomalies, BMPs to reduce the volume of water the environment during trench environment. developed a state-of-the-art data pipe joints and fittings may not reach which indicate leaks. When leaks discharges and to mitigate the impact of dewatering activities. In addition acquisition and analysis system. • Implementing zero-discharge the surface and can go undetected are found an alert is triggered, and these discharges includes: to non-toxic crab shells, SJW also With this system, the Water Quality flushing. In 2014, SJW became for long periods of time, wasting large geographic information is automatically department is able to let customers • Commissioning the design of makes use of wattles filled with the second utility in California amounts of water. While SJW quickly sent to our staff so that they can and staff know, in real time, where facilities to better use discarded walnut shells. These wattles have to implement zero-discharge responds to reported leaks, systems investigate and quickly address the leak flushing activities are taking track, water from well flushing activities. the advantage of being light and flushing. The truck uses a flushing like acoustic leak detection provide before it becomes a catastrophic break. the turbidity (cloudiness) removed Many SJW well facilities are now very effective as check dams. The method that virtually eliminates SJW and its customers with continuous Being able to identify leaks before from the system and to keep equipped with percolation and check dams work by slowing the water waste while doing a better and proactive leak detection before it they become large breaks provides records of when a segment of the filtration facilities. These facilities flow of water when it is discharged job of cleaning water mains. By would typically be noticed. numerous benefits including improved distribution system has been flushed. now capture the water discarded into the street during dewatering maintaining a closed system to public health and safety, reduced operations. The light weight of

URGENT REPAIR

DATA CLOUD MONITOR & Secure server USER UTILITY PRIORITIZE and analysis INTERFACE STAFF

Figure 9. Acoustic Leak Detection

SJW Group Sustainability Report 2019 | 16 Other Resource hourly, daily, or monthly basis through • Reducing water loss on the system Figure 10. AMI Transmission Network an online portal. side of the meter by creating areas Wireless Communication Efficiencies SJW has been assessing the feasibility in the distribution system that are SJW Customer Network SJW Office of AMI over the last several years isolated to track water loss Advanced Metering and gained valuable experience from • Automating the highly-manual and Infrastructure two AMI pilots that were completed hazardous work of manual meter Years of unprecedented drought in in 2018. In 2019, SJW developed reading (existing meter readers will California, upcoming state-level water a business case for a system-wide be retrained into other positions conservation mandates (Senate Bill AMI deployment and submitted an within SJW) No. 606 and Assembly Bill No. 1668), Water Use Data Water Meter Water Use Data application to the CPUC in December • Improving utility and regional and rising water costs mean SJW and 2019 for a multi-year AMI program. preparation for future droughts its customers require more real-time Figure 11. Overview of AMI Functionality AMI will provide numerous customer and conservation restrictions data on water use and proactive leak service, societal and operational • Improving high-bill troubleshooting notifications. Currently, most water benefits, including: Assist customers in meeting water budgets and meters within SJW’s service area and investigation via detailed Improve utility and regional preparation for being efficient with water use — customers will • Assisting customers in meeting future droughts and conservationrestrictions benefit from tools to manage their water use and $ are read manually and billed on a bi- interval data corresponding water bills water budgets while managing their monthly schedule, where neither the • Increasing employee and water use and corresponding water customer nor the utility has insight into community health and safety by bills Reduce water loss on the system-side of the Reduce water loss on the customer-side of the water usage apart from the one meter reducing vehicle miles driven for meter by creating district metered areas (areas in meter by proactively identifying continuous flow read captured every 60 days. Advanced • Reducing water loss on the the distribution system that are isolated to track and burst flow events, notifying customers, and meter reading and GHG emissions water loss) deploying vehicles to stop leaks Metering Infrastructure (AMI) helps customer side of the meter by meet today’s water challenges by proactively identifying continuous capturing near real-time interval flow and burst flow events, Increase employee and community safety by Improve high bill troubleshooting and data on water usage, indicating when notifying customers, and deploying reducing vehicle miles driven for meter reading and greenhouse gas emissions investigation via detailed interval data leaks may be occurring, and allowing vehicles to stop leaks customers to track their usage on an

Increase employee and community safety by Automate the highly-manual and hazardous work reducing vehicle miles driven for meter reading of manual meter reading — existing meter readers and greenhouse gas emissions will be retrained into other positions within SJW ! FEATURE ZEBRA MUSSELS

Zebra mussels are a nonnative, invasive surface water treatment plants. • updating the design of the intake pipes for species present in Canyon Lake , a In July of 2019, it was discovered easier and more frequent cleaning major SJWTX water source. Zebra that zebra mussels had attached • replacing the old intake screens with copper mussels will attach themselves to themselves to pumps at Canyon plated screens, as zebra mussels are averse most surfaces and can thus impact Lake in such dense layers they were to copper SJWTX operations and require large cutting production from one of the • working with regulatory entities to make amounts of energy and other resources intake pipes nearly in half. SJWTX the intake column less hospitable for the to address. To prevent operations immediately began scouring the zebra mussels impacts, SJWTX coordinates a twice- pipes to restore production. SJWTX These changes will help ensure that SJWTX yearly cleaning of the screens fixed also consequently designed physical production is not impaired by the zebra mussels, to the submersed intake pipes at its improvements to better manage the without impacting the lake environment. Canyon Lake Shores and Triple Peak zebra mussels, including:

SJW Group Sustainability Report 2019 | 17 03 Environment

FIGURE 12. SAN JOSE WATER'S BENEFITS FOR SWITCHING TO CLEAN ENERGY PROVIDERS SJW is aggressively planning for our future by addressing the effects Tons of CO % Carbon % Renewable Tons of CO 2 Energy Provider # of Accounts Total GWH 2 Avoided in of climate change and working to drastically reduce the carbon Free1 Energy2 Avoided3 2021 footprint of the organization. SJW’s Climate Change Policy provides San Jose Clean 62 23.2 80% 45% 89 3,461 Energy (SJCE) guidance to the organization on the direction and expectations Silicon Valley Clean 98 9.1 100% 55% 1,221 1,221 to provide drought resistant, sustainable water supplies for its Energy (SVCE) Pacific Gas & 0 0 78% 33% 0 0 customers while being an environmentally responsible organization Electric (PG&E) San Jose Water 160 32.3 86% 48% 1,310 4,682 that does more than its part to transition to a low-carbon economy. (SJW) Total

1Carbon free is Wind, Solar, Hydro and Nuclear 2Renewable energy is Wind and Solar 3Metric tons of CO2 or 2200 pounds

SJW Carbon and year. It is anticipated that by the end of Solar Power capacity of approximately 1,800 2021, SJW will meet its reduction goal Energy Goals Since 2007, SJW has been using solar kilowatts and provide SJW the ability to Climate Initiatives of 5,000 tons of CO2 per year. SJW aims to make 100% of their energy in an effort to reduce GHG both reduce overall energy use and limit purchased power carbon-free emissions and offset energy costs. peak energy demand charges. Initial Greenhouse Gas (GHG) Renewable Energy estimates show that these investments Emissions by the end of 2021, saving 4,682 SJW has installed solar panels and SJW switched to sustainable electrical tons of CO2 from 2019. By 2025, numerous small electrical panels on its will have short payback periods of 3 to SJW is actively reducing its GHG providers San Jose Clean Energy in SJW intends to install solar panels Columbine Reservoir. This upcoming 5 years, helping to decrease operational emissions in several ways. As described February 2019 and Silicon Valley Clean that will save approximately year, upon CPUC approval, SJW plans expenses, lower customer bills, and below, one large step was changing Energy in April 2017. While providing a 2,000,000 KwH or 2 GwH of to significantly enhance its alternative reduce the company’s carbon footprint. its energy provider from one that minimum of 1% savings in energy costs electrical use, which translates energy efforts by designing and offered some renewable energy for the company and its customers to an additional 290 tons of starting the permitting process to to two providers that offer a much when compared to the former CO2 from 2019. Combined with install photovoltaic systems at two higher percent of renewable energy. In provider, these energy providers energy conservation initiatives, of its largest-producing groundwater addition, SJW has recently switched the also distribute cleaner energy with a SJW’s overall goal is to save pumping stations, Williams Road fuel supply for all of its diesel-powered higher percentage of carbon-free and 5,000 tons of CO2 by 2025 from Station and Three Mile Station. These trucks and vehicles to a renewable renewable energy sources, as shown in a year 2017 baseline. two systems will have a combined biofuel. These two steps alone have cut the table on the next page. CO2 emissions by about 2,000 tons per

SJW Group Sustainability Report 2019 | 18 superior to traditional biodiesel. The Figure 14. GHG Calculation for SJW fuel is comprised of waste fats (such IMPACT CALCULATOR as animal and fish fats) and vegetable oil residues (such as palm, corn and VEHICLES AVERAGE 1 AVERAGE soybean oil) which results in up to a MILES 1 1 000 MILES DRIVEN 57 IN FLEET 90% reduction in GHG emissions, 5 PER GALLON 0 PER YEAR (DIESEL) according to Neste. All 57 of SJW’s diesel vehicles now exclusively use this GREENHOUSE GAS EMISSIONS COMPARISON biofuel, including backhoes, vans and NESTE MY light, medium and heavy construction CONVENTIONAL DIESEL GHG EMISSION RENEWABLE DIESEL REDUCTION equipment. 1720.15t CO e/a 79.21% Approximately 100,000 gallons 2 357.68

of biofuel will be used each year in tCO2e/a replacement of diesel fuel. As shown in the GHG calculation figure, this ANNUAL GREENHOUSE GAS EMISSIONS SAVINGS corresponds to an annual GHG emissions reduction of 79.21%, which is ENOUGH EMISSIONS 291 the equivalent annual GHG footprint of 12 1362.47 SAVINGS TO 243 OR OR 243 homes. tCO e/a 2 OFFSET Homes Trucks Cars Electric Vehicle Fleet Additionally, each EV will reduce GHG Read more about SJW’s adoption of Neste fuel here: sjwater.com/neste-renewable-diesel emissions estimated at 4.2 metric tons To reduce operating costs and GHG per 12,000 miles driven, assuming emissions, SJW has begun integrating an energy efficiency of 4 miles/kWh. electric vehicles (EVs) into its fleet. The FEATURE Based on the results of piloting two transition to EVs, limited at this time fleet EVs, the company will assess new to passenger vehicles, is expected to EV offerings in the marketplace and KITTREDGE WETLANDS CREATION provide the following financial savings: convert its entire fleet to EVs when it SJW actively manages the Los Western Pond Turtle. This project Figure 13. Annual Savings makes financial sense to do so. Gatos Creek watershed, an area of will ensure SJW is able to continue Per Electric Vehicle approximately 6,000 acres, under providing high-quality water from Annual the Los Gatos Creek Watershed local sources, while also protecting Costs of Gasoline Savings/ Biofuels Maintenance Program (Maintenance local wildlife and the beautiful habitat Vehicles Electric Program). To mitigate the impact on which they depend. To learn more Vehicle SJW is currently using biofuels in of management activities in the about this project, visit sjwater.com/ Fueling of gas place of diesel fuel for all of its trucks 12 hours watershed, SJW created a wetland Kittredge-wetlands. vehicles by fleet staff and construction equipment that use adjacent to Lake Kittredge. The Maintenance of gas diesel. The fuel is provided by Neste, 2 hours wetland provides important habitat vehicles by fleet staff the leading producer of biofuels in the for endangered species such as the Maintenance cost of world. The biofuel is a high-quality $360 California Red Legged Frog and the gas vehicles renewable diesel fuel that is also known as Hydrotreated Vegetable Oil and is Energy cost $926 considered an advanced form of biofuel

SJW Group Sustainability Report 2019 | 19 SJW is committed to customer service, stewardship of the environment, and supporting our community. for generations to come. 04 Social Responsibility

Customer Focused this statement to heart and not only Program Accomplishments Over a practices conservation in its own Three-year Period: Mission operations, but also assists customers • Turf removed: 1,407,095 square Customers expect water to flow every to use this precious resource more feet time they turn on the tap, but this efficiently every day. • Weather-Based Irrigation expectation encompasses more than In 2019, SJW focused conservation Controllers Installed: 1,134 just high-quality water delivery 24 outreach efforts on outdoor water hours a day, 365 days a year. Today’s use, which accounts for more than consumers want their companies to 50% of residential use. Working with CATCH Program be committed to customer service, Valley Water, SJW has encouraged its SJW developed the CATCH program stewards of the environment, customers to take advantage of the to empower its customers to and supportive of the community. many rebates available for landscape understand and optimize their water SJW is dedicated to a mission that retrofits. The company’s goal is to use. With this free program, a water encompasses all three. convert approved high water use efficiency expert visits a customer’s landscapes, such as lawns and pools, to home or business to check for leaks Conservation low water use landscapes and retrofit and recommends critical water- and Conservation is no longer a buzz existing equipment with approved high- money-saving improvements. With word brought up during intermittent efficiency irrigation equipment. CATCH, customers are left feeling droughts. Throughout California, the Valley Water Landscape Rebate confident that they are maximizing phrase “Making Conservation a Way water efficiency. of Life” is dominant. SJW has taken

Figure 15. CATCH Water Audit by Type

2016 2017 2018

Single-family residential audits 2,269 2,210 2,145

Multi-family residential audits 490 551 397

Commercial audits 57 44 47

Dedicated landscape audits 12 0 0 Additionally, 2019 is the first year Waterfluence SJWTX Conservation Efforts requirements for model homes assistance. In the fourth quarter of as well as external coordination and in which SJWTX held an outdoor with native or xeriscape landscape 2019, 17,760 customers were signed up partnerships. Internal efforts include Another aspect of SJW’s outdoor Because SJWTX similarly serves water use outreach event. The two- packages, limits on the amount of for WRAP. infrastructure upgrades to tanks water conservation efforts focuses on high-growth areas, the utility has day event in November was held in irrigation installed at residential sites, and pipes to increase earthquake large landscaped sites. Waterfluence started taking more steps to promote conjunction with a local nursery and and requirements for irrigation audits resilience, monitoring the structural is a company SJW has partnered water efficiency through conservation landscape design facility. At the event, in community green spaces. SJW Emergency integrity of nearby dams, doubling with through Valley Water to help and drought management. In 2019, customers had the opportunity to fuel tank capacity of service trucks so with this effort. This program offers SJWTX revised both their Drought Preparedness learn how to correctly set and use an they can stay in the field to complete dedicated landscape and recycled Management and Conservation plans. irrigation controller, understand the WRAP Water is vital to many parts of everyday critical repairs, and emergency fuel water customers a customized water The revisions in both plans helped benefits of healthy soil, grow native life, and its importance is only made Serving customers includes helping planning in case of power outages to budget based on aerial imagery and better align SJWTX with its neighbor plants, and view landscape designs clearer in the aftermath of a major those who need financial assistance. ensure generators essential to pump site verification of the amount and type utilities in the region. In particular, the that minimize the use of turf. Visitors event or natural disaster. The South The Water Rate Assistance Program operations remain functional. of irrigated area. Customers receive institution of a year-round watering were also able to engage with SJWTX Bay Area is subject to many types of (WRAP) provides a 15% discount on SJW’s preparedness efforts with a monthly water budget report that schedule is a major change that staff and learn more about SJWTX’s disasters including flooding, fires and of the total water bill for eligible low- external organizations include shows actual water use compared to mirrors what SJWTX’s neighbors have water resources, distribution system, course, earthquakes, so preparation is income customers. Information about participation in the planning and calculated water budget. The report is initiated to help reduce outdoor water new infrastructure projects, and more. key. SJW is aware of the responsibility this resource is communicated in many coordination of regional emergency provided to inform customers of their waste. Internally, SJWTX is working the utility holds to ensure customers Inspired by extensive new ways including bill inserts, the SJW response exercises and other training water use and encourage conservation. to improve customer communication have access to water in the case of development in SJWTX’s service area, website, community outreach events, events, as well as ongoing partnerships This program was introduced to on conservation and drought-related a disaster and is thus committed the utility has made a concerted effort and through phone calls with customer with Valley Water and other local customers in 2017 and is being funded topics by including more information to emergency preparedness and to include conservation provisions service representatives. This year’s agencies to ensure a coordinated by Valley Water. about water resources and efficient use organizational readiness. in new developer agreements. While in a quarterly newsletter. efforts included expanded postings response to any disaster or major event this is an on-going effort, some on social media to make sure the SJW’s preparedness efforts feature that may occur. changes made to-date include new most vulnerable populations receive both internal training and planning,

SJWTX community outreach event FEATURE SJW STAFF – WALKING THE WALK

SJW employees share the utility’s unit traveled to Fiji to work with the concern about environmental local water authorities. His section was and social issues. One of the most tasked with teaching basic sanitation prominent examples of recognizing to primary school students as well as the importance of safe, high-quality working with the water officials on drinking water is seen in SJW employee infrastructure projects and master Gavin Devries. An Engineering planning. To learn more about Gavin’s Manager in the Planning department, efforts in Pacific Pathways Exercise Gavin serves as a Captain in the United Cartwheel 2019, visit sjwater.com/ States Army Reserves. This year, his gavin-devries.

SJW Group Sustainability Report 2019 | 21 FirstNet In 2019, SJWTX took the important SJW was honored to receive step of ensuring all employees four MarCom awards for were enrolled in FirstNet. FirstNet creative communications is a wireless broadband network content produced in 2019. Gold specifically dedicated to ensuring awards were received for the first responders and critical utility and infrastructure entities can utility’s Kids Educational Activity communicate during an emergency. Booklet and an infographic on Water utilities need priority access to the SJW resiliency program, communication networks in the case and two Honorable Mentions for of a natural or man-made disaster, and using FirstNet ensures SJWTX will the Montevina Water Treatment not be affected by network overload Plant tour video and the when connectivity is most crucial. Summer 2019 water bill insert. This new safety feature also helps the utility disseminate key information Since its inception in 2004, throughout the community and among MarCom has evolved into one SJWTX customers more quickly and clearly. It is SJWTX’s goal to be as of the largest, most respected prepared as possible to maintain safe, creative competitions in the reliable service to its customers and world, and SJW is proud to be FEATURE the greater community, even in the recognized on this coveted list. situation of a disaster. SJW OPEN HOUSES

The highlight of 2019 outreach was answering questions about the utility Partnering with the Formalizing outreach efforts included a series of four open houses held in and educating visitors about various creating a calendar of events and different communities throughout aspects of water treatment and Community implementing a volunteer recruitment the SJW service area. In Saratoga, delivery. Members of the public were 2019 was a banner year for SJW effort to help staff events. The SJW Campbell, and two locations in San excited to learn more about their local community outreach. With a goal to Ambassador Program, revived in 2019, Jose, SJW provided demonstrations, water system and service provider. SJW HELD 4 OPEN included a group of 39 employees increase outreach efforts by 40% videos, and equipment so the public HOUSES IN 2019 from 2018, a record-number of 29 committed to sharing the company’s could experience various elements outreach events were achieved. In story with the public. of the water system, first-hand. Staff addition to favorite events like Bark in New outreach efforts in 2019 enjoyed meeting community members, the Park, Cupertino Diwali Festival, also included public tours of the Water Awareness Night with the San Montevina Water Treatment Plant. Jose Giants, and the Guadalupe River From Brownie troops to retirees, Run, many new events joined the customers were able to witness the line-up including the Berryessa Art & technology used to bring water to Thank you for providing a tour. It truly made me appreciate the Wine Festival, Bollywood in the Park, their taps every day. This includes the plant upgrade and the care taken with our water supply. and Happy Hollow Senior Safari. At use of cutting-edge microfiltration, every event, SJW staff enjoyed the reduction in chemical usage, and the “ – Montevina Water Treatment Plant visitor chance to listen to customers and use of local water supplies. answer questions. ”

SJW Group Sustainability Report 2019 | 22 Community Service FEATURE In 2019, SJW employees participated in many ways to make the community a better place to live: FIFTH GRADERS GET Martha’s Kitchen Rebuilding Together As a long-standing supporter SJW stepped up to participate in a large WATER WISE! of this San Jose soup kitchen, fence-building project for a home that SJW contributes not only will serve as a transitional place for Making sure the next generation of benefit of this hands-on conservation funds but also volunteer hours. women (and their children) who have students appreciates the value of program that combines school-based Employees helped prepare jobs but cannot find affordable housing. water, SJW offers a school-based lessons and a take-home package of and serve meals during the A dozen employees donated more than water education effort known water-saving devices. Learn more Thanksgiving in January event 100 hours of time to create a safe place as the WaterWiseTM Program. at sjwater.com/fifth-grade-water- for a grand total of 179.5 hours. for children to play. Approximately 3,400 fifth graders program. This was an increase of 41.5 throughout the service area enjoy the volunteer hours from 2018.

Hunger at Home Shoe Drive The Guadalupe River Park sports programs, art/music programs, Foreign Wars Post’s Fourth of July Minority Business Enterprises (MBE), SJW partnered with this local Fencing in undeveloped park lands cancer walks, and homeless shelters. Parade, sponsorship for the Canyon Women-Owned Business Enterprises agency for the first time in was a priority for the Guadalupe River One softball league used the donations Lake Rotary Fund’s college scholarship, (WBE), Disabled Veteran Business 2019. Employees donated more Park Conservancy who reached out for scholarships for girls that cannot providing financial support for Music Enterprises (DVBE) and Lesbian, Gay, than 500 pairs of shoes to to SJW for help. A dozen employees afford to play travel ball. in the Park programs, and maintenance Bi-sexual and Transgendered (LGBT) those in need. worked tirelessly to install more than for community walking trails. SJWTX DBEs. In 2019, SJW began its Supplier 250 feet of split-rail fence. All employee SJWTX Community was especially proud to sponsor the Diversity Champions program. In each efforts helped to improve the three- Involvement Canyon Lake Little League for the 15th department, employees are identified mile park that runs through the heart of Every year, SJWTX supports a consecutive year. to support the use of diverse suppliers downtown San Jose. variety of organizations. In 2019, in all areas of the company from food SJWTX contributed to 19 different vendors to construction companies. organizations ranging from the arts and Supplier Diversity Internal support of this important local businesses to veterans’ groups program has increased awareness Employee Community Fund contributions. This organization is run incentive, SJW provides a dollar-for- SJW is committed to continuous and youth sports. Some highlights from throughout the company. solely by employees. dollar match of employee contributions improvement of both its Supplier The SJW Employees' Community Fund, 2019 include providing support to the Funds to support this program come up to a maximum of $10,000 annually. Diversity Program and the CPUC’s a 501(c)(3) corporation, promotes Community Resource Center in the from two sources. Employees provide Through the 4th quarter of 2019, Utility Supplier Diversity Program. employee and retiree involvement in form of box fans and heaters so those tax-deductible contributions through 38 total grants were provided to the SJW strives to work with Diverse their local communities by providing in need can live in safe temperatures, bi-weekly payroll deductions or one- community for a total of $17,250. Business Enterprises (DBEs) that the means to support other non-profit participating in the local Veterans of organizations through employee time annual contributions. As an added These funds go to schools, churches, reflect its community including

SJW Group Sustainability Report 2019 | 23 05 Integrity. Employees – Respect. Service. Compassion. Culture, Service Trust. Teamwork. and Safety Transparency.

Throughout the organization, SJW employees embrace the company’s values in everything they do.

Employee Opinion upon opportunities as the companies Benefits, Employee Balance Pension Plan, and competitive vacation (based on tenure), ten paid In 2018, SJW introduced a program continue to grow and expand. compensation packages. sick days and fourteen paid holidays. for carpoolers to encourage the Survey Highlights from the 2019 Employee Care and SJW encourages ongoing employee reduction of fuel emissions and to Commuter Assistance Employee Opinion Survey results Opinion Survey: Development development through a variety support increased work/life balance. continue to be strong in 2019 with Program Participants in this program are • Positive employee comments spoke One of SJW’s highest priorities is of access points including tuition 79% of employees participating and an In commute-heavy Silicon Valley, SJW provided with a prescribed amount of highly of coworkers/teamwork, addressing the health and welfare reimbursement, on-site certification overall favorable rating of 72% for the employees have asked for and received fuel on a monthly basis at no cost to work culture, their job, and needs of employees and their family training, management development second year in a row. The Engagement programs to help with this difficult the employee carpool driver (subject management. members. The company does so by programs, safety training, an Index also remained relatively part of their workday. The Commuter to federal income tax). This program providing access to comprehensive e-learning platform and on the job unchanged year-over-year with 22% • The organization scored higher Assistance Program (CAP) helps continued into 2019. medical plan offerings – two of which training opportunities. of employees indicating they are fully than the Global Benchmark in key employees who live at least 20 miles have 100% employer-funded premiums Employees spend a significant portion engaged with another 56% in the key areas including employees believing from the Bascom Avenue site in San for employees and their families. of their careers with SJW. During contributor category. Many employees they have the tools and resources Jose. Regularly scheduled trains, buses Dental, Basic Life, and Employee their tenure, employees experience Equal Opportunity perceive a clear link between their they need to do their jobs well. and a customized shuttle service are Assistance insurance premiums are also a variety of life events including Employer efforts and the success of the • Employees feel that the people used to transport employees to and 100% employer funded. childbirth, family reunions, marriage, organization. The data also shows that they work with treat them with from work Monday - Friday (excluding SJW is an equal opportunity employer The financial health of SJW employees military service, personal or family employees identify positively with the respect. holidays) during commute hours. and is committed to compliance with medical issues, overseas travel vision and goals of the organization. is also supported through a 401(k) Participating employees are reimbursed all applicable laws providing equal • 83% of employees are confident and more. SJW offers 19 different SJW and SJWTX leadership is fully savings plan with employer matching, a at a rate of 100% of the cost of the employment opportunities. SJW policy that the organization has a paid and unpaid leave of absence committed to building upon the strong discounted Employee Stock Purchase appropriate monthly ticket (subject to prohibits unlawful discrimination based successful future. options. Each year, SJW also provides cultural foundation and improving Program, 100% employer-funded Cash federal income tax for reimbursement on race, color, religious creed, religious employees with two to six weeks of amounts above $260). belief or grooming, sex, gender,

SJW Group Sustainability Report 2019 | 24 gender identity, gender expression, or an employee unless undue hardship the Operating Engineers Local Union Workforce Diversity & Equality marital/domestic partner status, would result. No. 3 of the International Union of age, national origin, citizenship, Operating Engineers, A.F.L.-C.I.O. SJW ancestry, physical or mental disability, Labor, Health and looks forward to many more years of Figure 16. Gender At SJW GENDER medical condition, pregnancy, genetic Safety building, together with its labor unions, information or characteristics (or an enduring company. Making sure employees are healthy those of a family member), sexual and happy on the job is a top priority Women orientation, military and veteran Open Door Policy for SJW. The company strives to work 28.81% 33.33% status, status as a victim of domestic Men collaboratively with all employees to In an effort to facilitate open dialogue violence, or any other consideration provide the greatest opportunities and communication, SJW has an made unlawful by federal, state, 28.81% 33.33% for all. open-door policy. Employees at all or local laws. It also prohibits levels of the company are encouraged unlawful discrimination based on the Labor Relations and to bring ideas, suggestions, and perception that anyone has any of Management feedback to managers and directors. SJW EMPLOYEEFirst/Mid-Level DEMOGRAPHICSExecutive/Senior Level those characteristics or is associated Officials and Managers Officials and Managers SJW recognizes the important role Employees’ ideas and feedback can with a person who has or is perceived each of its unions and leadership help the company to grow, improve, as having any of those characteristics. GENDER AGE boards have in its success. They share a and better meet the needs of its All such discrimination is unlawful. common commitment to serving fellow customers and the community. Unless 12.64% 2.04% they are involved in a conference call, EMPLOYEE AGE To comply with applicable laws employees, customers, communities Figure 17. Age At SJW Women < 30 ensuring equal employment and protecting the environment. SJW confidential meeting or time-sensitive matter, managers and directors keep Men 12.64% 2.04% opportunities to qualified individuals and its labor unions have accomplished 28.81% 30-50 an open door, willing to listen and help 28.81% 33.33% with a disability, SJW will make a great deal since the establishment of 26.82% > 50 44.90% reasonable accommodations for the bring about a solution or clarification. the company’s first labor union in 1946. 28.81% All staff input can be presented without71.19% 66.67% 60.54% 53.06% known physical or mental limitations The company works collaboratively 28.81% 28.69% < 30 of an otherwise qualified individual with the Utility Workers’ Union of fear of personal recrimination. 26.82% 44.90% with a disability who is an applicant America, A.F.L.-C.I.O., Local 259 and 30-50 28.81% First/Mid-Level 71.31% Executive/Senior60.54% Level > 50 All Employees53.06% Management Officials and Managers Officials and Managers

All Employees All Employees Management

ETHNIC DIVERSITY Figure 18. Ethnic Diversity At SJW

1% 1% 3% 2% White 2% 7% Hispanic or Latino 7%

Asian 13% 38% 19% 65% Two or more races Pacific Islander 35% 6% Native American African American All Employees Management

SJW Group Sustainability Report 2019 | 25 Health & Safety Policy The 5-step IIPP implementation controls are put in place. Finally, Continuous Improvement of space rescue systems for tanks, new guardrails that provide a safe way process involves the following: personal protective equipment is folding guardrails for the underground to access equipment on top of the tank Employees are a key strategic building Health & Safety programs used for the hazards that cannot be vaults located on sidewalks to prevent in Dow Drive Reservoir. block at SJW, and their health and 1. Always set health and safety as the All H&S programs are designed based mitigated. To verify that the controls pedestrians from falling through the safety are core values for the company. top priority; on Plan-Do-Check-Act approach. Each Significant improvements were also are effective, IIPP provides tools for opening, and advanced fall protection Aiming for a zero-harm culture, the program element is implemented by made to SJW’s Personal Protective 2. Lead by example; reassessing the remaining risks. systems for ladders and unprotected company’s vision is to manage its Health including relevant stakeholders to plan Equipment (PPE) program in 2019. 3. Ensure training is received; edges of tanks. SJW has also and Safety (H&S) performance to the key parts of the program customized The protective footwear program was Culture of Safety implemented building stairs instead become a leader in the water services 4. Conduct self-inspections; and to fit operations. At the “Do” stage, expanded and is now based on wear- SJW fosters a culture of trust of fixed ladders wherever possible. industry. In 2018, the President and 5. Continually improve the program. SJW implements these planned parts and-tear with detailed replacement These improvements are part of an Chief Operating Officer together with that strengthens collaboration while checking to confirm the expected criteria instead of annual replacement. To ensure effective implementation of ongoing effort to minimize injury risks the Chief Executive Officer signed a and innovation in safety. Safe outcome. Adjustments are made at the In addition, Powered Air Purifying IIPP, quarterly self-assessment tools to employees and the public. new H&S Policy covering all facilities behaviors cannot be achieved by “Act” stage to keep the programs up Respirators (PAPR) were introduced for are provided to each department and operations empowering SJW with technical guidelines alone. Employee to date. This approach enables SJW Improvements in 2019 include several tasks that require a higher level to measure their own progress. In the mission and responsibilities to engagement is the basis for the to improve the program elements to upgraded confined space entry of respiratory protection for employees. addition, the H&S team carries out achieve this vision. The utility’s written world-class performance that SJW achieve world-class safety performance. equipment, including two new davit annual audits to ensure compliance. safety programs were updated in 2019 is striving for. Some examples of arms, winches, fall protection devices, to match the requirements of the new In an effort to reduce the occurrence employee involvement in safety at Facility Modifications and and harnesses. SJW also replaced H&S Policy. As a clear indication of its of injuries, SJW’s IIPP has tools to SJW include supervisors and crew Employee Protections several vault lids that were creating an leaders writing Job Hazard Analysis, commitment to the health and safety identify and report hazards in an In recent years, SJW has made strides ergonomic hazard to employees, built a employees conducting safety tailgate of employees, SJW’s H&S Policy states accessible location for all to see. For towards adopting and implementing new platform for operators to walk on sessions, mentors coaching trainees in that management, contractors and all 2019, each department has a target advanced safety features in its facilities. while diverting flows from Trout Creek working safely, union representatives employees are collectively responsible of identifying at least one hazard per These features include built-in confined to the treatment plant, and installed to ensure compliance with local, state week and addressing the identified actively involved in the H&S Steering and federal occupational health and hazard within the time limits allowed Committee and the Joint Labor- safety regulations. based on assigned risk values. Due Management Safety Committee, and dates to correct hazards are assigned employees actively reporting hazards Managing Health & Safety based on the priority given by the Risk and conducting self-inspections at their Assessment Chart: work areas. The SJW H&S Management System, called the Injury and Illness 1. Immediate – 15 days In preparation for emergencies, every building has a Building Emergency Prevention Program (IIPP), focuses 2. Critical – 30 days on the prevention and minimization Coordinator to act as an incident 3. Serious – 60 days of H&S risks by assigning specific commander during emergencies to responsibilities to ensure active 4. Moderate – 90 days keep employees and the public safe. participation at all levels within the 5. Low – 180 days Mock drills are conducted on a regular company’s organization. The IIPP basis to sharpen the skills of SJW The hazards are controlled based on is designed in parallel to match the emergency personnel. Emergency the hierarchy of controls principle by structure of ISO 45001 (formerly procedures are kept up to date for first developing solutions to eliminate OHSAS 18001), which will allow emergencies, such as fires, explosions, the risks or substituting hazards with the company to be certified in the chemical spills, active shooters, less dangerous ones. Additional steps near future. The IIPP consists of: a) bomb threats, medical situations, and are taken to implement engineering H&S Framework where policies and earthquakes. controls to isolate the hazards from responsibilities are declared; and b) SJW employees and the public. H&S Management System where risk Furthermore, by introducing safe work mitigation, training, recordkeeping and practices and training, administrative auditing takes place.

SJW Group Sustainability Report 2019 | 26 Types of Injury and Incident approximately 550,000 hours worked. SJW continually strives to improve Improving accredited college programs. Moreover, Rates The Total Recordable Incident Rate its H&S performance; hence, a senior SJW offers college scholarships to the (TRIR) for mid-fourth quarter is 7.2 management level performance goal Qualifications and children of active employees who plan In 2019, there were no fatal accidents and the Days Away/Restricted or Job for safety was adopted based on the to pursue or are currently pursuing within the SJW operations. More than Career Development Transfer (DART) rate is 2.5. recordable incident rate reduction. The a degree in engineering, biology, 100 years ago, there was one reported performance target of a 10% yearly Opportunities chemistry, business administration, or SJW employee death announced in a To prevent similar incidents in the reduction based on a 5-year moving SJW is committed to developing people, a field that qualifies the student for a local newspaper, however, no other future, all workplace incidents resulting average is calculated and monitored management and the organization by position in the investor-owned public fatal accidents have been reported in medical treatment and/or lost time quarterly to ensure the company is on focusing on the State Water Resources water supply business. since that time. were investigated to find the root Control Board (SWRCB) Drinking cause(s) of the incidents. Figure 19 track. SJW has implemented written Additional programs, such as an 20 work-related incidents took place by Water Operator Certification Program shows the last 5-years’ accident rates programs to achieve this target along apprenticeship program with the mid-fourth quarter in 2019, resulting in (DWOCP). The Joint Management- per 200,000 working hours with a with a near-miss reporting system, Local Pipefitters Union, provide an 162.5 lost working days, on the basis of Labor Training Committee offers coverage of 100% of employees: which allows SJW to analyze and take opportunity for unexperienced workers continuing education classes for both action before an incident occurs. Each to gain new skills and understand treatment operators and distribution Figure 19. SJW Accident rates incident and near-miss is investigated the importance of safety on the job. using the root cause analysis method operators at no cost to employees. In 12 Offering Crane Operator Certification addition, all fees are reimbursed to to make certain this type of incident through the National Commission for 10 employees who would like to obtain or cannot happen again. the Certification of Crane Operators increase their certification grade. 8 (NCCCO) is another testament of

6 The tuition waiver program allows SJW’s commitment to organizational employees to advance their education and individual development. 4 by taking classes online or by attending 2

0 2015 2016 2017 2018 2019

TRIR (Total Recorable Incident Rate) DART (Days Away/Restricted or Job Transfer) Rate FEATURE

Similarly, there have been no fatal accidents in the history of Canyon Lake Water Services Company. Figure 20 shows the prior 3-years’ accident rates per SJWTX WORK GEAR COMFORT 200,000 working hours with a coverage of 100% of employees: AND SAFETY

Figure 20. SJWTX Accident Rates In 2019, SJWTX invested in new high- all employees that perform work in the New safety equipment includes four- 12 visibility safety shirts designed to keep field. In addition to keeping employees way gas monitoring equipment for employees cool in the summer heat of cooler, the lighter hardhats feature work in confined spaces such as vaults, 10 Texas. The shirts, available in long and a six-point suspension system which ground storage tanks, and manholes. 8 short sleeves, eliminate the need for reduces neck tension and strain by the New, larger trucks were also added 6 wearing both a shirt and a vest. Doing end of the day. to the fleet, ensuring that proper away with an entire second layer of 4 The work boot allowance policy was horsepower is available for safe towing clothing keeps teams in the field cooler also changed to provide more boot and hauling tasks. 2 and reduces the risk of heat stroke. options. This way, employees have 0 In addition, new lightweight and the flexibility to buy boots that best fit 2017 2018 2019 vented hardhats were purchased for them and are safe and comfortable. TRIR (Total Recorable Incident Rate) DART (Days Away/Restricted or Job Transfer) Rate

SJW Group Sustainability Report 2019 | 27 Levels of training New ways of learning SJW understands that company-wide In 2019, SJW introduced a digital awareness level training and targeted learning platform, CornerStone, to SJW GROUP safety training are needed in conjunction enhance learning activities by making with technical measures to produce them more accessible, open, connected ENVIRONMENTAL POLICY world-class safety performance. In and collaborative. Both safety and 2019, a total of 350 labor-hours of cybersecurity courses were introduced The regulated water and wastewater It is SJW Group (Group) Policy to Accordingly, SJW Group shall OSHA outreach training, 820 labor- in this first year of the digital platform operating utilities of SJW Group are conduct business in compliance with develop and adopt an Environmental hours of safety tailgates, and 720 labor- to provide flexibility with learning subject to multiple state and federal applicable regulations in a manner that: Management System that is hours of specialized safety training were opportunities. By mid-fourth quarter, regulations regarding rates, service, consistent with provisions of the ISO completed by mid-fourth quarter. 320 hours of online training were • recognizes the unique business of finances, operations, water quality Standard 14001 and contains these successfully completed. providing water and wastewater and environmental standards. As service, and the impact it has on elements: a highly regulated business, the people and communities; • demonstrated compliance with Company is committed to operating • ensures the protection and all environmental regulations in compliance with all applicable conservation of the Group’s and permits; laws and regulations. Our goal is not natural resources; • leadership involvement and only to meet the letter of the law, engagement of employees in but to do so in a manner that builds • enhances the environmental improving the subsidiaries trust and respect with regulators, stewardship of its assets; environmental performance; the environmental community, our • adopts business practices that Our Ongoing Commitment customers and our shareholders. minimize the environmental • the stewardship of its watershed With operations in multiple states, impact of operations through lands, promotion of water Integrity. Respect. Service. Compassion. Trust. Teamwork. systems of different sizes and varying the use of renewable energy, conservation and efficient use Transparency. water resources, and regulatory water and energy conservation, of water resources in a manner As SJW Group expands to serve more customers than ever before across the requirements across the company, reduction, reuse and recycling that enhances the protection of U.S., we are committed to ensuring our values are embodied in every utility we appropriate operating practices are of materials, and management of its natural resources; operate. Upholding these values involves not only providing the highest quality implemented to meet the needs of hazardous materials and wastes; • the minimization of greenhouse water possible, but also ensuring the operations necessary to provide that water each system to serve its customers. • assures compliance with all gases while maximizing the are approached in a sustainable manner. We are committed to protecting the environmental regulations and competitive and financial environments from which that water is sourced and ensuring that water is used environmental permits; advantage through improved sustainably to serve our growing 1.5 million customers for generations to come. efficiencies and reduced costs; This second annual SJW Group Sustainability Report functions not only to • and enhancement of the Group’s share our efforts over the past year in protecting the environment, improving suppliers’ environmental operations and our utilities in general; the report also serves as a record of the performance. goals we set for ourselves, our progress towards achieving those goals, and our ongoing commitment to our customers, our planet, our shareholders, and our mission to serve high-quality water for the next 150 years.