Extreme drought in California could be either very bad or very good for AWR, not sure which
Water rationing could be very bad, but presumably cost of water & profits could rise. If the drought gets worse, it seems to me net effect on company is bad. Customers will be really POd about rising bills.
Last time there was a drought (70’s or 80’s), you had to conserve otherwise received a penalty on you bill. Then the water companies went to the PUC indication that due to conservation effort, they were not making enough $ to cover their cost. PUC then allow a rate increase. End result, PCU guarantees a set profit, but the questions, is how much.
Drought will be hard on customers but utility's always get an increase on price when customers cut water usage. People need to flush their toilets and take showers. Not much people can cut so my take is that AWR will benefit.