June 14, 2012 Evan Jacobs

For Immediate Release Office: 916-568-4252

Mobile: 707-495-6135

Evan.Jacobs@amwater.com NEW RATES APPROVED FOR CALIFORNIA AMERICAN WATER CUSTOMERS

Increase cover increases in operating costs and new capital projects

SACRAMENTO, Calif (June 14, 2012) -- The California Public Utilities Commission approved new rates for California American Water customers in its Sacramento District. Customers will receive notifications of how this increase will impact their bills. The increase will be distributed based on consumption levels and meter size.
"These rates are the product of open public proceedings that examined and deliberated every aspect and financial detail of our original rate request over the course of the last two years," said Andy Soulé, California American Water's Northern Division general manager. "The additional revenue generated from the these new rates will address the structural needs of our water system while mitigating as much as possible the financial impact to our customers. We made every effort to minimize costs in all of our projects and operations while honoring our obligation
to provide our customers with the highest level of water quality and service that they expect."
The new rates are expected to bring in around $6.,3 million in additional revenue to fund new infrastructure projects and improvements in the company's Sacramento-area water systems and to offset increases in purchased water, operational and maintenance costs through the end of
2014. The decision also approves the hiring of three new workers in our customer service, meter reading and production departments. The decision increases California American Water's total annual revenue in Sacramento to nearly $49 million and will increase rates by about 15 percent from current levels.
"A metered customer using about 11,000 gallons a month will see their bill increase by about 21 cents per day," Soulé said. "It's worth noting that despite this increase, our water is still a great value at about two gallons per penny."

PRESS RELEASE www.californiaamwater.com

NEW RATES FOR CALIFORNIA AMERICAN WATER CUSTOMERS

Some of the major infrastructure projects that these rates will help fund within the Sacramento
County service district include:

• More than $9 million for main replacements and fire flow protection improvements.

• More than $2 million to replace and upgrade some of the district's aging wells.

• More than $6 million in other system and water treatment improvements.

These investments are in addition to the company's ongoing expenditures to replace water lines, meters, hydrants and upgrade pumping and storage facilities to maintain water service, reliability, efficiency and quality throughout Sacramento.
To help customers use water wisely, the company has received authorization to continue a variety of conservation programs and rebates. The program includes offering low-flow showerhead and hose nozzles, sink aerators, leak detection kits and many other types of water- saving devices to all customers free of charge. The company also offers sizeable rebates for qualified water-efficient appliances like clothes washers and low-flow toilets as well as water efficient landscaping.
California American Water also offers all of its Sacramento customers a free home or business water use survey, where, upon request, the company will dispatch a conservation specialist to the customer's home to look for leaks and recommend other areas of water savings. These surveys can help you reduce your water use and your water bill.
For low-income customers, the company proudly offers "H20 Help to Others," a program designed to assist those experiencing financial difficulties in paying their water bill. Customers who qualify for the PG&E Care program will qualify for the "H20 Help to Others" program. Find out more by calling (888) 237-1333, or stopping by the local Sacramento office at 4701 Beloit Drive, Sacramento, CA 95838.
"We are here to work with all our customers through this rate adjustment, for which we have an array of programs and services," Soulé said. "We want to ensure that everyone is provided support in their efforts to conserve water and to assist those who might be struggling financially."

PRESS RELEASE www.californiaamwater.com

NEW RATES FOR CALIFORNIA AMERICAN WATER CUSTOMERS

California American Water, a wholly owned subsidiary of American Water (NYSE: AWK), provides high-quality and reliable water and/or wastewater services to approximately 600,000 people.
Founded in 1886, American Water is the largest publicly traded U.S. water and wastewater utility company. With headquarters in Voorhees, N.J., the company employs approximately
7,000 dedicated professionals who provide drinking water, wastewater and other related services to an estimated 15 million people in more than 30 states and parts of Canada. More
information can be found by visiting
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PRESS RELEASE www.californiaamwater.com

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