1. June 10, 2009 5:30 p.m.

2.  Agenda  Background: Frank Heldman, District Manager  Summary of 14.1 Filing: John Garon, Regulatory Affairs Manager  Water Use Efficiency Tips: Albert Frias, Conservation Coordinator  About Golden State Water Company (GSWC)  Provided water to Californians for 80 years  Serves one million people in more than 75 communities  Regulated by the California Public Utilities Commission  Annual Water Quality Report provides additional accountability  Customer service and information available 24 hours a day at 1-800-999-4033 and www.gswater.com Introductions

3. Background Golden State Water Company’s Water Shortage Plans Frank Heldman, District Manager

4. Background Drought and Pumping Restrictions  California is in the third year of a drought  Water storage in the state's major reservoirs and runoff projections remain well below average  Environmental restrictions on pumping water from the Delta to protect Delta Smelt

5. Background Impact on Local GSWC Water Supply  GSWC buys approximately 38 percent of its wholesale water from the Municipal Water District of Orange County (MWDC) for its more than 42,200 customers in the county  MWDC will implement mandatory water use allocations for all retailers including GSWC beginning July 1, 2009  If GSWC exceeds its allocation from MWDC, it will be assessed penalties  To meet its MWDC allocation, GSWC will ask its Orange County customers to reduce water usage by 6 percent beginning July 1, compared to historical average usage  The plan requires California Public Utilities Commission approval  If approved, fines and suspension of service may occur for customers who repeatedly violate a list of water use restrictions

8. Where Southern California Gets its Water Water Banking / Exchanges Transfers & Storage Local Supplies LA Aqueduct LA Aqueduct Colorado River Aqueduct Supplies Conservation Local Supplies Groundwater & Recycling State Water Project Supplies

9. Water Supply Conditions *Based on 15% Initial Table-A Allocation

10. Metropolitan Storage Reserves January 2007 January 2008 Estimated January 2009 ~2.2 MAF ~670 TAF ~2.8 MAF ~ 1.7 MAF ~670 TAF ~2.3 MAF ~ 1.0 MAF ~670 TAF ~1.7 MAF

11. –Up to 115%: Applicable rate + 2 X Tier 2 Water Supply Allocation Penalty Rates –Over 115%: Applicable rate + 4 X Tier 2 –Discount in recognition of Preferential Rights: 1 X Tier 2 * Untreated Tier 2 Rate is $528/AF in 2009

12. Summary Golden State Water Company’s Rule and Schedule 14.1 John Garon, Regulatory Affairs Manager

13. Plan Summary “Rule” 14.1  Outlines conservation measures  Voluntary conservation  GSWC asked customers to voluntarily reduce water by 20% beginning in October 2008  Mandatory conservation and rationing  Procedures on how to file for Schedule 14.1 (Mandatory Conservation)  PUC accepting public comments Tariff Unit, Water Division, 3rd floor California Public Utilities Commission, 505 Van Ness Avenue, San Francisco, CA 94102 E-mail: water_division@cpuc.ca.gov

14. “Schedule” 14.1 Plan Summary  Used for Mandatory Conservation and Rationing  Detailed outline of Mandatory Conservation and Rationing Program  Contains fines and penalties  Unauthorized and non-essential water use in Rule 14.1 becomes mandatory

15. Plan Summary Seven Stages of Plan Stage 1Stage 2Stage 3Stage 4Stage 5Stage 6Stage 7 % Annual Reduction Only Voluntary Reductions 5-10%>10-15%>15-20%>20-30%>30-40%>40-50% % of Customer Allocation Only Voluntary Reductions 90-95%85-89%80-84%70-79%60-69%50-59% Footnote – In Stages 1 through 7, fines will exist for repeatedly violating water use restrictions.

16. Plan Summary How GSWC Will Determine Each Customer’s Allocation  Three-year history (2004-2006)  Percent of reduction varies depending on Stage  Customers using 5 Ccf or less a month are exempted  Current and future allocations will be printed on billing statements  Exception process will allow customers opportunity to apply for adjustment

17. Plan Summary How Each Customer’s Allocation Will Appear on Billing Statements

18. Plan Summary Penalties for Going Over Allocation  1 st stage – No penalty  All other stages – Regular rate plus two times current quantity rate on the R3-1-R and R3-1-NR tariff for usage over allocation up to 15% – Regular rate plus three times current quantity rate on the R3-1-R and R3-1-NR tariff for usage that is 15% or more over allocation – The penalties GSWC issues to customers are designed to be revenue neutral and only cover costs GSWC incurs from exceeding its reduced MWDC allocation

19. Plan Summary Examples of Non-Essential and Unauthorized Use  Use of water resulting in excessive run-off in gutters, waterways, patios, driveways or streets  Use of water through broken or defective plumbing, sprinkler, watering or irrigation systems  Use of hose for outside areas for landscaping without an automatic shut-off valve  Complete listing of unauthorized use is available at meeting tonight in the copy of our 14.1 filing

20. Plan Summary Fines for Non-Essential and Unauthorized Use  1 st offense – warning issued  2 nd offense and every offense after Stage 1 & 2: $50 Stage 3: $100 Stage 4: $150 Stage 5: $200 Stage 6: $250 Stage 7: $300  If offense continues  Low flow restrictors installed  Disconnect

21. Plan Summary Flow Restrictor Charges  5/8” to 1” - $100  1-1/2” to 2” - $150  3” or larger - $200

22. Questions

23. Golden State Water Company Water Efficiency Tips Albert Frias, Water Conservation Coordinator

24. Topics of Discussion Water Use Efficiency – Water Conservation How Much Water Do We Use? How Can We Save Water? Rebates Available

25. What is Water Use Efficiency? Using Water Efficiently and Effectively  Lowering your water needs but achieving the same results  Using water only when needed or necessary

26. How Much Water Do We Use Indoors?

27.  Older toilets use between 3.5 and 7 gallons of water per flush  High-Efficiency Toilets use 1.28 gallons per flush  Average savings of 2.2 gallons per flush! High-Efficiency Toilets How Can We Save Water Indoors?

28.  Globally recognized water-saving device  Simple and easy to use water-saving device  Average savings of 0.625 – 1.25 gallons per flush! “Toilet Tummy”

29. How Can We Save Water Indoors?  Washing machines use an average of 40.9 gallons of water per load  High-efficiency clothes washers use an average of 24 gallons per load  Average savings of 16.9 gallons per load! High-Efficiency Clothes Washer

30. How Can We Save Water Indoors?  Older showerheads have an average flow rate of 5 gallons per minute  Low-flow showerheads have an average flow rate of 2 gallons per minute  Average savings of 15 gallons per 5-minute shower Low-Flow Shower Heads

31. How Can We Save Water Indoors?  Standard aerators have an average flow rate of 3 gallons per minute  Low-flow aerators have an average flow rate of 1.5 gallons per minute  Average savings of 3-gallons per use based on a 2- minute usage period Low-Flow Aerators

32. How Can We Save Water Indoors? Estimated faucet leakage rates  Drips 30 drips per minute = 4.32 gallons per day 60 drips per minute = 8.64 gallons per day 90 drips per minute = 12.96 gallons per day 120 drips per minute = 17.28 gallons per day Fix Leaks!

33. How Can We Save Water Indoors? Fix Leaky Toilets!  Silent leaks  Will waste from 30 to 500 gallons of water per day!  Dye test  Replace flapper – flush valve

34. How Can We Save Water Outdoors? Water your yard only before 8 a.m. to reduce evaporation and wind interference Save up to 25 gallons per day Install a smart sprinkler controller Save up to 40 gallons per day Use a broom instead of a hose to clean driveways and sidewalks Save up to 150 gallons each time Check your sprinkler system for leaks, overspray and broken sprinkler heads Save up to 16 gallons per day

35. Conservation Programs UPDATE: (GSWC customers within Metropolitan Water District service area) Due to high demand, the Metropolitan Water District, our major partner for rebate funds in many of our customer service areas in Southern California, has allocated all of the rebates for its fiscal year that ends June 30. No further rebate reservations are available at this time. However, after July 1, check our Web site for rebates on washers, toilets, and other devices. Residential and Commercial Rebates

36. Useful Web sites  www.gswater.com  www.bewaterwise.com  www.ccwater.com  www.H2ouse.org  www.cuwcc.org  www.water.ca.gov/drought  www.Planetgreen.discovery.com

37. Contacts  24-hour Customer Service  1-800-999-4033 or gswater.com  Water Use Efficiency Manager  Edwin DeLeon 909.394.3600 X683  Edeleon@gswater.com  Conservation Coordinator  Albert Frias 909.394.3600 X745  albertfrias@gswater.com

38. Conservation Rates Approved by Commission in August 2008 Implemented in November 2008 Main features: Lower monthly service charge so a larger portion of your bill is based on water consumption, giving you more control over your bills Tiered, or increasing block rates, have a higher unit price for usages in the higher block, providing an incentive for customers to use water efficiently Separate rates for Residential and Non-Residential Customers Residential = single family with one meter. Two tiers. Non-Residential = all others. Lower service charge with single quantity rate structure. Existing tariff sheet available here at meeting or www.gswater.com

39. Questions