1. CPUC/LIOB WATER/ENERGY CONSERVATION PANEL DISCUSSION Panel 1 – Current Water and Energy Conservation Programs California American Water Presented by David Stephenson – Manager Rate Regulation January 17, 2007

2. 1 California American Water Background Seven CPUC regulated water districts, One regulated wastewater district. Twenty-four separate and distinct service areas within the seven regulated districts. Service provided in metropolitan, urban and rural areas. Approximately 170,000 customers served.

3. 2 Current Water Conservation Programs In All Service Areas Metering and Meter Replacement Programs. System Pressure Control. Supply Side Management. Plumbing Fixture Retrofit Programs. Commercial and Multi-Family Water Audits. Large Turf Irrigation Audits. Demonstration Gardens. School Programs. Public Education Programs. Ultra-Low Flow Toilet Rebates. High Efficiency Washing Machine Rebates.

4. 3 Conservation Programs Used In Specific Areas Inclining Block Rate Design (In use in Monterey – Settled in Los Angeles – Proposed in Coronado, Sacramento, Larkfield and Village). Conservation Discount Rate Design (In use in Felton). Complete in-home retrofit program (Chualar Area). Joint Company/Community Committees (Monterey/Larkfield). Strict Water Use Regulations (Monterey). Full-Scale SCADA Controlled facilities (Los Angeles, Monterey). In-Lieu water Purchasing Programs (Los Angeles, Sacramento).

5. 4 Current Energy Conservation Programs That Indirectly Provide Water Conservation SCADA – controls water pressure, supply and time of use. Pump and Motor Replacement Programs – variable speed drives supply only in the quantities and pressures necessary.

6. 5 Current Water Conservation Programs That Indirectly Provide Energy Conservation Direct Correlation - High Efficiency Washing Machine Rebates Indirect Correlation – –Ultra-low flow toilet rebates –Plumbing fixture retrofits –In fact - all water conservation reduces energy consumption

7. 6 Program Coordination California Urban Water Conservation Counsel Monterey Peninsula Water Management District Callegues Municipal Water District Los Angeles Department of Water and Power West Basin Municipal Water District Metropolitan Water District Upper San Gabriel Valley Municipal Water District Sacramento Groundwater Authority Sacramento Groundwater Basin and the Central Sacramento Groundwater Forum Sonoma County Water Authority Larkfield/Wikiup Water District Advisory Committee San Diego County Water Authority

8. 7 Efforts To Determine Program Effectiveness The effort in this area is lagging behind efforts in other areas Metering and customer use comparisons In Monterey – studies have been conducted by MPWMD

9. 8 Funding For Programs Rates Stockholder Contributions Municipal provider payments