American Water Works Company, Inc. Announces Intention to Terminate the SJW Corp. Merger Agreement.

Business Editors

VOORHEES, N.J.--(BUSINESS WIRE)--Feb. 23, 2001

American Water Works Company, Inc., (NYSE:AWK) today announced that, in light of additional delays outlined in a new procedural scheduling order issued by the California Public Utilities Commission (CPUC), the company will exercise its right to terminate the SJW Corp. (SJW) merger agreement on April 28, 2001.

The February 20, 2001 CPUC scheduling order extends the date for a final decision regarding review of the merger application to at least September 2001.

"Continued uncertainty surrounding the regulatory process in this matter makes it impossible to plan and effectively implement the transaction contemplated by the agreement," noted Mr. J. James Barr, the company's president and chief executive officer. "We have reached the point that the interests of all concerned are best served by concluding this matter," Barr added.

The process of regulatory review of the application to merge SJW into American Water Works is now combined with a separate application requesting approval of an agreement to purchase the water assets of Citizens Communications (CZN) located in California.

American Water Works noted that it would continue to diligently pursue completion of the Citizens' transaction and that documentation before the CPUC allows separate evaluation of the SJW and CZN transactions. The termination date of American Water Works' agreement with Citizens is September 2001.

"Today's action does not signal any lack of interest by American Water Works in continuing to participate in the essential consolidation taking place in the water and wastewater industry," Mr. Barr emphasized. "However, decisive regulatory action is absolutely critical in order to successfully complete this important initiative."

American Water Works Company is the largest and most geographically diverse investor-owned water service provider in the nation. Its subsidiaries serve a population of approximately 10 million customers in 23 states.

This release may contain certain forward looking statements, including, without limitation, statements relating to the Company's plans, strategies, objectives, expectations, intentions and adequacy of resources, which are made pursuant to the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995.

These forward looking statements involve known and unknown risks, uncertainties, and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward looking statements.

These factors include, among others, the following: the success of pending applications for rate increases, inability to obtain, or to meet conditions imposed for, regulatory approval of pending acquisitions; general economic and business conditions; competition; success of operating initiatives, advertising and promotional efforts; existence of adverse publicity or litigation; changes in business strategy or plans; quality of management; availability, terms and development of capital; business abilities and judgement of personnel; changes in, or the failure to comply with governmental regulations, particularly those affecting the environment and water quality; and other factors described in the filings of the Company with the SEC.

The Company undertakes no obligation to publicly update or revise any forward looking statement, whether as a result of new information, future events or otherwise.