California Water Service Company, Salinas District Contracts Basin Water for Nitrate Removal Program.

New System Marks Seventh Well-Site Installation and Technology+Services Agreement between Parties

RANCHO CUCAMONGA, Calif. -- Basin Water Inc. (NASDAQ:BWTR), announced the finalization of a ten-year technology+services agreement with California Water Service Company (Cal Water) in its Salinas District for the removal of nitrates from groundwater at the District's 65-01 well site. The Basin Water proprietary high-efficiency ion exchange treatment system currently in preparation for the site will be the seventh system installed for Cal Water in this heavily agricultural district. Like Salinas' other Basin Water systems, this installation will be managed under an agreement that guarantees system performance on the basis of treated water volume and effluent compliance. In addition to guaranteed performance, the new system will generate low waste rates, maximize water recovery and accommodate the district's need to fit the new treatment capacity into a minimal footprint at the well-head.

According to Orlando Carreno, Vice President, West Region for Basin Water, the new contract underlines not only the continuing success of Basin Water's relationship with Cal Water in Salinas but also the value that is delivered via the technology+services business model. "California Water Service Company was one of the first water providers in the United States to recognize the value that Basin Water technology+services provide and we are very proud that our relationship has grown with each passing year," Carreno said. "Cal Water is at the leading-edge of a phenomenon that we expect to see grow throughout the West and across the United States as communities face new and increasingly stringent water quality regulations in an environment where economic and personnel resources are limited. At Basin Water, we believe we are up to the challenge of helping them meet their goals," he continued.

Companies continue 6-year "partnership" relationship

Cal Water is one of six subsidiaries of California Water Service Group, one of the largest investor-owned, U.S.-based water utilities in the nation. Cal Water serves nearly 2 million people through approximately 461,000 connections and utilizing nearly 900 wells. The Salinas District is 100% dependent on groundwater sources, and faces a constant threat from both nitrate contamination and saltwater intrusion.

The 65-01 site, like all of Basin Water's other installations with Cal Water Salinas, will be a turnkey installation in which Basin Water assists the district with California Department of Public Health permitting and provides all treatment equipment and associated connections, piping, wiring, startup and commissioning services, followed by full operation and maintenance of the unit for a ten-year period. The ten-year agreement features guaranteed cost of equipment and operation and represents a lowest life-cycle solution for the District. Basin Water employs a full-time dedicated technician in the Salinas District to provide these services at all seven installations. Start-up of the new system is expected to take place in spring 2008.

"At Cal Water, water quality is our highest priority, and we look forward to working with the Basin Water team on this important project," said Assistant District Manager Mike Jones. "Basin Water has been an important partner to the Salinas District for six years, and we're happy to continue the relationship," he added.

About Basin Water

Basin Water, Inc. is a provider of reliable, long-term process solutions for a range of clients, which includes designing, building and implementing systems for the treatment of contaminated groundwater, the treatment of wastewater, waste reduction and resource recovery. Basin Water employs treatment technologies including its own proprietary, scalable ion-exchange wellhead treatment system, along with a host of other treatment technologies designed to meet customer needs in an efficient, flexible and cost effective manner. Additional information may be found on the company's web site: www.basinwater.com.

Forward Looking Statements

This press release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These statements, including expectations relating to future revenues and income, the company's ability to gain new business and control costs, involve risks and uncertainties, as well as assumptions that, if they prove incorrect or never materialize, could cause the results of the company to differ materially from those expressed or implied by such forward-looking statements. Actual results may differ materially from these expectations due to various risks and uncertainties, including: the company's limited operating history, significant operating losses associated with certain of the company's contracts, the company's ability to identify and consummate other acquisition opportunities that improve the company's revenues and profitability, significant fluctuations in its revenues from period to period, its ability to effectively manage its growth, the success of the company's strategic partners, its long sales cycles, market acceptance of its technology, the geographic concentration of its operations and customers, its ability to meet customer demands and compete technologically, the company's ability to protect its intellectual property, regulatory approvals of the company's systems, changes in governmental regulation that may affect the water industry, particularly with respect to environmental laws, the company's ability to attract and retain qualified personnel and management members, the company's ability to manage its capital to meet future liquidity needs, changes in the board of directors and the timing of the company's stock repurchases, if any. More detailed information about these risks and uncertainties are contained in the company's filings with the Securities and Exchange Commission, including the company's Annual Report on Form 10-K for the year ended December 31, 2007. The company assumes no obligation to update these forward-looking statements to reflect any change in future events.