California Water Service Group Completes Acquisition of Ka'anapali Water Corporation.

Business Editors

SAN JOSE, Calif.--(BUSINESS WIRE)--April 30, 2003

California Water Service Group (NYSE:CWT) announced today that it has completed its acquisition of the Ka'anapali Water Corporation, which serves approximately 500 customers on the island of Maui in Hawaii, including six large resorts and eight condominium complexes.

"We are thrilled to be entering a fourth state. This was a great opportunity that fit perfectly into our growth strategy, which is to seek good quality systems in the western United States that will add immediately to stockholder value," said President and Chief Executive Officer Peter C. Nelson.

California Water Service Group purchased the Ka'anapali Water Corporation for approximately $8 million from AquaSource, Inc., whose parent company, DQE, is currently divesting itself of its water systems as part of a previously announced "Back to Basics" strategy focused on its core electric business. Ka'anapli Water Corporation has approximately $7.2 million in utility plant assets. It posted 2002 revenues of $2.9 million.

Ka'anapali Water Corporation employees have all received offers for continued employment. Jeff Eng, the current Area Manager, has accepted the position of General Manager for the new subsidiary.

"We welcome our new employees and look forward to providing them the support they need to continue providing high-quality water utility services," Nelson said.

Customer rates will not increase as a result of the transaction, which was approved by the Hawaii Public Utilities Commission on March 27, 2003. The Company has established a fifth operating subsidiary, the Hawaii Water Service Company, to serve its Hawaii customers.

California Water Service Group is the parent company of California Water Service Company, Washington Water Service Company, New Mexico Water Service Company and CWS Utility Services. The operating companies provide regulated and non-regulated water service to over 2 million people in 98 communities. The Company's common stock trades on the New York Stock Exchange under the symbol "CWT."

This news release contains forward-looking statements within the meaning established by the Private Securities Litigation Reform Act of 1995 ("Act"). The forward-looking statements are intended to qualify under provisions of the federal securities laws for "safe harbor" treatment established by the Act. Forward-looking statements are based on currently available information, expectations, estimates, assumptions and projections, and management's judgment about the Company, the water utility industry and general economic conditions. Such words as expects, intends, plans, believes, estimates, assumes, anticipates, projects, predicts, forecasts or variations of such words or similar expressions are intended to identify forward-looking statements. The forward-looking statements are not guarantees of future performance. They are subject to uncertainty and changes in circumstances. Actual results may vary materially from what is contained in a forward-looking statement. Factors that may cause a result different than expected or anticipated include: governmental and regulatory commissions' decisions; changes in regulatory commissions' policies and procedures; the timeliness of regulatory commissions' actions concerning rate relief; new legislation; electric power interruptions; increases in suppliers' prices and the availability of supplies including water and power; fluctuations in interest rates; changes in environmental compliance and water quality requirements; acquisitions and our ability to successfully integrate acquired companies; the ability to successfully implement business plans; changes in customer water use patterns; the impact of weather on water sales and operating results; access to sufficient capital on satisfactory terms; civil disturbances or terrorist threats or acts, or apprehension about the possible future occurrences of acts of this type; the involvement of the United States in war or other hostilities; restrictive covenants in or changes to the credit ratings on our current or future debt that could increase our financing costs or affect our ability to borrow, make payments on debt or pay dividends; and, other risks and unforeseen events. When considering forward-looking statements, you should keep in mind the cautionary statements included in this paragraph. The Company assumes no obligation to provide public updates of forward-looking statements.

Additional information is available at our Web site at www.calwater.com.