California Water Service Group Signs Agreement to Purchase Kaanapali Water Corporation.

Business Editors

SAN JOSE, Calif.--(BUSINESS WIRE)--Aug. 2, 2002

California Water Service Group (NYSE:CWT) announced today that it has signed an agreement to purchase the Kaanapali Water Corporation for $7.7 million in cash from AquaSource Utilities, Inc. Kaanapali Water Corporation provides water utility services to approximately 500 customers in Maui, Hawaii, including 10 resorts and eight condominium projects. It posted 2001 revenues of $3.3 million, and has net plant of approximately $7.3 million and current assets of $0.4 million.

"We are very excited about establishing a presence in yet another state," said Peter C. Nelson, President and Chief Executive Officer of California Water Service Group (the Company). "We continue to execute a disciplined growth strategy, pursuing opportunities that benefit our stockholders, customers, employees, and communities. This acquisition fits into that strategy, and we are looking forward to closing the deal," he said.

The purchase of the Kaanapali Water Corporation is subject to the regulatory approval of the Hawaii Public Utilities Commission. The Company expects to receive regulatory approval in mid-2003 and complete the transaction shortly thereafter. It will retain all employees and form a Hawaii-based subsidiary to operate the system.

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. Together these companies provide regulated and non-regulated water utility services to more than 2 million people in 96 California, Washington, and New Mexico communities. The Company's common stock trades on the New York Stock Exchange under the symbol "CWT."