New Mexico regulators approve California Water Service Group purchase of Rio Grande Utility Corp.

June 12, 2002
New Mexico regulators have voted unanimously to approve California Water Service Group's acquisition of the water and wasewater assets of the Rio Grande Utility Corp.

SAN JOSE, Calif., June 12, 2002 --The New Mexico Public Regulation Commission voted unanimously yesterday to approve California Water Service Group's acquisition of the water and wastewater assets of the Rio Grande Utility Corp., which serves 2,265 water and 1,600 sewer customers in unincorporated areas of Valencia County, New Mexico, located 30 miles south of Albuquerque.

Robert J. Davey, who is currently responsible for the overall management and operation of Rio Grande, will be retained by New Mexico Water Service Company to ensure successful integration of the two companies. New Mexico Water Service Company is a wholly-owned subsidiary of California Water Service Group, formed to serve customers and support growth in New Mexico.

"We are very pleased to have the Commission's unanimous approval and are looking forward to our enhanced role in providing service to communities and customers in New Mexico. We believe that the purchase will add value for our stockholders and better enable our New Mexico team to serve customers and meet water quality and supply challenges," said Peter C. Nelson, President and Chief Executive Officer of California Water Service Group (Group).

Group will purchase the assets of Rio Grande, which include five active water wells, two wastewater treatment plans, and rights to purchase 1,492 acre feet of groundwater, for $2.3 million. Group will also assume $3.1 million in debt. The acquisition is expected to close by the first of July, 2002.

"I have been very impressed by the California Water Service Group," said Davey. "The company has a long history of providing excellent customer service, and I know that with their experience and resources, we will be better able to meet new water quality standards and protect our water supply," he said.

New Mexico Water Service Co. will offer positions to all of those currently employed by Rio Grande Utility Corporation. 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 service to over 2 million people in 96 California, Washington, and New Mexico communities. Group's common stock trades on the New York Stock Exchange under the symbol "CWT."

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