Vidler Water Company completes first major water sale

Vidler Water Company, Inc. has sold a portion of its land and water rights in Arizona's Harquahala Valley groundwater basin to a unit of Allegheny Energy, Inc.

LA JOLLA, Calif., March 19, 2001 — PICO Holdings, Inc. announced that its water rights and water storage subsidiary Vidler Water Company, Inc. has sold a portion of its land and water rights in Arizona's Harquahala Valley groundwater basin to a unit of Allegheny Energy, Inc.

The 2,159.5 acres of deeded irrigable land and related 6,478.5 acre-feet of water rights, located in La Paz and Maricopa Counties, will allow the construction of a new electricity generating facility.

In addition to the cash purchase price of approximately $9.1 million, Vidler received a $300,000 non-refundable option fee earlier this year. Vidler will record a pre-tax gain of approximately $2.4 million from this transaction in the first quarter of 2001. The sale price represents $1,400 per acre-foot for transferable Harquahala Valley ground water. Following this sale, Vidler owns, or has the right to acquire, a further 49,426 acre-feet of transferable ground water in the Harquahala Valley.

John Hart, PICO's President and Chief Executive Officer, commented:

"Continuing urbanization in the Southwest has led to a permanent increase in the demand for electricity, which can only be met by the construction of new generating plants. We appear to be well positioned to supply the land and water required for new power plants in locations which also have the essential requirements of access to rail transport and to the electricity grid."

PICO expects to announce its fourth quarter and full year 2000 results on or before Monday, April 2, 2001.

For more information, visit www.picoholdings.com.

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