Customers Win as California American Water Executes Direct Access Power Agreement and Water Source Optimization

  Customers Win as California American Water Executes Direct Access Power
  Agreement and Water Source Optimization

 Both will produce savings that will be passed directly onto customers in Los
                         Angeles and Ventura Counties

Business Wire

CORONADO, Calif. -- October 4, 2013

California American Water announced today it executed a direct access power
purchase agreement for its largest facilities in Los Angeles and Ventura
Counties.

Direct access is a program managed by the California Public Utilities
Commission (CPUC) to allow large commercial power users to purchase power
directly from competitive energy service providers and realize savings. The
total reductions in costs realized will be used to lower customer bills the
following calendar year. While the exact savings is not known at this time, in
similar instances savings have been approximately 10 percent off of the
current Southern California Edison commercial rate, which would equate to
about $163,000 per year for California American Water. The agreement term is
October 2013 to January of 2015.

“We are thrilled to be able to take advantage of direct power purchase savings
and pass those savings directly onto our customers,” said Rob MacLean,
president of California American Water.

Separately, California American Water announced it will save approximately
$630,000 in Los Angeles County through water rights leases in the Central,
Raymond and Main basins during the 2013/2014 fiscal year. As with the savings
on electricity, every dollar saved on the water supply will flow directly to
the benefit of customers through a lower cost of service.

“By maximizing our groundwater supplies and limiting our reliance on
higher-cost imported water, we are able to provide the least-cost-possible
water to our customers,” said Garry Hofer, Southern California Operations
Manager. “These savings are directly passed along to those customers.”

Taken together, California American Water expects these two initiatives will
save approximately $793,000 for its operations in Los Angeles and Ventura
Counties.

California American Water, a subsidiary of American Water (NYSE: AWK),
provides high-quality and reliable water and/or wastewater services to
approximately 600,000 people.

Founded in 1886, American Water is the largest publicly traded U.S. water and
wastewater utility company. With headquarters in Voorhees, N.J., the company
employs approximately 6,700 dedicated professionals who provide drinking
water, wastewater and other related services to an estimated 14 million people
in more than 30 states, and parts of Canada. More information can be found by
visiting www.amwater.com.

Cautionary Statement Concerning Forward-Looking Statements

This release contains forward looking statements within the meaning of the
safe harbor provisions of the Private Securities Litigation Reform Act of
1995, including but not limited to our expectation of cost savings and our
ability to pass potential savings on to our customers. Forward-looking
statements are predictions based on our current expectations and assumptions
regarding future events. There are important factors, risks and uncertainties
that could cause actual results to differ materially from those expressed or
implied by such forward-looking statements, including, but not limited to:
general economic business conditions; changes in regulations or regulatory
treatment; and cost and availability of electricity. For a further discussion
of the risks relating to American Water’s business, see Item 1A, “Risk
factors” in its Annual Report on Form 10-K for the fiscal year ended December
31, 2012. American Water expressly disclaims any obligation to update these
forward-looking statements, except as otherwise specifically stated by
American Water or as required by law.

Contact:

California American Water
Kevin Tilden, 619-522-6362
Mobile: 619 206 8099
kevin.tilden@amwater.com