New Mexico Water Service Company Completes Acquisition, Grows Customer Base by 6%

New Mexico Water Service Company Completes Acquisition, Grows Customer Base by 6%

SAN JOSE, Calif. — New Mexico Water Service Company, a subsidiary of California Water Service Group (NYSE:CWT), today announced that it has completed the acquisition of the assets of the Cypress Gardens water system, which serves 350 homes in Valencia County, New Mexico.

Contiguous to New Mexico Water Service Company’s existing service area, the Cypress Gardens water system includes 350 service connections and related piping, a well, and a 250,000 gallon storage tank. The acquisition increases New Mexico Water Service Company’s customer base by 6%.

“The Cypress Gardens water system is in good condition and it will make a nice addition to our service area. More importantly, we’re looking forward to providing excellent service; our new customers can rely on us to provide a reliable supply of high quality water and responsive, 24-hour emergency service,” said General Manager Paul Risso.

Water rates will not increase for at least two years. The New Mexico Public Regulation Commission, which will regulate the rates, services, terms, and operation of the system, approved the application on September 6, 2005.

New Mexico Water Service Company was formed in 2002 when California Water Service Group acquired the Rio Grande Utility Corporation. Today, New Mexico Water Service Company serves 10,000 people through 6,100 service connections in several communities in Valencia County and the City of Elephant Butte.

California Water Service Group is the parent company of California Water Service Company, Washington Water Service Company, New Mexico Water Service Company, Hawaii Water Service Company, Inc., and CWS Utility Services. Together these companies provide regulated and non-regulated water service to more than 2 million people in 100 California, Washington, New Mexico, and Hawaii communities. Group’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, including decisions on proper disposition of property; changes in regulatory commissions’ policies and procedures; the timeliness of regulatory commissions’ actions concerning rate relief; new legislation; the ability to satisfy requirements related to the Sarbanes-Oxley Act and other regulations on internal controls; 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.

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