Conclusions of Law

1. This is a ratesetting proceeding.

2. A public hearing is not necessary.

3. The Application should be granted to the extent set forth in the order that follows.

4. The Commission has the authority pursuant to Code § 816 to grant California American authority to issue debt.

5. The proposed borrowings, pursuant to Code § 817 are for lawful purposes.

6. It is reasonable to exempt California American from the competitive bidding rule if it elects to finance though an affiliate subject to the affiliate transaction rules.

7. California American should comply with the reporting requirements of General Order 24-B on a quarterly basis.

8. There is a fee of $23,500 due or payable with respect to this Application pursuant to Code § 1904(b).

9. This decision should be effective upon payment of the fee.

10. CEQA does not apply here, because the decision to approve California American's application is not a project within the scope of CEQA.

11. California American should not use the proceeds authorized herein to fund capital projects until it has obtained any required Commission approvals for the projects, including any required environmental review under CEQA.

12. It is California American's responsibility to abide by and comply with any applicable environmental regulations for any capital improvement undertaken relative to this debt authorization.

ORDER

IT IS ORDERED that:

1. California-American Water Company (California American) is authorized, pursuant to Cal. Pub. Util. Code §§ 816-830 to issue up to $35,000,000 in debt securities to finance its long-term borrowing needs.

2. California American is exempted from the competitive bidding rule.

3. On or before the 25th day of the month following each quarter, California American shall file a report for the preceding quarter showing all receipts and disbursements required by General Order 24-B.

4. This authority is not effective until California American pays a $23,500 fee, pursuant to Pub. Util. Code § 1904(b), to the Commission's Fiscal Office.

5. The authority granted to California American in this decision remains in effect until modified or otherwise changed by a subsequent order of this Commission.

6. Application 08-08-025 is closed.

This order is effective today.

Dated November 6, 2008, at San Francisco, California.

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