Conclusions of Law

1. Santa Cruz and Almquist's failure to file comments on the proposed settlement constitutes their waiver of all objections to it.

2. CalAm and ORA have tendered an uncontested partial settlement as defined in Rule 51(f)(2).

3. The settlement is reasonable in light of the whole record, consistent with law, and in the public interest.

4. The settlement should be adopted.

5. The revised rates and step increases set forth in Appendices B and C are justified.

6. CalAm should be authorized to implement the rate changes set forth in this order.

7. For any Citizens districts for which there is no TY2005 general rate case, revenues for service rendered on and after January 1, 2005 that are associated with the Citizens acquisition synergies savings in those districts should be made subject to refund pending a determination of what portion of the synergies savings are to be shared with customers.

8. This decision should be made effective immediately to allow CalAm an opportunity to earn a reasonable return for its Citizens districts in TY2004.

ORDER

IT IS ORDERED that:

1. The joint motion of California-American Water Company (CalAm) and Montara Sanitary District for CalAm to withdraw Application (A.) 02-09-033 and Montara Sanitary District to withdraw from the consolidated proceeding is granted.

2. The amended settlement between CalAm and the Commission's Office of Ratepayer Advocates, Appendix F to this order, is adopted. Settlement Section 3, Montara District, shall be disregarded.

3. CalAm is authorized to file in accordance with General Order 96, and make effective on not less than five days' notice, the revised tariff schedules for 2003 included as Appendix B to this order. Felton district Rate Schedule No. FE-6M shall be canceled. The revised tariff schedules shall apply to service rendered on and after their effective date.

4. Consistent with the deferred step rate filing provisions adopted in Decision 02-12-068, on or after November 5, 2004, CalAm is authorized to file an advice letter in conformance with General Order 96, with appropriate supporting workpapers, requesting the 2004 step rate increases authorized in Appendix C to this order. If the rate of return on rate base for Sacramento, Larkfield, or Felton district, taking into account the rates then in effect and normal ratemaking adjustments for the twelve months ending September 30, 2004, exceeds the lower of (a) the rate of return found reasonable by the Commission for any of those districts for the corresponding period in the most recent decision, or (b) the rate of return found reasonable in this order, then CalAm shall file for a lesser increase in that district. The requested rates shall be reviewed by the Commission's Water Division and shall go into effect after Water Division's determination that they conform to this order. Water Division shall inform the Commission if it finds that the proposed rates do not conform to this order or other Commission decisions. The revised tariff schedules shall be made effective no earlier than January 1, 2005, and shall apply to service rendered on and after their effective date.

5. The summaries of earnings presented in Appendix A , and the quantities and calculations included as Appendix D to this order which underlie them, are adopted.

6. CalAm is authorized to file an advice letter seeking Commission authorization to transfer to its Sacramento district rate base and offset in rates the reasonable expenses associated with the start up costs for surface water procurement from Placer County Water Agency and recorded in the memorandum account authorized by Resolution W-4001. CalAm may file the advice letter only after it has executed a contract with Sacramento Suburban Water District securing access to the water.

7. Within 60 days of the effective date of this decision, CalAm shall file an advice letter seeking Commission authorization to recover through a rate surcharge, or to refund through a rate surcredit if appropriate, the accumulated balances in its Sacramento district purchased power balancing account and purchased power memorandum account as of December 31, 2002. CalAm's request shall follow the procedures established in the Commission's Balancing Account Rulemaking Proceeding, Rulemaking 01-12-009.

8. For any Citizens districts for which there is no test year 2005 general rate case, revenues for service rendered on and after January 1, 2005 that are associated with the Citizens acquisition synergies savings in those districts are made subject to refund pending a determination of what portion of the synergies savings are to be shared with customers.

9. CalAm's requests in A.02-09-030, A.02-09-031, and A.02-09-032 are granted as set forth above, and in all other respects are denied.

10. A.02-09-030, A.02-09-031, and A.02-09-032 are closed. A.02-09-033 is dismissed.

This order is effective today.

Dated ____________________, at San Francisco, California.__

APPENDIX A Page 1 CALIFORNIA-AMERICAN WATER COMPANY Felton District Test Year 2003 Summary of Earnings
		(At Present Rates)						ADOPTED
								At Present		At Authorized
		Cal-Am			ORA			Rates		ROR
		(Dollars in Thousands)						(Dollars in Thousands)
Operating Revenues
	Water	736.1			736.1			736.1		973.5
Operating Expenses
	Purchased Water	0.0			0.0			0.0		0.0
	Purchased Power	64.2			64.2			64.2		64.2
	Uncollectables	0.4			0.4			0.4		0.6
	Other Operation & Maintenance	89.0			89.0			89.0		89.0
	Payroll	228.5			228.5			228.5		228.5
	Pensions & Benefits	27.7			27.7			27.7		27.7
	Franchise Fees	0.0			0.0			0.0		0.0
	Other Administrative & General	28.2			27.0			27.0		27.0
	Acquisition Premium	51.3			51.3			51.0		51.0
	General Office Pro-rated Expense	91.3			91.3			91.3		91.3
	Depreciation & Amortization	122.9			121.2			123.2		123.2
	Ad Valorem Taxes	50.1			48.3			49.1		49.1
	Payroll Taxes	18.0			18.0			18.0		18.0
	State Income Tax	(12.3)			(11.7)			(11.7)		6.2
	Federal Income Tax	(34.3)			(31.8)			(41.6)		41.4
Total Expenses		725.0			723.4			716.1		817.2
Net Operating Revenue		11.1			12.7			20.0		156.3
Rate Base		2329.6			2272.9			2331.7		2331.7
Rate of Return		0.48%			0.56%			0.86%		6.71%

APPENDIX A Page 2 CALIFORNIA-AMERICAN WATER COMPANY Felton District Test Year 2004 Summary of Earnings
		(At Present Rates)						ADOPTED
								At Present Rates	At 2003 Rates		At Authorized ROR
		Cal-Am			ORA
		(Dollars in Thousands)						(Dollars in Thousands)
Operating Revenues
	Water	729.8			737.0			737.0	975.1		1,064.0
Operating Expenses
	Purchased Water	-			-			-	-		-
	Purchased Power	64.3			64.3			64.3	64.3		64.3
	Uncollectables	0.4			0.4			0.4	0.6		0.6
	Other Operation & Maintenance	93.7			93.7			93.7	93.5		93.5
	Payroll	235.3			235.3			235.3	235.3		235.3
	Pensions & Benefits	29.7			29.7			31.6	31.6		31.6
	Franchise Fees	-			-			-	-		-
	Other Administrative & General	28.8			27.6			25.7	25.7		25.7
	Acquisition Premium	58.1			58.1			54.6	54.6		54.6
	General Office Pro-rated Expense	93.5			93.5			93.4	93.4		93.4
	Depreciation & Amortization	134.4			130.6			133.7	133.7		133.7
	Ad Valorem Taxes	59.3			57.4			58.8	58.8		58.8
	Payroll Taxes	18.6			18.6			18.6	18.6		18.6
	State Income Tax	(16.8)			(16.0)			(11.9)	2.3		9.0
	Federal Income Tax	(57.5)			(51.9)			(51.0)	26.0		57.1
Total Expenses		741.8			741.3			747.2	838.4		876.2
Net Operating Revenue		(12.0)			(4.3)			(10.2)	136.7		187.8
Rate Base		2781.10			2685.80			2783.00	2783.00		2783.00
Rate of Return		-0.43%			-0.16%			-0.37%	4.91%		6.74%

APPENDIX A Page 3 CALIFORNIA-AMERICAN WATER COMPANY Larkfield District Test Year 2003 Summary of Earnings
		(At Present Rates)				ADOPTED
						At Present		At Authorized
		Cal-Am		ORA		Rates		ROR
		(Dollars in Thousands)				(Dollars in Thousands)
Operating Revenues
	Water	1551.3		1551.3		1551.3			1871.0
Operating Expenses
	Purchased Water	154.3		154.3		154.1			154.1
	Purchased Power	108.8		108.8		108.8			108.8
	Uncollectables	2.2		2.2		2.2			2.6
	Other Operation & Maintenance	139.3		136.7		138.9			138.8
	Payroll	188.9		188.9		188.9			188.9
	Pensions & Benefits	29.5		29.5		29.5			29.5
	Franchise Fees	0.0		0.0		0.0			0.0
	Other Administrative & General	46.7		42.5		42.7			42.7
	Acquisition Premium	92.0		92.0		91.5			91.5
	General Office Pro-rated Expense	163.6		163.6		163.6			163.6
	Depreciation & Amortization	367.9		367.1		368.5			368.5
	Ad Valorem Taxes	48.6		48.1		48.3			48.3
	Payroll Taxes	15.0		15.0		15.0			15.0
	State Income Tax	(0.4)		0.3		2.0			26.1
	Federal Income Tax	0.4		3.7		6.8			118.6
Total Expenses		1356.8		1352.7		1360.8			1497.1
Net Operating Revenue		194.5		198.6		190.5			373.9
Rate Base		5578.0		5520.8		5571.8			5571.8
Rate of Return		3.49%		3.60%		3.42%			6.71%

APPENDIX A Page 4 CALIFORNIA-AMERICAN WATER COMPANY Larkfield District Test Year 2004 Summary of Earnings
		(At Present Rates)				ADOPTED
						At Present	At 2003	At Authorized
		Cal-Am		ORA		Rates	Rates	ROR
		(Dollars in Thousands)				(Dollars in Thousands)
Operating Revenues
	Water	1,563.7		1,563.7		1,564.3	1,883.3	1,954.0
Operating Expenses
	Purchased Water	164.6		164.6		154.1	154.1	154.1
	Purchased Power	109.8		109.8		109.8	109.8	109.8
	Uncollectables	2.2		2.2		2.2	2.6	2.7
	Other Operation & Maintenance	126.3		121.2		126.8	126.3	126.3
	Payroll	195.0		195.0		195.0	195.0	195.0
	Pensions & Benefits	31.6		31.6		31.6	31.6	31.6
	Franchise Fees	-		-		-	-	-
	Other Administrative & General	34.9		30.7		30.9	30.9	30.9
	Acquisition Premium	105.1		105.1		98.8	98.8	98.8
	General Office Pro-rated Expense	167.6		167.6		167.4	167.4	167.4
	Depreciation & Amortization	398.4		395.0		398.5	398.5	398.5
	Ad Valorem Taxes	52.8		51.6		52.1	52.1	52.1
	Payroll Taxes	15.4		15.4		15.4	15.4	15.4
	State Income Tax	(3.7)		(2.3)		(0.9)	23.2	28.5
	Federal Income Tax	(16.9)		(10.6)		(4.9)	98.2	122.9
Total Expenses		1,383.1		1,376.9		1,376.8	1,503.9	1,534.0
Net Operating Revenue		180.6		186.8		187.5	379.4	420.0
Rate Base		6236.00		6077.50		6229.10	6229.10	6229.10
Rate of Return		2.90%		3.07%		3.01%	6.09%	6.74%

APPENDIX A Page 5 CALIFORNIA-AMERICAN WATER COMPANY Sacramento District Test Year 2003 Summary of Earnings
		(At Present Rates)				ADOPTED
						At Present		At Authorized
		Cal-Am		ORA		Rates		ROR
		(Dollars in Thousands)				(Dollars in Thousands)
Operating Revenues
	Water	16,192.8		16,192.8		16,192.8		21,410.0
Operating Expenses
	Purchased Water	496.1		496.1		510.2		510.2
	Purchased Power	2,381.8		2,381.8		2,381.8		2,381.8
	Payroll	1,639.3		1,600.7		1,600.7		1,600.7
	Uncollectables	68.2		64.8		50.2		66.4
	Other Operation & Maintenance	1,307.8		1,287.2		1,289.1		1,289.1
	Pensions & Benefits	290.0		284.1		284.1		284.1
	Franchise Fees	25.0		25.0		25.1		33.2
	Other Administrative & General	562.1		457.7		528.9		528.9
	Acquisition Premium	2,185.7		2,185.7		2,174.0		2,174.0
	General Office Pro-rated Expense	3,883.5		3,883.5		3,883.5		3,883.5
	Depreciation & Amortization	3,966.0		3,808.3		3,941.5		3,941.5
	Ad Valorem Taxes	462.5		434.1		449.3		449.3
	Payroll Taxes	129.0		126.1		126.1		126.1
	State Income Tax	(227.7)		(179.3)		(186.8)		205.8
	Federal Income Tax	(975.9)		(751.8)		(943.2)		874.3
Total Expenses		16,266.9		16,182.7		16,114.5		18,348.9
Net Operating Revenue		(74.1)		10.1		78.3		3,061.1
Rate Base		45,889.4		41,327.4		45,608.1		45,608.1
Rate of Return		-0.16%		0.02%		0.17%		6.71%

APPENDIX A Page 6 CALIFORNIA-AMERICAN WATER COMPANY Sacramento District Test Year 2004 Summary of Earnings
		(At Present Rates)				ADOPTED
						At Present Rates	At 2003 Rates	At Authorized ROR
		Cal-Am		ORA
		(Dollars in Thousands)				(Dollars in Thousands)
Operating Revenues
	Water	16,366.4		16,366.3		16,366.4	21,611.0	22,715.0
Operating Expenses
	Purchased Water	567.1		567.1		563.3	563.3	563.3
	Purchased Power	2,396.3		2,396.3		2,396.3	2,396.3	2,396.3
	Payroll	1,731.0		1,651.1		1,651.1	1,651.1	1,651.1
	Uncollectables	50.7		50.7		50.7	67.0	70.4
	Other Operation & Maintenance	1,383.1		1,361.8		1,339.4	1,323.1	1,339.4
	Pensions & Benefits	319.2		305.5		305.5	305.5	305.5
	Franchise Fees	25.3		25.3		25.4	33.5	35.2
	Other Administrative & General	574.6		469.3		540.2	540.2	540.2
	Acquisition Premium	2,491.6		2,491.6		2,341.9	2,341.9	2,341.9
	General Office Pro-rated Expense	3,979.4		3,979.4		3,973.7	3,973.7	3,973.7
	Depreciation & Amortization	4,282.1		3,994.9		4,203.8	4,203.8	4,203.8
	Ad Valorem Taxes	520.5		467.3		491.7	491.7	491.7
	Payroll Taxes	135.7		129.8		129.8	129.8	129.8
	State Income Tax	(313.0)		(249.5)		(244.6)	150.0	233.1
	Federal Income Tax	(1,369.4)		(1,092.5)		(1,067.1)	622.6	1,007.2
Total Expenses		16,817.5		16,599.6		16,701.1	18,793.5	19,282.6
Net Operating Revenue		(451.2)		(233.3)		(334.7)	2,817.5	3,432.4
Rate Base		51,694.9		44,159.5		50,896.9	50,896.9	50,896.9
Rate of Return		-0.87%		-0.53%		-0.66%	5.54%	6.74%

(END OF APPENDIX A)

California-American Water Company

Schedule No. FE-1

Felton Tariff Area

GENERAL METERED SERVICE

APPLICABILITY

Applicable to all metered water service.

TERRITORY

Felton and vicinity, Santa Cruz County.

RATES

Per Meter

Quantity Rates: Per Month

For all water delivered, per 100 cu.ft. $ 3.5633 (I)

Per Meter Per Month Per Meter Per Month

Service charge SDWBA Surcharge 1/

For 5/8 x ¾-inch meter 24.30 (I) $ 11.50

For ¾-inch meter 36.45 (I) 17.26

For 1-inch meter 60.75 (I) 28.76

For 1 ½-inch meter 121.51 (I) 57.52

For 2-inch meter 194.42 (I) 92.03

For 3-inch meter 364.53 (I) 172.55

For 4-inch meter 607.55 (I) 287.59

The service charge is a readiness-to-serve charge which is applicable

to all metered service and to which is to be added the charge for water used

computed at the quantity rates.

Conservation Discount

The following conservation discounts will be applied to the service and

quantity charges.

Monthly Consumption Discount

0-5 CCFs 20.00%

6-10 CFs 15.00%

11-15 CCFs 10.00%

Over 15 CCFs 0.00%

The percentage discount will be calculated based upon the customer's bi-monthly consumption.

(Continued)

California-American Water Company

Schedule No. FE-1

Felton Tariff Area

GENERAL METERED SERVICE (continued)

Service Reestablishment Charge:

For each reestablishment of water service $ 4.10

SPECIAL CONDITIONS

1. The service reestablishment charge is in addition to the charges calculated in

accordance with this schedule and will be made each time an account is reopened

for a customer at the time water service is to be restored after discontinuance at

that customer's request.

2. All bills are subject to the reimbursement fee set forth on Schedule No. UF.

METERED SERVICE SURCHARGE 1/

NOTE:

This surcharge is in addition to the regular monthly metered water bill. The

total monthly surcharge must be identified on each bill. This surcharge is

specifically for the repayment of the California Safe Drinking Water Bond Act loan

as authorized by Decision 96-12-061.

California-American Water Company

Schedule No. FE-4

Felton Tariff Area

PRIVATE FIRE PROTECTION SERVICE

APPLICABILITY

Applicable to all water service furnished to privately owned fire protection purposes.

TERRITORY

Felton and vicinity, Santa Cruz County

RATES

Per Meter

Per Month

For each 4-inch connection, or smaller, $ 32.14 (I)

For each 6-inch connection................ 48.25 (I)

For each 8-inch connection................ 64.28 (I)

For each 10-inch connection.............. 128.94 (I)

For each 12-inch connection.............. 181.52 (I)

SPECIAL CONDITIONS

1. The customer will pay without refund the entire cost of installing the service connection.

2. The maximum diameter of the main to which the service is connected.

3. The customer's installation must be such as to effectively separate the fire sprinkler

system from that of the customer's regular water service. As a part of the sprinkler

service installation there shall be a detector check or other similar device

acceptable to the utility which will indicate the use of water. Any unauthorized use

will be charged for at the regular established rate for general metered service,

and/or may be grounds for the utility's discontinuing the fire sprinkler service without

liability to the utility.

(continued)

California-American Water Company

Schedule No. FE-4 (continued)

Felton Tariff Area

PRIVATE FIRE PROTECTION SERVICE

4. There shall be no cross-connection between the fire sprinklers system supplied

by water through the utility's fire sprinkler service to any other source of

supply without the specific approval of the utility. This specific approval will

require, at the customers expense, a special double check valve installation or

other device acceptable to the utility. Any such unauthorized cross-connection

may by the grounds for immediately discontinuing the sprinkler system without

liability to the utility.

5. The utility will supply only such water at such pressure as may be available

from time to time as a result of its normal operation of the system.

6. All bills are subject to the reimbursement fee set forth on Schedule No. U.F

California-American Water Company

Schedule No. LW-1

Larkfield Tariff Area

GENERAL METERED SERVICE

APPLICABILITY

Applicable to all metered water service.

TERRITORY

The unincorporated areas known as the Larkfield and Wikiup subdivisions and the community of Fulton, three miles north of Santa Rosa, Sonoma County.

RATES Per Meter

Per Month

Quantity Rate:

For all water delivered, per 100 cu.ft. $2.599 ( I )

Service Charge:

For 5/8 x ¾ inch meter $12.86 ( R )

For ¾ inch meter $19.28 ( R )

For 1 inch meter $32.14 ( R )

For 1-1/2 inch meter $64.28 ( I )

For 2 inch meter $102.85

For 3 inch meter $192.85

For 4 inch meter $321.41

For 6 inch meter $642.83

For 8 inch meter $1,028.52 ( I )

For 10 inch meter $1,285.65 ( N )

The service charge is a readiness-to-serve charge which is applicable to all metered service and to which is to be added the monthly charge computed at the quantity rates.

Special Conditions

1. All bills are subject to the reimbursement fee set forth in Schedule No. UF.

California-American Water Company

Schedule No. LW-4

Larkfield Tariff Area

PRIVATE FIRE PROTECTION SERVICE

APPLICABILITY

Applicable to all water service furnished for privately owned fire protection systems.

TERRITORY

Larkfield Estates and vicinity located approximately three miles north of the City of Santa Rosa, Sonoma County.

RATES

Per Service

Size of Service Per Month

For 1½-inch connection $5.25 ( I )

For 4-inch connection $10.49

For 6-inch connection $15.80

For 8-inch connection $21.11

For 10-inch connection $26.35 ( I )

SPECIAL CONDITIONS

1. The fire protection service will be installed by the utility at the cost of the applicant. Such cost shall not be subject to refund.

2. If the distribution main of adequate size to serve a private fire protection system in addition to all other normal service does not exist in the street or alley adjacent to the premises to be served, then a service main from the nearest existing main of adequate capacity will be installed by the utility at the cost of the applicant. Such cost shall not be subject to refund.

3. Service hereunder is for private fire protection system to which no connections for other than fire protection purposes are allowed and which are regularly inspected by the underwriters having jurisdiction, are installed according to specifications of the utility, and are maintained to the satisfaction of the utility. The utility may install the standard detector type meter approved by the Board of Fire Underwriters for protection against theft, leakage or waste of water.

4. For water delivered for other than fire protection purposes, charges will be made therefore under Schedule No.1, General Metered Service.

5. The utility will supply only such water at such pressure as may be available from time to time as a result of its normal operation of the system.

6. All bills are subject to the reimbursement fee set forth in Schedule No. UF.

California-American Water Company

Schedule No. SAC-1

Sacramento Tariff Area

GENERAL METERED SERVICE

APPLICABILITY

Applicable to all metered water service.

TERRITORY

The unincorporated communities, subdivisions, and adjacent areas generally known as

Cordova, Rosemont, Parkway Estates, Lindale, Foothill Farms, Arlington Heights, Linwood,

Loretto Heights, Arden Highlands, Arden Estates and Sunrise Security Park. A part of the City

of Citrus Heights and the communities of Antelope and Sabre City in Sacramento and Placer

counties. The city of Isleton and vicinity and the unincorporated community of Walnut Grove in

Sacramento County. The lower southwestern portion of Placer County including the areas

Known as Morgan Creek, Doyle Ranch, Sun Valley Oaks and Riolo Greens.

RATES Per Meter

Per Month

Quantity Rates:

For all water delivered per 100 cu. ft. $ .9295 (I)

Service Charge:

For 5/8 x ¾-inch meter $7.04 (R)

For ¾-inch meter 10.56 (I)

For 1-inch meter 17.60 (I)

For 1 1/2-inch meter 35.19 (I)

For 2-inch meter 56.31 (I)

For 3-inch meter 105.58 (I)

For 4-inch meter 175.96 (I)

For 6-inch meter 351.93 (I)

For 8-inch meter 563.08 (I)

For 10-inch meter 703.85 (I)

The Service Charge is a readiness-to-serve charge which is applicable to all metered service

and to which is to be added the monthly charge computed at the Quantity Rates.

(Continued)

California-American Water Company

Schedule No. SAC-1

Sacramento Tariff Area

General Metered Service (continued)

SPECIAL CONDITIONS:

1. 1. All bills are subject to the reimbursement fee forth in Schedule No. UF.

2. 2. A surcharge is included on each bill to recover undercollected pumping power costs of $ 328,066.

The pumping power surcharge is $ .483 per customer on a monthly basis. This surcharge will be

collected over twelve-month period from the effective date of Advice Letter 578.

California-American Water Company

Schedule No. SAC-4

Sacramento Tariff Area

PRIVATE FIRE PROTECTION SERVICE

APPLICABILITY

Applicable to all water service rendered for private fire protection purposes.

TERRITORY

The unincorporated communities, subdivisions, and adjacent areas generally known

as Cordova, Rosemont, Parkway Estates, Lindale, Foothill Farms, Arlington Heights,

Linwood, Loretto Heights, Arden Highlands, Arden Estates, and Sunrise Security Park.

A part of the City of Citrus Heights and the communities of Antelope and Sabre City in

Sacramento and Placer Counties. The City of Isleton and vicinity and the

unincorporated community of Walnut Grove in Sacramento County. The lower

Southwestern portion of Placer County including the areas known as Morgan Creek,

Doyle Ranch, Sun Valley Oaks and Riolo Greens.

RATES

Per Meter

Per Month

For each 4-inch connection, or smaller, $ 26.91 (I)

For each 6-inch connection................ 44.82 (I)

For each 8-inch connection................ 63.11 (I)

For each 10-inch connection.............. 78.37 (I)

For each 12-inch connection.............. 112.36 (I)

SPECIAL CONDITIONS

1. The customer will pay without refund the entire cost of installing the service connection.

2. The maximum diameter of the service connection will not be more than the diameter of the

main to which the service is connected.

3. The customer's installation must be such as to effectively separate the fire sprinkler system

from that of the customer's regular water service. As a part of the sprinkler service installation

there shall be a detector check with by-pass meter or other similar device acceptable to the company

which will indicate the use of water. The utility may require a bi-annual test of the detector check

installation at customer cost as a condition of furnishing service. Any unauthorized use will be charged

for at the regular established rate for general metered service, and/or may be grounds for the

company's discontinuing the fire sprinkler service without liability to the company.

(Continued)

California-American Water Company

Schedule No. SAC-4 (Continued)

Sacramento Tariff Area

PRIVATE FIRE PROTECTION SERVICE

4. The company will supply only such water at such pressure as may be available from time

to time as the result of its normal operation of the system.

5. All bills are subject to the reimbursement fee set forth on Schedule No. UF.

6. A surcharge is included on each bill to recover undercollected pumping power costs of

$ 328,066. The pumping power surcharge is $ .483 per customer on a monthly basis. This surcharge will be collected over a twelve-month period from the effective date of Advice Letter 578.

California-American Water Company

Schedule No. SAC - 2R

Sacramento Tariff Area

RESIDENTIAL FLAT RATE SERVICE

APPLICABILITY

Applicable to all residential water service on a flat rate basis

TERRITORY

The unincorporated communities, subdivisions, and adjacent areas generally known

as Cordova, Rosemont, Parkway Estates, Lindale, Foothill Farms, Arlington Heights,

Linwood, Loretto Heights, Arden Highlands and Arden Estates. A part of the city of

Citrus Heights and the communities of Antelope and Sabre City in Sacramento and

Placer Counties. The unincorporated communities of Walnut Grove in Sacramento

County.

RATES Per Meter

Per Month

For a single-family residence including premises,

having the following areas:

4,500 sq. ft. or less.................................................................................$16.13 (I)

4,501 to 8,000 sq. ft.................................................................................21.82 (I)

For each additional residence on the same premises and served

From the same service connection..............................................................14.48 (I)

For each 1,000 sq. ft. or part of the area in excess of 8,000 sq. ft........................0.62 (I)

SPECIAL CONDITIONS:

1. The above residential flat rate charges apply to service connections not larger than ¾ inch in diameter.

(Continued)

California-American Water Company

Schedule No. SAC-2R

Sacramento Tariff Area

RESIDENTIAL FLAT RATE SERVICE



(Continued)

SPECIAL CONDITIONS:

2. All service not covered by the above classification will be furnished

only on a metered basis.

3. A meter may be installed at option of utility or customer for above

classifications in which event service thereafter will be furnished only

on the basis of Schedule No. SAC-1, General Metered Service. After

a meter is installed, metered service must be continued for at least 12

months before service will again be furnished at flat rates.

4. All bills are subject to the reimbursement fee forth in Schedule No.

UF.

5. A surcharge is included on each bill to recover undercollected pumping power costs of

$ 328,066. The pumping power surcharge is $ .483 per customer on a monthly basis.

This surcharge will be collected over twelve-month period from the effective date of

Advice Letter 578.

California-American Water Company

Rule No.11

DISCONTINUANCE AND RESTORATION OF SERVICE

(continued)

B. 2. For Noncompliance with Rules

The utility may discontinue service to any customer for violation of these rules after it has given the customer at least five days written notice of such intention. Where safety of water supply is endangered, service may be discontinued immediately without notice.

3. For Waste of Water

a. Where negligent or wasteful use of water exists on a customer's premises, the utility may discontinue the service if such practices are not remedied within five days after it has given the customer written notice to such effect.

b. In order to protect itself against serious and unnecessary waste or misuse of water, the utility may meter any flat rate service and apply the regularly established meter rates where the customer continues to misuse or waste water beyond five days after the utility has given the customer written notice to remedy such practices.

4. For Unsafe Apparatus or Where Service is Detrimental or Damaging to the Utility or its Customers.

If an unsafe or hazardous condition is found to exist on the customer's premises, or if the use of water thereon by apparatus, appliances, equipment or otherwise is found to be detrimental or damaging to the utility or its customers, the service may be shut off without notice. The utility will notify the customer immediately of the reasons for the discontinuance and the corrective action to be take by the customer before service can be restored.

5. For Fraudulent Use of Service

When the utility has discovered that a customer has obtained service by fraudulent means, or has diverted the water service for unauthorized use, the service to that customer may be discontinued without notice. The utility will not restore service to such customer until that customer has complied with all filed rules and reasonable requirements of the utility and the utility has been reimbursed for the full amount of the service rendered and the actual cost to the utility incurred by reason of the fraudulent use.

C. Restoration of Service

1. Reconnection Charge

Where service has been discontinued for violation of these rules or for nonpayment of bills, the

utility may charge $10.00 for reconnection of service during regular working hours, or $15.00

($50.00 for Felton, Larkfield, and Sacramento districts) for reconnection of service at other than (N)

regular working hours when the customer has requested that the reconnection be made at

other than regular working hours.

(continued)

(END OF APPENDIX B)

APPENDIX C Page 1 CALIFORNIA-AMERICAN WATER COMPANY Felton District Test Year 2004 Increases
Each of the following increases in rates may be put into effect on the indicated date by filing a
rate schedule which adds the appropriate increase to the rate which would otherwise be in
effect on that date.
				2004
Quantity Rates:
For all water delivered, per 100 cu. ft........................				$0.17
Service Charge:
For	5/8 x 3/4-inch meter	...........................		$3.87
	3/4-inch meter	...........................		$5.81
	1-inch meter	...........................		$9.69
	1-1/2-inch meter	...........................		$19.36
	2-inch meter	...........................		$30.97
	3-inch meter	...........................		$58.08
	4-inch meter	...........................		$96.80
Private Fire Protection
	4-inch and smaller	...........................		$3.89
	6-inch	...........................		$5.85
	8-inch	...........................		$7.79
	10-inch	...........................		$15.63
	12-inch	...........................		$22.01

APPENDIX C Page 2 CALIFORNIA-AMERICAN WATER COMPANY Larkfield District Test Year 2004 Increases
Each of the following increases in rates may be put into effect on the indicated date by filing a
rate schedule which adds the appropriate increase to the rate which would otherwise be in
effect on that date.
				2004
Quantity Rates:
For all water delivered, per 100 cu. ft........................				$0.038
Service Charge:
For	5/8 x 3/4-inch meter	...........................		$1.13
	3/4-inch meter	...........................		$1.71
	1-inch meter	...........................		$2.84
	1-1/2-inch meter	...........................		$5.69
	2-inch meter	...........................		$9.10
	3-inch meter	...........................		$17.06
	4-inch meter	...........................		$28.44
	6-inch meter	...........................		$56.87
	8-inch meter	...........................		$82.00
	10-inch meter	...........................		$113.75
Private Fire Protection
For	1 1/2 -inch connection	...........................		$0.23
	4-inch connection	...........................		$0.45
	6-inch connection	...........................		$0.68
	8-inch connection	...........................		$0.91
	10-inch connection	...........................		$1.13

APPENDIX C Page 3 CALIFORNIA-AMERICAN WATER COMPANY Sacramento District Test Year 2004 Increases
Each of the following increases in rates may be put into effect on the indicated date by filing a
rate schedule which adds the appropriate increase to the rate which would otherwise be in
effect on that date.
General Metered Service				2004
Quantity Rates:
For all water delivered, per 100 cu. ft.......................................				$0.00
Service Charge:
For	5/8 x 3/4-inch meter	....................................		$0.72
	3/4-inch meter	....................................		$1.08
	1-inch meter	....................................		$1.80
	1-1/2-inch meter	....................................		$3.61
	2-inch meter	....................................		$5.77
	3-inch meter	....................................		$10.82
	4-inch meter	....................................		$18.03
	6-inch meter	....................................		$36.06
	8-inch meter	....................................		$57.70
	10-inch meter	....................................		$72.12
Private Fire Service
	4" and less	....................................		$2.93
	6"	....................................		$4.89
	8"	....................................		$6.88
	10"	....................................		$8.54
	12"	....................................		$12.25
Unmetered
	4500 Sq ft or less	....................................		$1.06
	4501 to 8000 Sq ft.	....................................		$1.43
	8000 Sq. ft.	....................................		$0.04
	Add'l House on Lot	....................................		$0.95

(END OF APPENDIX C)

APPENDIX D Page 1 CALIFORNIA-AMERICAN WATER COMPANY Felton District Adopted Quantities
		2003	2004
PURCHASED POWER:
PGE
Water Production (kCcf)		198.414	198.639
Total Kwh		355671	356073
Kwh/Ccf		1.792570081	1.792563394
Unit Cost ($/Kwh)		0.180576994	0.18057814
Total Purchased Power Cost		$64,226	$64,299
CHEMICAL COSTS:
Water Production (kCcf)		198.414	198.639
Unit Cost ($ /kCcf)		19.65587106	19.65877798
Total Chemical Cost		$3,900	$3,905

APPENDIX D Page 2 CALIFORNIA-AMERICAN WATER COMPANY Felton District Taxes Based on Income
			($000)
			Test Year 2003		Test Year 2004
Operating Revenues			973.5		1,064.0
Deductions:
	O & M expenses		153.8		158.6
	A & G Expenses		54.7		57.3
	G. O. Prorated Expenses		91.3		93.4
	Payroll		228.5		235.3
	Acquisition Premium		51.0		54.6
	Taxes not on Inc.		67.1		77.4
	Interest		71.6		84.4
	Book Depreciation		123.2		133.7
Income before taxes			132.3		169.3
California Corp. Franchise Tax
State Tax Depreciation			0.0		0.0
Taxable Income for CCFT			132.3		169.3
CCFT Rate			7.56%		7.56%
CCFT			10.0		12.8
	Less Deferred Taxes		3.8		3.8
	Total State Income Taxes		6.2		9.0
Federal Income Tax
Federal Tax Deductions			(14.1)		(6.2)
Taxable income for FIT			118.3		163.1
FIT Rate			35.00%		35.00%
	FIT		41.4		57.1
Less:
	Investment Tax Credit		0.0		0.0
	Amortization of Reg. Assets		0.0		0.0
	Deferred Taxes - U.P.A.A.		0.0		0.0
	Amort of Excess Deferred Taxes		0.0		0.0
	Total Federal Income Tax		41.4		57.1
	Total FIT and CCFT		47.6		66.1

APPENDIX D Page 3 CALIFORNIA-AMERICAN WATER COMPANY Felton District Weighted Average Depreciated Rate Base
				($000)
			Test Year 2003		Test Year 2004
WTD AVG PLANT IN SERVICE			3,479.3		4,087.9
	MATERIALS & SUPPLIES		10.3		10.5
	WORKING CASH, OPERATIONAL		0.0		48.8
	WORKING CASH, LEAD-LAG		71.3		74.7
	WTD AVG DEPR RESERVE		(937.6)		(1,044.9)
	ADVANCES		0.0		0.0
	UNAMORTIZED ADVANCES		(1.4)		(1.4)
	(20 YR AMORTIZATION)
	CONTRIBUTIONS		(9.7)		(28.9)
	UNAMORTIZED CONTRIBUTIONS		(162.5)		(153.7)
	(20 YR AMORTIZATION)
	ACCUM. DEFERRED FIT		(96.0)		(170.0)
	ACCUM. DEFERRED SIT		(22.0)		(40.0)
	GENERAL OFFICE ALLOC.
	ACRS & MACRS DEPRECIATION
	UNAMORTIZED ITC
	TAXES ON - ADVANCES
	TAXES ON - CIAC
AVERAGE RATE BASE			2,331.7		2,783.0

APPENDIX D Page 4 CALIFORNIA-AMERICAN WATER COMPANY Felton District Water Sales Per Average Customer
				(ccf)
			Test Year 2003		Test Year 2004
Residential			101.1		101.1
Commercial			298.6		298.6
Public Authority			2,205.4		2,205.4
Industrial			-		-
Irrigation			528.0		528.0
Private Fire Service			0		0

APPENDIX D Page 5 CALIFORNIA-AMERICAN WATER COMPANY Felton District Average Number of Customers
			Test Year 2003		Test Year 2004
Metered Connections
Residential			1,134		1,136
Commercial			168		168
Public Authority			6		6
Industrial			0		0
Irrigation			1		1
Total metered connections			1,309		1,311
Fire Protection connections
Private Fire Service			9		9
Total Active connections			1,318		1320
Include Fire Protection			1,318		1,320
Exclude Fire Protection			1,309		1,311

APPENDIX D Page 6 CALIFORNIA-AMERICAN WATER COMPANY Felton District Total Sales and Supply (KCCF)
			Test Year 2003		Test Year 2004
METERED SALES
Residential			114.6		114.8
Commercial			50.2		50.2
Public Authority			13.2		13.2
Industrial			-		-
Irrigation			0.5		0.5
TOTAL METERED SALES			178.6		178.8
PRIVATE FIRE SERVICE			0.0		0.0
FLAT RATE SALES			-		-
Unaccounted For Water (10%)			19.8		19.9
TOTAL DELIVERED			198.4		198.7
PRODUCTION
Creeks and Springs			198.4		198.7
Total Production			198.4		198.7