IV. The SJWC System

SJWC is an investor-owned public utility in the business of providing water service to a population of approximately 971,000 people in the metropolitan San Jose area. SJWC's service area encompasses 138 square miles, including most of San Jose, most of Cupertino and parts of unincorporated Santa Clara County as well as the entire cities of Campbell, Monte Sereno, Saratoga, and the town of Los Gatos.

SJWC has three general sources of supply: (a) groundwater, (b) imported surface water, and (c) local surface water.

In an average year, 140 wells supply 45% of customer needs. The wells pump water from the major water-bearing aquifers of the Santa Clara Groundwater Basin. These aquifers are recharged naturally by rainfall and artificially by a system of local reservoirs and percolation ponds operated by the Santa Clara Valley Water District (District).

Approximately 50% of the Company's water supply originates from the State Water Project and the federally funded Central Valley Project San Felipe Division. This "imported" water is purchased from the District and piped into SJWC's system after treatment at one of the District's three water filtration plants.

In normal rainfall years surface water from local watersheds in the Santa Cruz Mountains provides approximately five to 8% of the total water supply. This figure can be much lower in drought years. A series of dams and automated intakes collect water released from Lakes Elsman and McKenzie. The water is then treated at SJWC's Montevina or Saratoga Filtration Plants, before it enters the distribution system.