SCWC's Reasons for Merging with Peerless

SCWC's parent company, ASW, and Peerless entered into a merger agreement on December 14, 1999, effective upon the approval of the Commission. The terms on this date and as modified by the settling parties are described below. The acquisition enables SCWC to expand its service territory in Los Angeles County and is expected to increase earnings. SCWC contends this transaction will further the goals of the State by combining a smaller water company in need of infrastructure improvements with a larger adjacent system better equipped to meet increasing operating, water quality and infrastructure replacement demands.