California Water Service (CWT) 8-K Cal Water Announces Results for the 3RD Quarter of 2008

Exhibit 99.1

	NEWS RELEASE CALIFORNIA WATER SERVICE GROUP
1720 North First Street San Jose, CA 95112-4598		October 29, 2008 For Immediate Release

Contact: Marty Kropelnicki (408) 367-8200
(analysts)
Shannon Dean (310) 257-1435 (media)

CAL WATER ANNOUNCES RESULTS FOR THE 3RD QUARTER OF 2008

     SAN JOSE, CA — California Water Service Group (NYSE : CWT) today announced net income of $22.2 million for the third quarter of 2008, up 61% compared to $13.8 million in the third quarter of 2007. Earnings per diluted share were $1.06 for the third quarter of 2008, up 58% compared to earnings per diluted share of $0.67 in the third quarter of 2007.

     Revenues increased by $17.9 million, or 16%, to $131.7 million, with rate increases adding $18.0 million and water usage by new customers adding $1.1 million. Other changes reduced revenues by $1.2 million.

     Total operating expenses for the third quarter of 2008 increased by $8.6 million to $104.9 million. Water production costs increased by $1.4 million compared to the same period last year. Administrative and general costs increased $0.3 million, or 2%. Other operations costs

increased $1.2 million, due primarily to increases in water quality laboratory fees, purchases of chemicals and filters, conservation program costs, and uncollectable accounts.

     Fewer water system repairs resulted in a $0.4 million decrease in maintenance expense, which was $3.8 million for the quarter. Depreciation expense increased $0.9 million to $9.3 million as a result of increases in capital expenditures.

     Other income, net of income taxes, was a loss of $0.5 million, compared to a gain of $0.8 million last year, due primarily to a mark-to-market adjustment associated with the market value of assets in the company’s non-qualified retirement plans.

     For the twelve months ended September 30, 2008, net income was $40.5 million and diluted earnings per share were $1.94, compared to net income of $29.5 million and diluted earnings per share of $1.43 for the same period in the prior year. Revenues for the trailing twelve months were $396.1 million, compared to $361.8 million for the same period last year.

     “During the third quarter, Cal Water accomplished many significant milestones. First, the Company completed its 2007 General Rate Case and, as a result, received timely rate relief on a number of significant items. With the

support of the California Public Utilities Commission (CPUC), the rate case was completed on schedule with rate relief starting in early July. Further, effective July 1st, the Company implemented the Water Rate Adjustment Mechanism (WRAM), the Modified Cost Balancing Account (MCBA), and tiered rates. With these three new mechanisms in place, Cal Water can further pursue water efficiency programs that benefit ratepayers and reduce overall water demand. These new mechanisms support the CPUC’s goals set forth in the Water Action Plan to improve water efficiency throughout the state,” said President and Chief Executive Officer Peter C. Nelson.

     As reported on September 3, 2008, the Company also completed its acquisition of Waikoloa Resort Utilities, Waikoloa Water Company, Inc., and Waikoloa Sanitary Sewer Company, Inc. (collectively known as West Hawaii Utilities), which together provide water utility services to 1,970 customer accounts and wastewater services to 300 customer accounts on the Big Island of Hawaii.

     “We are excited to welcome our new customers on the big island of Hawaii and look forward to serving them with the same quality and care we have become known for,” added Nelson.

     All stockholders and interested investors are invited to listen to the 2008 third quarter conference call on

October 30, 2008, at 11:00 a.m. (EDT), by dialing 1-866-259-1024 and keying in ID# 1285532. A replay of the call will be available from 2:00 p.m. (EDT) October 30, 2008, through December 29, 2008, at 888-266-2081, ID# 1285532. The call, which will be hosted by President and CEO, Peter Nelson and Vice President and Chief Financial Officer, Martin A. Kropelnicki, will also be webcast under the investor relations tab at www.calwatergroup.com.

     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., CWS Utility Services, and HWS Utility Services. Together these companies provide regulated and non-regulated water service to nearly 2 million people in 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, but are not limited to: governmental and regulatory commissions’ decisions; changes in regulatory commissions’ policies and procedures; the timeliness of regulatory commissions’ actions concerning rate relief; new legislation; 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, as well as the annual 10-K, Quarterly 10-Q, and other reports filed from time-to-time with the Securities and Exchange Commission (SEC). The Company assumes no obligation to provide public updates of forward-looking statements.

     Additional information is available at our Web site atwww.calwatergroup.com.

     Attachments (2).

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CALIFORNIA WATER SERVICE GROUP
CONDENSED CONSOLIDATED BALANCE SHEETS
Unaudited

	September 30			December 31
(In thousands, except per share data)	2008			2007
ASSETS
Utility plant:
Utility plant	$	1,552,267		$	1,447,047
Less accumulated depreciation and amortization		(463,375	)		(436,851	)
Net utility plant		1,088,892			1,010,196
Current assets:
Cash and cash equivalents		9,409			6,734
Receivables
Customers		30,466			18,600
Other		10,030			8,617
Unbilled revenue		19,896			12,911
Materials and supplies at average cost		4,914			4,744
Taxes, prepaid expense, and other assets		8,992			8,369
Total current assets		83,707			59,975
Other assets:
Regulatory assets		90,894			90,908
Goodwill		4,672			—
Other assets		22,881			23,420
Total other assets		118,447			114,328
	$	1,291,046		$	1,184,499
CAPITALIZATION AND LIABILITIES
Capitalization:
Common stock, $.01 par value	$	207		$	207
Additional paid-in capital		213,596			211,885
Retained earnings		187,565			173,617
Total common stockholders’ equity		401,368			385,709
Preferred stock		—			3,475
Long-term debt, less current maturities		288,663			289,220
Total capitalization		690,031			678,404
Current liabilities:
Current maturities of long-term debt		2,701			2,701
Accounts payable		45,616			36,694
Notes payable		40,284			—
Accrued expenses and other liabilities		57,448			30,258
Total current liabilities		146,049			69,653
Unamortized investment tax credits		2,467			2,467
Deferred income taxes, net		69,948			69,712
Pension and postretirement benefits other than pensions		39,747			39,444
Regulatory and other liabilities		47,076			38,783
Advances for construction		177,056			168,024
Contributions in aid of construction		118,672			118,012
Commitments and contingencies	$	1,291,046		$	1,184,499

CALIFORNIA WATER SERVICE GROUP
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
Unaudited
(In thousands, except per share data)

For the Three-Months ended:

	September 30,			September 30,
	2008			2007
Operating revenue	$	131,702		$	113,851
Operating expenses:
Water production costs		46,455			45,063
Admistrative and General		14,995			14,733
Other operations		12,935			11,762
Maintenance		3,824			4,233
Depreciation and amortization		9,281			8,392
Income taxes		13,510			8,426
Property and other taxes		3,940			3,707
Total operating expenses		104,940			96,316
Net operating income		26,762			17,535
Other income and expenses:
Non-regulated revenue		3,805			3,418
Non-regulated expenses		(4,501	)		(2,136	)
Gain (loss) on sale of non-utility property		—			—
Less: income taxes on other income and expenses		288			(522	)
		(408	)		760
Interest expense:
Interest Expense		5,233			4,936
Less: capitalized interest		(1,065	)		(450	)
Net interest expense		4,168			4,486
Net income	$	22,186		$	13,809
Earnings per share
Basic	$	1.06		$	0.67
Diluted	$	1.06		$	0.67
Weighted average shares outstanding
Basic		20,717			20,667
Diluted		20,740			20,691
Dividends per share of common stock	$	0.2925		$	0.2900

CALIFORNIA WATER SERVICE GROUP
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
Unaudited
(In thousands, except per share data)

For the Nine-Months ended:

	September 30,			September 30,
	2008			2007
Operating revenue	$	310,204		$	281,203
Operating expenses:
Water production costs		112,162			108,147
Admistrative and General		42,249			41,568
Other operations		37,766			33,857
Maintenance		12,884			13,983
Depreciation and amortization		27,779			25,173
Income taxes		20,126			13,761
Property and other taxes		11,163			10,548
Total operating expenses		264,129			247,037
Net operating income		46,075			34,166
Other income and expenses:
Non-regulated revenue		9,452			9,883
Non-regulated expenses		(9,715	)		(5,853	)
Gain (loss) on sale of non-utility property		7			(83	)
Less: income taxes on other income and expenses		118			(1,608	)
		(138	)		2,339
Interest expense:
Interest Expense		15,405			14,788
Less: capitalized interest		(1,955	)		(1,400	)
Net interest expense		13,450			13,388
Net income	$	32,487		$	23,117
Earnings per share
Basic	$	1.55		$	1.11
Diluted	$	1.55		$	1.11
Weighted average shares outstanding
Basic		20,707			20,664
Diluted		20,731			20,688
Dividends per share of common stock	$	0.8775		$	0.8700