Exhibit 99.1

American States Water Company Announces Approval by CPUC of Rate Increases


    SAN DIMAS, Calif.--(BUSINESS WIRE)--Jan. 4, 2007--American States
Water Company (NYSE:AWR) announced that the California Public
Utilities Commission ("CPUC") approved rate increases for all water
service areas of its Golden State Water Company ("GSWC") unit. The
authorized rate increases are effective January 1, 2007 and will
provide GSWC additional annual revenues of approximately $5,978,000 in
2007. The increases include interim rates for GSWC's Regions II and
III service areas, totaling approximately $1,357,000 annualized. Due
to a delay in issuing decisions on the General Rate Cases for rate
increases in Region II and to cover general office expenses at the
corporate headquarters, the Administrative Law Judge of the CPUC
assigned to these cases issued an order for the interim rate
increases. By the CPUC statute, once the final rates are approved,
they will be made effective retroactive to the date the interim rates
are in effect.

    Additionally, the CPUC approved temporary surcharges in Region I
water service areas of GSWC to recover previously incurred supply
costs of approximately $2,019,000 recorded in the supply cost
memorandum accounts. Further, the CPUC approved a surcharge in GSWC's
Region III service area to recover approximately $744,000 of discounts
and costs incurred for the California Alternative Rates for Water
("CARW") Program, a program that benefits low-income customers of
GSWC. All surcharges are in effect January 1, 2007. Regulatory assets
have been previously established for the collection of these two
items.

    Certain matters discussed in this news release with regard to the
Company's expectations may be forward-looking statements that involve
risks and uncertainties. The assumptions and risk factors that could
cause actual results to differ materially, include those described in
the Company's Form 10-Q and Form 10-K filed with the Securities and
Exchange Commission.

    American States Water Company is the parent of Golden State Water
Company, American States Utility Services, Inc. and Chaparral City
Water Company. Through its subsidiaries, AWR provides water service to
1 out of 30 Californians located within 75 communities throughout 10
counties in Northern, Coastal and Southern California (approximately
254,000 customers) and to approximately 13,000 customers in the city
of Fountain Hills, Arizona and a small portion of Scottsdale, Arizona.
The Company also distributes electricity to approximately 23,000
customers in the Big Bear recreational area of California. Through its
non-regulated subsidiary, American States Utility Services, the
Company contracts with municipalities, the U.S. government and private
entities to provide various services, including billing and meter
reading, water marketing and operation and maintenance of water and
wastewater systems.

    CONTACT: American States Water Company
             Robert J. Sprowls
             Senior Vice President, Chief Financial Officer,
             Treasurer and Corporate Secretary
             909-394-3600, extension 647