FORM OF PROXY

Published on March 6, 1997











CALIFORNIA WATER SERVICE COMPANY

PROXY SOLICITED BY THE BOARD OF DIRECTORS

PROXY


PETER C. NELSON and PAUL G. EKSTROM, and each of them with full power of
substitution, are hereby authorized to vote, as designated on the reverse side,
the stock of the undersigned at the Annual Meeting of Shareholders of
California Water Service Company to be held at 1720 N. First Street, San Jose,
California on Wednesday, April 16, 1997 at 10:00 A.M., or at any adjournment
thereof.


PLEASE DATE, SIGN AND MAIL IMMEDIATELY IN THE ENCLOSED ENVELOPE.

(CONTINUED AND TO BE SIGNED ON REVERSE SIDE)

SEE REVERSE SIDE
/X/ Please mark votes as in this example.

IF NOT OTHERWISE DIRECTED, THIS PROXY WILL BE VOTED FOR THE APPROVAL OF THE
FORMATION OF A HOLDING COMPANY, FOR THE ELECTION OF THE BOARD'S NOMINEES FOR
DIRECTORS, AND FOR RATIFICATION OF THE APPOINTMENT OF KPMG PEAT MARWICK, LLP AS
AUDITORS. THE BOARD OF DIRECTORS RECOMMENDS VOTING IN FAVOR OF THESE MATTERS.

1. PROPOSAL TO APPROVE THE FORMATION OF A HOLDING COMPANY

FOR: ____
AGAINST: ____
ABSTAIN: ____

2. ELECTION OF DIRECTORS

FOR ALL NOMINEES: ____ WITHHELD FROM ALL NOMINEES: ____
(except as marked below)

(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE
STRIKE A LINE THROUGH NOMINEE'S NAME IN THE LIST BELOW.)

Robert W. Foy, Edward D. Harris, Jr., M.D., Robert K. Jaedicke, Linda R. Meier,
Peter C. Nelson, C.H. Stump, Edwin E. van Bronkhorst, Richard P. Magnuson, and
J.W. Weinhardt.

3. PROPOSAL TO RATIFY THE APPOINTMENT OF KPMG PEAT MARWICK, LLP
as the independent auditors of the Company.

FOR: ____
AGAINST: ____
ABSTAIN: ____

4. IN THEIR DISCRETION UPON SUCH OTHER MATTERS AS MAY PROPERLY COME BEFORE
THE MEETING.

MARK HERE FOR ADDRESS CHANGE AND NOTE AT LEFT ____

NOTE: Please sign exactly as name appears hereon. If signing as attorney,
executor, administrator, trustee, guardian or the like, please give your full
title as such. If signing for a corporation, please give your title. In the
case of shares standing in the name of two or more persons, California law
permits the voting of such shares under a proxy signed by any one of such
persons if none of the others is present in person or represented by proxy.

PLEASE DATE, SIGN and RETURN PROMPTLY

Signature _______________________ Date _______________

Signature _______________________ Date _______________