[CAL LOGO OMITTED] NEWS RELEASE CALIFORNIA WATER SERVICE GROUP [GRAPHIC OMITTED] 1720 North First Street San Jose, CA 95112-4598 July 27, 2005 Contact: Richard D. Nye (408) 367-8216 (analysts) Shannon Dean (310) 257-1435 (media) CAL WATER ANNOUNCES SECOND QUARTER 2005 RESULTS; BOARD DECLARES 243rd CONSECUTIVE QUARTERLY DIVIDEND AND APPOINTS NEW VICE PRESIDENT, ENGINEERING & WATER QUALITY - -------------------------------------------------------------------------------- SAN JOSE, CA - California Water Service Group (NYSE : CWT) today announced net income of $7.6 million and earnings of $0.41 per share for the second quarter of 2005, compared to net income of $10.1 million and earnings of $0.59 per share in the second quarter of 2004. Revenue for the second quarter decreased $7.4 million, or 8%, to $81.5 million. Rate increases added $2.5 million to revenue and sales to new customers added $0.9 million. These increases were offset by a $10.8 million decrease in sales to existing customers resulting from cooler temperatures and higher than normal rainfall. "Our results continue to be hampered by cool weather and an unusual amount of precipitation. In California, we had 2.5 inches of rain in the second quarter, compared to less than one-third of an inch in the second quarter of 2004. Long term, the above-average precipitation replenishes the state's underground aquifers and reservoirs; in the short term, however, it decreases sales and impacts our earnings," said President and Chief Executive Officer Peter C. Nelson. 5 "Despite the rain, we continue to execute our strategy by aggressively pursuing fair regulatory treatment, operating efficiently, adding customers, and providing excellent service, and we expect to see improved results when the weather heats up and sales rise," Nelson said. Total operating expenses for the second quarter decreased 6%, or $4.6 million. Water production costs decreased 12% due to the decrease in water usage. Other operations expenses were comparable to those incurred in the second quarter of 2004. Maintenance expense increased 24%, reflecting work done on wells, pumping equipment, water treatment equipment, mains, and meters. Depreciation expense increased 7% due to increases in 2004 capital expenditures. Income taxes were 25% lower due to lower pre-tax income. Other income increased $0.2 million, or 34%, primarily due to interest from short term investments. There were minimal gains from property sales for either quarter. On July 21, 2005, the California Public Utilities Commission (CPUC) approved the Company's 2004 General Rate Case filing (GRC), which will increase revenues by $7.6 million on an annual basis. The decision is substantially the same as the proposed decision announced on June 28, 2005. The GRC includes 8 of the Company's 24 districts and nearly 50% of the Company's California customers. The new rates were effective July 26, 2005. At their meeting today, Directors declared the 243rd consecutive quarterly dividend on common stock in the amount of $0.2850. It is payable on August 19, 2005, to stockholders of record on August 8, 2005. The regular dividend on Series C preferred stock was also declared. The Board also appointed Michael J. Rossi as Vice President, Engineering & Water Quality, effective October 1, 2005. Currently California Water Service Company's Chief Engineer, Rossi began his career with the Company in 1977. He 6 holds a Bachelor of Science Degree in Civil Engineering and a Master of Science Degree in Business Administration, both earned at San Jose State University. He is also a registered civil engineer and state-certified water treatment and water distribution operator. Robert R. Guzzetta, who currently holds the position, was appointed as Vice President of Operations. He will succeed Raymond H. Taylor, who is retiring after 23 years of service. At the same time, the Board approved additional changes in responsibilities of three other officers of the Company. Dan L. Stockton, current Vice President of Information Systems, was appointed Vice President, Corporate Development & Corporate Secretary; Paul G. Ekstrom, currently Vice President, Customer Service & Corporate Secretary, was appointed Vice President, Customer Service & Information Systems; and Francis S. Ferraro, currently Vice President, Regulatory Matters & Corporate Development, was appointed Vice President, Regulatory & Corporate Relations. All changes will be effective October 1, 2005. "These key leadership changes further position the Company to achieve its objectives," Nelson said. Investors are invited to listen to the Company's analyst teleconference, which is scheduled for 4:00 p.m. EDT / 1:00 p.m. PDT on July 28, 2005. The call-in number is 1-866-814-1919 and the ID No. is 733669. A replay is available through September 25, 2005, by calling 1-888-266-2081 and entering pass code 733669. 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., and CWS Utility Services. Together these companies provide regulated and non-regulated water service to more than 2 million people in 100 California, Washington, New Mexico, and Hawaii communities. 7 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: governmental and regulatory commissions' decisions, including decisions on proper disposition of property; changes in regulatory commissions' policies and procedures; the timeliness of regulatory commissions' actions concerning rate relief; new legislation; the ability to satisfy requirements related to the Sarbanes-Oxley Act and other regulations on internal controls; 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. The Company assumes no obligation to provide public updates of forward-looking statements. Additional information is available at our Web site at www.calwatergroup.com. Attachments (2). ### 8