Market Overview

American States Water Company Announces a Settlement Agreement in its Water Utility General Rate Case


American States Water Company (NYSE:AWR) announced that on August 15,
2018, its regulated utility subsidiary, Golden State Water Company
(GSWC) and the California Public Utilities Commission's (CPUC's) Office
of Ratepayer Advocates (ORA) filed a joint motion to adopt a settlement
agreement between GSWC and the ORA in connection with the water utility
general rate case. GSWC had filed a general rate case application in
July 2017 for all of its water regions and the general office to
determine new rates for the years 2019 – 2021. The CPUC is scheduled to
issue a proposed decision in the water general rate case during the
fourth quarter of 2018. When approved, the new rates will become
effective January 1, 2019.

The proposed settlement agreement, if approved by the CPUC, resolves all
the issues in the general rate case application and among other things,
authorizes GSWC to invest approximately $335.4 million in capital
infrastructure over the three-year rate cycle in order to continue to
provide safe and reliable water utility service to its customers. The
$335.4 million of infrastructure investment, as settled, includes $20.4
million of capital projects to be filed for revenue recovery through
advice letters when those projects are completed.

Excluding the advice letter project revenues, the water gross margin for
2019 in the settlement filing will increase by approximately $6.0
million as compared to the 2018 adopted water gross margin. The 2019
water revenue requirement and gross margin have been reduced for a
decrease of approximately $7.0 million in depreciation expense (as
settled for 2019) compared to the adopted 2018 depreciation expense due
to a reduction in the overall composite depreciation rates based on a
revised study filed in the general rate case. Had depreciation expense
remained the same as in 2018, the water gross margin for 2019 would have
increased by approximately $13.0 million. The decrease in depreciation
expense lowers the water gross margin, and is offset by a corresponding
decrease in depreciation expense, resulting in no impact to net
earnings. The settlement as filed also allows for potential additional
water revenue increases in 2020 and 2021 of approximately $10 million
and $12 million, respectively, subject to the results of an earnings
test and changes to the forecasted inflationary index values.

Forward-Looking Statements

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 most recent Form 10-Q and Form 10-K filed with the Securities
and Exchange Commission.

About American States Water Company

American States Water Company is the parent of Golden State Water
Company and American States Utility Services, Inc. Through its utility
subsidiary, Golden State Water Company, AWR provides water service to
approximately 260,000 customers located throughout 10 counties in
Northern, Coastal and Southern California. The company also distributes
electricity to approximately 24,000 customers in the City of Big Bear
Lake and surrounding areas in San Bernardino County, California. Through
its contracted services subsidiary, American States Utility Services,
Inc., the company provides operations, maintenance and construction
management services for water distribution and wastewater collection and
treatment facilities located on military bases throughout the country
under 50-year privatization contracts with the U.S. government.

American States Water Company has paid dividends to shareholders every
year since 1931, increasing the dividends received by shareholders each
calendar year for 64 consecutive years, which places it in an exclusive
group of companies on the New York Stock Exchange that have achieved
that result.

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