Welcome to the American States Water Company conference call discussing second quarter 2008 results. If you have not yet received a copy of this morning’s news release announcing earnings for the quarter, please call 909-394-3600 extension 710 and one will be faxed or emailed to you. If you would like to listen to the replay of this call, it will begin this afternoon at approximately 2:00 PM PT and run through Thursday, August 14, 2008. The toll free number to dial for the replay is 800-642-1687 and the conference ID number is 56212702. At this time all participants are in a listen-only mode. Later we will conduct a question and answer session. (Operator Instructions) As a reminder, this call will be recorded and will be limited to no more than one hour. I would now like to turn the call over to Mr. Robert Sprowls.

Good morning or afternoon Ladies and Gentlemen and welcome to the presentation on American States Water Company’s second quarter 2008 results. I am Bob Sprowls, Chief Financial Officer of American States, and Floyd Wicks, President and CEO of the company is also with me today. As usual following the conclusions of our prepared remarks the call will be opened up for questions. I would like to remind you that certain matters discussed during this conference call are forward-looking statements intended to qualify for the Safe Harbor from liability established by the Securities Litigation Reform Act of 1995. I ask that you review the forward-looking information disclosure in our Form 10K and Form 10Q on file with the Securities and Exchange Commission. The factors underlying the company’s forward-looking statements are dynamic and subject to change. Therefore, these forward-looking statements speak only as of the date they are given. The company is under no obligation to update them. However, we may choose from time to time to update them and if we do so, we will disseminate the updates to the investing public. During our presentation today Floyd and I may refer to American States Water Company as AWR, our flagship subsidiary Golden State Water Company as GSWC, and American States Utility Services as ASUS. Before I talk about the results, I would like to mention that we plan to file the 10Q tomorrow and within our 10Q we have divided nearly each line of our income statement by segment; that is, water, electric and contracted services. This should provide more transparency on the results of American States Utility Services. Having said that let’s begin with the results for the quarter. Basic and fully diluted earnings for the quarter ended June 30, 2008 were $0.54 and $0.53 per share respectively as compared…

Good morning Ladies and Gentlemen. Before we start on the status of key regulatory filings, I would like to take this opportunity to congratulate Bob Sprowls on his appointment to succeed me as Chief Executive Officer and President of the company effective January 1, 2009 as identified in a news release earlier this week. I will continue as a director of the company and effective January 09 as well as the Vice Chair of the Board of Directors. It is gratifying to me personally that an insider so-called was selected as my successor. Bob and I are already working on a transition plan which will include a company-wide tour to meet with all employees and keep business leaders as well. Now let’s discuss the status of key regulatory filings and important actions and those still pending. As Bob mentioned earlier the PUC approved rate increases subsequent to June 30 of 07 including the seven rate making areas in Region 1 customer service areas effective January 1 of 08. The authorized rate increases are anticipated to provide Golden State Water with additional annual revenues of approximately $6.4 million in 2008 based on authorized return on equity of $10.2% rate increases for Regions 2 and 3 customer service areas also effective January 1 of this year. The authorized rate increases will provide Golden State Water with additional annual revenues of approximately $3.6 million for Region 2 which represents the second year of a three-year rate case approved in 07, an increase of $3 million for Region 3 which is the third year of a three-year rate increase approved in 2006. The combined rate increases for all three regions, 1, 2 and 3, are designed to generate approximately $13 million in additional annual revenues effective January this year based upon normalized sales levels…

(Operator Instructions) Our first question comes from [Hikee Door] – Janney Montgomery Scott, LLC. [Hikee Door] – Janney Montgomery Scott, LLC: Can we start with the regulatory matters in California? When will Golden State be implementing the RAM?

We’re hopeful it will be implemented this year. Whether it is going to be during this quarter or the fourth quarter, we’re hoping before the end of the third quarter but it’s not certain yet. [Hikee Door] – Janney Montgomery Scott, LLC: Had it always been that you were planned to go after Cal Water? I know that they have implemented theirs either last month or the month before. I thought that you would both be implementing around the same time.

No, just as we’re on different schedules for filing rate cases, the PUC has really categorized each of the Class A companies on a very strict schedule and we’re following Cal Water and I think Cal American was the other one that was ahead of us. I’m not sure of that.

Yes, they divided up the companies in to two phases and we got in to the second phase. [Hikee Door] – Janney Montgomery Scott, LLC: But the way it gets implemented is similar, right? The accounting doesn’t change from company-to-company?

That’s right. [Hikee Door] – Janney Montgomery Scott, LLC: I believe this is the first that I’m hearing of the rate case last month, perhaps I’m out of the loop. Can we have some numbers around the Region 2, Region 3 request that you recently made?

Yes, I believe that’s going to be in the Q tomorrow. [Hikee Door] – Janney Montgomery Scott, LLC: If it’s not handy I can wait until tomorrow, no big deal.

For Region 2, $20.3 million is the increase effective 2010 and then it’s $2.6 million in 2011 and $4.2 million in 2012. For Region 3 it’s $30 million in 2010, $1.17 million in 2011 and $3.7 million in 2012. [Hikee Door] – Janney Montgomery Scott, LLC: And now do those numbers assume the let’s call it 10.25 ROE that you’ve been getting currently? Or, how does that work?

Yes, the 10.2. Now, the 10.2 that we’re currently getting is really on just Region I. [Hikee Door] – Janney Montgomery Scott, LLC: Right but that get’s applied to future rate cases until the cost of capital proceedings get completed, right? Although in theory the cost of capital should be completed before this decision comes out.

Yes, it should, that’s right. [Hikee Door] – Janney Montgomery Scott, LLC: Just as a final question, can you talk a little bit more about ASUF and the efforts to get price increases on these military contracts?

Yes, it’s been quite an extensive operation to get these filings made for price redeterminations as well as equitable adjustment filings. And, as you know, as we’ve mentioned before, these filings in many ways sort of emulate what we do in terms of filing a rate case. In the case of the military basis our regulator frankly is the US government and it’s new for them as well and I think that’s frankly why it’s taking a little longer than we would anticipate. But, we’re making progress. They have included – there have been some recent interim adjustments while we’re waiting for the final increase to be determined so I believe we’re on track for having better news by the end of the third quarter. [Hikee Door] – Janney Montgomery Scott, LLC: Is there additional information on this in the Q as well or is it kind of mum’s the word until a decision gets made from the government?

Well, at this point we have filed the redeterminations for an east coast bases, the Virginia and Maryland bases and so those are being considered. For Fort Bliss, we expect to file that price redetermination in the third quarter. And, there is more detail in the 10Q but that’s the process we’re going through. Fort Bliss has been a little bit of a problem in terms of this particular item but we’re working through it. It’s also the base where we had the significant waste water project so we look at it as a lot of opportunity there. But, it’s just a little tougher to work through the red tape I guess.

With regard to that, Bob makes a good point, if you could imagine moving in 30,000 people in to an already existing fairly good sized base within a short period of time, two to three years, it’s a very busy place and we believe there will be other opportunities there but we can’t forecast that at this point.

Our next question comes from Allan Seymour – Columbia Management. Allan Seymour – Columbia Management: I have two questions, the first one is your return on equity request of 12.5%, can you give me some sense of history of how that has worked out in the past? Then the second question has to do with when a developer in your area does a development and requests water, how do you handle that capital expenditure? And, are there accounts receivable associated with any developer that you may have to get reimbursement from?

The return we requested in the water rate case for Region 2 and 3 is 12.1% ROE and typically we’ll go in for a rate increase and request a ROE that we think is valid but seldom do we get what we ask for. In a number of cases we’ve been requesting between 11.5% and [inaudible] we come out in the neighborhood of 10%. So, I don’t want you to think that you can sort of scale 12.1% down that way because what happens typically in a rate case is a lot of cases you end up settling this particular issue with the Department with direct testimony, it doesn’t make it to the hearing in terms of putting your witnesses on the stand. With given the new ROE approach for the water companies, there will be cross examination given to rate of return witnesses because they basically bifurcated the return on equity component or the cost of capital component from the general rate case approach. It use to be that there would be a little bit of horse trading in terms of we’ll take a slightly lower return if we get this particular capital project in or this particular operating expense, or vice versa. Floyd do you want to handle the second question?

Regarding the developer projects where we deal frankly throughout the state of California, typically we follow the rules as set up through the California Public Utilities Commission where developers would put in all the infrastructure required to serve the development and then over a period of 40 years, that developer would get a payback pretty much pro rata on one fortieth each year at no interest. That’s what we affectionately call Rule 15. It’s been in place for quite a number of years in California but we do not put our own capital at risk in these developer related projects. I don’t know if that fully answers your question or not, I’d be happy to try again.

Well they basically contribute the dollars they spent on this infrastructure to the company?

Correct, that’s right.

If you look at the liability side of the company’s balance sheet you’ll see two lines there, customer advances for construction and contributions in aid of construction. That’s where this infrastructure has been sort of contributed. On the left hand side you’ll see the assets that have been contributed and on the right hand side you’ll see sort of these liabilities for the customer advances for construction we have to pay back to the customer over time and that’s what Floyd described. At some point some of this property turns in to contributions in aid of construction and those are dollars we don’t have to pay back.

The dollars we pay back under the so called advance, the developer advances the dollars and we pay them back, those dollars over time find their way in to rate base so that does build rate base over time but at a much slower pace than if we paid for that capital up front and imposed it in the rate base.

There are no further questions at this time. I will now turn the call back to management for any closing remarks.

Thank you all again. We really appreciate your participation today and for your continued interest in the company and we thank you for following our news releases here this week and congratulations again to Bob Sprowls.

Thank you.

Thank you all.

Thank you.

This concludes today’s American States Water Company conference call. As a reminder, the call will be available for replay beginning at approximately 2:00 pm pacific time. The toll free number for the replay is 800-642-1687 and the conference ID number is 56212702. You may also access the replay at www.ASWater.com. Thank you for your participation. You may now disconnect.