Good day ladies and gentlemen and thank you for standing by. Welcome to the California Water Service Group third quarter 2010 earnings results. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will be given at that time. And as a reminder, this conference is being recorded. I would now like to turn the conference over to Mr. Martin Kropelnicki. Sir, you may begin.

Thanks, Tammy. Good morning everybody and welcome to the third quarter of 2010 conference call for California Water Service Group. With me today is Pete Nelson, President and CEO. I’d like to remind everyone that a replay of today's discussions will be available from Oct 28 through December 27 at 1-888-266-2081, ID number 1484282. Before discussing the results for the quarter I'd like to take a few minutes to discuss forward-looking statements. In particular during the course of this conference call, the company may make certain forward-looking statements because these statements deal with future events, they are subject to various risks and uncertainties and actual results could differ materially from the company’s current expectations. Because of this, the company strongly advises all current stockholders as well as all interested parties to carefully read and understand the company’s disclosures on risk and uncertainties down in our Form 10-Q, Form 10-K and other reports filed from time to time with the Securities and Exchange Commission. Having said that, let's take a look at the quarter and I'll turn over to Pete to talk about some of the evolving issues with the PUC. Revenue for the quarter increased $7.2 million or 5.2% to $146 million. Included in that number was a gross WRAM adjustment of $11 million in the WRAMs, the Water Rate Adjustment Mechanism associated with revenue and an $8.6 million negative MCBA, which is a modified cost balancing account which tested the production cost where actual production costs were below adopted numbers. That gave us a net $2.4 million increase to income. Operating expenses for the quarter were $5.4 million, increased $5.4 million or 4.7% to $120.5 million. I'll briefly go through the production cost breakout between purchase water, purchase power, and pump taxes but please keep in mind these are…

Okay, thanks Marty and good morning everyone. I'll be wrapping up I hope, two important procedures that I have talked about several times in the past. Both are important to the company's financial position going forward and both are nowhere important to you and rest on the call. The first is the 2009 General Rate Case. There has been a new event there and that the Administrative Law Judge issued his proposed decision yesterday in this case. And the second item is a revision to the Water Action Plan which I'll call Water Action Plan II. And as you recall this document sets the public policy for regulating water companies in California. Both of these as I said are very important to the company. They are important to the Commission. In fact the Commission has spent a lot of time on both these procedures in the last few months especially in the last month or two. And that’s partly because we had at least two commissioners and may be three commissioners who were leaving the Commission at the end of this year. One is Commissioner Bohn and the second is Commissioner Grueneich, both are turned out and we expect them to be leaving the Commission. Our third commissioner, Commissioner Ryan has not been confirmed by the State Senate. So that’s a possible change there but we are not quite sure yet. Commissioners Simon and Peevey are in the middle of their terms so we expect them to stay on. So as I said, we expect two or three new commissioners to be appointed next year by the new governor. That’s important to get these cases approved before the end of the year. So I think I'll start with the Water Action Plan II. It’s on the Commission’s agenda to be…

Actually two quick comments on the GRC settlement that’s coming through. One, Pete here pointed out pension expense and the difficulty in predicting that as we start the year, we have a pension estimate that are actually is put together and that we use that to book our 587 expense throughout the year. And then you threw it up later in the year and Q3, we got a revised estimate from our actuaries based on the new census data and we booked the $780,000 adjustment with a quarter for pension expense. So that’s it in the quarter and when it goes back to really January first it was based on new information, like new employees and things like that. Certainly, the pension balancing account would mitigate some of that volatility with that number in the 587 expense is covered by that pension balancing account. In addition as part of the General Rate Case settlement and with all parties being signed off there were a couple of contested assets to associate some of our smaller districts and during the settlement process we agreed the cap what was in the rates associating what these two projects in particular and as a result we have a cap and what’s in rates we have a reduction that we had a charge for the income statement about $600,000 of share, excuse me $600,000 period which comes as about $0.02 of share. So, between the pension and the settlement we had made adjustments in for about $0.04 of share in the quarter. So, looking forward pension balance put in place couple of other points would like to highlight on the balance sheet. The company finished the quarter with net utility plans at $1.28 billion, that’s up approximately from 9% from last year when we are have $1.75 billion at the end of Q3 company funded CapEx we have spent about $79 million through September 30, 2010 sort of going to the final stretch with our program as you may recall we have a fairly aggressive program, to between 120 and $130 million for the year, our construction work in progress balance finish the quarter at a $141 million, so these are incurred dollar spent associated with capital projects that as we build them and want to build they are taking out the construction work in progress and put into rate case. That’s up approximately12% over Q3 of last year which is a $126 million. Net cash flow from operations was a positive $78 million and as I mentioned earlier we are about $56 million ROI credit. So having said that why don’t we open it up Tammy for questions from people on the call please.

(Operator Instructions). Our first question is from Garik Shmois of Longbow Research. Your line is open.

I have two questions the first one is in regards to the Water Action Plan that you mentioned, just wondering sounds similar to the existing plan, but you know given that as you mentioned, seems like it has more teeth in it, is it going to change any way that you approach the business either with respect to capital budget or M&A or the way that you promote conservation efforts?

Garik good question. It will not change what we do. I think it gives us more support for going further in conservation. But if it doesn't change our business or our approach to capital expense.

Okay. And I just have one more question on the administrative expense. You've been doing good job controlling it there. Was there any expenses that are rolling off that were related to the general rate case coming to an end that we should factor in as we model out over the next couple of quarters? And or do you think that the expense run rate at these levels is a pretty good number to use?

That's a good question. I’ll take that one. If you look at our SG&A, our A&G depend on what you want to call it really you are seeing the function of A: We kept the operating budgets flat, that parts of the operating budgets we cut back this year going into 2010 because we knew it will be stretch year, that's number one. So we cut our budgets very lean this year. Number two, you know the company is spending a larger amount on capital projects and the labor associated with those capital projects as well as the benefit cost get charged through to that asset. So, and I talked about this pension estimate although you see the decline in A&G at $1.3 million, the pension cost also floats through there. So your declining A&G would have been even higher, if we didn't have that write off going through their for the revised estimate. So its hard to say we will level all that going into 2011, where and clearly in our budget process right now and we’ll have the budgets rolled out when we get to the February conference calls to give you more guidance on that, but really its about keeping the operations kind of lean and mean as we went through 2010.

Thank you. Our next question is from Heike Doerr of Janney. Your line is open.

Marty, can you tell us what the mark-to-market long-term insurance policy swing was in the quarter? Was there one this quarter as there have been in past quarters?

There is one every quarter and what Heike is talking about is the company has certain benefit plans and down in other income and expense. We have assets and liabilities associated with those plans and two of the plans have a Rabbi Trust and those Rabbi Trust are wrapped with the thin layer of life insurance and behind that trust beyond that life insurance there are investment assets and so we require to true up the cash render value associated with the life insurance, but behind that is a bunch of investments or mutual funds. So for the quarter the mark-to-market was $1.4 million positive and that compares to a $1.7 million positive in Q3 of last year. On a year-to-date basis for the nine months ended its $1.3 million positive, compared to the $2.9 million positive for the same period last year. Heike Doerr – Janney: And can we talk a little bit about the process for these advice letters? How arduous is the filing process and how long will it take for you to get a decision? I'm wondering how we should think about that revenue and if perhaps that additional $7 million or $9 million is really a 2012 revenue contributor and not necessarily 2011?

I would say of the $7 million, there is a whole bunch of projects there. We have to do the project, build the project close it out and then out go at the Commission for rates. And I think your estimate is probably right. 2012 was a better starting time for those projects. These are things like build a new transmission line or a new well, you are not quite sure how long it’s going to take you. So I would spread that out over the three year period.

And is this a bit of a divergence from how the Commission has handled projects like this in the past, right? They've normally just said if you expect it will be done on this date and you can start recouping or earning on that regardless of if the project had been completed?

Actually it’s not a change, the last two general rate cases included projects like this. And there is always a number hits in my brain of 20 to 30 projects, that are in advice letter status all the time and as we complete them we filed for recovery and the rates are changing. So it has been the practice for I see the last two general rate cases, small numbers but it still is part of our capital program and we are used to the process.

And on average, how long does it take from after you've filed the advice letter to getting a decision from the Commission? Is it a quick turnover?

It is about 30 days from application of the advice letter until rates change.

Thank you. (Operator Instructions). Our next question comes from Jonathan Reeder of Wells Fargo.

Just wanted to I guess kind of clarify one thing. Heike already touched on it. So the insurance sounds like the mark to market impact was kind of a plus $0.04 which kind of negates the negative $0.02 charges. Is that kind of right, thinking about it that way?

Well I think you got to look at what line that rolls up in? It’s down below the line in other income and expense. So it’s contaminating or lead into utility operations. So you are correct that it’s below the line and it added about $0.02 to earnings which is basically down a little bit in the contribution phase in the third quarter of last year.

But if I'm just looking on the overall quarterly impact of kind of one-time charges, I guess the positive and negatives overall kind of net out where 98 is a pretty good ongoing kind of Q3 number?

Yes I mean you have all the elements. We did $0.98 a share, we had the pension adjustment. We had the settlement from the GRC and then you have the mark-to-market adjustment with the corporate and life insurance products, yes.

Thank you. I am showing no further questions in the queue at this time.

Great, thanks Tammy. Well just in closing as Pete said it seems like it’s been a long 18 months. It’s nice to kind of see it coming to an end. We are real happy with the results of the general rate case. We are also very happy with the company’s ability to manage it’s A&G expenses. We went through this 18 month period which was an extended process but we are happy to get wrapped up and we look forward to talking to everyone in February for our yearend earnings call. So thank you for our support and we will talk to everyone later. Thanks. Bye.

Ladies and gentlemen this does conclude the conference. You may all disconnect at this time. Everyone have a great day.