California American Water Distribution System    
  Quarterly Water Supply Strategy and Budget: October - December 2006     
         
  Proposed Production Values by Source in Acre-Feet    
  Assuming "Above Normal" Inflow Conditions1    
                   
  SOURCE/USE MONTH   YEAR-TO-DATE    
    Oct-06 Nov-06 Dec-06   Oct-05 - Aug-06 Percent    
               
  Source          
  San Clemente Reservoir 0 0 0   0 0.0%    
               
  Carmel Valley Aquifer            
          Upper Subunits 31 30 31   877 6.8%    
          Lower Subunits 842 641 580   9,146 70.9%    
               
  Seaside Groundwater Basin            
          Coastal Subareas 450 400 350   2,872 22.3%    
               
  Use            
         Customer Service 1,323 1,071 961   12,484      
         Seaside Injection 0 0 0   411      
  Total 1,323 1,071 961   12,895 100.0%    
       
  Text Box: Notes: 1. The budget reflects "above normal" inflow conditions and assumes that the monthly inflows at the San Clemente Dam site during the October-December 2006 period will approximate the 30% exceedence frequency flow, based on the 1902-2005 simulated period of record and represents the high end of the normal range of inflows. 2. The annual budget period corresponds to the Water Year, which begins on October 1 and ends on September 30 of the following Calendar Year. 3. Anticipated production for the October - December 2006 period is based on Cal-Am production of 3,355 acre-feet from the Monterey Peninsula Water Resources System, including 2,155 AF from the Carmel River Basin and 1,200 AF from the coastal subareas of the Seaside Groundwater Basin. Total monthly production for the system was calculated by multiplying total annual production times the average fraction of annual production for October, November and December (based on production data from 1986 to 2005, adjusted for an assumption that production from the Seaside Groundwater Basin would not exceed 3,504 AF per year and production from the Carmel River Basin would not exceed 11,285 AF per year). 4. Anticipated production for "Seaside Injection" is based on an average diversion rate of approximately 1,000 gallons per minute (gpm) or 4.4 AF per day from Cal-Am's sources in the Carmel River Basin. "Total" monthly Cal-Am "use" includes water for customer service and water for injection into the Seaside Groundwater Basin. 5. No surface water diversions from San Clemente Reservoir are assumed for this period based on concerns regarding water quality (elevated turbidity) and lowered water levels required by the Division of Dam Safety as part of the for the San Clemente Reservoir Drawdown Project. 6. Anticipated monthly production from the Upper Carmel Valley Alluvial Aquifer Subunits is based on a continuous pumping rate of 0.5 cfs in October, November, and December from the combined capacities of Cal-Am's Russell Wells No. 2 and 4.