California American Water Distribution System    
  Quarterly Water Supply Strategy and Budget: January - March 2007     
                   
  Proposed Production Values by Source in Acre-Feet    
  Assuming "Normal" Inflow Conditions    
                   
  SOURCE/USE MONTH   YEAR-TO-DATE    
    Jan-07 Feb-07 Mar-07   Oct-06 - Nov-06 Percent    
                   
  Source                
  San Clemente Reservoir 0 0 0   0 0.0%    
                   
  Carmel Valley Aquifer                
          Upper Subunits 58 78 97   46 2.0%    
          Lower Subunits 1,018 972 1,105   1,416 61.8%    
                   
  Seaside Groundwater Basin                
          Coastal Subareas 0 0 0   828 36.2%    
                   
  Use                
         Customer Service 941 867 999   2,290      
         Seaside Injection 135 183 203   0      
  Total 1,076 1,050 1,202   2,290 100.0%    
                   
  Text Box: Notes: 1. The budget reflects "normal" inflow conditions and assumes that the monthly inflows at the San Clemente Dam site during the January-March 2007 period will approximate the median or 50% exceedence frequency flows, based on the 1902-2006 simulated period of record. 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 "Customer Service" for the January - March 2007 period is based on Cal-Am production of 2,807 acre-feet (AF) from the Monterey Peninsula Water Resources System, including 2,807 AF from the Carmel River Basin and 0 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 January, February, and March (based on production data from 1986 to 2006, adjusted for an assumption that production from the Seaside Groundwater Basin would not exceed 3,504 AF and production from the Carmel River Basin would not exceed 11,285 AF in WY 2007). 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 in January and approximately 1,500 gallons per minute (gpm) or 6.6 AF per day in February and March 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 average monthly production from the upper subunits for the past five years (WY 2002-2006) and the assumption that Cal-Am operations will be governed by "high-flow " rules.