The Company had previously announced that due to limited cash resources, as well as the slow development of the water market in California, and restrictions on that development imposed by the actions of certain regulatory agencies and government-controlled water wholesalers, it had retained Houlihan Lokey Howard & Zukin ("HLHZ") to assist it in evaluating various alternatives.

As a result of careful study of alternatives by management, assisted by HLHZ, the Board approved a plan to continue a program of overhead reduction and to sell certain assets of the Company while simultaneously seeking a buyer for the entire Company.

Commenting on the program approved by the Board, Michael Patrick George, Chairman, President and CEO of Western Water Company, said: "We are disappointed that the slow pace of market development has made it unlikely that we will be able to achieve our objective of building a viable, sustainable water sales business as a free-standing company and within a reasonable time horizon. Nevertheless, we have a responsibility to all security holders to adjust our business plan to maximize a recovery for them. Management is committed to carrying out its objectives of protecting our security holders and serving the needs of our customers."

The Company also announced that Mr. George assumed the additional position of Acting Chief Financial Officer, following the resignation of Ronald I. Simon due to the Company's decision to close its San Diego office. Mr. Simon will continue as a part-time consultant to the Company through the end of the Company's first fiscal quarter.

Western Water is engaged in the identification, development, transportation, sale and lease of water rights and water to municipalities and other end users in the western United States and owns water rights and real estate in California and Colorado.

Statements contained in this release which are not historical facts are forward looking statements that involve risks and uncertainties that could cause actual results or future events to differ from those contained herein. Factors that could cause actual results or events to differ include the Company's ability to purchase and sell water rights and obtain financing and other factors and considerations detailed in the Company's Securities and Exchange Commission filings.

CONTACT: Western Water Company, Point Richmond

Michael Patrick George, 510/234-7400