SAN DIEGO, Calif. (September 1, 1998) - Noting that nearly every Federal, state, local and environmental water interest has endorsed voluntary water transfers, Michael Patrick George, the president and CEO of Western Water Company, has sounded a call for new interim rules to promote a functioning market environment in which individuals, government entities and agricultural interests with surplus water could help meet short-term needs of water users in other regions.

Mr. George's keynote speech for the Urban Water Institute's annual meeting in San Diego, Calif., underscored his observation that "there is lots of talk, but little action" in terms of developing the understandable regulations necessary to allow voluntary water transfers help bring water supply and demand into balance.

Regarding existing regulations - which he said "are numerous, confusing and sometimes in conflict" - Mr. George declared that "There are so many rules that there are no rules!" He explained that California must take the lead in developing interim rules, which would clarify and/or supercede the existing jumble of regulations as part of the current CALFED process. Such interim rules should allow water rights owners with excess supply to sell to entities experiencing shortages and stimulate others in similar situations to try creative solutions. He pointed out the reluctance of many agencies and businesses, in the absence of clear rules, to be the first to try new solutions to old - and growing - problems.

It is regulation, not technology, that stands in the way of moving water supplies, according to Mr. George. He explained that, notwithstanding available infrastructure capacity, movement of water is often blocked by the varying regulations of the jurisdictions through which water must pass from points of origin to areas of need. Mr. George said that some of those regulations relate to environmental preservation, which in itself requires water transfers.

"The value of interim rules," said Mr. George, "would be to apply water transfer theory to the real world, to experiment with market impacts, but to avoid modifying permanent regulation until we see what works."

He said that increasing water needs today and in the future are generated not only by growing populations, recreational use and the requirements of agricultural and other interests that acquire water rights through land ownership, but also by habitat preservation and restoration, as well as strategies to implement environmental balance.

Water transfers between willing sellers and willing buyers are a critical component of a comprehensive plan to balance supply and demand through market mechanisms rather than governmental allocation and cross subsidies.

Western Water Company is publicly traded on the Nasdaq and its symbol is WWTR. Western Water is a San Diego-based company and can be reached through its web site, www.wwtr.com. The outline and visual aids for Mr. George's keynote speech are available on the web.

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 water rights and obtain financing and other factors and considerations detailed in the Company's Securities and Exchange Commission filings.