Document:

<PAGE>   1
                                                                   EXHIBIT 10.13

                      ENERGY MANAGEMENT SERVICE AGREEMENT
                      WITH ILLINOVA ENERGY PARTNERS, INC.
<PAGE>   2
                            [LETTERHEAD OF ILLINOVA]

April 5, 1999

Mr. Joel Dickson
Vice President of Customer Service and Operations Support
Southern California Water Company
630 E. Foothill Blvd.
San Dimas, CA 91773

Dear Mr. Dickson:

This letter constitutes an Agreement ("Agreement") between ILLINOVA ENERGY
PARTNERS, INC. ("IEPI"), a Delaware corporation, and the Southern California
Water Company (SCWC) and its Bear Valley Electric Division (BEAR VALLEY). IEPI
and SCWC are each sometimes referred to herein as "Party" and are collectively
referred to as "Parties." The purpose of this Agreement is to enable a Party to
purchase, sell or exchange capacity, energy, and/or other services (a
"Transaction") from, to, or with the other Party in accordance with the terms
and conditions provided herein. This Agreement is not intended to obligate
either Party to purchase, sell or exchange any amount of such capacity, energy,
and/or other services from, to or with the other Party except as provided
herein.

                              Term and Conditions

1.   Term of Agreement

     This Agreement shall become effective upon execution by both Parties and
     commence on May 1, 1999, and shall remain in effect until April 30, 2002;
     provided, however, that this Agreement shall remain in effect as to any
     Transaction agreed upon by the Parties prior to termination until the
     completion of and final payment for such Transaction.

2.   Availability for Purchase, Sale or Exchange of Capacity, Energy and/or
     Other Services

     a.   IEPI shall provide services under this section pursuant to the terms
     and conditions of the Scheduling Coordination and Real-Time Services
     Agreement between IEPI and SCWC, dated April 5, 1999.

<PAGE>   3
Mr. Joel Dickson
April 5, 1999
Page 2

3.   Compensation for Capacity, Energy and/or Other Services

     The compensation to be paid with respect to a Transaction hereunder shall
     be as specified in the agreement entered into pursuant to Section 2(b) or
     Section(c); provided, however, that the compensation for a sale of
     capacity, energy and/or other services by IEPI shall be pursuant to IEPI's
     then current FERC Electric Rate Schedule. IEPI's current schedule, Schedule
     No. 1, is attached hereto as Exhibit A and made a part hereof. Such
     Schedule may be amended from time to time.

4.   Reliability

     Both IEPI and SCWC shall comply with the operation and scheduling
     guidelines specified by the North American Electric Reliability Council and
     the Western Systems Coordinating Council.

5.   Billing and Payment

     a.   All power Transactions hereunder shall be accounted for on the basis
          of scheduled hourly quantities. Each Party shall maintain records of
          hourly schedules for accounting and operating purposes. The billing
          period for Transactions hereunder shall be one (1) calendar month.

     b.   A bill shall be submitted within approximately ten (10) days following
          the last day of each month covering Transactions during that month.
          Payment shall be due within twenty (20) days of the date the bill was
          received. Payment shall be made by electronic wire transfer to the
          address set forth in this Section 5.

     c.   Amounts not paid on or before the due date shall accrue interest at
          one and one half percent (1 1/2%) per month or the maximum rate
          permitted by law, whichever is less, from the due date until payment
          is made.

     d.   In the event any portion of a bill is in dispute, the disputed amount
          shall be paid under protest when due. The dispute shall be discussed
          and resolved by the Authorized Representatives, who shall use their
          best efforts to amicably and promptly resolve the dispute. Upon
          determination of the correct billing amount, the proper adjustment
          shall be paid or refunded promptly with interest accrued in accordance
          with Section 5(c) and computed from the date payment was received to
          the date the adjustment is made.
<PAGE>   4
Mr. Joel Dickson
April 5, 1999
Page 3

     e.   All billings to SCWC shall be sent to:

          Mr. Raymond P. Juels
          Manager of Energy Resources
          Southern California Water Company
          630 E. Foothill Blvd.
          San Dimas, CA 91773

          or to such address as SCWC may specify by written notice given as
          provided herein.

     f.   All payments to IEPI greater than $50,000 shall be by wire transfer
          to:

          American National Bank
          2000 South Naperville Road
          Wheaton, IL 60187
          ABA#: 071000770
          Account#: 1818-0752
          For Illinova Energy Partners

          All payments to IEPI less than $50,000 may be made by check to:

          Illinova Power Marketing, Inc.
          Attention: Jennifer Hughey, Controller
          6955 Union Park Center, Suite 300
          Midvale, Utah 84047

          or to such other address as IEPI may specify by written notice given
          as provided herein.

     6.   Authorized Representatives

          Within thirty (30) days after execution of this Agreement, each Party
          shall designate in writing its Authorized Representative(s) for
          purposes of this Agreement. Either Party may, by written notice to the
          other given as provided herein, change its Authorized
          Representative(s).
<PAGE>   5
Mr. Joel Dickson
April 5, 1999
Page 4

     7.   Tax Liability

          All transactions are subject to any applicable sales, use, franchise,
          excise, ad valorem or other similar tax. Receipt of satisfactory
          evidence of exemption is required to avoid any applicable taxation.

     8.   Notices

          All written notices under this Agreement (except bills given pursuant
          to Section 5) shall be deemed effective upon receipt if delivered in
          person or sent by facsimile, express courier, or registered or
          certified mail, postage prepaid, to the address specified below:

          If to IEPI:

          Illinova Power Marketing, Inc.
          Attention: Jennifer Hughey, Controller
          6955 Union Park Center, Suite 300
          Midvale, Utah 84047
          Fax No.: (801) 568-2104

          If to SCWC:

          Mr. Raymond P. Juels
          Manager of Energy Resources
          Southern California Water Company
          630 E. Foothill Blvd.
          San Dimas, CA 91773

          A Party may, by notice given as provided in this Section, change the
          address to which notice is to be given.

     9.   Necessary Authorization

          Each Party represents that it has the necessary corporate and/or
          legal authority to enter into this Agreement and to perform each and
          every duty and obligation imposed herein, and that this Agreement
          constitutes a valid, binding and enforceable obligation of such
          Party. Each individual affixing a signature to this Agreement
          represents and warrants that he or she has been duly authorized to
          execute this Agreement on behalf of the Party he or she represents.

<PAGE>   6
Mr. Joel Dickson
April 5, 1999
Page 5

10.  indemnification

     Each party agrees to protect, indemnify and hold harmless the other Party,
     its directors, officers, employees and agents, against and from any and all
     losses, claims, actions, suits and proceedings (including attorneys fees
     and costs) for or on account of injury to or death of persons or damage to
     property resulting from or arising out of the indemnifying Party's actions
     or facilities, excepting only such injury, death, or damage as may be
     caused by the fault or negligence of the other Party, its directors,
     officers, employees, or agents. This Section 10 is not intended to impose
     on a Party an obligation to protect, indemnify and defend the other Party
     with respect to injury or death of persons or damage to property, resulting
     from or arising out of the fault or negligence of entities or persons other
     than a Party, its directors, officers, employees or agents.

11.  Uncontrollable Forces

     Neither Party shall be considered to be in default in the performance of
     any obligations under this Agreement (other than obligations to pay bills)
     when and to the extent such failure of performance shall be due to any
     uncontrollable force. The term "uncontrollable force" shall mean any cause
     beyond the control of the Party affected, including but not restricted to,
     failure or threat of failure of facilities, flood, earthquake, geohydraulic
     subsidence, tornado, storm, fire, or other catastrophe, civil disobedience,
     labor dispute, or sabotage, restraint by court order or public authority
     (whether valid or invalid), and action or non-action by or inability to
     obtain or maintain the necessary authorizations or approvals from any
     governmental agency or authority. An "uncontrollable force" must be a
     cause which by exercise of due diligence the affected Party could not
     reasonably have been expected to avoid and which by exercise of due
     diligence it shall not be able to overcome. The failure to perform for any
     reason of any supplier of capacity, energy or other services to IEPI shall
     constitute an uncontrollable force affecting IEPI and entitling IEPI to
     relief under this Section 11. No Party shall, however, be relieved of
     liability for failure of performance if such failure is due to causes
     arising out of its own negligence or due to removable or remediable causes
     which it fails to remove or remedy within a reasonable time period. Nothing
     contained herein shall be construed so as to require a Party to settle any
     strike or labor dispute in which it may be involved. A Party rendered
     unable to fulfill any of its obligations under this Agreement by reason of
     uncontrollable force shall give prompt written notice of such fact to the
     other Party and shall exercise due diligence to remove such inability with
     all reasonable dispatch.

<PAGE>   7
Mr. Joel Dickson
April 5, 1999
Page 6

12.  Audit Rights

     Upon prior notice, SCWC shall have the right to designate its own employee
     representative(s) or its contracted representative(s) with a certified
     public accounting firm who shall have the right to examine those accounts,
     books, records, or supporting documentation to verify the accuracy of any
     statement, charge, computation or demand made under or pursuant to any
     agreement and related capacity, energy, transmission or other electric
     services agreements. Any such audit(s) shall be at the auditing Party's
     expense and undertaken at responsible times and in conformance with
     generally accepted auditing standards. The IEPI agrees to fully cooperate
     with any such audit(s).

     The right to audit shall extend during the length of any agreement and for
     a period of not more than one (1) year following the month in which
     services were performed. The Parties shall retain all necessary records and
     documentation for the entire length of this audit period.

13.  Control and Payment of Subordinates

     SCWC retains IEPI on an independent contractor basis and not as an
     employee. The personnel performing the services contemplated by this
     agreement on behalf of SCWC shall at all times be under IEPI's exclusive
     direction and control and are not employees of SCWC. IEPI shall pay all
     wages, salaries, and other amounts due such personnel in connection with
     their performance of services under any agreement and as required by law.
     IEPI shall be responsible for all reports and obligations regarding such
     personnel including, but not limited to: social security taxes, income tax
     withholding, unemployment insurance, and worker's compensation insurance.

14.  Fair Employment

     Parties agree not to unlawfully discriminate in its employment practices
     against any employee, applicant for employment, or group of people on the
     basis of race, religion, color, sex, age, physical condition or national
     origin.

15.  Assignment

     No transfer or assignment of all or any part of this Agreement or of any
     rights, benefits, or duties hereunder by any Party shall be effective
     without the prior written consent of the other Party, which consent shall
     not be unreasonably withheld; provided, that this Section 15 shall not
     apply to interests which arise by reason of security agreements

<PAGE>   8
Mr. Joel Dickson
April 5, 1999
Page 7

     heretofore granted or executed by a Party, or to an assignment to the
     successor of a Party by merger or corporate reorganization.

16.  No Dedication of Facilities

     Any undertaking by one Party under any provisions of this Agreement shall
     not constitute the dedication of the system or any portion thereof of such
     Party to the public or to the other Party or any other person or entity,
     and it is understood and agreed that any such undertaking by either Party
     shall cease upon the termination of such Party's obligations under this
     Agreement.

17.  Choice of Laws

     This Agreement shall be governed by and construed in accordance with the
     laws of the State of California, except to the extent preempted by the
     Federal Power Act and the rules and regulations of the FERC.

18.  Binding Effect

     The terms and provisions of this Agreement, and the respective rights and
     obligations hereunder of each Party, shall be binding upon, and inure to
     the benefits of, its successors and permitted assigns.

19.  Non-Waiver of Defaults

     No waiver by either Party of any default of the other Party under this
     Agreement shall operate as a waiver of a future default, whether of a like
     or different character.

20.  Written Amendments

     No modification of the terms and provisions of this Agreement shall be or
     become effective except by written amendment executed by the Parties.

21.  Severability

     Should any provision of this Agreement for any reason be declared invalid
     or unenforceable by final and applicable order of any court or regulatory
     body having jurisdiction, such decision shall not affect the validity of
     the remaining portions, and the remaining portions shall remain in force
     and effect as if this Agreement had been executed without the invalid
<PAGE>   9
Mr. Joel Dickson
April 5, 1999
Page 8

     portion. This Agreement is subject to review by the California Public
     Utilities Commission "CPUC". The Agreement may be terminated if
     disapproved by the CPUC: however, SCWC shall be liable for any economic
     damages to IEPI with respect to any power transactions made under this
     Agreement with IEPI.

22.  Survival

     Any provisions(s) of this Agreement that expressly or by implication comes
     into or remains in force following the termination or expiration of this
     Agreement shall survive the termination or expiration of this Agreement.

     If the foregoing terms are acceptable to SCWC, please sign and return one
     copy of this Agreement. The remaining copy is for your files.

     Sincerely,

     /s/ MARK V. ALLEN
     -----------------------
     Mark V. Allen
     Director, Regional Marketing
     Illinova Energy Partners, Inc.

     Accepted as of this 5 day of April, 1999 for:

     The Southern California Water Company

     /s/ JOEL A. DICKSON
     ------------------------
     Joel A. Dickson

     By:    Mr. Joel Dickson
     Title: Vice President of Customer Service and Operations Support

<PAGE>   10
                                   EXHIBIT A

                         ILLINOVA ENERGY PARTNERS, INC.
                               FERC TARIFF NO. 1

1.   Availability: Illinova Energy Partners, Inc. ("IEPI") makes electric energy
     and capacity available for resale under this Rate Schedule to any
     purchaser.

2.   Applicability: This schedule is applicable to all sales of energy or
     capacity by IEPI not otherwise subject to a particular rate schedule of
     IEPI.

3.   Rates: All sales shall be made at rates established by agreement between
     the purchaser and IEPI.

4.   Other Terms and Conditions: All other terms and conditions shall be
     established by agreement between the purchaser and IEPI.

5.   Affiliate Sales and Purchases Prohibited: No sale or purchase may be made
     pursuant to this Rate Schedule to or from any IEPI affiliate.

6.   Effective Date: This Rate Schedule is effective on and after May 20, 1995.
<PAGE>   11
                             [ILLINOVA LETTERHEAD]

Mr. Raymond P. Juels
Manager of Energy Resources
Southern California Water Company
630 E. Foothill Blvd.
San Dimas, CA 91773

RE:  Illinova Energy Partners, Inc. (IEP) Agreements with Southern California
     Water Company (SCWC) for Electric Power Management Services

Dear Ray:

IEP hereby submits its originals of our three-year Daily Purchasing Agreement.

Please execute both originals for each agreement, keep one for your records and
forward one executed original back to IEP per my attention. I look forward to
our transition meeting at 2:00 p.m. in IEP's Irvine offices on Friday, April 23,
1999.

If you have any questions, please call myself at (801) 568-2126. Thank you again
for your business, and Illinova looks forward to commencing service for you.

Sincerely,

/s/ MARK V. ALLEN

Mark V. Allen
Director, Regional Marketing
<PAGE>   12
                             [ILLINOVA LETTERHEAD]

VIA FACSIMILE

April 5, 1999                               IEP REF# S- S-BEAR VALLEY - SCWC-001
Mr. Joel Dickson
Vice President of Customer Service and Operations Support
Southern California Water Company
630 E. Foothill Blvd.
San Dimas, CA 91773

This letter agreement outlines the terms and conditions of a transaction between
the Southern California Water Company, its Bear Valley Electric Division and
Illinova Energy Partners, Inc. (IEP).

BUYER:              Southern California Water Company

SELLER:             Illinova  Energy Partners, Inc.

PRODUCT:            Firm Energy

TERM:               May 1, 1999 through April 30, 2000.

HOURS:              Monday through Sunday, Hour Ending (HE) 0100 through Hour
                    Ending (HE) 2400, Pacific Prevailing Time (PPT), including
                    NERC Holidays.

AMOUNT:             MW PER HOUR    DAYS    HOURS PER DAY    TOTAL MWh
                    -----------    ----    -------------    ---------
                         12         365          24          105,120

PRICE:              US DOLLARS $28.00/MWh

POINT OF DELIVERY:  Delivered at California PX location take-out points,
                    including Victorville-Lugo midpoint and Vista Substation.

SCHEDULING:         IEP will schedule energy based upon the amounts above. IEP's
                    telephone numbers for real-time coverage of this agreement
                    are (801) 568-2151 and 1-800-500-3260.

CURTAILMENTS:       Curtailments are only permitted for system emergencies due
                    to UNCONTROLLABLE FORCES (unanticipated events that prevent
                    a Party from performing it's obligations at the Delivery
                    Point to deliver or receive energy, which is not within the
                    reasonable control and which by the exercise of all
                    commercial efforts such Party has been unable to overcome or
                    obtain or cause to be obtained substitute performance
                    therefore). Curtailments shall not be made for economic
                    reasons.

DAMAGES:            If SELLER fails to deliver the Amount, where such failure
                    was not excused by uncontrollable forces (as defined under
                    Curtailments) or by Buyer, Seller shall be liable to Buyer
                    for all such energy. The liability shall be calculated as
                    the difference between
<PAGE>   13
April 5, 1999

               1) Buyer's reasonably incurred cost of replacing the comparable
               energy Seller failed to deliver (per megawatt-hour) and 2) the
               PRICE times the total Contract energy not delivered, to the
               extent that the calculation resulted in a positive number.

               If BUYER fails to accept delivery of the Amount, where such
               failure was not excused by uncontrollable forces (as defined
               under Curtailments) or by Seller, Buyer shall be liable to
               Seller for all such energy. The liability shall be calculated as
               the difference between 1) the PRICE and 2) the revenue (per
               megawatt-hour) that Seller receives in selling the capacity and
               energy Buyer failed to accept times the total Contract energy not
               accepted, to the extent that the calculation resulted in a
               positive number. Neither party shall be liable to the other for
               any consequential, incidental, punitive, or special damages for
               failure to take or receive energy in accordance with the
               conditions stated above.

IEP CONTACTS:  Primary Contact                    Secondary Contact
               Gaston Mejia                       Layne Brown
               Short Term Trader                  Director Power Operations
               Phone: (801) 568-2129              Phone: (801) 568-2150

GENERAL TERMS: This confirmation letter is provided pursuant to and in
               accordance with The Illinova-Southern California Water Company
               Enabling Agreement and constitutes part of and is subject to all
               of the terms and provisions of such Agreement. Terms used but
               not defied herein shall have the meanings ascribed to them in
               the Agreement.

BILLING:       Billings and payment shall be in accordance with the terms
               specified in Section 9 of the WSPP Agreement. Information for
               SCWC and IEP are provided below.

               Billings shall be mailed to:
               Southern California Water Company
               630 E. Foothill Blvd.
               San Dimas, CA 91773
               Attention: Mr. Raymond P. Juels

               Payments shall be mailed to:         Payments over $50,000 shall
                                                    be wired to:
               Illinova Energy Partners, Inc.       American National Bank
               6955 Union Park Center, Suite 300    2000 South Naperville Road
               Midvale, UT 84047                    Wheaton, IL 60187
               Attn: Jennifer Hughey                ABA #: 071000770
                                                    Account #: 1818-0752
                                                    For Illinova Energy Partners

ARTICLE II:    DEFAULT AND FINANCIAL RESPONSIBILITY

               Should a party have a reasonable basis to believe that the
               creditworthiness or financial responsibility of the other Party
               has become unsatisfactory at any time during which this
               Agreement is in effect, satisfactory security may be required
               before further deliveries are made. In the event either Party
               shall (i) Make an assignment or any general arrangement for the
               benefit of creditors; (ii) file a petition or otherwise
               commence, authorize, or
<PAGE>   14
April 5, 1999

               acquiesce in the commencement of a proceeding or cause under any
               bankruptcy or similar law for the protection of creditors or
               have such petition filed or proceeding commenced against it;
               (iii) otherwise become bankrupt or insolvent (however
               evidenced); (iv) be unable to pay its debts as they fall due; or
               (v) default in its payment or performance of any obligation to
               the other Party under this Agreement and fail to give adequate
               security, or assurance of, its ability to perform its further
               obligation under this Agreement within forty-eight (48) hours of
               a reasonable request by the other Party, then the other party
               shall have the right, without prior notice, to withhold payment
               or suspend deliveries or terminate this Agreement, in addition
               to any and all other remedies available hereunder or pursuant to
               the law.

If the terms and conditions shown above accurately reflect your understanding
of our agreement, please indicate by signing and returning a facsimile copy of
this Agreement to IEP at (801) 568-2103.

Sincerely,

Illinova Energy Partners                Southern California Water Company

/s/ MARK V. ALLEN                       /s/ JOEL DICKSON
----------------------------------      ---------------------------------------
Mark V. Allen                           Mr. Joel Dickson
Director, Regional Marketing            Vice President of Customer & Operations
                                        Support
<PAGE>   15
                             [ILLINOVA LETTERHEAD]

VIA FACSIMILE
APRIL 7, 1999           IEP REF# S-BEAR VALLEY - SCWC-DAILY PURCHASING AGREEMENT
Mr. Joel Dickson
Vice President of Customer Service and Operations Support
Southern California Water Company
630 E. Foothill Blvd.
San Dimas, CA 91773

This letter agreement outlines the terms and conditions of a transaction
between the Southern California Water Company, its Bear Valley Electric
Division and Illinova Energy Partners, Inc. (IEP).

BUYER:              Southern California Water Company (SCWC)

SELLER:             Illinova Energy Partners, Inc.

PRODUCT:            Daily Energy Purchasing: the total amount of energy
                    required to satisfy SCWC load for Bear Valley Electric
                    during the term of this agreement on a daily, to monthly
                    forward, basis, less any forward purchase made under
                    separate confirmation by SCWC with IEP.

TERM:               May 1, 1999 through April 30, 2002.

HOURS:              Monday through Sunday, Hour Ending (HE) 0100 through Hour
                    Ending (HE) 2400, Pacific Prevailing Time (PPT), including
                    NERC Holidays.

AMOUNT:
<TABLE>
                    <S>            <C>            <C>            <C>
                    VARIES         1096           24             VARIES
</TABLE>

PRICE:              The price for the Product supplied to SCWC will be on a
                    total pass through basis to purchase from various power
                    sources including the California Power Exchange. All fees,
                    charges, including but not limited to ISO ancillary
                    services, PX fees and losses shall be included in the price.

PERFORMANCE:        IEP will be paid monthly based on a Performance Benchmark
                    Incentive Payment, for energy purchased under this
                    agreement, on a daily basis as follows: 40% of the daily
                    savings for taking the positive resultant between [the
                    product total of {the Power Exchange Clearing Price "Day
                    Ahead Zonal Price Constrained "LA 4" (as listed on the
                    calpx.com website), plus the daily purchasing
                    administrative charge for the California Power Exchange,
                    plus the applicable ISO Wheeling Access Charges, plus Grid
                    Management Charges, plus Spin and Non-Spin Charges}
                    multiplied by hourly load during the period in excess of
                    any firm energy purchased from IEP under a separate
                    agreement for the same period] minus IEP's Delivered Cost
                    at the Victorville-Lugo Midpoint. Such calculations of
                    performance shall identify all applicable line items when
                    billed.

<PAGE>   16
April 9, 1999

POINT OF DELIVERY:  Delivered at California PX location take-out points,
                    including Victorville-Lugo midpoint and Vista Substation.

SCHEDULING:         Unless otherwise instructed by SCWC, IEP will schedule
                    energy based upon historical energy usage for the previous
                    year's monthly load adjusted daily for current year
                    representation of common weekend and week day loads. IEP's
                    telephone numbers for real-time coverage of this agreement
                    are (801) 568-2151 and 1-800-500-3260.

CURTAILMENTS:       Curtailments are only permitted for system emergencies due
                    to UNCONTROLLABLE FORCES (unanticipated events that prevent
                    a Party from performing it's obligations at the Delivery
                    Point to deliver or receive energy, which is not within the
                    reasonable control and which by the exercise of all
                    commercial efforts such Party has been unable to overcome or
                    obtain or cause to be obtained substitute performance
                    therefore). Curtailments shall not be made for economic
                    reasons.

DAMAGES:            If SELLER fails to deliver the Amount, where such failure
                    was not excused by uncontrollable forces (as defined under
                    Curtailments) or by Buyer, Seller shall be liable to Buyer
                    for all such energy. The liability shall be calculated as
                    the difference between 1) Buyer's reasonably incurred cost
                    of replacing the comparable energy Seller failed to deliver
                    (per megawatt-hour) and 2) the PRICE times the total
                    Contract energy not delivered, to the extent that the
                    calculation resulted in a positive number.

                    If BUYER fails to accept delivery of the Amount, where such
                    failure was not excused by uncontrollable forces (as
                    defined under Curtailments) or by Seller, Buyer shall be
                    liable to Seller for all such energy. The liability shall
                    be calculated as the difference between 1) the PRICE and 2)
                    the revenue (per megawatt-hour) that Seller receives in
                    selling the capacity and energy Buyer failed to accept
                    times the total Contract energy not accepted, to the extent
                    that the calculation resulted in a positive number. Neither
                    party shall be liable to the other for any consequential,
                    incidental, punitive, or special damages for failure to
                    take or receive energy in accordance with the conditions
                    stated above.

IEP CONTACTS:       Primary Contact               Secondary Contact
                    Gaston Mejia                  Layne Brown
                    Short Term Trader             Director Power Operations
                    Phone: (801) 568-2129         Phone: (801) 568-2150

GENERAL TERMS:      This confirmation letter is provided pursuant to and in
                    accordance with The Illinova-Southern California Water
                    Company Enabling Agreement and constitutes part of and is
                    subject to all of the terms and provisions of such
                    Agreement. Terms used but not defined herein shall have the
                    meanings ascribed to them in the Agreement.

<PAGE>   17
April 9, 1999

BILLING:    Billings and payment shall be in accordance with the terms specified
            in The Illinova-Southern California Water Company Enabling
            Agreement. Information for SCWC and IEP are provided below.

            Billings shall be mailed to:
            Southern California Water Company
            630 E. Foothill Blvd.
            San Dimas, CA 91733
            Attention: Mr. Raymond P. Juels

            Payments shall be mailed to:          Payments over $50,000 shall be
                                                  wired to:
            Illinova Energy Partners, Inc.        American National Bank
            6955 Union Park Center, Suite 300     2000 South Naperville Road
            Midvale, UT 84047                     Wheaton, IL 60187
            Attn: Jennifer Hughey                 ABA#: 071000770
                                                  Account#: 1818-752
                                                  For Illinova Energy Partners

ARTICLE II: DEFAULT AND FINANCIAL RESPONSIBILITY

            Should a party have a reasonable basis to believe that the
            creditworthiness or financial responsibility of the other Party has
            become unsatisfactory at any time during which this Agreement is in
            effect, satisfactory security may be required before further
            deliveries are made. In the event either Party shall (i) Make an
            assignment or any general arrangement for the benefit of creditors;
            (ii) file a petition or otherwise commence, authorize, or acquiesce
            in the commencement of a proceeding or cause under any bankruptcy or
            similar law for the protection of creditors or have such petition
            filed or proceeding commenced against it; (ii) otherwise become
            bankrupt or insolvent (however evidenced); (iv) be unable to pay its
            debts as they fall due; or (v) default in its payment or performance
            of any obligation to the other Party under this agreement and fail
            to give adequate security for or assurance of its ability to perform
            its further obligation under this agreement within forty-eight (48)
            hours of a reasonable request by the other Party, then the other
            Party shall have the right, without prior notice, to withhold or
            suspend deliveries to Party, then the other Party shall have the
            right, without prior notice, to withhold or suspend deliveries or
            terminate this Agreement, in addition to any and all other remedies
            available the hereunder or pursuant to the law.

If the term and conditions shown above accurately reflect your understanding of
our agreement, please indicate by signing and returning a facsimile copy of this
Agreement to IEP at (801) 568-2103.

Sincerely,

Illinova Energy Partners                     Southern California Water Company

/s/ MARK V. ALLEN                            /s/ JOEL DICKSON
----------------------------------           ----------------------------------
Mark V. Allen                                Mr. Joel Dickson
Director, Regional Marketing                 Vice President of Customer &
                                             Operations Support
<PAGE>   18
                             [ILLINOVA LETTERHEAD]

Mr. Joel Dickson
Vice President of Customer Service and Operations Support
Southern California Water Company
630 E. Foothill Blvd.
San Dimas, CA 91773

RE:  SCHEDULING COORDINATION & REAL-TIME SERVICES AGREEMENT -- METERING &
     COMMUNICATIONS

Dear Mr. Dickson:

This represents an amendment to the Scheduling Coordination & Real-Time Services
(Agreement) between Illinova Energy Partners, Inc. (IEP) and the Southern
California Water Company for its Division Bear Valley Electric Services
(Customer) dated April 7, 1999.

Pursuant to Section 8 Metering and Communications of the subject agreement, IEP
is to provide Customer with the proposed costs for metering and communications
prior to billing for such services. Accordingly, IEP has had a few visits to
Bear Valley with one of its Meter Service Providers and designed a metering
interrogation scheme that I believe is better than the prior configuration by
our predecessor. In addition, this considers a permanent installation owned by
Customer. The Exhibit A attached provides you with the detail of such
installation, and the total cost for this service is a one-time charge of
$7,200 (billable in the first month in which the equipment was installed. IEP's
monthly charge for metering interrogation is hereby quoted as $35.00 per month.

If the above pricing meets with your approval, please so indicate by signing
this Agreement in the space provided below and return a faxed copy to my
attention at (801) 568-2103.

Sincerely,

/s/ MARK V. ALLEN
-----------------------
Mark V. Allen
Director, Regional Marketing
California & Desert Southwest

Accepted as of this 13th day of May, 1999, for Southern California Water Company

/s/ JOEL A. DICKSON
-----------------------
Mr. Joel Dickson
Vice President of Customer & Support Services

<PAGE>   19
                             [ILLINOVA LETTERHEAD]

                                                                       EXHIBIT A

                    BEAR VALLEY ELECTRIC SERVICE - METERING
                              CONVERSION PROPOSAL

               DESCRIPTION                                                  QTY

DATA STAR, TYPE D-102,32K, 4-CHANNEL, SOLID STATE PULSE RECORDER - WITH       2
TELEPHONE MODEM

PULSE SPLITTING RELAY - MERCURY WETTED WITH 3 RELAYS INSTALLED - 1 IN,        4
2 OUT

FUSE BLOCKS WITH DIRECT MOUNTING BASE AND TUBULAR SCREWS, SIMILAR OR          2
EQUAL TO BUCHANAN CAT. #342 - INCLUDES TYPE 'KTK' OR 'KLM' FUSES

FASTENERS - CONNECTORS - TERMINALS - COUPLINGS                                1

PROVIDE ALL LABOR NECESSARY TO INSTALL A COMPLETED METERING INSTALLATION     32

VEHICLE MILES TO AND FROM PROJECT                                           400

TECHNICIANS TRAVEL TIME FROM THEIR BASE TO THE JOB SITE AND RETURN            8

COSTS INCURRED FOR PERFORMING A SITE INSPECTION TO DETERMINE COMPONENTS       4
NECESSARY TO COMPLETE PROJECT

PROJECT ENGINEERING AND COMPONENT ACQUISITION                                 3

                                                       TOTAL          $7,200.00
<PAGE>   20

       [DIAGRAM OF SUB-METERING SPECIFICATION FOR "GOLDHILL" SUBSTATION]

<PAGE>   21

        [DIAGRAM OF SUB-METERING SPECIFICATION FOR "HARNISH" SUBSTATION]

<PAGE>   22
                             [ILLINOVA LETTERHEAD]

Mr. Joel Dickson
Vice President of Customer Service and Operations Support
Southern California Water Company
630 E. Foothill Blvd.
San Dimas, CA 91773

RE:  SCHEDULING COORDINATION & REAL-TIME SERVICES AGREEMENT

Dear Mr. Dickson:

This agreement for Scheduling Coordination & Real-Time Services (Agreement)
sets forth the rates, terms, and conditions under which Illinova Energy
Partners, Inc. (Illinova) agrees to provide twenty four (24) hour real-time
services and Schedule Coordination to Southern California Water Company for its
Division Bear Valley Electric Services (Customer). Illinova and Customer are
hereinafter collectively referred to as "Parties" or individually as "Party",
and hereby agree as follows:

1. TERM AND EFFECTIVE DATE

This Agreement shall become effective on Hour Ending 0100 (Pacific Prevailing
Time) May 1, 1999, and shall remain in force and effect until April 30, 2002.

2. SERVICES TO BE PROVIDED BY ILLINOVA

Illinova will provide the following hourly services for Customer:

     Illinova shall act as Scheduling Coordinator, in accordance with the
     requirements of the California Independent System Operator ("ISO") tariff,
     for Customer's loads at associated take-out points.

     Develop Customer's pre-schedules based on load forecasts or load profiles
     provided by Customer, or Illinova under a separate Daily Purchasing
     Agreement dated April 7, 1999, or any applicable Utility Distribution
     Company ("UDC").

     Coordinate pre-schedules with any applicable UDC, Independent System
     Operator ("ISO"), Power Exchange ("PX") and/or other suppliers.

     Maintain Customer's schedules every hour. Each transaction will describe
     the delivery of power from a supplying party's control area (the
     generator), through all intermediate Purchase Sale Entities, to a
     receiving party's control area (load). A full path must be included
     detailing all entities that take title to the energy and all transmission
     paths.

<PAGE>   23

                                                                    CONFIDENTIAL

        Monitor schedules in effect during the term of the Agreement twenty-four
        (24) hours per day.

        Confirm scheduled transactions as required. It is anticipated that
        schedules will be confirmed on a pre-scheduled basis within twenty-four
        (24) hours prior to the transaction. Illinova shall confirm schedule
        start and stop times with each entity Customer is purchasing from and
        delivering to.

        If conditions require a modification to a pre-scheduled transaction,
        Illinova will, as directed, make sales and purchase decisions for
        Customer on a best effort basis to minimize losses, scheduling
        inconsistencies, and imbalances. In the event that such a service is
        requested Illinova will not be held liable for any losses that may be
        incurred due to its marketing transactions.

        Provide Customer an hourly accounting of each day's transactions,
        including any changes to pre-scheduled transactions.

        Use reasonable efforts to resolve any discrepancies with other parties.

3. SERVICES PROVIDED BY CUSTOMER.

        Customer shall furnish Illinova, in a timely manner, with all
        information necessary for Illinova to carry out its responsibilities as
        Scheduling Coordinator in accordance with the ISO tariff, and shall
        carry out all directives from Illinova in performance of its role as
        Scheduling Coordinator in accordance with the ISO tariff.

        If required by Illinova, Customer shall acquire and maintain, throughout
        the term of this agreement, a form and amount of credit protection
        acceptable to Illinova, not to exceed $3,000,000, for the performance of
        this Agreement. This will include any additional charges by Illinova to
        maintain credit for Customer schedules with the ISO.

        By 3:00 PM (Pacific Time) on every normal work day observed by both
        parties, Customer, or Illinova as Customer representative under separate
        Daily Energy Purchasing Agreement dated April 7, 1999, shall provide
        Illinova with an hourly listing of all changes to standard pre-scheduled
        transactions for the following day or days.

        Provide Illinova with a twenty-four (24) hour emergency contact and
        pager number.

                                     Page 2
<PAGE>   24
SCWC/Illinova Scheduling Coordination Contract                      CONFIDENTIAL

4. CHARGES

The charge for the services described above will be billed according to the
following:

4.1  Illinova Charges

          1. Initial  setup charge (one time):                   $7,000.00
             Due and payable upon execution of this Agreement

          2. Monthly Base Fee:                                   $2,500.00

          3. Customer shall pay a Monthly Variable Fee equal to.

             Monthly Variable Fee:                               $0.35/MWH

          4. Monthly Administration and Billing Charge:            $500.00

          5. Illinova Re-marketing fee:                          $0.15/MWH

4.2 Imbalance Fees, Penalties, and Re-marketing

     If Customer's actual energy usage exceeds the forecasted amount, Customer
     shall receive the ex-post price for this excess energy, and if such
     situation is expected to exist for any length of time, and Illinova can
     re-market this excess energy to other Scheduling Coordinators or
     counter-parties, Illinova will inform Customer of such an opportunity, and
     upon Customer concurrence, Illinova will re-market said excess. Customer
     will pay Illinova, the Energy Re-Marketing Fee listed above, for energy
     re-marketed. Customer shall also be responsible for any additional
     penalties or imbalance charges imposed by the ISO for imbalances due to
     Customer's energy usage deviating from the actual monthly energy amount
     defined by the forecast.

4.3 Pass-Through Costs

     Unless specified under a separate power transaction between Customer and
     IEP, Customer shall be responsible for, and shall pay Illinova or any other
     provider of the service as applicable, for all charges imposed by the ISO,
     Automated Power Exchange (APX) and the California Power Exchange ("PX") in
     connection with the service provided under this Agreement, including but
     not limited to, charges for transmission (including Grid Management
     Charges, Grid Operations Charges, Ancillary Services Charges, Imbalance
     Energy Charges, Usage Charges, Wheeling Access Charges, Voltage Support and
     Black Start Charges, and Reliability Must-Run Charges, Losses, or Taxes
     imposed by the ISO), distribution, ancillary services (including costs for
     ancillary services purchased by Illinova from third parties for purpose of
     this Agreement), access charges, PX administration charges, whether such
     charges are billed directly to Customer or are billed to Illinova;
     provided, that Illinova shall be responsible for payment to the ISO of any
     imbalance charges as imposed by the ISO as a result of Illinova's failure
     to deliver energy to the ISO provided to Illinova by Customer. Any such
     imbalance charge for which Illinova is responsible shall be based on the
     difference between (i) the total energy scheduled by

                                     Page 3
<PAGE>   25
SCWC/Illinova Scheduling Coordination Contract                      CONFIDENTIAL

      Illinova to, and received by, the ISO and (ii) Illinova's total customer
      load within the Zone or Take-Out Points, as defined in the ISO tariff,
      where such imbalances occur. Where charges are billed to Illinova by the
      ISO, or PX in respect of service provided to Customer under this Agreement
      and to other scheduling clients, Illinova shall make appropriate
      allocations of such billed amounts to all scheduling clients inclusive of
      Customer.

4.4 Losses

      Illinova shall bill Customer for energy losses provided in accordance with
      delivery of Customer energy under this Agreement based on the hourly
      registrations of energy on the meters installed at the Customer Direct
      Access Account interconnection points, increased by the corresponding
      percentage points to account for losses between the interconnection point
      or points at which Illinova delivers or schedules Customer supplied energy
      deliveries to the ISO Controlled Grid and the Customer interconnection
      points. If the amount of energy scheduled or delivered by Illinova to the
      interconnection point or points on the ISO Controlled Grid does not equal
      the amount of energy registered on the meters at the Customer
      interconnection points plus the appropriate loss factor in an hour, the
      variance shall be reconciled and billed in accordance with Section 7 of
      this Agreement.

7. PAYMENT

Illinova will submit its invoices to Customer on a monthly basis. All billings
to Customer will be sent to:

            Mr. Raymond P. Juels
            Southern California Water Company
            630 E. Foothill Blvd.
            San Dimas, CA 91773

or to such address as Customer may specify by written notice given as provided
herein.

IEP and SCWC will develop an acceptable invoicing format and include quarterly
fuel mix for supply, as can be determined with suppliers. Invoices should
include line items to clearly identify charges herein.

Invoices submitted by Illinova to Customer shall be due and payable 20 days
after the date of the invoice. Customer agrees to pay interest at the rate of
1.5% per month, or the maximum rate as permitted by law, on any invoiced
amounts which are not paid on or before the due date, until the date of payment.

Payments to Illinova shall be           Payments over $50,00 shall be
  mailed to:                              wired to:
Illinova Energy Partners, Inc.          American National Bank
6955 Union Park Center, Suite 300       2000 South Naperville Road
Midvale, UT 84047                       Wheaton, IL 60187
Attn: Jennifer Hughey                   ABA #: 071000770
                                        Account #: 1818-0752
                                        For Illinova Energy Partners account

                                     Page 4

<PAGE>   26
SCWC/Illinova Scheduling Coordination Contract                      CONFIDENTIAL

Illinova hereby represents that its bills will be based upon some estimated
amounts. For example, ISO charges will be billed to Scheduling Coordinators,
such as Illinova, on a quarterly basis. Accordingly, Illinova shall bill, or
credit, for any adjustments to past billings for estimated amounts being
reconciled with actual amounts.

All correspondence with regard to payment shall be made to the same address.

8.  METERING & COMMUNICATION

Customer shall be responsible for the cost of establishing and maintaining
communication equipment necessary to conduct the scheduling coordination
services for energy management pursuant to this agreement. Such costs shall
include meters, monthly communication & maintenance costs and other necessary
equipment. Such costs shall be discussed and agreed to before they are actually
incurred.

9.  AUDIT

Either Party, at its own expense, shall have the right, at all reasonable
times, to review and audit the books, records, documents of the other Party,
directly pertaining to the billing and power delivery data required to
administer this Agreement. The foregoing shall not be construed to permit
either Party to conduct a general audit of the other Party's records.
Information obtained by either Party's representatives in examining the other
Party's applicable records to verify such billings and power delivery data
shall not be disclosed to third parties without prior written consent of the
audited Party, or unless in response to compulsory judicial or regulatory
processes and after giving the other Party as much advance written notice as
possible, with such time not to be less than (15) days. The right to audit
shall extend for a period of one (1) year following the date of each payment.
It will be incumbent upon the Parties to retain all necessary records and
documentation during this audit period.

10. FORCE MAJEURE

Neither Party shall be liable for any delay or failure in performance of any
part of this Agreement (other than obligations to pay money) from any cause
beyond its reasonable control, including but not limited to flood, fire,
lightning, epidemic, quarantine restriction, war, sabotage, act of a public
enemy whether foreign or domestic, earthquake, insurrection, riot, civil
disturbance, strike, work stoppage caused by jurisdictional or similar
disputes, restraint by court order or public authority, action or non-action
by or inability to obtain necessary authorization or approval from any
governmental authority, or failure or inability of the ISO or the UDC to accept
energy from Illinova or to deliver energy to Customer in amounts received from
Illinova, or any combination of these causes, whether affecting the Party or
the Party's suppliers, which by the exercise of due diligence and foresight
such Party could not reasonably have been expected to avoid and which by the
exercise of due diligence the Party has been unable to overcome. The Party
claiming a force majeure condition shall give the other Party such notice of
the condition as is reasonable under the circumstances. Upon notice of the
force majeure condition being provided, the obligations of the Party invoking
the force majeure, to the extent they are affected by the force majeure
condition, shall be suspended during the continuation of such condition and

                                     Page 5

<PAGE>   27
SCWC/Illinova Scheduling Coordination Contract                     CONFIDENTIAL

shall, so far as is possible, be remedied with all reasonable dispatch.

11.  INDEMNIFICATION

11.1  To the fullest extent permitted by law, and subject to the limitations
set forth in Section 21, "Limitation of Liability to Amount of
Direct Damages", of this Agreement, each Party (the "Indemnifying Party") shall
indemnify and hold harmless the other Party, its parent company or companies
and affiliates, and their shareholders, officers, directors, employees, agents,
servants, and assigns (collectively, the "Indemnified Party"), and at the
Indemnified Party's option, the Indemnifying Party shall defend the Indemnified
Party from and against any and all claims and liabilities for losses, expenses,
damage to property, injury to or death of any person, including, but not
limited to, the Indemnified Party's employees and its parent company's and
affiliates' employees, subcontractors and subcontractors' employees, or any
other liability incurred by the Indemnified Party, which shall include
reasonable attorney fees, caused wholly or in part by any negligent, grossly
negligent or willful act or omission by the Indemnifying Party, its officers,
directors, employees, agents or assigns arising out of this Agreement, except
to the extent such claim, liability, loss, expense, damage to property, injury
or death is caused by any negligent, grossly negligent or willful act or
omission of the Indemnified Party.

11.2  If any claim covered by Section 11.1 is brought against the Indemnified
Party, then the Indemnifying Party shall be entitled to participate in, and
unless in the opinion of counsel for the Indemnified Party a conflict of
interest between the Parties may exist with respect to such claim, assume the
defense of such claim, with counsel reasonably acceptable to the Indemnified
Party. Even if the Indemnifying Party assumes the defense of the Indemnified
Party pursuant to this subsection b, the Indemnified Party, at its sole option,
may participate in the defense, at its own expense, with counsel of its own
choice without relieving the Indemnifying Party of any of its obligations
hereunder.

11.3  The Indemnifying Party's obligation to indemnify under this Section 10
shall survive termination of this Agreement, and shall not be limited in any
way by any limitation on the amount or type of damages, compensation or
benefits payable by or for the Indemnifying Party under any statutory scheme,
including, without limitation, under any worker's compensation acts, disability
benefit acts or other employee benefit acts.

12.  GOVERNING LAW

This Agreement shall be governed by, and interpreted and construed in
accordance with, the laws of the State of California, and shall exclude any
choice of law rules that direct the application of the laws of another
jurisdiction, irrespective of the place or places of execution or of the order
in which signatures of the parties are affixed or of the place or places of
performance; provided, that any provision of this Agreement that is subject to
the jurisdiction of the Federal Energy Regulatory Commission ("FERC") shall be
governed by, and interpreted and construed in

                                     Page 6
<PAGE>   28
SCWC/Illinova Scheduling Coordination Contract                     CONFIDENTIAL

accordance with, the regulations of the FERC and such other laws of the United
States as are applicable to that provision.

13.  AMENDMENT

This Agreement may be modified only upon mutual written agreement of the
Parties.

14.  WAIVER

Any waiver at any time by either Party with respect to any of its rights under
this Agreement or the failure of a Party to insist on the performance by the
other Party of an obligation under this Agreement shall not be deemed an
amendment or modification of this Agreement and shall not be deemed a waiver of
such right, or acquiescence to non-performance of such obligation, during the
remainder of the term of this Agreement.

15.  PROPRIETARY INFORMATION

Illinova considers pricing information contained in this Agreement to be
proprietary and confidential. Disclosure of any pricing information contained
in this Agreement shall require the prior written consent of Illinova. Customer
considers all information provided to Illinova under Section 3 of this
Agreement and all information that Illinova obtains in carrying out the services
described in Section 2 of this Agreement to be proprietary and confidential.
Disclosure or use of any of the aforementioned information contained in this
Agreement other than to carry out the services outlined in Section 2 of this
Agreement shall require the prior written consent of Customer.

16.  ASSIGNMENT AND DELEGATION

     16.1  Neither Party shall assign any of its rights or obligations under
           this Agreement except with the prior written consent of the other
           Party, which consent shall not be unreasonably withheld or delayed.
           No assignment of any right or obligation under this Agreement shall
           relieve the assigning Party of any of its obligations under this
           Agreement until such obligations have been assumed in writing by the
           assignee. When duly assigned in accordance with the preceding two
           sentences, any obligation so assigned shall be binding upon the
           assignees, and the assignor shall be relieved of its rights and
           obligations that have been duly assigned. Any assignment in violation
           of this Section 16.1 shall be void.

     16.2  Notwithstanding the provisions of subsection 16.1, either Party may
           delegate any of its duties under this Agreement to an agent or
           subcontractor, provided that the delegating Party shall remain fully
           responsible for performance of any delegated duties, shall serve as
           the point of contact between the delegatee and the other Party, and
           shall provide the other Party with 30 days prior written notice of
           any such delegation, which notice shall contain such information
           about the delegatee as the other Party shall reasonably require.

                                     Page 7
<PAGE>   29
SCWC/Illinova Scheduling Coordination Contract                     CONFIDENTIAL

17. AUTHORITY TO EXECUTE AGREEMENT

Each Party acknowledges that it has read this Agreement and that the Party
fully understands its rights and obligations under this Agreement. Each Party
further acknowledges that it has had an opportunity to consult with an attorney
of its own choosing to explain the terms of this Agreement and the consequences
of signing it.

Each Party represents and warrants (i) that it has the full power and authority
to execute and deliver this Agreement and to perform its terms, (ii) that
execution, delivery and performance of this Agreement have been duly authorized
by all necessary corporate or other action by such Party, and do not conflict
with the Party's articles of incorporation or by-laws, or cause a default under
any contract or other agreement to which such Party is subject, and (iii) that
this Agreement constitutes such Party's legal, valid and binding obligation and
is enforceable against such Party in accordance with its terms. Each person
executing this Agreement for a Party represents and warrants that he or she has
the authority to bind the Party on whose behalf he or she is executing this
Agreement.

18. CONSTRUCTION SHALL NOT BE FOR OR AGAINST DRAFTER

No provision of this Agreement shall be construed or interpreted for or against
any Party because that Party drafted or caused its legal representative to
draft the provision.

19. DISPUTE RESOLUTION PROCEDURES

Any dispute between the Parties concerning the provisions, interpretation or
implementation of this Agreement which remains unresolved for a period of six
months shall, upon written notice given by one Party to the other Party, be
forwarded to Customer's Chief Financial Officer and to Illinova's Vice
President of the Western Region ("Executive" or "Executives"), who shall meet
within 30 days following the date of the notice, or at such other time as
agreed upon by the Executives, to discuss and attempt to resolve the dispute.
Any resolution agreed upon by the Executives shall be binding upon the Parties.
A resolution reached by the Executives shall not be effective until set forth
in a writing signed by both Executives. If the Executives cannot resolve the
dispute within 30 days following their initial meeting either Party may pursue
any remedy available to the Party at law, in equity or under this Agreement to
resolve the dispute. If the title of either Executive position referred to in
this Section 19 is eliminated or changed, or if this Agreement is assigned
pursuant to Section 16, the Party subject to the change, or the assignee of
such Party, shall substitute a comparable executive for the purpose of this
Section 19 and shall promptly notify the other Party in writing.

Each Party shall bear its own attorney fees and other costs incurred in
connection with any dispute, except as otherwise (i) agreed by the Parties in
the resolution of the dispute, (ii) ordered

                                     Page 8
<PAGE>   30
SCWC/Illinova Scheduling Coordination Contract                     CONFIDENTIAL

by a court or administrative agency of competent jurisdiction, or (iii)
determined by the arbitrator or other neutral in any alternative dispute
resolution process used by the Parties, in accordance with the rules and
procedures adopted and agreed to by the Parties for purposes of that process.

20. ENTIRE AGREEMENT

This Agreement, including all attachments hereto and agreements contemplated
herein, constitutes the entire agreement and understanding between the Parties
as to the subject matter of this Agreement, and merges and supersedes all prior
oral or written agreements, understandings, commitments, representations and
discussions between the Parties. The Agreement may be amended, modified or
supplemented only in accordance with Section 13 or Section 16 of this Agreement.

21. LIMITATION OF LIABILITY TO AMOUNT OF DIRECT DAMAGES

Each Party's liability to the other Party for any loss, cost, claim, injury,
liability or expense, including any reasonable attorney fees to which the other
Party is entitled, relating to or arising from an act or omission in the Party's
performance of this Agreement, shall be limited to the amount of direct damage
actually incurred. In no event shall either Party be liable to the other Party
for any indirect, special, consequential or punitive damages of any kind
whatsoever, whether in contract, tort or strict liability.

22. LIMITATION ON TIME TO MAKE CLAIMS

With the exception of claims for indemnity under Section 11, "Indemnification",
of this Agreement, no claims may be made under this Agreement, or submitted to
dispute resolution pursuant to Section 19, "Dispute Resolution Procedures", of
this Agreement, more than three years after the date the claim accrued. The
Parties agree that failure to make any claim falling within the scope of this
Section 22 within three years shall bar any cause of action. Provided, however,
that claims for indemnity under Section 11, "Indemnification", of this Agreement
shall not be limited by the three year limitation of this Section, but shall be
governed by the applicable statute of limitations.

23. NOTICES AND DEMANDS

Unless another means of notice is expressly provided for in another Section of
this Agreement, all notices and demands given or made by a Party under this
Agreement shall be sent by the sending Party by facsimile with a copy sent, by
United States Mail, to the designated recipient of the receiving Party at the
addresses set forth below.

to SCWC:
     Southern California Water Company
     630 E. Foothill Blvd.
     San Dimas, CA 91773

<PAGE>   31
SCWC/Illinova Scheduling Coordination Contract                      CONFIDENTIAL

     Attention: Mr. Raymond P. Juels

If to Illinova:

     Illinova Power Marketing, Inc.
     Attention: Jennifer Hughey, Controller
     Union Park Center, Suite 300
     Midvale, Utah 84047
     Fax No.: (801) 568-2104

A Party may, by notice to the other Party provided in accordance with this
Section, change the name of designated recipient, address, and facsimile number
to which notices and demands shall thereafter be sent. Any notice provided
pursuant to this Section shall be effective upon confirmation of receipt of the
sending party's facsimile, if between the hours of 8:00 A.M. and 4:00 P.M.
Pacific Time, and at 8:00 A.M. Pacific Time on the next business day if at any
other time.

24. REMEDIES CUMULATIVE

Except as expressly provided otherwise in this Agreement, all remedies in this
Agreement, including the right of termination, are cumulative, and use of any
remedy shall not preclude any other remedy in this Agreement.

25. SECTION HEADINGS

The headings placed at the start of each Section of this Agreement are solely
for the convenience of reference of the Parties, are not and shall not be deemed
to be a part of this Agreement, shall in no way define, modify, or restrict any
of the terms or provisions of this Agreement, and shall not be used in any
manner in the interpretation or construction of this Agreement.

26. TAXES

Unless expressly provided otherwise in the Section or Sections of this Agreement
establishing charges, the charge or charges specified in this Agreement for
services and products provided hereunder do not include any amounts in respect
of any State or local taxes that are assessed, imposed or owing as a function of
the revenues, billings, purchase price, deliveries or usage under this
Agreement. Illinova shall add the amount of any such taxes that are applicable
to services or products for which Illinova is rendering an invoice to Customer
to the amount of the billing stated on such invoice, with such amount to be
calculated at the applicable rate or rates of tax. Customer shall be responsible
for payment of any such taxes, and for the filing of returns, with respect to
any tax not added to Customer's invoice by Illinova. Customer shall also be
responsible to pay any penalties, interest or other charges resulting from
Customer's failure to timely pay any such tax, or resulting from Illinova's
failure to timely pay any such tax due to Customer's failure to timely provide
Illinova with information necessary to determine or compute such tax or file a
return.

                                    Page 10

<PAGE>   32
SCWC/Illinova Scheduling Coordination Contract                     CONFIDENTIAL

27. THIRD-PARTY BENEFICIARIES

The provisions of this Agreement are for the benefit of the Parties and not for
any other person or third party beneficiary. The provisions of this Agreement
shall not impart rights enforceable by any person, firm or organization other
than a Party, or a successor or assignee of a Party, to this Agreement.

28. SEVERABILITY

Should any provision of this Agreement for any reason be declared invalid or
unenforceable by final and applicable order of any court or regulatory body
having jurisdiction, such decision shall not affect the validity of the
remaining portions, and the remaining portions shall remain in force and effect
as if this Agreement had been executed without the invalid portion. This
Agreement is subject to review by the California Public Utilities Commission
"CPUC". The Agreement may be terminated if disapproved by the CPUC: however,
SCWC shall be liable for any economic damages to IEP with respect to any power
transactions made or service cost incurred under this Agreement with IEP.

29. TIME OF ESSENCE

The Parties agree that time is of the essence for all portions of this
Agreement.

If the above accurately reflects your understanding of the agreement reached by
representatives of Illinova and Customer, please so indicate by signing both
originals of this Agreement in the space provided below and return one fully
executed original to me.

Sincerely,

/s/ MARK V. ALLEN
-----------------------
Mark V. Allen
Director, Regional Marketing
California & Desert Southwest

Accepted as of this 16th day of April, 1999, for Southern California Water
Company

/s/ JOEL DICKSON
-----------------------
Mr. Joel Dickson
Vice President of Customer & Support Services

                                    Page 11<PAGE>   1
                                                                   EXHIBIT 10.14

               AMENDED AND RESTATED CHANGE IN CONTROL AGREEMENTS
                     BETWEEN AMERICAN STATES WATER COMPANY,
           SOUTHERN CALIFORNIA WATER COMPANY AND CERTAIN EXECUTIVES,
                          DATED AS OF OCTOBER 25, 1999

<PAGE>   2

                AMENDED AND RESTATED CHANGE-IN-CONTROL AGREEMENT

      This Amended and Restated Change-in-Control Agreement (the "Agreement") is
dated as of October 25, 1999, is entered into by and among McClellan Harris III
(the "Executive"), American States Water Company (the "Company") and its wholly
owned subsidiary, Southern California Water Company, a California corporation
("SCW"), and amends and restates in its entirety the Change-in-Control Agreement
dated as of October 27, 1998 among the Executive, the Company and SCW.

                                    RECITALS

      The Company considers it essential to the best interest of the Company and
its shareholders that the Executive be encouraged to remain with the Company and
SCW and continue to devote full attention to the Company's business
notwithstanding the possibility, threat or occurrence of a Change in Control (as
defined in Section 3). The Company believes that it is in the best interest of
the Company and its shareholders to reinforce and encourage the continued
attention and dedication of the Executive and to diminish inevitable
distractions arising from the possibility of a Change in Control. Accordingly,
to assure the Company that it will have the Executive's undivided attention and
services notwithstanding the possibility, threat or occurrence of a Change in
Control, and to induce the Executive to remain in the employ of the Company and
SCW, and for other good and valuable consideration, the Board of Directors of
the Company and SCW has, at the recommendation of the Company's Compensation
Committee, caused the Company and SCW to enter into this Agreement.

<PAGE>   3

                              TERMS AND CONDITIONS

      The Executive, the Company and SCW hereby agree to the following terms and
conditions:

      1.    TERM OF AGREEMENT

            If a Change in Control (as defined in Section 3) occurs on or before
the expiration date of this Agreement and while the Executive is still an
employee of the Company or SCW, then this Agreement will continue in effect for
two years from the date of such Change in Control and, if the Executive's
employment with the Company or SCW is terminated within such two-year period,
this Agreement shall thereafter continue in effect until all of the obligations
of the Company and SCW under this Agreement shall have been fulfilled. If no
Change in Control occurs on or before December 31, 2000, this Agreement shall
expire; provided, however that this Agreement shall be automatically extended
for an additional two years to December 31, 2002 if (i) a plan or agreement for
a Change in Control has been approved by the Board of Directors of the Company
or SCW on or before the expiration date, or (ii) the Company and SCW have not
delivered to you or you shall have not delivered to the Company and SCW written
notice at least 60 days prior to the expiration date that such expiration date
shall not be so extended. This Agreement shall continue to be automatically
extended for an additional two-year period and each succeeding two-year period
if a plan or agreement for a Change in Control has been approved by the Board of
Directors of the Company or SCW or the Company, SCW or you have failed to give
notice by the time and in the manner described in this Section 1.

                                      -2-
<PAGE>   4

      2.    CHANGE IN CONTROL DATE

            The "Change in Control Date" shall mean the first date during the
term of this Agreement on which a Change in Control (as defined in Section 3)
occurs; provided, however, that if a Change in Control occurs and if the
Executive's employment with the Company or SCW is terminated after approval by
the Board of Directors of the Company or SCW of a plan or agreement for a Change
in Control but prior to the date on which the Change in Control occurs, the
"Change in Control Date" shall mean the date immediately preceding the date of
such termination.

      3.    CHANGE IN CONTROL

            A "Change in Control" shall mean any of the following events:

            (a)   the dissolution or liquidation of either the Company or SCW,
unless its business is continued by another entity in which holders of the
Company's voting securities immediately before the event own, either directly or
indirectly, more than 50% of the continuing entity's voting securities
immediately after the event;

            (b)   any sale, lease, exchange or other transfer (in one or a
series of transactions) of all or substantially all of the assets of either the
Company or SCW, unless its business is continued by another entity in which
holders of the Company's voting securities immediately before the event own,
either directly or indirectly, more than 50% of the continuing entity's voting
securities immediately after the event;

                                      -3-
<PAGE>   5

            (c)   any reorganization or merger of the Company or SCW, unless the
holders of the Company's voting securities immediately before the event own,
either directly or indirectly, more than 50% of the continuing or surviving
entity's voting securities immediately after the event;

            (d)   an acquisition by any person, entity or group acting in
concert of more than 50% of the voting securities of the Company or SCW, unless
the holders of the Company's voting securities immediately before the event own,
either directly or indirectly, more than 50% of the acquirer's voting securities
immediately after the acquisition; or

            (e)   a change of one-half or more of the members of the Board of
Directors of the Company or SCW within a twelve-month period, unless the
election or nomination for election by shareholders of new directors within such
period constituting a majority of the applicable Board was approved by the vote
of at least two-thirds of the directors then still in office who were in office
at the beginning of the twelve-month period.

      4.    EFFECTIVE PERIOD

            For the purpose of this Agreement, the "Effective Period" is the
period commencing on the Change in Control Date and ending on the date this
Agreement terminates.

      5.    TERMINATION OF EMPLOYMENT

            (a)   Death or Disability: The Executive's employment shall
terminate automatically upon the Executive's death. If the Disability (as
defined below) of the Executive occurs during the Effective Period, the Company
or SCW may give the Executive written notice of their intention to terminate the
Executive's employment. In such event, the Executive's employment with the
Company or SCW shall terminate effective on the 30th day after receipt of

                                      -4-
<PAGE>   6

such notice by the Executive (the "Disability Effective Date"), provided that,
within the 30 days after such receipt, the Executive shall not have returned to
full-time performance of his or her duties. For purposes of this Agreement,
"Disability" shall mean the absence of the Executive from his or her duties with
the Company or SCW on a full-time basis for 180 consecutive business days as a
result of a physical or mental condition which prevents the Executive from
performing the Executive's normal duties of employment and which is (i)
determined to be total and permanent by a physician selected by the Company or
SCW or their insurers and acceptable to the Executive or the Executive's legal
representative and/or (ii) entitles the Executive to the payment of long-term
disability benefits from the Company's or SCW's long-term disability plan
commencing no later than the Disability Effective Date.

            (b)   Cause: The Company or SCW may terminate the Executive's
employment other than for Cause or Disability during the Effective Period as
provided in Section 6(a). The Company or SCW may also terminate the Executive's
employment during the Effective Period for Cause. For purposes of this
Agreement, "Cause" shall be limited to the following:

                  (i)   the Executive's failure to render services to the
            Company or SCW where such failure amounts to gross neglect or gross
            misconduct of the Executive's responsibility and duties,

                  (ii)  the Executive's commission of an act of fraud or
            dishonesty against the Company or any affiliate of the Company, or

                  (iii) the Executive's conviction of a felony or other crime
            involving moral turpitude.

                                      -5-
<PAGE>   7

            (c)   Good Reason: The Executive's employment may be terminated by
the Executive during the Effective Period for Good Reason. For purposes of this
Agreement, "Good Reason" shall mean:

                  (i)   the assignment to the Executive of any duties
            inconsistent in any respect with the Executive's position (including
            status, offices, titles and reporting requirements), authority,
            duties or responsibilities as in effect on the Change in Control
            Date, or any other action by the Company or SCW which results in a
            diminution in such position, authority, duties or responsibilities,
            excluding for this purpose an isolated, insubstantial and
            inadvertent action not taken in bad faith and which is remedied by
            the Company or SCW, as the case may be, promptly after receipt of
            notice thereof given by the Executive;

                  (ii)  any failure by the Company or SCW to reappoint the
            Executive to a position held by the Executive on the Change in
            Control Date, except as a result of the termination of the
            Executive's employment by the Company or SCW for Cause or
            Disability, the death of the Executive, or the termination of the
            Executive's employment by the Executive other than for Good Reason;

                  (iii) reduction by the Company or SCW in the Executive's base
            salary as in effect on the date hereof or as the same may be
            increased from time-to-time;

                  (iv)  the taking of any action by the Company or SCW
            (including the elimination of benefit plans without providing
            substitutes therefore or the reduction of the Executive's benefits
            thereunder) that would substantially diminish the aggregate value of
            the Executive's incentive awards and other fringe

                                      -6-
<PAGE>   8

            benefits including the executive benefits and perquisites from the
            levels in effect prior to the Change in Control Date;

                  (v)   the Company's or SCW's requiring the Executive to be
            based at any office or location which increases the distance from
            the Executive's home to the office location by more than 35 miles
            from the distance in effect as of the Change in Control Date;

                  (vi)  any failure by the Company or SCW to comply with and
            satisfy Section 11(c) of this Agreement.

      6.    OBLIGATIONS OF THE COMPANY UPON TERMINATION

            (a)   Good Reason, Other Than for Cause or Disability: If the
Company or SCW shall terminate the Executive's employment other than for Cause
or Disability during the Effective Period, or the Executive shall terminate
employment for Good Reason during the Effective Period, the Company and SCW
agrees, subject to Section 8, to make the payments and provide the benefits
described below:

                  (i)   The Company and/or SCW shall pay to the Executive in a
            cash lump sum within 10 days from the date of the Executive's
            termination of employment an amount equal to the product of (A) and
            (B), where (A) is 2.99 and (B) is the Executive's annual base salary
            at the highest of the rate in effect at any time during the three
            years preceding the date of termination.

                  (ii)  The Company and/or SCW shall also pay to the Executive
            in a cash lump sum within 10 days from the date of termination an
            amount equal to the sum of (A) the Executive's base salary through
            the date of termination, plus (B) any

                                      -7-
<PAGE>   9

            compensation previously deferred by the Executive (together with any
            accrued earnings or interest thereon), plus (C) any accrued vacation
            pay, in each case to the extent not theretofore paid (the amounts
            referred to in this paragraph (ii) are hereinafter referred to as
            the "Accrued Obligations").

                  (iii) The Company and/or SCW shall also pay to the Executive
            in a cash lump sum within 10 days from the date of termination an
            amount equal to the excess of (A) over (B), where (A) is equal to
            the single sum actuarial equivalent of what would be the Executive's
            accrued benefits under the terms of the Southern California Water
            Company Pension Plan (or any successor thereto), including any
            supplemental retirement plan providing additional pension benefits,
            (hereinafter together referred to as the "Pension Plan") at the time
            of the Executive's termination of employment, without regard to
            whether such benefits are "vested" thereunder, if the Executive were
            credited with an additional two years of continuous service after
            the termination of Executive's employment with the Company or SCW at
            the Executive's highest annual rate of compensation covered by such
            Pension Plan within the three years preceding the date of the
            termination of the Executive's employment with the Company or SCW
            and (B) is equal to the single sum actuarial equivalent of the
            Executive's accrued benefits under the Pension Plan at the time of
            the Executive's termination of employment. The payment under this
            paragraph (iii) shall not extinguish any rights the Executive has to
            benefits under the Pension Plan. For purposes of this paragraph,
            "actuarial equivalent" shall be determined using the actuarial
            assumptions used under the

                                      -8-
<PAGE>   10

            Pension Plan for determining the actuarial equivalence of different
            annuity forms of benefits. In no event shall the additional two
            years of continuous service referred to above cause the Executive to
            be deemed to be older than the Executive's actual age for any
            purpose under this Agreement.

                  (iv)  For two years after the Executive's date of termination,
            or such longer period as may be provided by the terms of the
            appropriate plan, program, practice or policy, the Company and SCW
            shall continue to provide welfare benefits and fringe benefits and
            other perquisites to the Executive and/or the Executive's family at
            least equal to those which would have been provided to them if the
            Executive's employment had not been terminated (in accordance with
            the most favorable plans, practices, programs or policies of the
            Company and its affiliates applicable generally to other peer
            executives and their families immediately preceding the date of the
            Executive's termination of employment); provided, however, that if
            the Executive becomes employed by another employer and is eligible
            to receive medical or other welfare benefits under another
            employer-provided plan, the medical and other welfare benefits
            described herein shall be secondary to those provided under such
            other plan during such applicable period of eligibility. For
            purposes of determining eligibility (but not the time of
            commencement of benefits) of the Executive for any retiree benefits
            pursuant to such plans, practices, programs and policies, the
            Executive shall be considered to have remained employed until two
            years after the date of termination of employment and to have
            retired on the last day of such period. Following the

                                      -9-
<PAGE>   11

            period of continued benefits referred to in this subsection, the
            Executive and the Executive's family shall be given the right
            provided in Section 4980B of the Internal Revenue Code of 1986 (the
            "Code") to elect to continue benefits in all group medical plans. In
            the event that the Executive's participation in any of the plans,
            programs, practices or policies of the Company or SCW referred to in
            this subsection is barred by the terms of such plans, programs,
            practices or policies, the Company and/or SCW shall provide the
            Executive with benefits substantially similar to those which the
            Executive would be entitled as a participant in such plans,
            programs, practices or policies. At the end of the period of
            coverage, the Executive shall have the option to have assigned to
            the Executive, at no cost and with no apportionment of prepaid
            premiums, any assignable insurance policy owned by the Company or
            SCW and relating specifically to the Executive.

                  (v)   The Company and/or SCW shall enable the Executive to
            purchase, at the end of the Effective Period, the automobile, if
            any, provided by the Company and/or SCW for the Executive's use at
            the time of the Executive's termination of employment at the
            wholesale value of such automobile at such time, as shown in the
            current addition of the National Auto Research Publication Blue
            Book. At the Executive's election, the Executive may retain any
            existing club memberships of the Executive purchased by the Company
            or SCW upon reimbursement to the Company or SCW, as the case may be,
            of any membership costs paid by the Company or SCW.

                                      -10-
<PAGE>   12

                  (vi)  To the extent not theretofore paid or provided, the
            Company and/or SCW shall timely pay or provide the Executive any
            other amounts or benefits required to be paid or provided or which
            the Executive is eligible to receive under any plan, program,
            policy, practice, contract or agreement of the Company and its
            affiliates (such other amounts and benefits being hereinafter
            referred to as "Other Benefits") in accordance with the terms of
            such plan, program, policy, practice, contract or agreement.

                  (vii) The Executive shall be entitled to interest on any
            payments not paid on a timely basis as provided in this Section 6(a)
            at the applicable Federal Rate provided for in Section 7872(f)(2)(A)
            of the Code.

            (b)   Death: If the Executive's employment is terminated by reason
of the Executive's death during the Effective Period, this Agreement shall
terminate without further obligations to the Executive's legal representatives
under this Agreement, other than for payment of Accrued Obligations and the
timely payment or provision of Other Benefits. Accrued Obligations shall be paid
to the Executive's estate or beneficiary, as applicable, in a cash lump sum
within 10 days of the date of the Executive's death.

            (c)   Disability: If the Executive's employment is terminated by
reason of the Executive's Disability during the Effective Period, this Agreement
shall terminate without further obligations to the Executive, other than for
payment of Accrued Obligations and the timely payment or provision of Other
Benefits. Accrued Obligations shall be paid to the Executive in a cash lump sum
within 30 days of the Executive's termination of employment.

                                      -11-
<PAGE>   13

            (d)   Cause, Other than for Good Reason: If the Executive's
employment shall be terminated for Cause during the Effective Period or, if the
Executive voluntarily terminates employment during the Effective Period,
excluding a termination for Good Reason, this Agreement shall terminate without
further obligations to the Executive, other than for Accrued Obligations and any
benefits payable to Executive under a plan, policy, practice, etc., referred to
in Section 7 below. Accrued Obligations shall be paid to the Executive in a cash
lump sum within 60 days of the Executive's termination of employment.

      7.    NON-EXCLUSIVITY OF RIGHTS

            Subject to Section 8, nothing in this Agreement shall prevent or
limit the Executive's continuing or future participation in any plan, program,
policy or practice provided by the Company or any of its affiliates and for
which the Executive may qualify, nor, subject to Sections 8 and 20, shall
anything herein limit or otherwise affect such rights as the Executive may have
under any contract or agreement with the Company or any of its affiliates.
Amounts which are vested benefits or which the Executive is otherwise entitled
to receive under any plan, policy, practice, program, contract or agreement with
the Company or any of its affiliates at or subsequent to the date of termination
of the Executive's employment shall be payable in accordance with such plan,
policy, practice, program, contract or agreement except as explicitly modified
by this Agreement.

      8.    LIMITATION ON BENEFITS

            Notwithstanding anything in this Agreement to the contrary, if any
payments or benefits to be made to or for the Executive's benefit, whether
pursuant to this Agreement or otherwise, whether by the Company, SCW or another
entity or person, would not be deductible

                                      -12-
<PAGE>   14

by the Company or SCW due to limitations imposed by Section 162(m) of the Code,
then such payments or benefits shall be deferred to the extent necessary until
such time as such payments would be deductible under Section 162(m) of the Code.
Either the Company, SCW or the Executive may request a determination as to
whether any payments would be subject to limitations on deductibility under
Section 162(m) of the Code and, of so requested, such determination shall be
made by independent legal counsel selected by the Company or SCW and approved by
the Executive. Payment may be delayed pending any such determination, provided
that the Executive shall be entitled to interest on any delayed payment at the
applicable Federal Rate provided for in Section 7872(f)(2)(A) of the Code. The
Executive shall also be entitled to interest on any payments deferred as a
result of the limitations on deductibility under Section 162(m) of the Code at
the applicable Federal Rate provided for in Section 7872(f)(2)(A) of the Code.

      9.    PARACHUTE PAYMENTS

            (a)   Gross-Up Payment. In the event that any payment or
distribution by the Company or SCW to or for the benefit of the Executive
(whether paid or payable or distributed or distributable pursuant to the terms
of this Agreement or otherwise, but determined without regard to any additional
payments under this Section 9(a)) (a "Payment") is determined to be subject to
the excise tax imposed by Section 4999 of the Code, or any interest or penalties
are incurred by the Executive with respect to such excise tax (such excise tax,
together with any such interest and penalties, are hereinafter collectively
referred to as the "Excise Tax"), then the Company and SCW shall pay to the
Executive an additional payment (a "Gross-Up Payment") in

                                      -13-
<PAGE>   15

an amount such that after payment by Executive of all taxes (including any
interest or penalties imposed with respect thereto) and Excise Tax imposed upon
the Gross-Up Payment, Executive retains an amount of the Gross-Up Payment equal
to the Excise Tax imposed upon such Payments.

            (b)   Accounting Firm. Subject to the provisions of Section 9(c),
all determinations required to be made under this Section 9, including whether
and when a Gross-Up Payment is required and the amount of such Gross-Up Payment
and the assumptions to be utilized in arriving at such determination, shall be
made by Arthur Andersen LLP or such other certified public accounting firm as
may be designated by Executive and which is satisfactory to the Company and SCW
(the "Accounting Firm"), which shall provide detailed supporting calculations
both to the Company and SCW and to Executive within 15 business days after such
determinations are requested by Executive, the Company or SCW. All fees and
expenses of the Accounting Form shall be borne solely by the Company and SCW.
The Company and SCW shall be jointly and severally obligated to pay any Gross-Up
Payment, as determined pursuant to this Section 9(b), to Executive within five
days after the receipt by the Company and/or SCW of the Accounting Firm's
determination. Any determination by the Accounting Firm shall be final and
binding on the Company, SCW and the Executive. As a result of the uncertainty in
the application of Section 4999 of the Code at the time of the initial
determination by the Accounting Firm hereunder, it is possible that Gross-Up
Payments which will not have been made by the Company and/or SCW should have
been made (an "Underpayment"), consistent with the calculations required to be
made hereunder. In the event that the Company and SCW exhausts its remedies
pursuant to Section 9(c) and Executive thereafter is required to make a payment
of

                                      -14-
<PAGE>   16

any Excise Tax, the Accounting Firm shall determine the amount of the
Underpayment that has occurred and the Company and SCW shall be jointly and
severally obligated to pay any such Underpayment promptly to or for the benefit
of Executive.

            (c)   Internal Revenue Service Claims. Executive shall notify the
Company and SCW in writing of any claim by the Internal Revenue Service that, if
successful, would require the payment by the Company and/or SCW of a Gross-Up
Payment. Executive shall give such notice as soon as practicable but no later
than ten business days after Executive is informed in writing of such claim and
shall apprise the Company and SCW of the nature of such claim, and the date on
which such claim is requested to be paid. Executive shall not pay such claim
prior to the expiration of the 30-day period following the date on which it
gives such notice to the Company and SCW (or such shorter period ending on the
date that any payment of taxes with respect to such claim is due). If the
Company or SCW notifies Executive in writing prior to the expiration of such
period that it desires to contest such claim, Executive shall:

                  (i)   Give the Company and SCW any information reasonably
            requested by either of them relating to such claim,

                  (ii)  Take such action in connection with contesting such
            claim as the Company or SCW shall reasonably request in writing from
            time to time, including, without limitation, accepting legal
            representation with respect to such claim by an attorney reasonably
            selected by the Company or SCW,

                  (iii) Cooperate with the Company and SCW in good faith in
            order to contest such claim effectively, and

                                      -15-
<PAGE>   17

                  (iv)  Permit the Company and SCW to participate in any
            proceedings relating to such claim;

provided, however, that the Company and SCW shall be jointly and severally
obligated to bear and pay directly all costs and expenses (including additional
interest and penalties) incurred in connection with such contest and shall
indemnify and hold the Executive harmless, on an after-tax basis, for any Excise
Tax or income tax (including interest and penalties with respect thereto)
imposed as a result of such representation and payment of costs and expenses.
Without limitation on the foregoing provisions of this Section 9(c), the Company
and SCW shall control all proceedings taken in connection with such contests
and, at their sole discretion, may pursue or forgo any and all administrative
appeals, proceedings, hearings and conferences with the taxing authority in
respect of such claim and may, at their sole option, either direct Executive to
pay the tax claimed and sue for a refund or contest the claim in any permissible
manner, and Executive agrees to prosecute such contest to a determination before
any administrative tribunal, in a court of initial jurisdiction and in one or
more appellate courts, as the Company and SCW shall determine; provided, however
that if the Company or SCW directs Executive to pay such claim and sue for a
refund, the Company or SCW, as the case may be, shall advance the amount of such
payment to Executive, on an interest-free basis and shall indemnify and hold
Executive harmless, on an after-tax basis, from any Excise Tax or income tax
(including interest or penalties with respect thereto) imposed with respect to
such advance or with respect to any imputed income with respect to such advance;
and further provided that any extension of the statute of limitations relating
to payment of taxes for the taxable year of Executive with respect to which such
contested amount is claimed to be due is limited solely to such contested
amount.

                                      -16-
<PAGE>   18

Furthermore, the control by the Company and/or SCW of the contest shall be
limited to issues with respect to which the Gross-Up Payment would be payable
hereunder and Executive shall be entitled to settle or contest, as the case may
be, any other issue raised by the Internal Revenue Service or any other taxing
authority.

            (d)   Refunds. If, after the receipt by Executive of an amount
advanced by the Company and/or SCW pursuant to Section 9(c), Executive becomes
entitled to receive any refund with respect to such claim, Executive shall
(subject to compliance by the Company and SCW with the requirements of Section
9(c)) promptly pay to the Company and SCW the amount of such refund (together
with any interest paid or credited thereon after taxes applicable thereto). If,
after the receipt by Executive of an amount advanced by the Company and/or SCW
pursuant to Section 9(c), a determination is made that Executive shall not be
entitled to any refund with respect to such claim and the Company or SCW does
not notify Executive in writing of its intent to contest such denial of refund
prior to the expiration of 30 days after such determination, then such advance
shall be forgiven and shall not be required to be repaid and the amount of such
advance shall offset, to the extent thereof, the amount of Gross-Up Payment
required to be paid.

      10.   FULL SETTLEMENT

            The obligation of the Company and SCW to make the payments provided
for in this Agreement and otherwise to perform their obligations hereunder shall
not be affected by any set-off, counterclaim, recoupment, defense or other
claim, right or action which the Company or SCW may have against the Executive
or others. In no event shall the Executive be obligated to seek other employment
or take any other action by way of mitigation of the amounts payable to

                                      -17-
<PAGE>   19

the Executive under any of the provisions of this Agreement and, except as
provided in Section 6(a)(iv), such amounts shall not be reduced whether or not
Executive obtains other employment.

      11.   SUCCESSORS

            (a)   This Agreement is personal to the Executive and shall not be
      assignable by the Executive other than by will or the laws of descent and
      distribution. This Agreement shall inure to the benefit of and be
      enforceable by the Executive's legal representatives.

            (b)   This Agreement shall inure to the benefit of and be binding
      upon the Company, SCW and their successors and assigns.

            (c)   The Company and SCW will require any successor (whether direct
      or indirect, by purchase, merger, consolidation or otherwise) to all or
      substantially all of their business and/or assets to assume expressly and
      agree to perform this Agreement in the same manner and to the same extent
      that the Company or SCW would be required to perform it if no such
      succession had taken place. As used in this Agreement, the "Company" shall
      mean the Company as defined and any successor to its business and/or
      assets which assumes and agrees to perform this Agreement by operation of
      law, or otherwise, and "SCW" shall mean SCW as defined and any successor
      to its business and/or assets which assumes and agrees to perform this
      Agreement by operation of law, or otherwise.

      12.   ARBITRATION

                                      -18-
<PAGE>   20

            (a)   Because it is agreed that time will be of the essence in
determining whether any payments are due to the Executive under this Agreement,
the Executive may submit any claim for payment under this Agreement or dispute
regarding the interpretation of this Agreement to arbitration. This right to
select arbitration shall be solely that of the Executive, and the Executive may
decide whether or not to arbitrate in his or her discretion. The "right to
select arbitration" is not mandatory on the Executive, and the Executive may
choose in lieu thereof to bring an action in an appropriate civil court. Once an
arbitration is commenced, however, it may not be discontinued without the mutual
consent of both parties to the arbitration. During the lifetime of the Executive
only he or she can use the arbitration procedure set forth in this section.

            (b)   Any claim for arbitration may be submitted as follows: If the
Executive disagrees with the Company or SCW regarding the interpretation of this
Agreement and the claim is finally denied by the Company or SCW in whole or in
part, such claim may be filed in writing with an arbitrator of the Executive's
choice who is selected by the method described in the next three sentences. The
first step of the selection shall consist of the Executive submitting a list of
five potential arbitrators to the Company and SCW. Each of the five arbitrators
must be either (1) a member of the National Academy of Arbitrators located in
the State of California or (2) a retired California Superior Court or Appellate
Court judge. Within two weeks after receipt of the list, the Company and SCW
shall select one of the five arbitrators as the arbitrator for the dispute in
question. If the Company and SCW fail to select an arbitrator in a timely
manner, the Executive shall then designate one of the five arbitrators as the
arbitrator for the dispute in question.

                                      -19-
<PAGE>   21

            (c)   The arbitration hearing shall be held within thirty days (or
as soon thereafter as possible) after the picking of the arbitrator. No
continuance of the hearing shall be allowed without the mutual consent of the
Executive and the Company. Absence from or nonparticipation at the hearing by
either party shall not prevent the issuance of an award. Hearing procedures
which will expedite the hearing may be ordered at the arbitrator's discretion,
and the arbitrator may close the hearing at his or her discretion when
sufficient evidence to satisfy issuance of an award has been presented.

            (d)   The arbitrator's award shall be rendered as expeditiously as
possible and in no event later than thirty days after the close of the hearing.
In the event the arbitrator finds that the Company or SCW has breached this
Agreement, he or she shall order the Company or SCW, as the case may be, to
immediately take the necessary steps to remedy the breach. The award of the
arbitrator shall be final and binding upon the parties. The award may be
enforced in any appropriate court as soon as possible after it is rendered. If
an action is brought to confirm the award, the Company, SCW and the Executive
agree that no appeal shall be taken by either party from any decision rendered
in such action.

            (e)   The Company and SCW will be considered the prevailing party in
a dispute if the arbitrator determines that neither the Company nor SCW has
breached this Agreement. Otherwise, the Executive will be considered the
prevailing party. In the event that the Company and SCW are the prevailing
party, the fee of the arbitrator and all necessary expenses of the hearing
(excluding any attorneys' fees incurred by the Company or SCW) including
stenographic reporter, if employed, shall be paid by the Executive. In the event
that Executive is the prevailing party, the fee of the arbitrator and all
necessary expenses of the hearing (including all

                                      -20-
<PAGE>   22

attorneys' fees incurred by the Executive), including the fees of a stenographic
reporter if employed, shall be paid by the Company and SCW.

      13.   GOVERNING LAW

            The laws of California shall govern the validity and interpretation
of this Agreement, with regard to conflicts of laws.

      14.   CAPTIONS

            The captions of this Agreement are not part of the provisions hereof
and shall have no force or effect.

      15.   AMENDMENT

            This Agreement may not be amended or modified otherwise than by a
written agreement executed by the parties hereto or their respective successors
and legal representatives.

      16.   NOTICES

            All notices and other communications regarding this Agreement shall
be in writing and shall be hand delivered to the other party or sent by prepaid
registered or certified mail, return receipt requested, addressed as follows:

            If to the Executive:
                                -------------------------------------

                                -------------------------------------

                                -------------------------------------

            If to the Company:  American States Water Company
                                630 East Foothill Boulevard
                                San Dimas, CA 91773
                                Attn: Secretary
            If to SCW:          Southern California Water Company
                                630 East Foothill Boulevard
                                San Dimas, CA 91773

                                      -21-
<PAGE>   23

                                Attn: Secretary

or to such other address as either party shall have furnished to the other in
writing. Notice and communications shall be effective when actually received by
the addressee.

      17.   SEVERABILITY

            The lack of validity or enforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other provision
of this Agreement.

      18.   WITHHOLDING TAXES

            The Company and SCW may withhold required federal, state, local or
foreign taxes from any amounts payable under this Agreement.

      19.   NO WAIVER

            The Executive's, the Company's or SCW's failure to insist upon
strict compliance with any provision of this Agreement or the failure to assert
any right the Executive, the Company or SCW may have under this Agreement,
including, without limitation, the right of the Executive to terminate
employment for Good Reason, shall not be deemed to be a waiver of such provision
or right or any other provision or right under this Agreement.

      20.   AT-WILL EMPLOYMENT

            The Executive, the Company and SCW acknowledge that, except as may
otherwise be provided under any other written agreement between the Executive,
the Company and SCW, the employment of the Executive by the Company and SCW
prior to the Change in Control Date is "at will" and, prior to the Change in
Control Date, the Executive's employment may be terminated by either the
Executive or the Company or SCW, as the case may be, at any

                                      -22-
<PAGE>   24

time, in which case the Executive shall have no further rights under this
Agreement. From and after the Change in Control Date, this Agreement shall
supersede any other agreement between the parties with respect to the subject
matter hereof.

      21.   COUNTERPARTS

      This Agreement may be executed simultaneously in two or more counterparts,
each of which shall be deemed an original, but all of which shall together
constitute one and the same Agreement.

      21.   JOINT AND SEVERAL LIABILITY

      The obligation of the Company and SCW to make payments hereunder shall be
joint and several.

      22.   ALLOCATION OF PAYMENTS

      As between the Company and SCW, any payments to be made by the Company
and/SCW hereunder shall be allocated between the Company and SCW on the same
basis as the payment of salary and benefits of the Executive were allocated
between the Company and SCW immediately prior to the Change in Control Date.

                                      -23-
<PAGE>   25

      IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered as of the day and year first written above in Los
Angeles, California.

                                          AMERICAN STATES WATER COMPANY

                                          By  /s/ Floyd E. Wicks
                                            -----------------------------------
                                          Title   President and C.E.O.

                                          SOUTHERN CALIFORNIA WATER COMPANY

                                          By /s/  Floyd E. Wicks
                                            -----------------------------------
                                          Title   President and C.E.O.

                                          EXECUTIVE

                                          /s/ McClellan Harris III
                                          -------------------------------------

                                      -24-
<PAGE>   26

                AMENDED AND RESTATED CHANGE-IN-CONTROL AGREEMENT

      This Amended and Restated Change-in-Control Agreement (the "Agreement") is
dated as of October 25, 1999, is entered into by and among Joel A. Dickson (the
"Executive"), American States Water Company (the "Company") and its wholly owned
subsidiary, Southern California Water Company, a California corporation ("SCW"),
and amends and restates in its entirety the Change-in-Control Agreement dated as
of October 27, 1998 among the Executive, the Company and SCW.

                                    RECITALS

      The Company considers it essential to the best interest of the Company and
its shareholders that the Executive be encouraged to remain with the Company and
SCW and continue to devote full attention to the Company's business
notwithstanding the possibility, threat or occurrence of a Change in Control (as
defined in Section 3). The Company believes that it is in the best interest of
the Company and its shareholders to reinforce and encourage the continued
attention and dedication of the Executive and to diminish inevitable
distractions arising from the possibility of a Change in Control. Accordingly,
to assure the Company that it will have the Executive's undivided attention and
services notwithstanding the possibility, threat or occurrence of a Change in
Control, and to induce the Executive to remain in the employ of the Company and
SCW, and for other good and valuable consideration, the Board of Directors of
the Company and SCW has, at the recommendation of the Company's Compensation
Committee, caused the Company and SCW to enter into this Agreement.

                                      -25-
<PAGE>   27

                              TERMS AND CONDITIONS

      The Executive, the Company and SCW hereby agree to the following terms and
conditions:

      1.    TERM OF AGREEMENT

            If a Change in Control (as defined in Section 3) occurs on or before
the expiration date of this Agreement and while the Executive is still an
employee of the Company or SCW, then this Agreement will continue in effect for
two years from the date of such Change in Control and, if the Executive's
employment with the Company or SCW is terminated within such two-year period,
this Agreement shall thereafter continue in effect until all of the obligations
of the Company and SCW under this Agreement shall have been fulfilled. If no
Change in Control occurs on or before December 31, 2000, this Agreement shall
expire; provided, however that this Agreement shall be automatically extended
for an additional two years to December 31, 2002 if (i) a plan or agreement for
a Change in Control has been approved by the Board of Directors of the Company
or SCW on or before the expiration date, or (ii) the Company and SCW have not
delivered to you or you shall have not delivered to the Company and SCW written
notice at least 60 days prior to the expiration date that such expiration date
shall not be so extended. This Agreement shall continue to be automatically
extended for an additional two-year period and each succeeding two-year period
if a plan or agreement for a Change in Control has been approved by the Board of
Directors of the Company or SCW or the Company, SCW or you have failed to give
notice by the time and in the manner described in this Section 1.

                                      -26-
<PAGE>   28

      2.    CHANGE IN CONTROL DATE

            The "Change in Control Date" shall mean the first date during the
term of this Agreement on which a Change in Control (as defined in Section 3)
occurs; provided, however, that if a Change in Control occurs and if the
Executive's employment with the Company or SCW is terminated after approval by
the Board of Directors of the Company or SCW of a plan or agreement for a Change
in Control but prior to the date on which the Change in Control occurs, the
"Change in Control Date" shall mean the date immediately preceding the date of
such termination.

      3.    CHANGE IN CONTROL

            A "Change in Control" shall mean any of the following events:

            (a)   the dissolution or liquidation of either the Company or SCW,
unless its business is continued by another entity in which holders of the
Company's voting securities immediately before the event own, either directly or
indirectly, more than 50% of the continuing entity's voting securities
immediately after the event;

            (b)   any sale, lease, exchange or other transfer (in one or a
series of transactions) of all or substantially all of the assets of either the
Company or SCW, unless its business is continued by another entity in which
holders of the Company's voting securities immediately before the event own,
either directly or indirectly, more than 50% of the continuing entity's voting
securities immediately after the event;

                                      -27-
<PAGE>   29

            (c)   any reorganization or merger of the Company or SCW, unless the
holders of the Company's voting securities immediately before the event own,
either directly or indirectly, more than 50% of the continuing or surviving
entity's voting securities immediately after the event;

            (d)   an acquisition by any person, entity or group acting in
concert of more than 50% of the voting securities of the Company or SCW, unless
the holders of the Company's voting securities immediately before the event own,
either directly or indirectly, more than 50% of the acquirer's voting securities
immediately after the acquisition; or

            (e)   a change of one-half or more of the members of the Board of
Directors of the Company or SCW within a twelve-month period, unless the
election or nomination for election by shareholders of new directors within such
period constituting a majority of the applicable Board was approved by the vote
of at least two-thirds of the directors then still in office who were in office
at the beginning of the twelve-month period.

      4.    EFFECTIVE PERIOD

            For the purpose of this Agreement, the "Effective Period" is the
period commencing on the Change in Control Date and ending on the date this
Agreement terminates.

      5.    TERMINATION OF EMPLOYMENT

            (a) Death or Disability: The Executive's employment shall terminate
automatically upon the Executive's death. If the Disability (as defined below)
of the Executive occurs during the Effective Period, the Company or SCW may give
the Executive written notice of their intention to terminate the Executive's
employment. In such event, the Executive's employment with the Company or SCW
shall terminate effective on the 30th day after receipt of

                                      -28-
<PAGE>   30

such notice by the Executive (the "Disability Effective Date"), provided that,
within the 30 days after such receipt, the Executive shall not have returned to
full-time performance of his or her duties. For purposes of this Agreement,
"Disability" shall mean the absence of the Executive from his or her duties with
the Company or SCW on a full-time basis for 180 consecutive business days as a
result of a physical or mental condition which prevents the Executive from
performing the Executive's normal duties of employment and which is (i)
determined to be total and permanent by a physician selected by the Company or
SCW or their insurers and acceptable to the Executive or the Executive's legal
representative and/or (ii) entitles the Executive to the payment of long-term
disability benefits from the Company's or SCW's long-term disability plan
commencing no later than the Disability Effective Date.

            (b)   Cause: The Company or SCW may terminate the Executive's
employment other than for Cause or Disability during the Effective Period as
provided in Section 6(a). The Company or SCW may also terminate the Executive's
employment during the Effective Period for Cause. For purposes of this
Agreement, "Cause" shall be limited to the following:

                  (i)   the Executive's failure to render services to the
            Company or SCW where such failure amounts to gross neglect or gross
            misconduct of the Executive's responsibility and duties,

                  (ii)  the Executive's commission of an act of fraud or
            dishonesty against the Company or any affiliate of the Company, or

                  (iii) the Executive's conviction of a felony or other crime
            involving moral turpitude.

                                      -29-
<PAGE>   31

            (c)   Good Reason: The Executive's employment may be terminated by
the Executive during the Effective Period for Good Reason. For purposes of this
Agreement, "Good Reason" shall mean:

                  (i)   the assignment to the Executive of any duties
            inconsistent in any respect with the Executive's position (including
            status, offices, titles and reporting requirements), authority,
            duties or responsibilities as in effect on the Change in Control
            Date, or any other action by the Company or SCW which results in a
            diminution in such position, authority, duties or responsibilities,
            excluding for this purpose an isolated, insubstantial and
            inadvertent action not taken in bad faith and which is remedied by
            the Company or SCW, as the case may be, promptly after receipt of
            notice thereof given by the Executive;

                  (ii)  any failure by the Company or SCW to reappoint the
            Executive to a position held by the Executive on the Change in
            Control Date, except as a result of the termination of the
            Executive's employment by the Company or SCW for Cause or
            Disability, the death of the Executive, or the termination of the
            Executive's employment by the Executive other than for Good Reason;

                  (iii) reduction by the Company or SCW in the Executive's base
            salary as in effect on the date hereof or as the same may be
            increased from time-to-time;

                  (iv)  the taking of any action by the Company or SCW
            (including the elimination of benefit plans without providing
            substitutes therefore or the reduction of the Executive's benefits
            thereunder) that would substantially diminish the aggregate value of
            the Executive's incentive awards and other fringe

                                      -30-
<PAGE>   32

            benefits including the executive benefits and perquisites from the
            levels in effect prior to the Change in Control Date;

                  (v)   the Company's or SCW's requiring the Executive to be
            based at any office or location which increases the distance from
            the Executive's home to the office location by more than 35 miles
            from the distance in effect as of the Change in Control Date;

                  (vi)  any failure by the Company or SCW to comply with and
            satisfy Section 11(c) of this Agreement.

      6.    OBLIGATIONS OF THE COMPANY UPON TERMINATION

            (a)   Good Reason, Other Than for Cause or Disability: If the
Company or SCW shall terminate the Executive's employment other than for Cause
or Disability during the Effective Period, or the Executive shall terminate
employment for Good Reason during the Effective Period, the Company and SCW
agrees, subject to Section 8, to make the payments and provide the benefits
described below:

                  (i)   The Company and/or SCW shall pay to the Executive in a
            cash lump sum within 10 days from the date of the Executive's
            termination of employment an amount equal to the product of (A) and
            (B), where (A) is 2.99 and (B) is the Executive's annual base salary
            at the highest of the rate in effect at any time during the three
            years preceding the date of termination.

                  (ii)  The Company and/or SCW shall also pay to the Executive
            in a cash lump sum within 10 days from the date of termination an
            amount equal to the sum of (A) the Executive's base salary through
            the date of termination, plus (B) any

                                      -31-
<PAGE>   33

            compensation previously deferred by the Executive (together with any
            accrued earnings or interest thereon), plus (C) any accrued vacation
            pay, in each case to the extent not theretofore paid (the amounts
            referred to in this paragraph (ii) are hereinafter referred to as
            the "Accrued Obligations").

                  (iii) The Company and/or SCW shall also pay to the Executive
            in a cash lump sum within 10 days from the date of termination an
            amount equal to the excess of (A) over (B), where (A) is equal to
            the single sum actuarial equivalent of what would be the Executive's
            accrued benefits under the terms of the Southern California Water
            Company Pension Plan (or any successor thereto), including any
            supplemental retirement plan providing additional pension benefits,
            (hereinafter together referred to as the "Pension Plan") at the time
            of the Executive's termination of employment, without regard to
            whether such benefits are "vested" thereunder, if the Executive were
            credited with an additional two years of continuous service after
            the termination of Executive's employment with the Company or SCW at
            the Executive's highest annual rate of compensation covered by such
            Pension Plan within the three years preceding the date of the
            termination of the Executive's employment with the Company or SCW
            and (B) is equal to the single sum actuarial equivalent of the
            Executive's accrued benefits under the Pension Plan at the time of
            the Executive's termination of employment. The payment under this
            paragraph (iii) shall not extinguish any rights the Executive has to
            benefits under the Pension Plan. For purposes of this paragraph,
            "actuarial equivalent" shall be determined using the actuarial
            assumptions used under the

                                      -32-
<PAGE>   34

            Pension Plan for determining the actuarial equivalence of different
            annuity forms of benefits. In no event shall the additional two
            years of continuous service referred to above cause the Executive to
            be deemed to be older than the Executive's actual age for any
            purpose under this Agreement.

                  (iv)  For two years after the Executive's date of termination,
            or such longer period as may be provided by the terms of the
            appropriate plan, program, practice or policy, the Company and SCW
            shall continue to provide welfare benefits and fringe benefits and
            other perquisites to the Executive and/or the Executive's family at
            least equal to those which would have been provided to them if the
            Executive's employment had not been terminated (in accordance with
            the most favorable plans, practices, programs or policies of the
            Company and its affiliates applicable generally to other peer
            executives and their families immediately preceding the date of the
            Executive's termination of employment); provided, however, that if
            the Executive becomes employed by another employer and is eligible
            to receive medical or other welfare benefits under another
            employer-provided plan, the medical and other welfare benefits
            described herein shall be secondary to those provided under such
            other plan during such applicable period of eligibility. For
            purposes of determining eligibility (but not the time of
            commencement of benefits) of the Executive for any retiree benefits
            pursuant to such plans, practices, programs and policies, the
            Executive shall be considered to have remained employed until two
            years after the date of termination of employment and to have
            retired on the last day of such period. Following the

                                      -33-
<PAGE>   35

            period of continued benefits referred to in this subsection, the
            Executive and the Executive's family shall be given the right
            provided in Section 4980B of the Internal Revenue Code of 1986 (the
            "Code") to elect to continue benefits in all group medical plans. In
            the event that the Executive's participation in any of the plans,
            programs, practices or policies of the Company or SCW referred to in
            this subsection is barred by the terms of such plans, programs,
            practices or policies, the Company and/or SCW shall provide the
            Executive with benefits substantially similar to those which the
            Executive would be entitled as a participant in such plans,
            programs, practices or policies. At the end of the period of
            coverage, the Executive shall have the option to have assigned to
            the Executive, at no cost and with no apportionment of prepaid
            premiums, any assignable insurance policy owned by the Company or
            SCW and relating specifically to the Executive.

                  (v)   The Company and/or SCW shall enable the Executive to
            purchase, at the end of the Effective Period, the automobile, if
            any, provided by the Company and/or SCW for the Executive's use at
            the time of the Executive's termination of employment at the
            wholesale value of such automobile at such time, as shown in the
            current addition of the National Auto Research Publication Blue
            Book. At the Executive's election, the Executive may retain any
            existing club memberships of the Executive purchased by the Company
            or SCW upon reimbursement to the Company or SCW, as the case may be,
            of any membership costs paid by the Company or SCW.

                                      -34-
<PAGE>   36

                  (vi)  To the extent not theretofore paid or provided, the
            Company and/or SCW shall timely pay or provide the Executive any
            other amounts or benefits required to be paid or provided or which
            the Executive is eligible to receive under any plan, program,
            policy, practice, contract or agreement of the Company and its
            affiliates (such other amounts and benefits being hereinafter
            referred to as "Other Benefits") in accordance with the terms of
            such plan, program, policy, practice, contract or agreement.

                  (vii) The Executive shall be entitled to interest on any
            payments not paid on a timely basis as provided in this Section 6(a)
            at the applicable Federal Rate provided for in Section 7872(f)(2)(A)
            of the Code.

            (b)   Death: If the Executive's employment is terminated by reason
of the Executive's death during the Effective Period, this Agreement shall
terminate without further obligations to the Executive's legal representatives
under this Agreement, other than for payment of Accrued Obligations and the
timely payment or provision of Other Benefits. Accrued Obligations shall be paid
to the Executive's estate or beneficiary, as applicable, in a cash lump sum
within 10 days of the date of the Executive's death.

            (c)   Disability: If the Executive's employment is terminated by
reason of the Executive's Disability during the Effective Period, this Agreement
shall terminate without further obligations to the Executive, other than for
payment of Accrued Obligations and the timely payment or provision of Other
Benefits. Accrued Obligations shall be paid to the Executive in a cash lump sum
within 30 days of the Executive's termination of employment.

                                      -35-
<PAGE>   37

            (d)   Cause, Other than for Good Reason: If the Executive's
employment shall be terminated for Cause during the Effective Period or, if the
Executive voluntarily terminates employment during the Effective Period,
excluding a termination for Good Reason, this Agreement shall terminate without
further obligations to the Executive, other than for Accrued Obligations and any
benefits payable to Executive under a plan, policy, practice, etc., referred to
in Section 7 below. Accrued Obligations shall be paid to the Executive in a cash
lump sum within 60 days of the Executive's termination of employment.

      7.    NON-EXCLUSIVITY OF RIGHTS

            Subject to Section 8, nothing in this Agreement shall prevent or
limit the Executive's continuing or future participation in any plan, program,
policy or practice provided by the Company or any of its affiliates and for
which the Executive may qualify, nor, subject to Sections 8 and 20, shall
anything herein limit or otherwise affect such rights as the Executive may have
under any contract or agreement with the Company or any of its affiliates.
Amounts which are vested benefits or which the Executive is otherwise entitled
to receive under any plan, policy, practice, program, contract or agreement with
the Company or any of its affiliates at or subsequent to the date of termination
of the Executive's employment shall be payable in accordance with such plan,
policy, practice, program, contract or agreement except as explicitly modified
by this Agreement.

      8.    LIMITATION ON BENEFITS

            Notwithstanding anything in this Agreement to the contrary, if any
payments or benefits to be made to or for the Executive's benefit, whether
pursuant to this Agreement or otherwise, whether by the Company, SCW or another
entity or person, would not be deductible

                                      -36-
<PAGE>   38

by the Company or SCW due to limitations imposed by Section 162(m) of the Code,
then such payments or benefits shall be deferred to the extent necessary until
such time as such payments would be deductible under Section 162(m) of the Code.
Either the Company, SCW or the Executive may request a determination as to
whether any payments would be subject to limitations on deductibility under
Section 162(m) of the Code and, of so requested, such determination shall be
made by independent legal counsel selected by the Company or SCW and approved by
the Executive. Payment may be delayed pending any such determination, provided
that the Executive shall be entitled to interest on any delayed payment at the
applicable Federal Rate provided for in Section 7872(f)(2)(A) of the Code. The
Executive shall also be entitled to interest on any payments deferred as a
result of the limitations on deductibility under Section 162(m) of the Code at
the applicable Federal Rate provided for in Section 7872(f)(2)(A) of the Code.

      9.    PARACHUTE PAYMENTS

            (a)   Gross-Up Payment. In the event that any payment or
distribution by the Company or SCW to or for the benefit of the Executive
(whether paid or payable or distributed or distributable pursuant to the terms
of this Agreement or otherwise, but determined without regard to any additional
payments under this Section 9(a)) (a "Payment") is determined to be subject to
the excise tax imposed by Section 4999 of the Code, or any interest or penalties
are incurred by the Executive with respect to such excise tax (such excise tax,
together with any such interest and penalties, are hereinafter collectively
referred to as the "Excise Tax"), then the Company and SCW shall pay to the
Executive an additional payment (a "Gross-Up Payment") in

                                      -37-
<PAGE>   39

an amount such that after payment by Executive of all taxes (including any
interest or penalties imposed with respect thereto) and Excise Tax imposed upon
the Gross-Up Payment, Executive retains an amount of the Gross-Up Payment equal
to the Excise Tax imposed upon such Payments.

            (b)   Accounting Firm. Subject to the provisions of Section 9(c),
all determinations required to be made under this Section 9, including whether
and when a Gross-Up Payment is required and the amount of such Gross-Up Payment
and the assumptions to be utilized in arriving at such determination, shall be
made by Arthur Andersen LLP or such other certified public accounting firm as
may be designated by Executive and which is satisfactory to the Company and SCW
(the "Accounting Firm"), which shall provide detailed supporting calculations
both to the Company and SCW and to Executive within 15 business days after such
determinations are requested by Executive, the Company or SCW. All fees and
expenses of the Accounting Form shall be borne solely by the Company and SCW.
The Company and SCW shall be jointly and severally obligated to pay any Gross-Up
Payment, as determined pursuant to this Section 9(b), to Executive within five
days after the receipt by the Company and/or SCW of the Accounting Firm's
determination. Any determination by the Accounting Firm shall be final and
binding on the Company, SCW and the Executive. As a result of the uncertainty in
the application of Section 4999 of the Code at the time of the initial
determination by the Accounting Firm hereunder, it is possible that Gross-Up
Payments which will not have been made by the Company and/or SCW should have
been made (an "Underpayment"), consistent with the calculations required to be
made hereunder. In the event that the Company and SCW exhausts its remedies
pursuant to Section 9(c) and Executive thereafter is required to make a payment
of

                                      -38-
<PAGE>   40

any Excise Tax, the Accounting Firm shall determine the amount of the
Underpayment that has occurred and the Company and SCW shall be jointly and
severally obligated to pay any such Underpayment promptly to or for the benefit
of Executive.

            (c)   Internal Revenue Service Claims. Executive shall notify the
Company and SCW in writing of any claim by the Internal Revenue Service that, if
successful, would require the payment by the Company and/or SCW of a Gross-Up
Payment. Executive shall give such notice as soon as practicable but no later
than ten business days after Executive is informed in writing of such claim and
shall apprise the Company and SCW of the nature of such claim, and the date on
which such claim is requested to be paid. Executive shall not pay such claim
prior to the expiration of the 30-day period following the date on which it
gives such notice to the Company and SCW (or such shorter period ending on the
date that any payment of taxes with respect to such claim is due). If the
Company or SCW notifies Executive in writing prior to the expiration of such
period that it desires to contest such claim, Executive shall:

                  (i)   Give the Company and SCW any information reasonably
            requested by either of them relating to such claim,

                  (ii)  Take such action in connection with contesting such
            claim as the Company or SCW shall reasonably request in writing from
            time to time, including, without limitation, accepting legal
            representation with respect to such claim by an attorney reasonably
            selected by the Company or SCW,

                  (iii) Cooperate with the Company and SCW in good faith in
            order to contest such claim effectively, and

                                      -39-
<PAGE>   41

                  (iv)  Permit the Company and SCW to participate in any
            proceedings relating to such claim;

provided, however, that the Company and SCW shall be jointly and severally
obligated to bear and pay directly all costs and expenses (including additional
interest and penalties) incurred in connection with such contest and shall
indemnify and hold the Executive harmless, on an after-tax basis, for any Excise
Tax or income tax (including interest and penalties with respect thereto)
imposed as a result of such representation and payment of costs and expenses.
Without limitation on the foregoing provisions of this Section 9(c), the Company
and SCW shall control all proceedings taken in connection with such contests
and, at their sole discretion, may pursue or forgo any and all administrative
appeals, proceedings, hearings and conferences with the taxing authority in
respect of such claim and may, at their sole option, either direct Executive to
pay the tax claimed and sue for a refund or contest the claim in any permissible
manner, and Executive agrees to prosecute such contest to a determination before
any administrative tribunal, in a court of initial jurisdiction and in one or
more appellate courts, as the Company and SCW shall determine; provided, however
that if the Company or SCW directs Executive to pay such claim and sue for a
refund, the Company or SCW, as the case may be, shall advance the amount of such
payment to Executive, on an interest-free basis and shall indemnify and hold
Executive harmless, on an after-tax basis, from any Excise Tax or income tax
(including interest or penalties with respect thereto) imposed with respect to
such advance or with respect to any imputed income with respect to such advance;
and further provided that any extension of the statute of limitations relating
to payment of taxes for the taxable year of Executive with respect to which such
contested amount is claimed to be due is limited solely to such contested
amount.

                                      -40-
<PAGE>   42

Furthermore, the control by the Company and/or SCW of the contest shall be
limited to issues with respect to which the Gross-Up Payment would be payable
hereunder and Executive shall be entitled to settle or contest, as the case may
be, any other issue raised by the Internal Revenue Service or any other taxing
authority.

            (d)   Refunds. If, after the receipt by Executive of an amount
advanced by the Company and/or SCW pursuant to Section 9(c), Executive becomes
entitled to receive any refund with respect to such claim, Executive shall
(subject to compliance by the Company and SCW with the requirements of Section
9(c)) promptly pay to the Company and SCW the amount of such refund (together
with any interest paid or credited thereon after taxes applicable thereto). If,
after the receipt by Executive of an amount advanced by the Company and/or SCW
pursuant to Section 9(c), a determination is made that Executive shall not be
entitled to any refund with respect to such claim and the Company or SCW does
not notify Executive in writing of its intent to contest such denial of refund
prior to the expiration of 30 days after such determination, then such advance
shall be forgiven and shall not be required to be repaid and the amount of such
advance shall offset, to the extent thereof, the amount of Gross-Up Payment
required to be paid.

      10.   FULL SETTLEMENT

            The obligation of the Company and SCW to make the payments provided
for in this Agreement and otherwise to perform their obligations hereunder shall
not be affected by any set-off, counterclaim, recoupment, defense or other
claim, right or action which the Company or SCW may have against the Executive
or others. In no event shall the Executive be obligated to seek other employment
or take any other action by way of mitigation of the amounts payable to

                                      -41-
<PAGE>   43

the Executive under any of the provisions of this Agreement and, except as
provided in Section 6(a)(iv), such amounts shall not be reduced whether or not
Executive obtains other employment.

      11.   SUCCESSORS

            (a)   This Agreement is personal to the Executive and shall not be
assignable by the Executive other than by will or the laws of descent and
distribution. This Agreement shall inure to the benefit of and be enforceable by
the Executive's legal representatives.

            (b)   This Agreement shall inure to the benefit of and be binding
upon the Company, SCW and their successors and assigns.

            (c)   The Company and SCW will require any successor (whether direct
or indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of their business and/or assets to assume expressly and agree
to perform this Agreement in the same manner and to the same extent that the
Company or SCW would be required to perform it if no such succession had taken
place. As used in this Agreement, the "Company" shall mean the Company as
defined and any successor to its business and/or assets which assumes and agrees
to perform this Agreement by operation of law, or otherwise, and "SCW" shall
mean SCW as defined and any successor to its business and/or assets which
assumes and agrees to perform this Agreement by operation of law, or otherwise.

      12.   ARBITRATION

            (a)   Because it is agreed that time will be of the essence in
determining whether any payments are due to the Executive under this Agreement,
the Executive may submit any claim for payment under this Agreement or dispute
regarding the interpretation of this Agreement to arbitration. This right to
select arbitration shall be solely that of the Executive, and

                                      -42-
<PAGE>   44

the Executive may decide whether or not to arbitrate in his or her discretion.
The "right to select arbitration" is not mandatory on the Executive, and the
Executive may choose in lieu thereof to bring an action in an appropriate civil
court. Once an arbitration is commenced, however, it may not be discontinued
without the mutual consent of both parties to the arbitration. During the
lifetime of the Executive only he or she can use the arbitration procedure set
forth in this section.

            (b)   Any claim for arbitration may be submitted as follows: If the
Executive disagrees with the Company or SCW regarding the interpretation of this
Agreement and the claim is finally denied by the Company or SCW in whole or in
part, such claim may be filed in writing with an arbitrator of the Executive's
choice who is selected by the method described in the next three sentences. The
first step of the selection shall consist of the Executive submitting a list of
five potential arbitrators to the Company and SCW. Each of the five arbitrators
must be either (1) a member of the National Academy of Arbitrators located in
the State of California or (2) a retired California Superior Court or Appellate
Court judge. Within two weeks after receipt of the list, the Company and SCW
shall select one of the five arbitrators as the arbitrator for the dispute in
question. If the Company and SCW fail to select an arbitrator in a timely
manner, the Executive shall then designate one of the five arbitrators as the
arbitrator for the dispute in question.

            (c)   The arbitration hearing shall be held within thirty days (or
as soon thereafter as possible) after the picking of the arbitrator. No
continuance of the hearing shall be allowed without the mutual consent of the
Executive and the Company. Absence from or nonparticipation at the hearing by
either party shall not prevent the issuance of an award. Hearing procedures
which will expedite the hearing may be ordered at the arbitrator's discretion,
and the arbitrator

                                      -43-
<PAGE>   45

may close the hearing at his or her discretion when sufficient evidence to
satisfy issuance of an award has been presented.

            (d)   The arbitrator's award shall be rendered as expeditiously as
possible and in no event later than thirty days after the close of the hearing.
In the event the arbitrator finds that the Company or SCW has breached this
Agreement, he or she shall order the Company or SCW, as the case may be, to
immediately take the necessary steps to remedy the breach. The award of the
arbitrator shall be final and binding upon the parties. The award may be
enforced in any appropriate court as soon as possible after it is rendered. If
an action is brought to confirm the award, the Company, SCW and the Executive
agree that no appeal shall be taken by either party from any decision rendered
in such action.

            (e)   The Company and SCW will be considered the prevailing party in
a dispute if the arbitrator determines that neither the Company nor SCW has
breached this Agreement. Otherwise, the Executive will be considered the
prevailing party. In the event that the Company and SCW are the prevailing
party, the fee of the arbitrator and all necessary expenses of the hearing
(excluding any attorneys' fees incurred by the Company or SCW) including
stenographic reporter, if employed, shall be paid by the Executive. In the event
that Executive is the prevailing party, the fee of the arbitrator and all
necessary expenses of the hearing (including all attorneys' fees incurred by the
Executive), including the fees of a stenographic reporter if employed, shall be
paid by the Company and SCW.

      13.   GOVERNING LAW

            The laws of California shall govern the validity and interpretation
of this Agreement, with regard to conflicts of laws.

                                      -44-
<PAGE>   46

      14.   CAPTIONS

            The captions of this Agreement are not part of the provisions hereof
and shall have no force or effect.

      15.   AMENDMENT

            This Agreement may not be amended or modified otherwise than by a
written agreement executed by the parties hereto or their respective successors
and legal representatives.

      16.   NOTICES

            All notices and other communications regarding this Agreement shall
be in writing and shall be hand delivered to the other party or sent by prepaid
registered or certified mail, return receipt requested, addressed as follows:

            If to the Executive:
                                -----------------------------------

                                -----------------------------------

                                -----------------------------------

            If to the Company:  American States Water Company
                                630 East Foothill Boulevard
                                San Dimas, CA 91773
                                Attn: Secretary

            If to SCW:          Southern California Water Company
                                630 East Foothill Boulevard
                                San Dimas, CA 91773
                                Attn: Secretary

or to such other address as either party shall have furnished to the other in
writing. Notice and communications shall be effective when actually received by
the addressee.

                                      -45-
<PAGE>   47

      17.   SEVERABILITY

            The lack of validity or enforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other provision
of this Agreement.

      18.   WITHHOLDING TAXES

            The Company and SCW may withhold required federal, state, local or
foreign taxes from any amounts payable under this Agreement.

      19.   NO WAIVER

            The Executive's, the Company's or SCW's failure to insist upon
strict compliance with any provision of this Agreement or the failure to assert
any right the Executive, the Company or SCW may have under this Agreement,
including, without limitation, the right of the Executive to terminate
employment for Good Reason, shall not be deemed to be a waiver of such provision
or right or any other provision or right under this Agreement.

      20.   AT-WILL EMPLOYMENT

            The Executive, the Company and SCW acknowledge that, except as may
otherwise be provided under any other written agreement between the Executive,
the Company and SCW, the employment of the Executive by the Company and SCW
prior to the Change in Control Date is "at will" and, prior to the Change in
Control Date, the Executive's employment may be terminated by either the
Executive or the Company or SCW, as the case may be, at any time, in which case
the Executive shall have no further rights under this Agreement. From and after
the Change in Control Date, this Agreement shall supersede any other agreement
between the parties with respect to the subject matter hereof.

                                      -46-
<PAGE>   48

      21.   COUNTERPARTS

            This Agreement may be executed simultaneously in two or more
counterparts, each of which shall be deemed an original, but all of which shall
together constitute one and the same Agreement.

      21.   JOINT AND SEVERAL LIABILITY

            The obligation of the Company and SCW to make payments hereunder
shall be joint and several.

      22.   ALLOCATION OF PAYMENTS

            As between the Company and SCW, any payments to be made by the
Company and/ SCW hereunder shall be allocated between the Company and SCW on the
same basis as the payment of salary and benefits of the Executive were allocated
between the Company and SCW immediately prior to the Change in Control Date.

                                      -47-
<PAGE>   49

      IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered as of the day and year first written above in Los
Angeles, California.

                                          AMERICAN STATES WATER COMPANY

                                          By /s/  Floyd E. Wicks
                                             ----------------------------------
                                          Title   President and C.E.O.

                                          SOUTHERN CALIFORNIA WATER COMPANY

                                          By /s/  Floyd E. Wicks
                                             ----------------------------------
                                          Title   President and C.E.O.

                                          EXECUTIVE

                                          /s/ Joel A. Dickson
                                          -------------------------------------

                                      -48-
<PAGE>   50

                AMENDED AND RESTATED CHANGE-IN-CONTROL AGREEMENT

      This Amended and Restated Change-in-Control Agreement (the "Agreement") is
dated as of October 25, 1999, is entered into by and among Floyd E. Wicks (the
"Executive"), American States Water Company (the "Company") and its wholly owned
subsidiary, Southern California Water Company, a California corporation ("SCW"),
and amends and restates in its entirety the Change-in-Control Agreement dated as
of October 27, 1998 among the Executive, the Company and SCW.

                                    RECITALS

      The Company considers it essential to the best interest of the Company and
its shareholders that the Executive be encouraged to remain with the Company and
SCW and continue to devote full attention to the Company's business
notwithstanding the possibility, threat or occurrence of a Change in Control (as
defined in Section 3). The Company believes that it is in the best interest of
the Company and its shareholders to reinforce and encourage the continued
attention and dedication of the Executive and to diminish inevitable
distractions arising from the possibility of a Change in Control. Accordingly,
to assure the Company that it will have the Executive's undivided attention and
services notwithstanding the possibility, threat or occurrence of a Change in
Control, and to induce the Executive to remain in the employ of the Company and
SCW, and for other good and valuable consideration, the Board of Directors of
the Company and SCW has, at the recommendation of the Company's Compensation
Committee, caused the Company and SCW to enter into this Agreement.

                                      -49-
<PAGE>   51

                              TERMS AND CONDITIONS

      The Executive, the Company and SCW hereby agree to the following terms and
conditions:

      1.    TERM OF AGREEMENT

            If a Change in Control (as defined in Section 3) occurs on or before
the expiration date of this Agreement and while the Executive is still an
employee of the Company or SCW, then this Agreement will continue in effect for
two years from the date of such Change in Control and, if the Executive's
employment with the Company or SCW is terminated within such two-year period,
this Agreement shall thereafter continue in effect until all of the obligations
of the Company and SCW under this Agreement shall have been fulfilled. If no
Change in Control occurs on or before December 31, 2000, this Agreement shall
expire; provided, however that this Agreement shall be automatically extended
for an additional two years to December 31, 2002 if (i) a plan or agreement for
a Change in Control has been approved by the Board of Directors of the Company
or SCW on or before the expiration date, or (ii) the Company and SCW have not
delivered to you or you shall have not delivered to the Company and SCW written
notice at least 60 days prior to the expiration date that such expiration date
shall not be so extended. This Agreement shall continue to be automatically
extended for an additional two-year period and each succeeding two-year period
if a plan or agreement for a Change in Control has been approved by the Board of
Directors of the Company or SCW or the Company, SCW or you have failed to give
notice by the time and in the manner described in this Section 1.

                                      -50-
<PAGE>   52

      2.    CHANGE IN CONTROL DATE

            The "Change in Control Date" shall mean the first date during the
term of this Agreement on which a Change in Control (as defined in Section 3)
occurs; provided, however, that if a Change in Control occurs and if the
Executive's employment with the Company or SCW is terminated after approval by
the Board of Directors of the Company or SCW of a plan or agreement for a Change
in Control but prior to the date on which the Change in Control occurs, the
"Change in Control Date" shall mean the date immediately preceding the date of
such termination.

      3.    CHANGE IN CONTROL

            A "Change in Control" shall mean any of the following events:

            (a)   the dissolution or liquidation of either the Company or SCW,
unless its business is continued by another entity in which holders of the
Company's voting securities immediately before the event own, either directly or
indirectly, more than 50% of the continuing entity's voting securities
immediately after the event;

            (b)   any sale, lease, exchange or other transfer (in one or a
series of transactions) of all or substantially all of the assets of either the
Company or SCW, unless its business is continued by another entity in which
holders of the Company's voting securities immediately before the event own,
either directly or indirectly, more than 50% of the continuing entity's voting
securities immediately after the event;

                                      -51-
<PAGE>   53

            (c)   any reorganization or merger of the Company or SCW, unless the
holders of the Company's voting securities immediately before the event own,
either directly or indirectly, more than 50% of the continuing or surviving
entity's voting securities immediately after the event;

            (d)   an acquisition by any person, entity or group acting in
concert of more than 50% of the voting securities of the Company or SCW, unless
the holders of the Company's voting securities immediately before the event own,
either directly or indirectly, more than 50% of the acquirer's voting securities
immediately after the acquisition; or

            (e)   a change of one-half or more of the members of the Board of
Directors of the Company or SCW within a twelve-month period, unless the
election or nomination for election by shareholders of new directors within such
period constituting a majority of the applicable Board was approved by the vote
of at least two-thirds of the directors then still in office who were in office
at the beginning of the twelve-month period.

      4.    EFFECTIVE PERIOD

            For the purpose of this Agreement, the "Effective Period" is the
period commencing on the Change in Control Date and ending on the date this
Agreement terminates.

      5.    TERMINATION OF EMPLOYMENT

            (a)   Death or Disability: The Executive's employment shall
terminate automatically upon the Executive's death. If the Disability (as
defined below) of the Executive occurs during the Effective Period, the Company
or SCW may give the Executive written notice of their intention to terminate the
Executive's employment. In such event, the Executive's employment with the
Company or SCW shall terminate effective on the 30th day after receipt of

                                      -52-
<PAGE>   54

such notice by the Executive (the "Disability Effective Date"), provided that,
within the 30 days after such receipt, the Executive shall not have returned to
full-time performance of his or her duties. For purposes of this Agreement,
"Disability" shall mean the absence of the Executive from his or her duties with
the Company or SCW on a full-time basis for 180 consecutive business days as a
result of a physical or mental condition which prevents the Executive from
performing the Executive's normal duties of employment and which is (i)
determined to be total and permanent by a physician selected by the Company or
SCW or their insurers and acceptable to the Executive or the Executive's legal
representative and/or (ii) entitles the Executive to the payment of long-term
disability benefits from the Company's or SCW's long-term disability plan
commencing no later than the Disability Effective Date.

            (b)   Cause: The Company or SCW may terminate the Executive's
employment other than for Cause or Disability during the Effective Period as
provided in Section 6(a). The Company or SCW may also terminate the Executive's
employment during the Effective Period for Cause. For purposes of this
Agreement, "Cause" shall be limited to the following:

                  (i)   the Executive's failure to render services to the
            Company or SCW where such failure amounts to gross neglect or gross
            misconduct of the Executive's responsibility and duties,

                  (ii)  the Executive's commission of an act of fraud or
            dishonesty against the Company or any affiliate of the Company, or

                  (iii) the Executive's conviction of a felony or other crime
            involving moral turpitude.

                                      -53-
<PAGE>   55

            (c)   Good Reason: The Executive's employment may be terminated by
the Executive during the Effective Period for Good Reason. For purposes of this
Agreement, "Good Reason" shall mean:

                  (i)   the assignment to the Executive of any duties
            inconsistent in any respect with the Executive's position (including
            status, offices, titles and reporting requirements), authority,
            duties or responsibilities as in effect on the Change in Control
            Date, or any other action by the Company or SCW which results in a
            diminution in such position, authority, duties or responsibilities,
            excluding for this purpose an isolated, insubstantial and
            inadvertent action not taken in bad faith and which is remedied by
            the Company or SCW, as the case may be, promptly after receipt of
            notice thereof given by the Executive;

                  (ii)  any failure by the Company or SCW to reappoint the
            Executive to a position held by the Executive on the Change in
            Control Date, except as a result of the termination of the
            Executive's employment by the Company or SCW for Cause or
            Disability, the death of the Executive, or the termination of the
            Executive's employment by the Executive other than for Good Reason;

                  (iii) reduction by the Company or SCW in the Executive's base
            salary as in effect on the date hereof or as the same may be
            increased from time-to-time;

                  (iv)  the taking of any action by the Company or SCW
            (including the elimination of benefit plans without providing
            substitutes therefore or the reduction of the Executive's benefits
            thereunder) that would substantially diminish the aggregate value of
            the Executive's incentive awards and other fringe

                                      -54-
<PAGE>   56

            benefits including the executive benefits and perquisites from the
            levels in effect prior to the Change in Control Date;

                  (v)   the Company's or SCW's requiring the Executive to be
            based at any office or location which increases the distance from
            the Executive's home to the office location by more than 35 miles
            from the distance in effect as of the Change in Control Date;

                  (vi)  any failure by the Company or SCW to comply with and
            satisfy Section 11(c) of this Agreement.

      6.    OBLIGATIONS OF THE COMPANY UPON TERMINATION

            (a)   Good Reason, Other Than for Cause or Disability: If the
Company or SCW shall terminate the Executive's employment other than for Cause
or Disability during the Effective Period, or the Executive shall terminate
employment for Good Reason during the Effective Period, the Company and SCW
agrees, subject to Section 8, to make the payments and provide the benefits
described below:

                  (i) The Company and/or SCW shall pay to the Executive in a
            cash lump sum within 10 days from the date of the Executive's
            termination of employment an amount equal to the product of (A) and
            (B), where (A) is 2.99 and (B) is the Executive's annual base salary
            at the highest of the rate in effect at any time during the three
            years preceding the date of termination.

                  (ii)  The Company and/or SCW shall also pay to the Executive
            in a cash lump sum within 10 days from the date of termination an
            amount equal to the sum of (A) the Executive's base salary through
            the date of termination, plus (B) any

                                      -55-
<PAGE>   57

            compensation previously deferred by the Executive (together with any
            accrued earnings or interest thereon), plus (C) any accrued vacation
            pay, in each case to the extent not theretofore paid (the amounts
            referred to in this paragraph (ii) are hereinafter referred to as
            the "Accrued Obligations").

                  (iii) The Company and/or SCW shall also pay to the Executive
            in a cash lump sum within 10 days from the date of termination an
            amount equal to the excess of (A) over (B), where (A) is equal to
            the single sum actuarial equivalent of what would be the Executive's
            accrued benefits under the terms of the Southern California Water
            Company Pension Plan (or any successor thereto), including any
            supplemental retirement plan providing additional pension benefits,
            (hereinafter together referred to as the "Pension Plan") at the time
            of the Executive's termination of employment, without regard to
            whether such benefits are "vested" thereunder, if the Executive were
            credited with an additional two years of continuous service after
            the termination of Executive's employment with the Company or SCW at
            the Executive's highest annual rate of compensation covered by such
            Pension Plan within the three years preceding the date of the
            termination of the Executive's employment with the Company or SCW
            and (B) is equal to the single sum actuarial equivalent of the
            Executive's accrued benefits under the Pension Plan at the time of
            the Executive's termination of employment. The payment under this
            paragraph (iii) shall not extinguish any rights the Executive has to
            benefits under the Pension Plan. For purposes of this paragraph,
            "actuarial equivalent" shall be determined using the actuarial
            assumptions used under the

                                      -56-
<PAGE>   58

            Pension Plan for determining the actuarial equivalence of different
            annuity forms of benefits. In no event shall the additional two
            years of continuous service referred to above cause the Executive to
            be deemed to be older than the Executive's actual age for any
            purpose under this Agreement.

                  (iv)  For two years after the Executive's date of termination,
            or such longer period as may be provided by the terms of the
            appropriate plan, program, practice or policy, the Company and SCW
            shall continue to provide welfare benefits and fringe benefits and
            other perquisites to the Executive and/or the Executive's family at
            least equal to those which would have been provided to them if the
            Executive's employment had not been terminated (in accordance with
            the most favorable plans, practices, programs or policies of the
            Company and its affiliates applicable generally to other peer
            executives and their families immediately preceding the date of the
            Executive's termination of employment); provided, however, that if
            the Executive becomes employed by another employer and is eligible
            to receive medical or other welfare benefits under another
            employer-provided plan, the medical and other welfare benefits
            described herein shall be secondary to those provided under such
            other plan during such applicable period of eligibility. For
            purposes of determining eligibility (but not the time of
            commencement of benefits) of the Executive for any retiree benefits
            pursuant to such plans, practices, programs and policies, the
            Executive shall be considered to have remained employed until two
            years after the date of termination of employment and to have
            retired on the last day of such period. Following the

                                      -57-
<PAGE>   59

            period of continued benefits referred to in this subsection, the
            Executive and the Executive's family shall be given the right
            provided in Section 4980B of the Internal Revenue Code of 1986 (the
            "Code") to elect to continue benefits in all group medical plans. In
            the event that the Executive's participation in any of the plans,
            programs, practices or policies of the Company or SCW referred to in
            this subsection is barred by the terms of such plans, programs,
            practices or policies, the Company and/or SCW shall provide the
            Executive with benefits substantially similar to those which the
            Executive would be entitled as a participant in such plans,
            programs, practices or policies. At the end of the period of
            coverage, the Executive shall have the option to have assigned to
            the Executive, at no cost and with no apportionment of prepaid
            premiums, any assignable insurance policy owned by the Company or
            SCW and relating specifically to the Executive.

                  (v)   The Company and/or SCW shall enable the Executive to
            purchase, at the end of the Effective Period, the automobile, if
            any, provided by the Company and/or SCW for the Executive's use at
            the time of the Executive's termination of employment at the
            wholesale value of such automobile at such time, as shown in the
            current addition of the National Auto Research Publication Blue
            Book. At the Executive's election, the Executive may retain any
            existing club memberships of the Executive purchased by the Company
            or SCW upon reimbursement to the Company or SCW, as the case may be,
            of any membership costs paid by the Company or SCW.

                                      -58-
<PAGE>   60

                  (vi)  To the extent not theretofore paid or provided, the
            Company and/or SCW shall timely pay or provide the Executive any
            other amounts or benefits required to be paid or provided or which
            the Executive is eligible to receive under any plan, program,
            policy, practice, contract or agreement of the Company and its
            affiliates (such other amounts and benefits being hereinafter
            referred to as "Other Benefits") in accordance with the terms of
            such plan, program, policy, practice, contract or agreement.

                  (vii) The Executive shall be entitled to interest on any
            payments not paid on a timely basis as provided in this Section 6(a)
            at the applicable Federal Rate provided for in Section 7872(f)(2)(A)
            of the Code.

            (b)   Death: If the Executive's employment is terminated by reason
of the Executive's death during the Effective Period, this Agreement shall
terminate without further obligations to the Executive's legal representatives
under this Agreement, other than for payment of Accrued Obligations and the
timely payment or provision of Other Benefits. Accrued Obligations shall be paid
to the Executive's estate or beneficiary, as applicable, in a cash lump sum
within 10 days of the date of the Executive's death.

            (c)   Disability: If the Executive's employment is terminated by
reason of the Executive's Disability during the Effective Period, this Agreement
shall terminate without further obligations to the Executive, other than for
payment of Accrued Obligations and the timely payment or provision of Other
Benefits. Accrued Obligations shall be paid to the Executive in a cash lump sum
within 30 days of the Executive's termination of employment.

                                      -59-
<PAGE>   61

            (d)   Cause, Other than for Good Reason: If the Executive's
employment shall be terminated for Cause during the Effective Period or, if the
Executive voluntarily terminates employment during the Effective Period,
excluding a termination for Good Reason, this Agreement shall terminate without
further obligations to the Executive, other than for Accrued Obligations and any
benefits payable to Executive under a plan, policy, practice, etc., referred to
in Section 7 below. Accrued Obligations shall be paid to the Executive in a cash
lump sum within 60 days of the Executive's termination of employment.

      7.    NON-EXCLUSIVITY OF RIGHTS

            Subject to Section 8, nothing in this Agreement shall prevent or
limit the Executive's continuing or future participation in any plan, program,
policy or practice provided by the Company or any of its affiliates and for
which the Executive may qualify, nor, subject to Sections 8 and 20, shall
anything herein limit or otherwise affect such rights as the Executive may have
under any contract or agreement with the Company or any of its affiliates.
Amounts which are vested benefits or which the Executive is otherwise entitled
to receive under any plan, policy, practice, program, contract or agreement with
the Company or any of its affiliates at or subsequent to the date of termination
of the Executive's employment shall be payable in accordance with such plan,
policy, practice, program, contract or agreement except as explicitly modified
by this Agreement.

      8.    LIMITATION ON BENEFITS

            Notwithstanding anything in this Agreement to the contrary, if any
payments or benefits to be made to or for the Executive's benefit, whether
pursuant to this Agreement or otherwise, whether by the Company, SCW or another
entity or person, would not be deductible

                                      -60-
<PAGE>   62

by the Company or SCW due to limitations imposed by Section 162(m) of the Code,
then such payments or benefits shall be deferred to the extent necessary until
such time as such payments would be deductible under Section 162(m) of the Code.
Either the Company, SCW or the Executive may request a determination as to
whether any payments would be subject to limitations on deductibility under
Section 162(m) of the Code and, of so requested, such determination shall be
made by independent legal counsel selected by the Company or SCW and approved by
the Executive. Payment may be delayed pending any such determination, provided
that the Executive shall be entitled to interest on any delayed payment at the
applicable Federal Rate provided for in Section 7872(f)(2)(A) of the Code. The
Executive shall also be entitled to interest on any payments deferred as a
result of the limitations on deductibility under Section 162(m) of the Code at
the applicable Federal Rate provided for in Section 7872(f)(2)(A) of the Code.

      9.    PARACHUTE PAYMENTS

            (a)   Gross-Up Payment. In the event that any payment or
distribution by the Company or SCW to or for the benefit of the Executive
(whether paid or payable or distributed or distributable pursuant to the terms
of this Agreement or otherwise, but determined without regard to any additional
payments under this Section 9(a)) (a "Payment") is determined to be subject to
the excise tax imposed by Section 4999 of the Code, or any interest or penalties
are incurred by the Executive with respect to such excise tax (such excise tax,
together with any such interest and penalties, are hereinafter collectively
referred to as the "Excise Tax"), then the Company and SCW shall pay to the
Executive an additional payment (a "Gross-Up Payment") in

                                      -61-
<PAGE>   63

an amount such that after payment by Executive of all taxes (including any
interest or penalties imposed with respect thereto) and Excise Tax imposed upon
the Gross-Up Payment, Executive retains an amount of the Gross-Up Payment equal
to the Excise Tax imposed upon such Payments.

            (b)   Accounting Firm. Subject to the provisions of Section 9(c),
all determinations required to be made under this Section 9, including whether
and when a Gross-Up Payment is required and the amount of such Gross-Up Payment
and the assumptions to be utilized in arriving at such determination, shall be
made by Arthur Andersen LLP or such other certified public accounting firm as
may be designated by Executive and which is satisfactory to the Company and SCW
(the "Accounting Firm"), which shall provide detailed supporting calculations
both to the Company and SCW and to Executive within 15 business days after such
determinations are requested by Executive, the Company or SCW. All fees and
expenses of the Accounting Form shall be borne solely by the Company and SCW.
The Company and SCW shall be jointly and severally obligated to pay any Gross-Up
Payment, as determined pursuant to this Section 9(b), to Executive within five
days after the receipt by the Company and/or SCW of the Accounting Firm's
determination. Any determination by the Accounting Firm shall be final and
binding on the Company, SCW and the Executive. As a result of the uncertainty in
the application of Section 4999 of the Code at the time of the initial
determination by the Accounting Firm hereunder, it is possible that Gross-Up
Payments which will not have been made by the Company and/or SCW should have
been made (an "Underpayment"), consistent with the calculations required to be
made hereunder. In the event that the Company and SCW exhausts its remedies
pursuant to Section 9(c) and Executive thereafter is required to make a payment
of

                                      -62-
<PAGE>   64

any Excise Tax, the Accounting Firm shall determine the amount of the
Underpayment that has occurred and the Company and SCW shall be jointly and
severally obligated to pay any such Underpayment promptly to or for the benefit
of Executive.

            (c)   Internal Revenue Service Claims. Executive shall notify the
Company and SCW in writing of any claim by the Internal Revenue Service that, if
successful, would require the payment by the Company and/or SCW of a Gross-Up
Payment. Executive shall give such notice as soon as practicable but no later
than ten business days after Executive is informed in writing of such claim and
shall apprise the Company and SCW of the nature of such claim, and the date on
which such claim is requested to be paid. Executive shall not pay such claim
prior to the expiration of the 30-day period following the date on which it
gives such notice to the Company and SCW (or such shorter period ending on the
date that any payment of taxes with respect to such claim is due). If the
Company or SCW notifies Executive in writing prior to the expiration of such
period that it desires to contest such claim, Executive shall:

                  (i)   Give the Company and SCW any information reasonably
            requested by either of them relating to such claim,

                  (ii)  Take such action in connection with contesting such
            claim as the Company or SCW shall reasonably request in writing from
            time to time, including, without limitation, accepting legal
            representation with respect to such claim by an attorney reasonably
            selected by the Company or SCW,

                  (iii) Cooperate with the Company and SCW in good faith in
            order to contest such claim effectively, and

                                      -63-
<PAGE>   65

                  (iv)  Permit the Company and SCW to participate in any
            proceedings relating to such claim;

provided, however, that the Company and SCW shall be jointly and severally
obligated to bear and pay directly all costs and expenses (including additional
interest and penalties) incurred in connection with such contest and shall
indemnify and hold the Executive harmless, on an after-tax basis, for any Excise
Tax or income tax (including interest and penalties with respect thereto)
imposed as a result of such representation and payment of costs and expenses.
Without limitation on the foregoing provisions of this Section 9(c), the Company
and SCW shall control all proceedings taken in connection with such contests
and, at their sole discretion, may pursue or forgo any and all administrative
appeals, proceedings, hearings and conferences with the taxing authority in
respect of such claim and may, at their sole option, either direct Executive to
pay the tax claimed and sue for a refund or contest the claim in any permissible
manner, and Executive agrees to prosecute such contest to a determination before
any administrative tribunal, in a court of initial jurisdiction and in one or
more appellate courts, as the Company and SCW shall determine; provided, however
that if the Company or SCW directs Executive to pay such claim and sue for a
refund, the Company or SCW, as the case may be, shall advance the amount of such
payment to Executive, on an interest-free basis and shall indemnify and hold
Executive harmless, on an after-tax basis, from any Excise Tax or income tax
(including interest or penalties with respect thereto) imposed with respect to
such advance or with respect to any imputed income with respect to such advance;
and further provided that any extension of the statute of limitations relating
to payment of taxes for the taxable year of Executive with respect to which such
contested amount is claimed to be due is limited solely to such contested
amount.

                                      -64-
<PAGE>   66

Furthermore, the control by the Company and/or SCW of the contest shall be
limited to issues with respect to which the Gross-Up Payment would be payable
hereunder and Executive shall be entitled to settle or contest, as the case may
be, any other issue raised by the Internal Revenue Service or any other taxing
authority.

            (d)   Refunds. If, after the receipt by Executive of an amount
advanced by the Company and/or SCW pursuant to Section 9(c), Executive becomes
entitled to receive any refund with respect to such claim, Executive shall
(subject to compliance by the Company and SCW with the requirements of Section
9(c)) promptly pay to the Company and SCW the amount of such refund (together
with any interest paid or credited thereon after taxes applicable thereto). If,
after the receipt by Executive of an amount advanced by the Company and/or SCW
pursuant to Section 9(c), a determination is made that Executive shall not be
entitled to any refund with respect to such claim and the Company or SCW does
not notify Executive in writing of its intent to contest such denial of refund
prior to the expiration of 30 days after such determination, then such advance
shall be forgiven and shall not be required to be repaid and the amount of such
advance shall offset, to the extent thereof, the amount of Gross-Up Payment
required to be paid.

      10.   FULL SETTLEMENT

            The obligation of the Company and SCW to make the payments provided
for in this Agreement and otherwise to perform their obligations hereunder shall
not be affected by any set-off, counterclaim, recoupment, defense or other
claim, right or action which the Company or SCW may have against the Executive
or others. In no event shall the Executive be obligated to seek other employment
or take any other action by way of mitigation of the amounts payable to

                                      -65-
<PAGE>   67

the Executive under any of the provisions of this Agreement and, except as
provided in Section 6(a)(iv), such amounts shall not be reduced whether or not
Executive obtains other employment.

      11.   SUCCESSORS

            (a)   This Agreement is personal to the Executive and shall not be
assignable by the Executive other than by will or the laws of descent and
distribution. This Agreement shall inure to the benefit of and be enforceable by
the Executive's legal representatives.

            (b)   This Agreement shall inure to the benefit of and be binding
upon the Company, SCW and their successors and assigns.

            (c)   The Company and SCW will require any successor (whether direct
or indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of their business and/or assets to assume expressly and agree
to perform this Agreement in the same manner and to the same extent that the
Company or SCW would be required to perform it if no such succession had taken
place. As used in this Agreement, the "Company" shall mean the Company as
defined and any successor to its business and/or assets which assumes and agrees
to perform this Agreement by operation of law, or otherwise, and "SCW" shall
mean SCW as defined and any successor to its business and/or assets which
assumes and agrees to perform this Agreement by operation of law, or otherwise.

      12.   ARBITRATION

                                      -66-
<PAGE>   68

            (a)   Because it is agreed that time will be of the essence in
determining whether any payments are due to the Executive under this Agreement,
the Executive may submit any claim for payment under this Agreement or dispute
regarding the interpretation of this Agreement to arbitration. This right to
select arbitration shall be solely that of the Executive, and the Executive may
decide whether or not to arbitrate in his or her discretion. The "right to
select arbitration" is not mandatory on the Executive, and the Executive may
choose in lieu thereof to bring an action in an appropriate civil court. Once an
arbitration is commenced, however, it may not be discontinued without the mutual
consent of both parties to the arbitration. During the lifetime of the Executive
only he or she can use the arbitration procedure set forth in this section.

            (b)   Any claim for arbitration may be submitted as follows: If the
Executive disagrees with the Company or SCW regarding the interpretation of this
Agreement and the claim is finally denied by the Company or SCW in whole or in
part, such claim may be filed in writing with an arbitrator of the Executive's
choice who is selected by the method described in the next three sentences. The
first step of the selection shall consist of the Executive submitting a list of
five potential arbitrators to the Company and SCW. Each of the five arbitrators
must be either (1) a member of the National Academy of Arbitrators located in
the State of California or (2) a retired California Superior Court or Appellate
Court judge. Within two weeks after receipt of the list, the Company and SCW
shall select one of the five arbitrators as the arbitrator for the dispute in
question. If the Company and SCW fail to select an arbitrator in a timely
manner, the Executive shall then designate one of the five arbitrators as the
arbitrator for the dispute in question.

                                      -67-
<PAGE>   69

            (c)   The arbitration hearing shall be held within thirty days (or
as soon thereafter as possible) after the picking of the arbitrator. No
continuance of the hearing shall be allowed without the mutual consent of the
Executive and the Company. Absence from or nonparticipation at the hearing by
either party shall not prevent the issuance of an award. Hearing procedures
which will expedite the hearing may be ordered at the arbitrator's discretion,
and the arbitrator may close the hearing at his or her discretion when
sufficient evidence to satisfy issuance of an award has been presented.

            (d)   The arbitrator's award shall be rendered as expeditiously as
possible and in no event later than thirty days after the close of the hearing.
In the event the arbitrator finds that the Company or SCW has breached this
Agreement, he or she shall order the Company or SCW, as the case may be, to
immediately take the necessary steps to remedy the breach. The award of the
arbitrator shall be final and binding upon the parties. The award may be
enforced in any appropriate court as soon as possible after it is rendered. If
an action is brought to confirm the award, the Company, SCW and the Executive
agree that no appeal shall be taken by either party from any decision rendered
in such action.

            (e)   The Company and SCW will be considered the prevailing party in
a dispute if the arbitrator determines that neither the Company nor SCW has
breached this Agreement. Otherwise, the Executive will be considered the
prevailing party. In the event that the Company and SCW are the prevailing
party, the fee of the arbitrator and all necessary expenses of the hearing
(excluding any attorneys' fees incurred by the Company or SCW) including
stenographic reporter, if employed, shall be paid by the Executive. In the event
that Executive is the prevailing party, the fee of the arbitrator and all
necessary expenses of the hearing (including all

                                      -68-
<PAGE>   70

attorneys' fees incurred by the Executive), including the fees of a stenographic
reporter if employed, shall be paid by the Company and SCW.

      13.   GOVERNING LAW

            The laws of California shall govern the validity and interpretation
of this Agreement, with regard to conflicts of laws.

      14.   CAPTIONS

            The captions of this Agreement are not part of the provisions hereof
and shall have no force or effect.

      15.   AMENDMENT

            This Agreement may not be amended or modified otherwise than by a
written agreement executed by the parties hereto or their respective successors
and legal representatives.

      16.   NOTICES

            All notices and other communications regarding this Agreement shall
be in writing and shall be hand delivered to the other party or sent by prepaid
registered or certified mail, return receipt requested, addressed as follows:

            If to the Executive:
                                -----------------------------------

                                -----------------------------------

                                -----------------------------------

            If to the Company:  American States Water Company
                                630 East Foothill Boulevard
                                San Dimas, CA 91773
                                Attn: Secretary

            If to SCW:          Southern California Water Company

                                      -69-
<PAGE>   71

                                630 East Foothill Boulevard
                                San Dimas, CA 91773
                                Attn: Secretary

or to such other address as either party shall have furnished to the other in
writing. Notice and communications shall be effective when actually received by
the addressee.

      17.   SEVERABILITY

            The lack of validity or enforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other provision
of this Agreement.

      18.   WITHHOLDING TAXES

            The Company and SCW may withhold required federal, state, local or
foreign taxes from any amounts payable under this Agreement.

      19.   NO WAIVER

            The Executive's, the Company's or SCW's failure to insist upon
strict compliance with any provision of this Agreement or the failure to assert
any right the Executive, the Company or SCW may have under this Agreement,
including, without limitation, the right of the Executive to terminate
employment for Good Reason, shall not be deemed to be a waiver of such provision
or right or any other provision or right under this Agreement.

      20.   AT-WILL EMPLOYMENT

            The Executive, the Company and SCW acknowledge that, except as may
otherwise be provided under any other written agreement between the Executive,
the Company and SCW, the employment of the Executive by the Company and SCW
prior to the Change in Control Date is "at will" and, prior to the Change in
Control Date, the Executive's employment

                                      -70-
<PAGE>   72

may be terminated by either the Executive or the Company or SCW, as the case may
be, at any time, in which case the Executive shall have no further rights under
this Agreement. From and after the Change in Control Date, this Agreement shall
supersede any other agreement between the parties with respect to the subject
matter hereof.

      21.   COUNTERPARTS

            This Agreement may be executed simultaneously in two or more
counterparts, each of which shall be deemed an original, but all of which shall
together constitute one and the same Agreement.

      21.   JOINT AND SEVERAL LIABILITY

            The obligation of the Company and SCW to make payments hereunder
shall be joint and several.

      22.   ALLOCATION OF PAYMENTS

            As between the Company and SCW, any payments to be made by the
Company and/ SCW hereunder shall be allocated between the Company and SCW on the
same basis as the payment of salary and benefits of the Executive were allocated
between the Company and SCW immediately prior to the Change in Control Date.

                                      -71-
<PAGE>   73

      IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered as of the day and year first written above in Los
Angeles, California.

                                          AMERICAN STATES WATER COMPANY

                                          By     /s/  Lloyd E. Ross
                                            -----------------------------------
                                          Title  Chairman of the Board

                                          SOUTHERN CALIFORNIA WATER COMPANY

                                          By     /s/  Lloyd E. Ross
                                            -----------------------------------
                                          Title  Chairman of the Board

                                          EXECUTIVE

                                          /s/ Floyd E. Wicks
                                          -------------------------------------

                                      -72-

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