Exhibit 99.1
                               RWE Acquisition
[LOGO]
                                  Update #26



August 6, 2002


This is an update on the RWE/Thames transaction for American Water Associates.
Future updates will be distributed in the coming weeks via email. They are
then archived, along with other important materials, in the "RWE Acquisition
Update" database on Lotus Notes. The information in this "Update" will also be
filed with the US Securities and Exchange Commission and can be viewed on the
commission's EDGAR database at www.sec.gov/edgar.shtml.


Regulatory Approval Update . . .

There are nine states where regulatory approval is required before the RWE
transaction can be complete. Significant action has recently taken place in
three:

California
Evidentiary hearings began on July 29. During the course of the hearings, the
Administrative Law Judge (ALJ) clarified the schedule for the proceedings. The
schedule calls for the ALJ to issue a recommended decision no later than
December 19, 2002. Once the Judge's decision is issued there is a 25-day
period for comments by the applicants and interveners before the record is
presented to the Commission for decision.

On August 1, RWE/Thames and American Water reached a settlement agreement with
two intervenors, the California Office of Ratepayer Advocates (ORA) and the
Utility Workers Union of America (UWA). Consistent with the settlement
agreement, ORA and UWUA are recommending that the Commission approve the
transaction. Two other intervenors in the proceeding, the City of Montara and
the City of Thousand Oaks have not altered their position. The only other
intervenor, the City of San Diego, has announced its support of the settlement
agreement and has withdrawn its opposition to the transaction after it was
confirmed that the management of California-American Water has the authority
to resolve all issues with the city.

Continued . . .





Illinois
Hearings were concluded last week and a schedule was set for the first series
of briefs. This series will be concluded by August 30. After that, the ALJ
will take some time to issue a proposed order. This order will then be the
subject of a second round of briefs. Once these steps have been completed, the
ALJ will place an order before the full Commission for its consideration. We
anticipate the Commission to enter its final order by the end of the year.


Pennsylvania
The ALJ assigned to the case issued a decision that recommends approval of the
acquisition with conditions. The commission is expected to review the judge's
recommendation and deliver its decision this month.


##