Fair Value of Financial Instruments:

9 Months Ended

Sep. 30, 2012

Fair Value of Financial Instruments:

Fair Value of Financial Instruments:

Note 5 — Fair Value of Financial Instruments:

For cash and cash equivalents, accounts receivable, accounts payable and short-term debt, the carrying amount is assumed to approximate fair value due to the short-term nature of the amounts. The table below estimates the fair value of long-term debt held by GSWC. Rates available to GSWC at September 30, 2012 and December 31, 2011 for debt with similar terms and remaining maturities were used to estimate fair value for long-term debt. The interest rates used for the September 30, 2012 valuation decreased as compared to December 31, 2011, increasing the fair value of long-term debt as of September 30, 2012. Changes in the assumptions will produce differing results.

	September 30, 2012				December 31, 2011
(dollars in thousands)	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Financial liabilities:
Long-term debt—GSWC	$	344,426	$	469,065	$	340,686	$	437,275

As previously discussed in Note 4, the accounting guidance for fair value measurements establishes a framework for measuring fair value and requires fair value measurements to be classified and disclosed in one of three levels. Publicly issued notes are measured using current U.S. corporate bond yields available for similar financial instruments and are classified as Level 1.  Private placement notes and other long-term debt are measured using current U.S. corporate bond yields for similar debt instruments and are classified as Level 2. The following tables set forth by level, within the fair value hierarchy, GSWC’s long-term debt measured at fair value as of September 30, 2012:

(dollars in thousands)	Level 1		Level 2		Level 3	Total
Long-term debt—GSWC	$	295,778	$	173,287	—	$	469,065