Kentucky Public Service Commission

Order Entered: (1) Kentucky-American is authorized to continue participating in the AWCC borrowing program under the terms of the financial Services Agreement that it executed with AWCC on June 15, 2000. (2) Kentucky-American is authorized to issue AWCC securities in the form of notes or debentures in an aggregate amount of $26.9 million from time to time prior to December 31, 2012. (3) At least 15 days prior to Kentucky-American's issuance of any notes or debentures, Kentucky-American shall notify the Commission in writing of the proposed issuance. (4) For all securities or evidences of indebtedness that have a term exceeding two years and that are issued under the Agreement's borrowing program, Kentucky-American shall file a report detailing the terms and conditions of the particular securities issued. (5) Kentucky-American shall obtain Commission approval prior to the issuance of any security or long-term evidences of indebtedness. (6) The proceeds from the financing authorized herein shall be used only for the lawful purposes set out in the application. (7) Kentucky-American's failure to comply with Ordering Paragraph 3 of this Order when issuing any security or long-term evidences of indebtedness without prior Commission authorization shall subject Kentucky-American and its officials to the penalties of KRS 278.990(1).

No Deficiency Letter

Acknowledge Receipt of Filing

Application of Kentucky-American Water Company for Issuance of Indebtedness and Continued Participation with American Water Capital Corp.