SAN JOSE WATER COMPANY SPECIAL DEFERRAL ELECTION PLAN

                                                  Exhibit 10.3

                          SAN JOSE WATER COMPANY 

                      SPECIAL DEFERRAL ELECTION PLAN

                          PLAN AMENDMENT NO. 2

                          ____________________

     The San Jose Water Company Special Deferral Election Plan

(the "Plan"), as previously adopted and approved by the

Executive Compensation Committee of the Board of Directors of

SJW. Corp. and subsequently amended by such committee in

December 2004, is hereby further amended as follows:

     1.  Article VI of the Plan is hereby amended in its

entirety to read as follows:

                               ARTICLE VI

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                           INVESTMENT RETURN

                           _________________

         6.01  Investment Return for 2005 Calendar Year.  For

the period commencing January 1, 2005 and ending December 31,

2005 (the "2005 Investment Year"), the Participant's Deferral

Election Subaccount for the 2005 Plan Year and/or the Deferral

Election Subaccount attributable to his or her March 2005 Bonus

Payment shall be adjusted periodically to reflect the earnings,

gains and losses equal to the actual investment experience

realized for the period by one or more of the investment funds

selected by the Participant from the investment alternatives

identified in Appendix I. The initial selection of the

applicable investment funds for such subaccount must be made

prior to the start of the 2005 Investment Year. On each day on

which the U.S. financial markets are open during the 2005

Investment Year, the Participant's Deferral Election Subaccount

for the 2005 Plan Year and/or the Deferral Election Subaccount

attributable to his or her March 2005 Bonus Payment shall be

adjusted to reflect the investment gains, earnings or losses

those subaccounts would have actually realized had they been

invested on that day in the selected investment funds. 

         6.02  Reallocation of Account Balances Between Funds. 

A Participant may elect at any time during the 2005 Investment

Year to reallocate (in such percentages as the Plan

Administrator shall authorize) part or all of the balance of his

or her Deferral Election Subaccount for the 2005 Plan Year

and/or the Deferral Election Subaccount attributable to his or

her March 2005 Bonus Payment among the available investment

alternatives.  Such election shall be made on a form provided by

the Plan Administrator, and the designated reallocation shall be

effected as soon as reasonably practicable after the filing of

such form with the Plan Administrator or its designate.

         6.03  Investment Return for Subsequent Calendar Years. 

Commencing January 1, 2006 and continuing throughout the period

there remains an outstanding balance credited to such

subaccount, each