This slide presentation outlines the Santa Clara Valley Water District and how it has used the California Awards for Performance Excellence (CAPE) to meet the challenges it is facing. The challenges include: increasingly stringent regulations; high customer expectations and rising water rates; diminishing tax revenues and unfunded liabilities; maintaining a strong, diverse, and ethical workforce; ensuring a safe, healthy and inclusive work environment; increasing costs; and, population growth and resulting demand on limited water resources. The presentation outlines Lessons Learned from using the CAPE program which include: lead with a vision - easy to remember, easy to understand, relevant to challenges and mission, and describes what you strive to become; learn from others; manage with tools - standardize management and measurement systems, use comparative data; seek external validation; understand customer requirements; and, Plan, Do, Check, Act - Focus on continual improvement. A case study is outlined of the 2006 Water Rate Setting Process at the Santa Clara Valley Water District in 2004 when staff projected double-digit rate increases to offset increasing costs. Water Commission Issues included: large District reserves, cities experiencing pain; constantly changing (increasing) rate projections; perception of inordinate overhead; and, lack of context for District rates. The utility's response is outlined along with supporting statistics, the outcome of the situation and reasons for using CAPE. Includes tables, figures.