CPUC Approves Regional Desalination Project

The California Public Utilities Commission (CPUC) today authorized plans to develop the Regional Desalination Project, which will be built on the California central coast north of Monterey.

The project, which will produce 10 million gallons of water daily for the Monterey Peninsula, is required to replace water currently taken from the Carmel River, and is expected to be complete by 2015.

“Today’s approval by the CPUC allows us to proceed with final design work and ultimately, construction,” said California American Water President Rob MacLean. “It is a huge step forward for the people of the Monterey Peninsula who have struggled for decades to develop a reliable water supply and for the efforts to protect the Carmel River and its habitat.”

The Regional Desalination Project will be developed by California American Water, a regulated utility and water provider to the Monterey Peninsula, and the Marina Coast Water District and the Monterey County Water Resources Agency, two local public water agencies. The cities of the Monterey Peninsula will also participate in oversight of the project through an advisory committee.

Last year, the state issued a Cease and Desist Order, requiring a 70-percent cutback on water taken from the Carmel River by 2016. The Carmel River currently supplies the majority of potable water to Monterey Peninsula residents, who have among the lowest per capita water consumption in California. The Regional Water Project will enable compliance with the state order as well as help protect the community from future droughts.

The project is estimated to cost about $400 million, which includes construction of a new water pipeline that will transport potable water from the area of Marina south to the Monterey Peninsula and related storage facilities. California American Water estimates that over the next five years, average monthly water bills will increase from $38 to approximately $80 as a result of the project and other investments, including the removal of the San Clemente Dam. The exact cost impact to California American Water customers will be the subject of a separate application to the CPUC, which is expected to be filed sometime next year.

Several steps remain before construction can begin. Engineering, design and technical reports must now be prepared and approved by a variety of state and federal agencies. The next major step will be filing for California Coastal Commission approval. That filing is expected in 2011. The project is scheduled to be complete and begin delivering water by 2015.

California American Water, a wholly owned subsidiary of American Water (NYSE: AWK), provides high-quality and reliable water and/or wastewater services to approximately 600,000 people.

Founded in 1886, American Water is the largest investor-owned U.S. water and wastewater utility company. With headquarters in Voorhees, N.J., the company employs more than 7,000 dedicated professionals who provide drinking water, wastewater and other related services to approximately 16 million people in 35 states, as well as Ontario and Manitoba, Canada. More information can be found by visiting www.amwater.com.