California American Water Applies for State Grant to Fund Water Project Test Well

California American Water has submitted a grant application to the California Department of Water Resources seeking $1 million to help fund the installation of a $3-million slant test well, which is needed for its proposed desalination project. The company is applying for the maximum amount the grant program allows for a pilot or test project.

The grant monies are available from Proposition 50, the Water Security, Clean Drinking Water and Coastal and Beach Protection Act of 2002. Utilities such as California American Water are eligible for the funding, which is designated to support projects that advance desalination as part of California’s water supply.

“This funding would help reduce costs to our customers,” said California American Water President Robert MacLean. “We have been tracking this opportunity for some time. I can’t imagine anyone has a better fit. If we are awarded this grant, it would fulfill the State’s objective and provide a direct benefit to the Monterey Peninsula community.”

California American Water is moving forward with the Monterey Peninsula Water Supply Project, a multi-sourced approach to solving the Monterey Peninsula’s perennial water shortage and reducing pumping from the Carmel River. The largest component of the project is a either a 6.4 or 9.6 million gallon per day desalination plant that would draw seawater from slant wells that are buried in the sand and extend beneath the ocean floor. Slant wells, also called subsurface intakes, are the preferred technology of California permitting agencies, including the State Water Resources Control Board and the California Coastal Commission. The Monterey Bay National Marine Sanctuary and the National Oceanic and Atmospheric Administration recently issued guidelines for desalination projects within the sanctuary and directed any project proponent to pursue subsurface intakes where feasible. The company is building a slant test well to determine the feasibility of the slant well construction techniques in addition to determining the quantity and quality of the source water that can be drawn from the well.

The company’s grant application adds to a robust cost saving plan embedded in the project, which includes low-interest State Revolving Fund loans and an innovative proposal to accept a local public agency contribution of either $78 or $99 million, depending on the plant size. The total project cost is currently estimated at $277 or $320 million, depending on the plant size. Construction of the test well is estimated at $3 million. California American Water plans to begin construction of the test well in November of this year. The larger project is expected to be complete in late 2018.

For more information on this and other news and updates about this project, please visit the project website at www.watersupplyproject.org.

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

Founded in 1886, American Water Works Company is the largest publicly traded U.S. water and wastewater utility company. With headquarters in Voorhees, N.J., the company employs approximately 6,700 dedicated professionals who provide drinking water, wastewater and other related services to an estimated 14 million people in more than 30 states, and parts of Canada. More information can be found by visiting www.amwater.com.