California American Water to Sign Pure Water Monterey Expansion Agreement

Rhea-AI Summary

California American Water has signed the Pure Water Monterey Expansion (PWMe) agreement, a vital project to ensure future water supplies for the Monterey Peninsula. This decision follows a recent ruling by the California Public Utilities Commission (CPUC) that updates previous decisions affecting infrastructure investments. The CPUC will now allow the company standard ratemaking treatment for construction costs linked to the expansion, which also includes a desalination plant. These initiatives aim to replace water lost from the Carmel River and comply with state water directives.

Positive

• California American Water will benefit from standard ratemaking treatment for construction funding of expansion-related infrastructure, enhancing financial stability.
• The PWMe agreement strengthens the water supply framework of the Monterey Peninsula, ensuring long-term water availability for the community.

Negative

• None.

California Public Utilities Commission Revises Pure Water Monterey Expansion Decision

MONTEREY, Calif.--(BUSINESS WIRE)-- California American Water will sign the Pure Water Monterey Expansion (PWMe) agreement. The expansion project is a critical component for future water supplies for the Monterey Peninsula, along with desalination and an Aquifer Storage and Recovery system that stores excess winter river flows for use during dry months. The announcement comes in response to the Order issued yesterday by the California Public Utilities Commission (CPUC) regarding California-American Water Company’s Application for Rehearing of Decision 22-12-001. The order denies a rehearing but modifies several critical portions of the decision.

“Since 1995, residents of the Monterey Peninsula have faced an uncertain future for their water supply,” said Kevin Tilden, president of California American Water. “Today, with desalination and water reuse in process, and aquifer storage and recovery on line, the Peninsula now has a secure water future. This will protect the Carmel River while providing water needed for the community. I want to thank everyone who worked hard on each of these projects to bring them to fruition.”

In its original PWMe decision, issued in December 2022, the Commission delayed recovery of infrastructure investments made by the company to support the project, denied recovery of the company’s actual financing costs, and contradicted CPUC precedent and practice. The decision as originally written would have had substantial negative impacts on the company, its customers and the region. California American Water requested the CPUC review the decision.

In yesterday’s order, the CPUC has corrected factual errors to its original decision. California American Water will be allowed standard ratemaking treatment for the construction funding of the pumps and pipes that were built to support the expansion. The company is also required to file additional information about proposed extraction wells that parties agree are needed to deliver PWMe water from the Seaside Aquifer to customers across the service area.

Together, the recently approved desalination plant and the Pure Water Monterey Expansion will allow the community to replace water no longer available from the Carmel River and comply with the orders of the State Water Resources Control Board.

About California American Water:

California American Water, a subsidiary of American Water (NYSE: AWK), provides high-quality and reliable water and wastewater services to more than 700,000 people. Information regarding California American Water’s service areas can be found on the company’s website www.californiaamwater.com.

About American Water:

With a history dating back to 1886, American Water is the largest and most geographically diverse U.S. publicly traded water and wastewater utility company. The company employs more than 6,500 dedicated professionals who provide regulated and regulated-like drinking water and wastewater services to more than 14 million people in 24 states. American Water provides safe, clean, affordable, and reliable water services to our customers to help keep their lives flowing. For more information, visit amwater.com and diversityataw.com. Follow American Water on Twitter, Facebook and LinkedIn.

View source version on businesswire.com: https://www.businesswire.com/news/home/20230331005435/en/

Media:

Luke Gianni

Manager of External Affairs

California American Water

831-236-8523

luke.gianni@amwater.com

Source: California American Water

FAQ

What is the significance of the Pure Water Monterey Expansion for AWK?

The Pure Water Monterey Expansion is essential for providing reliable water supplies to the Monterey Peninsula and allows California American Water to recover construction costs through standard ratemaking.

How did the California Public Utilities Commission impact California American Water's PWMe agreement?

The CPUC's recent order corrected previous decisions that hindered infrastructure cost recovery, allowing California American Water to secure necessary funding for the Pure Water Monterey Expansion.

What are the expected benefits of the desalination plant for AWK's operations?

The desalination plant, along with the PWMe, will help replace lost water from the Carmel River, enhancing water availability and compliance with state regulations for California American Water.