California American Water, a wholly owned subsidiary of American Water (NYSE: AWK), provides high-quality and reliable water and/or wastewater services to more than 600,000 people. On the Monterey Peninsula, California American Water serves the communities of Carmel-by-the-Sea, Carmel Valley, Carmel Highlands, Pebble Beach, Pacific Grove, Monterey, Del Rey Oaks, Seaside, Sand City as well as several areas along the Highway 68 corridor. Also in Monterey County, California American Water serves the community of Chualar.

The Monterey Peninsula Water Management District is a regulatory public agency serving Monterey, Seaside, Carmel, Carmel Valley, Carmel-by-the-Sea, the Carmel Highlands, Pacific Grove, and Del Rey Oaks, Sand City and Pebble Beach. The District’s Conservation Division works in conjunction partnership with California American Water to provide education and encourage water conservation in an effort to protect water resources for the benefit of the community.

Water Supply on the Monterey Peninsula: The Monterey Peninsula, like most areas of the Southwestern United States, has a semi-arid climate that receives little or no rainfall from April to November. However, unlike many areas in California (such as Los Angeles, San Diego and San Francisco), the Monterey Peninsula has no access to imported water and is totally dependent on local rainfall for its water supply.

The Monterey Peninsula depends on two water sources that receive this local rainfall: The Carmel River, which drains a 255-square-mile watershed and run 36 miles from its source in the Santa Lucia mountains to the sea; and the Seaside Basin, which is recharged by local rain and which underlies the City of Seaside as well as parts of the former Fort Ord and Highway 68 corridor.

According to various agencies of the state and the courts, both of these sources have been over-pumped. In order to protect local species and habitats and to protect our natural resources, California American Water has been ordered to drastically reduce its pumping from the Carmel River and the Seaside Basin.

Since the late 1970s, California American Water and the Monterey Peninsula community have pursued new water supply projects, not only to meet regulatory demands, but to protect against naturally occurring droughts.

The need to develop a new supply became urgent when, in the mid-1990’s, the State Water Resources Control Board (SWRCB) determined that nearly 70% of the Peninsula’s water supply was illegal. At the same time, the SWRCB approved a 24,000 acre-foot supply for a new dam on the Carmel River that was proposed by the Monterey Peninsula Water Management District.

Unanticipated by SWRCB regulators and the MPWMD, the financing for the new dam was rejected by the voters in 1995. Later, federal wildlife officials made it essentially impossible to build a new dam by declaring two native species, the steelhead trout and the red-legged frog, to be “threatened” under the federal Endangered Species Act.

At the same time, the California Legislature required the Public Utilities Commission to develop a plan for a water supply for the Monterey Peninsula that did not include a dam. This “Plan B” was completed in 2002. Its principal components were a desalination plant in Moss Landing and increased storage of excess Carmel River flows in the Seaside Basin.

Cal Am took the essential components of Plan B and turned them into the Coastal Water Project. An application to complete this project has been filed with the Public Utilities Commission since 2004. Until a new water supply project is built, customers on the Monterey Peninsula are compelled to increase water conservation efforts in order to comply with regulatory restrictions.

The Monterey Peninsula has the lowest per capita water consumption of any comparable community in the State of California, approximately 70 gallons per person per day.