Carmel River Cutback Order Back In Effect

Santa Clara Court allows enforcement of Cease and Desist Order until litigation resolved

Pacific Grove, CA/PRNewswire/ - Santa Clara Superior Court Judge Kevin Murphy has authorized enforcement of a Cease and Desist Order, which restricts the water supply for the Monterey Peninsula, while the order continues to be argued in court.

The State Water Resources Control Board issued the Cease and Desist Order in November, 2009. The order restricts California American Water's operations on the Carmel River, which provides approximately 80 percent of the Monterey Peninsula's water supply.

Thursday's ruling reverses an earlier decision made in Monterey County Court last November to stay the order while legal challenges by California American Water, the Monterey Peninsula Water Management District and others were heard. The case was moved to Santa Clara County earlier this year.

The Cease and Desist Order requires California American Water to:

• Incrementally reduce Carmel River diversions to 3,376 acre-feet a year by December 31, 2016. (The area currently relies on approximately 8,500 acre-feet from the river each year.)
• Place a moratorium on new water connections that would rely on water from the Carmel River.
• Implement projects to obtain at least 500 acre-feet of temporary water supplies.

"The Company is currently in compliance with water diversion limits imposed by the Cease and Desist Order and is working to stay in compliance," said California American Water Vice President Ed Simon. "Because of the community's efforts to save water and the wet weather this year, we will likely be able to avoid water rationing in the near term. But it will be incredibly challenging to meet the cutbacks demanded in future years without a new water supply."

California American Water has entered into a partnership with the Monterey County Water Resources Agency and the Marina Coast Water District to build a desalination facility that would serve as a replacement supply for the Carmel River. The project is currently under review by the California Public Utilities Commission and could be complete as early as 2014.

In order for California American Water to impose a moratorium on new water connections, as required by the order, it must first apply to the California Public Utilities Commission for permission, Simon said.

"Public notice and public meetings will be required on this subject," Simon said. "We will notify our customers as soon as public input opportunities are announced."

Judge Murphy also denied the company's motion for a preliminary injunction, which it filed in response to the state's request to lift the stay. The next hearing in the case will be held on Monday, June 14, in San Jose, where they will set a briefing schedule.

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.

SOURCE California American Water