California American Water Continues to Fight Condemnation Effort

Focus remains on providing high-quality, reliable water service

MONTEREY, Calif.--(BUSINESS WIRE)--California American Water announced today that it will vigorously defend its right to continue to serve the customers and the communities in its Monterey Peninsula Water System in response to the Monterey Peninsula Water Management District’s (District) filing of an eminent domain action.

“California American Water has proudly and reliably served the customers on the Monterey Peninsula for more than 60 years, and we will continue to do so. Our system is not for sale,” said Evan Jacobs, Director of External Affairs for California American Water. “We will defend against the District’s actions because it is not in the best interest of our customers, we believe the District does not have the legal authority nor the expertise to reliably run such a complex water system, and this effort will cost residents millions of dollars.”

To date, the District’s actions have already spanned more than five years at a cost of more than $3 million in public funds spent for legal and consulting fees.

“The District is irresponsibly rolling the dice with this action, and it’s likely going to be a disaster for our community. Government takeovers were defeated in California as the courts found that government ownership would not benefit customers. The results were losses of $13 million for the City of Claremont and $25 million for the City of Apple Valley Ranchos,” said John Tilley, President of Monterey Commercial Property Owners Association. “If the District continues with this gamble, the loss for Monterey residents will likely be much larger than for those cities. Five years ago, we were told that voting for a feasibility study would cost nothing. Now we are talking about millions of dollars in legal fees and other costs.”

California American Water will continue to contest the District’s legal authority to seize the water system, citing its lack of legal authority to become the water service provider for the Monterey Peninsula. In 2021, Monterey County Local Area Formation Commission (LAFCO) denied the District’s application to become a water service provider. California American Water will seek to have the case dismissed based on these basic legal defects. If the case is not dismissed outright, it will follow a multi-year legal course.

“We believe the District is not qualified nor legally allowed to run California American Water’s Monterey Peninsula water system, which is one of the most complex systems in the state with multiple water sources and a complicated distribution and storage system,” continued Jacobs. “The community would be better served if the District worked cooperatively with California American Water to secure sustainable water supplies and protect the Carmel River.”

California American Water has owned and operated the water system serving parts of Seaside, Sand City, Monterey, Pacific Grove, Del Ray Oaks, Pebble Beach, Carmel-by-the-Sea and unincorporated Carmel Valley for more than 60 years. The company employs about 100 people who live and work in Monterey County, including licensed water treatment and distribution operators, engineers, and water quality experts.

“Our dedicated employees will remain focused on providing reliable service as we plan to serve these vibrant communities for many decades to come,” said Jacobs.

About American Water

American Water (NYSE: AWK) is the largest regulated water and wastewater utility company in the United States. With a history dating back to 1886, We Keep Life Flowing® by providing safe, clean, reliable, and affordable drinking water and wastewater services to more than 14 million people across 14 regulated jurisdictions and 18 military installations. American Water’s 6,500 talented professionals leverage their significant expertise and the company’s national size and scale to achieve excellent outcomes for the benefit of customers, employees, investors, and other stakeholders.

For more information, visit amwater.com and join American Water on LinkedIn, Facebook, X and Instagram.

About California American Water

California American Water, a subsidiary of American Water, provides high-quality and reliable water and wastewater services to approximately 700,000 people.

Cautionary Statement Concerning Forward-Looking Statements

Certain statements in this press release are forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements relate to, among other things, the outcome, timing and results of the District’s condemnation efforts with respect to California American Water’s Monterey peninsula water system. These statements are based on the current expectations of management of California American Water. There are a number of risks and uncertainties that could cause actual results to differ materially from these forward-looking statements, including with respect to (1) the outcome of the eminent domain litigation filed by the District, and the timing of its resolution; (2) the continued success by California American Water of challenges to the District’s authority to own and operate the Monterey peninsula water system; (3) the result of California American Water’s efforts to dismiss the District’s eminent domain litigation; (4) unexpected costs, liabilities or delays that may be incurred by California American Water in connection with the defense of this eminent domain litigation and other associated proceedings and actions; (5) other regulatory, legislative, local, municipal or other actions adversely affecting California American Water specifically or the water and wastewater industries generally, including with respect to the ongoing Monterey Peninsula Water Supply Project; and (6) other economic, business and other factors.