California American Water Appeals Ruling on LAFCO Decision

California American Water is appealing the Superior Court’s December 11, 2023 decision to vacate a Monterey County Local Agency Formation Commission (LAFCO) December 2021 resolution denying the Monterey Peninsula Water Management District (MPWMD) application for authorization to become a retail water supplier. This is a requirement for MPWMD to serve Monterey customers. If the Superior Court’s decision to vacate stands, the matter would potentially be sent back to LAFCO for reconsideration.

LAFCO has filed a separate and similar appeal.

“The court set aside the resolution and allowed MPWMD to seek further review by LAFCO, but no additional review is necessary because the facts are the same,” said Evan Jacobs, Senior Director of External Affairs for California American Water. “MPWMD does not have the experience or capacity to operate one of the most complex water systems in the country, and its proposal would impose an undue burden on Monterey residents.”

The LAFCO decision stems from the Measure J ballot initiative that was approved in 2018 to explore the “feasibility” of MPWMD acquiring California American Water’s Monterey assets and operating the system. Proponents of Measure J predicted an acquisition of these assets would be quick and inexpensive. Five years later, MPWMD has spent more than $3 million of Monterey Peninsula residents’ money on legal and consulting fees.

“Our hope is that MPWMD would focus on securing new water supplies and protecting the Carmel River and its ecosystem,” said Jacobs. “It’s frustrating that these needless legal costs are steadily increasing as California American Water continues to manage this system prudently and provide local communities with safe and reliable service.”

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.

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.

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