California American Water Rejects Unauthorized Purchase Offer

Monterey Peninsula Water Management District Lacks Authority to Purchase or Operate the Water System

MONTEREY, Calif.--(BUSINESS WIRE)--California American Water issued its response to Monterey Peninsula Water Management District’s (MPWMD) offer to purchase California American Water’s water system serving the Monterey Peninsula. The company has declined the purchase offer, confirming that its water system is not for sale and pointing out that MPWMD does not have the legal authority to purchase or operate the potable water system serving the area. California American Water reiterated its commitment to working cooperatively with MPWMD and other community partners to bring approved new sources of water supply online to protect the Carmel River.

“California American Water has provided high-quality and reliable water service to its customers on the Monterey Peninsula for many decades and plans to continue serving its customers and working to address the real issues of water supply and environmental protection facing the Monterey Peninsula,” said Evan Jacobs, Director of External Affairs for California American Water. “MPWMD should stop wasting taxpayer money and reconsider its reckless and infeasible attempt to purchase our water system.”

In 2018, after previous failed attempts to secure voter authorization to pursue a takeover of California American Water’s Monterey Peninsula system, the Measure J ballot measure authorized MPWMD to explore the feasibility of the purchase and operation of California American Water’s Monterey Peninsula water system. In 2021, after more than a year of careful consideration and public hearings, the Monterey Local Area Formation Commission (Monterey LAFCo) rejected MPWMD’s application to become a retail water utility. This authorization is a necessary prerequisite to any attempt to purchase and operate the water system that serves the Monterey Peninsula. Monterey LAFCo cited several reasons for the rejection, including the financial risk to MPWMD’s and its taxpayers, as well as the impact of severing the Monterey Peninsula water system from California American Water’s other operations in Monterey County. MPWMD subsequently sued Monterey LAFCo for its decision; that lawsuit is pending in the courts.

“MPWMD has spent over $3 million dollars pursuing its effort so far and is putting tens of millions more at risk by proceeding without the needed legal authority,” added Jacobs. “It’s time to recognize that they have fulfilled the voter mandate to explore the feasibility of purchasing the water system and return to their core mission of promoting conservation and protecting the Carmel River.”

If MPWMD moves forward with an eminent domain action to condemn the water system, we expect that it will be subject to dismissal by the court. A failed attempt will result in MPWMD bearing responsibility for its own attorney’s fees as well as those of California American Water.

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.