Date: December 17, 2014 Presented by CAW at the California State Lands Commission hearing T E S T S L A N T W E L L P R O J E C T

2 – Carmel River and Habitat Restoration  San Clemente Dam Removal Project  Reduce Pumping from Carmel River Environmental Project New Replacement & Sustainable Water Supply – Monterey Peninsula Water Supply Project (MPWSP)  Desalination  Groundwater Replenishment  Aquifer Storage & Recovery SEASIDE BASIN 5%

3  CPUC conducting EIR for MPWSP project.  Customers conservation efforts to date successfully reduced residential use to less than 50 gallons per person per day, one of lowest in California.  A critical step – The test well is a significant milestone we must achieve to move forward. Avoidance of snowy plover season is essential.  Will provide important data to public and state agencies on feasibility of slant wells. Background

Community Support 1.Surfrider Foundation 2.Sierra Club 3.Salinas Valley Water Coalition 4.Planning and Conservation League Foundation 5.Monterey Regional Water Pollution Control Agency 6.Monterey Peninsula Water Management District 7.Monterey Peninsula Regional Water Authority 8.Monterey County Water Resources Agency 9.Monterey County Farm Bureau 10.LandWatch Monterey County 11.County of Monterey 12.Coalition of Peninsula Businesses 13.CPUC Office of Ratepayer Advocates 14.City of Pacific Grove 15.Citizens for Public Water 16.California American Water 4 Signatories to CPUC Settlement All support investigating slant well at CEMEX site

5 “…the slant test well is an experiment whose data is critical to making a good decision on the ultimate viability of the Monterey Peninsula Water Supply Project. I can see no reason why the test slant well should not be approved.” - U.S. Representative Sam Farr, 20 th District, California “[I] support… California American Water Company’s appeal …for approval of the Coastal Development Permits required for Cal Am’s test well project. …The Monterey Peninsula Water Supply Project is a critical environmental project to protect the Carmel River… and the future water supply for Monterey Peninsula residents and businesses.” -Senator Bill Monning, 17 th Senate District, California “The information that will be gathered from the slant test well on source water and feasibility is an important step and will serve to further the state of knowledge with respect to alternatives to open ocean intakes. …I urge you to grant the appeal and Coastal Development Permits….” - Assemblymember Mark Stone, 29 th District, California Legislature “The level of support for this project is both meaningful and broad and provides an opportunity for progress unseen in a generation.” – Mayor Ralph Rubio, City of Seaside “…the entire Monterey Peninsula area is in desperate need of a new water source. …Too much is riding on this project to have it go through more delays.” - Monterey County Herald, November 8, 2014 “The Coastal Commission can take a big step toward protecting the environment, ending a critical regional water shortage, and solving everybody’s long-term water problem by approving Cal Am’s test well now.” - Carmel Pine Cone, October 31, 2014

6 “The coastal development permit for a test slant well is a critical component of evaluating [the Monterey Peninsula Water Supply Project.] The State Board urges the Commission to adopt its staff’s recommendation….” -Thomas Howard, Executive Director, State Water Resources Control Board Regulatory Support  Project awarded $1 million grant from California Department of Water Resources  SWRCB supports test well as part of overall solution to Carmel River overdraft “We look forward to working with you to achieve a successful project in furtherance of desalination as a viable water supply to meet California’s needs.” - Richard A. Mills, Chief, Water Recycling and Desalination Section, Division of Statewide Integrated Water Management

Project Description  Determine feasibility of drawing seawater through slant well  Extensive data gathering and analysis to benefit current and future policy decisions  Seawater returned to ocean via an existing outfall – no brine  Install Monitoring Wells on-site and equip off-site wells to monitor inland groundwater impacts  Construct Dec to Feb and operate for up to 24 months 7

Project Site Overview Map of Test Slant Well Project Site 8 Groundwater Monitoring Wells Electrical Power Feed Test Slant Well Drilling Site (0.2 acres) Pipeline & connection to existing ocean outfall manhole Scale: 1,000 feet Pacific Ocean Test Well State Lands Lease

9 Test Slant Well Profile Schematic CEMEX Drill Site Infiltration 415 ft 14 in. screen Ocean 760 Total Length Aquitard 35,000 mg/l TDS (approximate salinity of seawater)

10 Monitoring Well Program 1.Extensive  4 locations on-site with 3 wells at each location and additional off-site wells 2.Safeguards  On-site monitoring well data will detect groundwater effects before inland impacts occur and allow adequate response time to reduce or stop pumping 3.Robust  Equipment logs data at 15 min intervals (level and conductivity) 4.Transparency  Raw data and summary of results posted to website on daily to weekly basis ( Pre-pumpingWeekly baseline monitoringUp to 3 months PumpingDaily for 1 monthThen weekly or monthly, as required, for 2 years Post-pumpingWeekly for 1 monthThen monthly for 11 months

Conclusion 1.Urgent & Necessary 2.Broad Support of Environmental and Regulatory Agencies – CDP unanimously approved by Coastal Commission on Nov. 12 th – Federal FONSI authorization issued by Monterey Bay National Marine Sanctuary on Dec. 8 th. 3.Consistent with LCP and Coastal Act Provisions – Protects Snowy Plover and other biological resources – ESHA, majority of work located in secondary habitat – Mitigation management and restoration plan 4.Asking you to support project and approve State Lands lease 11