Full-scale design to be based on one year's water quality results

California American Water announced today that the official, one-year testing period recently began at its desalination pilot plant located on the site of the Moss Landing power generation station in northern Monterey County. A renewed license agreement was signed in August with the owner of the power plant, Dynegy, Inc., to operate the pilot plant, which is analyzing water quality and technical operations for final design of a full-scale, 11 million gallon per day desalination plant that California American Water proposes to construct at that site. The proposed full-scale desalination plant is intended to replace water being pumped from the Carmel River and Seaside Groundwater Basin, in response to legal directives to sharply reduce use of those existing resources due to environmental and potential seawater intrusion concerns, respectively.

After overcoming a series of permitting delays, California American Water began the desalination pilot plant operation earlier this summer, more than three years after its initial anticipated start date.

"With all of the pressure we're under to reduce pumping from the Carmel River and Seaside Basin, the importance of this start-up can't be overstated," said General Manager Craig Anthony.

The company proposed the Coastal Water Project - a combination seawater desalination and underground storage project - in 2004 after the state legislature ordered the California Public Utilities Commission (CPUC) to evaluate an environmentally preferable alternative to a new dam and reservoir on the Carmel River. The CPUC approved the recommendation borne of that effort, called "Plan B," which was embraced by California American Water and named the Coastal Water Project. A draft Environmental Impact Report (EIR) on the project is being prepared by the CPUC's energy division, and is scheduled to be released for public comment by the end of January 2009.

Construction of the pilot plant, at a cost of $2 million, was completed under budget and in advance of company estimates earlier this year, after a series of permit delays at the California Coastal Commission and the Monterey County Planning Department - delays that were lengthened as a result of a lawsuit recently dismissed by the Monterey County superior court, following the court's earlier denial of their request to stop construction and operation of the desalination pilot testing facility.

"The data we collect at this plant will be essential to design of our Moss Landing full-scale desalination project, approval of which we hope will be considered by the California Public Utilities Commission by the middle of next year," said Coastal Water Projects Manager for California American Water, Dave Berger. "The information we are gathering will help us determine exactly what treatment processes will be most effective and efficient in terms of both water quality and energy use. And, with our desalination pilot plant on line, we are already producing water of higher quality than most forms of drinking