APPLICATION FILED FOR LOW-COST PROJECT FINANCING
On December 31, 2018, California American Water submitted its State Revolving Fund application for low-interest financing to help fund construction of the Monterey Peninsula Water Supply Project. The company applied for a financial assistance package in the amount of $138 million, which would cover nearly half the project cost.
The U.S. Environmental Protection Agency and the State Water Resource Control Board administer state Revolving Fund or (SRF) loans for water projects in California. Last year, PureWater Monterey, one of the three key source water components of the Monterey Peninsula Water Supply Project, being developed by Monterey One Water, was awarded $88 million in SRF funding.
“The ways in which the water supply project will be financed and the interest rates secured will have a great deal of influence on the overall project cost and impact to customer water bills,” said California American Water president Rich Svindland. “We are committed to continually seeking opportunities to lower project costs as we move ahead toward construction.”
In addition to the SRF funding application, California American Water received a grant to offset costs of the project’s test well, engaged in value engineering and will be reducing its traditional percentage of equity financing in order to moderate anticipated rate increases to customers.
The funding application describes the many advantages the Monterey Peninsula Water Supply Project brings including, reducing the use of limited natural resources, namely the Carmel River and the Seaside Groundwater Basin, and providing the following environment and ecosystem benefits:
• Restoring flows to the Carmel River and creating ecosystem benefits to the river habitat;
• Protecting threatened species in the riparian and aquatic habitat along the Carmel River, including the steelhead trout and California red-legged frog;
• Reducing withdrawals from the Seaside Groundwater Basin and protect the basin for long- term reliability; and,
• Minimizing seawater intrusion in the Salinas Valley Groundwater Basin, an impaired aquifer.