MYTH: Cal Am has illegally over-pumped the Carmel River.

  • FACT: Due to a 1995 reclassification of the water drawn Carmel Valley wells by state regulators, Cal Am lost its legal permissions to use a majority of its water rights overnight. Recognizing this sudden change would cause a drastic shortage in water, the State Water Resource Control Board (SWRCB) gave Cal Am until the end of 2021 to reduce pumping on the Carmel River. While developing new water sources with the Water Supply Project, Cal Am has invested more than $100 million in projects to protect and improve the Carmel River ecosystem.

MYTH: Cal Am has over-pumped the Seaside Ground Water Basin.

  • FACT: When the SWRCB first placed restrictions on water production from the Carmel River, they directed Cal Am to maximize its diversions from the Seaside Basin in order to reduce reliance on the river. It was California American Water that first recognized the need and took action to ensure a long-term management plan was in place to protect the basin from over-pumping. 

MYTH: Cal Am failed to properly manage the San Clemente Dam, allowing it to silt up, and improperly charged customers for its removal.

  • FACT: In 2015, Cal Am responsibly retired the San Clemente Dam, which had reached the end of its 100-year life expectancy and was silted up due to natural processes - not neglect. Cal Am negotiated an arrangement with public agencies to ensure its customers were only responsible for the least-cost solution to the dam's seismic safety issues. Read more about the San Clemente Dam here.

MYTH: Cal Am is responsible for the failure of past attempts to solve the community's water supply problem.

  • FACT: Cal Am has made several efforts to generate a new water supply, some of which have been successful, and some of which have failed due to challenges outside the company's control, such as arduous permitting processes and approvals. California Am's current project, the Monterey Peninsula Water Supply Project, has already surmounted hurdles that have prevented other supply solutions from succeeding in the past.

MYTH: Cal Am's Water Supply Project has no water rights, uses unproven slant well technology, is too expensive, and risks litigation that could stop its development.

  • FACT: Cal Am's Monterey Peninsula Water Supply Project has been subject to numerous environmental studies and comprehensive vetting by multiple public agencies, resulting in a robust project design that minimizes environmental impact and maximizes water security for future generations. The project represents the least cost, feasible alternative to addressing the area's supply concerns. Read more about the Water Supply Project here.

MYTH: Cal Am so miscalculated its revenue requirements that it needed to add surcharges to water bills.

  • FACT: California experienced a historic drought. This meant that all water agencies, public and private, were subject to reduced revenues. One estimate showed that 78% of California water utilities planned to increase rates to make up for revenues lost as a result of increased conservation.

MYTH: Cal Am has incurred $100 million in avoidable costs, which they've passed on to customers.

  • FACT: If the water system were managed by a public agency, many of the charges PWN cites  would still have been incurred and passed on to water customers. For example, environmental review costs would apply to any owner of the Monterey water system. The California Public Utilities Commission vets and reviews all expenditures for prudency before approving their recovery through water bills.

MYTH: The MPWSP has no water rights, and therefore cannot succeed.

MYTH: The desal project will pass $71 million surcharge and all the risk on to us ratepayers. Investors are left with no risks, yet expect a large return as profit.

  • FACT: The company proposed the surcharge in order to reduce the amount of equity Cal Am invests in the project, thereby decreasing costs to customers. There is no rate of return whatsoever associated with the proposed surcharge.

MYTH: Cal Am and CPUC agreed to bypass the longstanding county ordinance that requires public ownership of desal facilities.

  • FACT: The California Public Utilities Commission issued a ruling which states that the county ordinance does not apply to Cal Am and other investor-owned utilities. The county stated it would not challenge this ruling.

MYTH: Cal Am does not support public agency financing, which can lower costs.

  • FACT: This claim is patently false. California Am’s financing proposal for the Monterey Peninsula Water Supply Project calls for substantial public agency contributions. We estimate that the suite of low-cost financing options we have identified will save customers more than $400 million over the life of the project.