Monterey desalination estimate reaches US$825 million as financing application is filed

California American Water filed updated costs, financing and rate proposals for the Monterey Peninsula Water Supply Project’s desalination facilities with the California Public Utilities Commission on 23 October. The company’s total construction estimate is US$825 million, subject to regulatory review.

The utility says approval processes, permitting and legal challenges extended the schedule after the CPUC authorised the project in 2018. Labour and material escalation, together with engineering, procurement and legal expense, contributed to the estimate. The release does not describe US$825 million as an executed EPC contract price.

The proposed financing and ratemaking measures are estimated by the company to reduce customer impacts by US$588 million over the project’s 40-year life. This is a modelled benefit of the proposal, not an approved grant, and it cannot simply be deducted from construction cost to derive a net project price.

The company says its water-supply work has reduced Carmel River pumping by 75%, while previously approved supply-demand assessments identified a deficit by 2050. Regulators and stakeholders must now evaluate the updated costs, funding and rate implications. The release gives no new construction start date or pump and valve awards.