LOS ANGELES – Today Cadiz Inc. ( “Cadiz”, the “Company”) is pleased to report that it has executed a Letter of Intent with Lake Arrowhead Community Services District (LACSD), a California water retailer, for the reservation of 3,000 acre-feet per year from the Cadiz Valley Water Conservation, Recovery & Storage Project (“Project”). LACSD supplies approximately 20,000 customers in Lake Arrowhead, California and is the first retail entity located within San Bernardino County to formally express interest in joining the Project. LACSD is limited from diverting local water from Lake Arrowhead and Cadiz water would provide greater water supply reliability and relief to area residents during future droughts.
Under the LOI, LACSD can reserve up to 3,000 acre-feet of water from the Project at $960/acre-foot delivered to the Colorado River Aqueduct. LACSD would take the water through an exchange with a State Water Project contractor or directly by extension and conversion of existing LACSD facilities. LACSD’s participation in the Projectis contingent upon a satisfactory conveyance arrangement and completing supplemental environmental review, if required. San Bernardino County’s approvals of the groundwater extraction plan for the Project and the environmental review for the existing participating agencies were recently upheld against legal challenges earlier this year.
Cadiz CEO Scott Slater said of the LOI: “California faces both short and long-term challenges in overcoming the state’s systemic water shortages. Cadiz offers a sustainable supply that can contribute to the solution locally in San Bernardino County and we are pleased that Lake Arrowhead is interested in pursuing participation.”
LACSD joins six Southern California agencies already participating in the Project, including Santa Margarita Water District, which executed a Purchase & Sale agreement in 2012, and five additional agencies with option agreements. In 2012, Cadiz reserved 20% of the Project’s supplies for the future needs of San Bernardino County-based agencies and LACSD is the first water retailer to access this reserved supply. The Company intends to pursue additional LOIs with public water suppliers consistent with Project approvals to meet local demand.