Cadiz Inc., the downtown water company with a proposed project to pump and transport water from an aquifer beneath its Mojave Desert land holdings, announced last week that it plans to donate up to $5 million from project revenue towards efforts to improve water quality at nearby water systems and throughout Southern California.
The $5 million donation would be administered over a five-year period by the Fenner Valley Water Authority, which would then distribute the money to eligible small water systems that serve disadvantaged communities. The money would be used primarily to build water treatment systems.
“All communities deserve equitable access to clean, safe and affordable drinking water regardless of their income, background or geography,” Scott Slater, Cadiz’ chief executive, said in a statement. “This $5 million fund will help address water quality issues for those water systems struggling to provide clean and safe water in their communities.”
Slater told the Business Journal that he expects applications from several rural water systems in the general vicinity of the Cadiz holdings, east of the community of Twentynine Palms.
“As of right now, we cannot get water to many of these small rural communities, largely because of local water quality issues,” he said.
He said the water in some of these communities has uranium and other potentially hazardous contaminants that need to be treated before the water is usable. These communities would be able to use a portion of the money in the fund as local matching dollars to seek state or federal grants for water treatment.
Slater said the money would come from revenues once Cadiz’ water project is operational. He acknowledged that the promise of getting a share of the $5 million could prompt some of the agencies to advocate for swift approval of the project’s remaining permits.
Cadiz is seeking its final permits for its long-planned project to pump up to 50,000 acre-feet of water per year out of the aquifer and transfer it via water pipeline to the Colorado River Aqueduct.
That aqueduct is owned and operated by the Metropolitan Water District of Southern California; Cadiz must still negotiate terms with the district to transport its water through the aqueduct to its customer water agencies, most notably the Santa Margarita Water District in south Orange County.
Cadiz would not discuss annual revenue expectations for its water project. But a look at public rate documents on the MWD’s website indicates that its base water rate ranges from about $200 per acre-foot to $300 per acre-foot, with the full-service rate – including various surcharges and water treatment fees – around $1,000 per acre-foot. That would put the annual revenue from the Cadiz project at anywhere between $10 million per year and $50 million per year.
