A California water utility has finalized an agreement to buy water from an underground reservoir owned by Los Angeles-based Cadiz Inc., both parties announced Monday.
Golden State Water Co., a subsidiary of San Dimas-based American States Water Co., has finalized the option it signed last year to buy as much as 5,000 acre-feet per year of the water from the Cadiz underground reservoir in the middle of the Mojave Desert. An acre-foot is about 325,000 gallons; the Golden State deal could supply 10,000 to 20,000 households with a year's water supply.
The deal, which was executed on Friday, also gives Golden State Water the option to store an undisclosed amount of water in the Cadiz aquifer. Under another aspect of the arrangement, Golden State has committed an undisclosed amount of funds toward the environmental review that will be necessary before regulatory approval.
Cadiz acquired 47,000 acres of desert property east of Twentynine Palms in the 1980s and has been trying to monetize the underground aquifer there ever since. The Metropolitan Water District of Southern California was negotiating a $150 million water storage deal in 2002, but those talks collapsed under political pressure and environmental opposition.
Earlier this month, Cadiz reached water storage and purchase deals with two other water agencies: the Santa Margarita Water District and the Three Valleys Municipal Water District.
Cadiz is also trying to lure solar power generation companies to the site.
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