California American Water Company Lease Application

The Commission manages roughly four million acres of tide and submerged lands and the beds of natural navigable rivers, streams, lakes, bays, estuaries, inlets, and straits, along with other proprietary lands throughout the state. The boundary of the Commission’s jurisdiction at the CalAm site is the ordinary high water mark as generally shown by the mean high tide line. CalAm’s existing test slant well extends approximately 196 feet below the surface onto sovereign land, and is under lease with the Commission. The four proposed slant wells would extend approximately 130 to 160 feet onto sovereign land and would terminate about 200 feet below the ocean floor.

Site map showing the location of the proposed lease area, four proposed slant wells, and the existing test slant well.

CalAm has applied to the Commission for a General Lease for the construction and use of four new subsurface slant wells and the conversion and use of one existing subsurface slant well for use in CalAm’s seawater desalination plant. Other components of the project, including the slant well pads, water transportation pipelines, and the desalination facility, are proposed to be located farther inland above the mean high tide line and are outside the Commission’s jurisdiction.  

CalAm has been using the upland area under a legal right granted by the private upland landowner, RMC Pacific Materials (d/b/a CEMEX). The landowner granted several easements to CalAm, beginning with a temporary, 24-month easement to CalAm in 2014 that was later amended to extend the use period until February 2018. The landowner granted a permanent easement to CalAm in 2018. The slant well easement occupies approximately 30 acres of the approximately 400-acre CEMEX site, and it allows for “accessing, constructing, installing, operating, and maintaining slant wells and related pipelines and utilities for a desalination facility to be constructed by Grantee [CalAm], including such items as wellhead vaults, underground electrical conduit, underground water transmission pipelines, electrical panels, and related appurtenances, as well as signs, markers, and similar notices and warnings as may be necessary to identify the location of any underground pipelines, utilities, or equipment.”

The upland property is privately owned by RMC Pacific Materials (d/b/a CEMEX). The Commission’s understanding is that some areas of the beach are under periodic access restrictions during the Snowy Plover nesting season.

In 2017, the California Coastal Commission and the State Lands Commission negotiated a Settlement Agreement that requires CEMEX to eventually transfer the land associated with its former beach sand mining operation to a nonprofit or governmental entity or consortium approved by the State Lands Commission in consultation with the City of Marina. This land transfer has not occurred, but may occur before or after CEMEX completes mine reclamation required by the Surface Mining and Reclamation Act. Before the land is transferred, it must be placed under a deed restriction “to preserve the open space and habitat values of the property” that allows for public access. (see above, “What right does CalAm have to use the upland and beach area?“). Any open space or recreation uses for the site must be consistent with the easement.

No. While the Commission is in some situations an owner of water rights associated with the lands it owns, it does not regulate water rights. Surface water rights and groundwater rights determinations are under the purview of the State Water Resources Control Board. For this reason, the Commission will not determine whether CalAm has a legal right to withdraw subsurface water.

In June 2025, the State Water Resources Control Board Administrative Hearing Office issued a Final Report as Referee in City of Marina v. RMC Lonestar (Lonestar), Superior Court of California, County of Monterey, Case No. 20CV001387. The report was issued pursuant to the court’s order of October 7, 2021, seeking the expert opinion of the State Water Resources Control Board. The Superior Court will consider the report as evidence in the ongoing litigation, as provided in section 2019 of the Water Code.

The Commission requires lessees to obtain and comply with all required permits. For this proposed lease, one of those permits is the Coastal Commission’s Coastal Development permit. The permit contains a condition related to the Lonestar case requiring CalAm to obtain a favorable judgment from the court or an order from the SWRCB demonstrating that (1) CalAm has, or can feasibly obtain, water rights (to the extent applicable) for the Project and (2) Cal-Am’s project would not cause harm to any aquifer that is a source of drinking water to the City of Marina or the Marina Coast Water District.

No. The Commission has no jurisdiction or regulatory authority over the review and adoption of water supply and demand estimates. The California Public Utilities Commission (CPUC) Water Division has primary regulatory authority and jurisdiction over privately-owned water utilities, including CalAm. On August 14, 2025, the CPUC issued and adopted Decision 25-08-006, which updated the water supply and demand estimates of the MPWSP. The CPUC later issued a corrective order, Decision 25-10-001. The CPUC decisions adopted a water supply estimate of 11,204 acre-feet per year for the Monterey Peninsula Water Supply Project and a projected 2050 water demand of 13,732 acre-feet per year. Thus, a water supply shortfall of 2,528 acre-feet per year is projected.

On November 17, 2022, the California Coastal Commission conditionally approved a Coastal Development permit for the Monterey Peninsula Water Supply Project. The Staff Report and Addendum are available on the Coastal Commission’s website. The Coastal Commission’s Final Adopted Findings are available on our website. Many of the permit conditions remain outstanding, and the Permit has not yet been issued. A more detailed status of the permit conditions will be provided in the State Lands Commission staff report when it becomes available.