Today Cadiz Inc. (NASDAQ: CDZI) is pleased to announce the addition of water utility Suburban Water Systems (“Suburban”) to its Water Conservation & Storage Project (“Project”). Suburban is a wholly-owned subsidiary of SouthWest Water Company (“SouthWest Water”), a provider of water, wastewater and municipal utilities services to a population of over one million people from across the southern tier of the U.S.A. By entering today into an Option Agreement with Cadiz for conserved water and related storage capacity in the Project, Suburban joins Santa Margarita Water District (“Santa Margarita”), Three Valleys Municipal Water District (“Three Valleys”), and Golden State Water Company (“Golden State) as a Project participant. With the addition of Suburban, 60% of the water to be conserved annually by the Project is now under option. The Company is in continuing discussions with additional potential participants.
Under Suburban’s Option Agreement, which contains terms consistent with those previously announced for the other Project participants, Suburban will have the right to acquire a firm, annual supply of 5,000 acre-feet of water at a pre-determined formula competitive with its incremental cost of new water. Suburban will also have the option to acquire storage capacity in the Project to manage this new supply in complement with its other water resources. These rights will be exercisable upon completion of the California Environmental Quality Act (“CEQA”) review. Suburban has committed funds to the CEQA review process and will share costs with the other Project participants and Cadiz.
“Suburban takes pride in our stewardship of California’s precious water resources and we believe that the Cadiz Project can provide a sustainable new water supply in an environmentally responsible manner. We look forward to Suburban’s participation in the Project, which will offer additional reliability for our customers,” said Mike Quinn, President of Suburban Water Systems.
Cadiz and its partners are continuing to make progress in the Project’s environmental review and permitting phase. In June, Cadiz announced that Santa Margarita would serve as lead agency for the CEQA review of the Project. Following that announcement, ESA Associates, a leading environmental consulting firm, was retained to prepare the Project’s formal CEQA documentation. Technical studies and field work are currently under way as part of the process to prepare the CEQA documents, which are scheduled to be released before the end of the year.