California State Lands Commission Approves Slant Well Lease Application for Monterey Peninsula Water Supply Project

Rhea-AI Summary

American Water (AWK) announced that the California State Lands Commission approved its lease application for state lands needed for the Monterey Peninsula desalination project. The approval covers four new subsurface slant wells and conversion of one existing well, following a three-year review with extensive community and tribal input.

The desalination plant is part of the Monterey Peninsula Water Supply Project, intended to address a projected 815 million-gallon annual water supply deficit by 2050, enhance drought resilience, reduce Carmel River dependence, and use slant well technology to limit impacts on marine life.

Positive

• State Lands Commission approves key lease for Monterey desalination wells
• Approval follows three-year review with environmental justice and tribal input
• Project targets 815 million-gallon annual water deficit by 2050
• Subsurface slant wells designed to reduce marine life impacts

Negative

• None.

News Market Reaction – AWK

+2.40%

+2.40% Session close to close

In the Jun 24 session, AWK gained 2.40%, reflecting a moderate positive market reaction.

Data tracked by StockTitan Argus on the day of publication.

Market Context

This announcement advances a key desalination component of AWK’s Monterey plan, with slant wells add...

Analysis

This announcement advances a key desalination component of AWK’s Monterey plan, with slant wells addressing an 815 million-gallon projected shortfall. Investors can track how this local approval complements ongoing rate proceedings and broader capital deployment across regulated subsidiaries.

Key Figures

New slant wells: 4 wells Converted slant well: 1 well Review duration: 3 years +1 more

4 metrics

New slant wells 4 wells New subsurface slant wells for Monterey Peninsula desalination project

Converted slant well 1 well Existing subsurface slant well to be converted for desalination plant use

Review duration 3 years Length of State Lands Commission application review process

Water supply deficit 815 million gallons/year Projected Monterey Peninsula water shortfall by 2050 per CPUC

Historical Context

5 past events · Latest: Jun 22 (Positive)

Pattern 5 events

Date	Event	Sentiment	24h Move	Catalyst
Jun 22	Conservation guidance	Positive	+0.5%	Indiana American Water promoted wise water use ahead of hotter, drier weather.
Jun 22	Acquisition anniversary	Positive	+0.5%	New Jersey American Water highlighted investment and community support since Salem City acquisition.
Jun 22	Industry conference role	Positive	+0.5%	American Water showcased expertise and solutions at the ACE26 water industry conference.
Jun 18	Conservation outreach	Positive	-0.1%	California American Water urged conservation as summer demand increases in its service area.
Jun 18	Summer tips	Positive	-0.3%	American Water shared tips to reduce outdoor water waste and support affordability.

24h Move is the share-price change in the day after each event; other market factors may also have contributed.

Pattern Detected

Recent AWK news items, even when positive, have typically been followed by modest price moves within about half a percent.

Key Terms

subsurface slant wells, desalination plant, environmental justice, brackish groundwater

4 terms

subsurface slant wells technical

"the construction and use of four new subsurface slant wells and the conversion"

Subsurface slant wells are underground boreholes drilled at a deliberate angle instead of straight down, letting one surface location reach oil or gas pockets that sit sideways or under land that can’t be disturbed. Investors care because these angled wells can boost access to reserves, lower the need for multiple surface sites and cut certain costs, while also changing production potential and regulatory or environmental risk—like steering a driveway around a neighbor’s yard to reach a house.

desalination plant technical

"for the proposed desalination plant on the Monterey Peninsula"

A desalination plant is an industrial facility that removes salt and other minerals from seawater or brackish water to produce fresh water people and businesses can use. Investors care because these plants turn a natural resource into a saleable commodity with ongoing revenue and predictable operating costs, much like a utility or toll bridge: capital-intensive to build but potentially steady income if demand, pricing, regulation, and energy costs are favorable.

environmental justice regulatory

"through environmental justice outreach, outreach to the Monterey community"

Environmental justice is the principle that environmental benefits (clean air, water, green space) and burdens (pollution, toxic waste, industrial facilities) should be distributed fairly across communities, regardless of income, race, or location. For investors it matters because unequal impacts can trigger regulatory action, legal liability, reputational damage, or community opposition that affect a company’s costs and license to operate — think of it as neighborhood fairness shaping business risk and value.

brackish groundwater technical

"drawing naturally filtered seawater or brackish groundwater into the well"

Water found underground that is saltier than freshwater but not as salty as seawater, typically sitting between a freshwater lens and ocean water. Think of it as a diluted ocean — usable but often needing treatment — and it matters to investors because it affects costs and permits for projects that rely on water (real estate, agriculture, mining, desalination, and utilities), can influence operating expenses, regulatory risk, and the value of land or infrastructure.

AI-generated analysis. How Rhea-AI works. Not financial advice.

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PACIFIC GROVE, Calif., June 23, 2026 /PRNewswire/ -- Today, the California State Lands Commission (SLC) voted to approve California American Water's application for the lease of state lands that comprise a part of its Monterey Peninsula desalination project.

The SLC evaluated California American Water's lease application for the construction and use of four new subsurface slant wells and the conversion and use of one existing subsurface slant well for the proposed desalination plant on the Monterey Peninsula. During the three-year application review process, SLC staff gathered extensive community input through environmental justice outreach, outreach to the Monterey community and through tribal consultation.

"We thank the State Lands Commission for their thorough review of the facts and the approval of California American Water's lease application," said Sarah Leeper, President of California American Water. "This decision is integral to bringing reliable, drought-proof water to the Monterey peninsula to provide opportunities for sustainable growth while reducing dependence on the Carmel River."

The proposed desalination plant is a necessary component of the Monterey Peninsula Water Supply Project's (MPWSP) three-pronged plan to restore regional water supplies, prepare for droughts, support long-term water reliability and economic stability, and provide for sustainable growth.

To protect water quality, reduce environmental impacts and comply with permitting requirements, the desalination facility will feature subsurface slant wells. These wells are drilled diagonally from land to beneath the ocean floor, drawing naturally filtered seawater or brackish groundwater into the well. Unlike open-ocean intakes, slant wells reduce harm to marine life as they naturally provide filtration and are less vulnerable to waves, storms and surface pollution.

Last year, the California Public Utilities Commission confirmed that the Monterey Peninsula faces a water supply deficit of 815 million gallons per year by 2050. That projected shortfall underscores the critical nature of the SLC's approval and the need for additional water supplies to meet demands well into the future.

Today's decision reflects years of meaningful dialogue with local residents and environmental justice stakeholders. California American Water remains committed to bringing the Monterey community a long-term, drought-proof water supply. For more information on the MPWSP, visit https://www.watersupplyproject.org.

About American Water
American Water (NYSE: AWK) is the largest regulated water and wastewater utility company in the United States. With a history dating back to 1886 and celebrating 140 years in 2026, We Keep Life Flowing® by providing safe, clean, reliable and affordable drinking water and wastewater services to approximately 14 million people with regulated operations in 14 states and on 18 military installations. American Water's approximately 7,000 talented professionals leverage their significant expertise and the company's national size and scale to achieve excellent outcomes for the benefit of customers, employees, investors and other stakeholders. For more information, visit amwater.com and join American Water on LinkedIn, Facebook, X and Instagram.

About California American Water
California American Water, a subsidiary of American Water (NYSE: AWK) with approximately 300 dedicated employees, provides safe, clean, reliable and affordable water and wastewater services to approximately 720,000 people.

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SOURCE American Water

FAQ

What did American Water (AWK) receive approval for in June 2026?

American Water received California State Lands Commission approval for a lease covering lands needed for its Monterey Peninsula desalination project. According to the company, this includes constructing four new subsurface slant wells and converting one existing well after a three-year review process.

How does the Monterey Peninsula Water Supply Project help address the 2050 water deficit?

The Monterey Peninsula Water Supply Project aims to help address a projected 815 million-gallon annual water deficit by 2050. According to American Water, the desalination plant is one component of a three-pronged plan to restore supplies, improve reliability, and support economic stability.

Why is the State Lands Commission lease approval important for AWK shareholders?

The lease approval is an essential regulatory step for advancing the Monterey desalination project. According to American Water, the project is designed to provide reliable, drought-proof water to the Monterey Peninsula, potentially supporting long-term demand, regional growth, and system resilience.

What are subsurface slant wells and why are they used in the AWK Monterey project?

Subsurface slant wells are diagonally drilled wells from land to beneath the ocean floor that draw naturally filtered seawater or brackish groundwater. According to American Water, they help protect water quality, reduce environmental impacts, and are less harmful to marine life than open-ocean intakes.

How did community and environmental justice input shape the Monterey Peninsula desalination approval?

The lease review process included extensive outreach to the Monterey community, environmental justice stakeholders, and tribal representatives. According to American Water, today’s approval reflects years of dialogue with local residents and emphasizes the company’s commitment to a long-term, drought-proof water supply.

What role does the Carmel River play in the Monterey Peninsula Water Supply Project?

The project aims to reduce dependence on the Carmel River by providing alternative water supplies through desalination. According to American Water, the new desalination facility is intended to support sustainable growth while helping restore regional water balances and long-term supply reliability.