October 2014 Cadiz Valley Water Conservation, Recovery and Storage Project

Southern California Water Supply o MWD  State Water Project  Colorado River Aqueduct o LADWP  LA Aqueduct o OCWD  OC Aquifer

CADIZ Colorado River Aqueduct DANBY PIUTE About Cadiz o California company founded in o Owns land (45,000 acres) and water rights in three San Bernardino County locations. o 20-year organic farm operation in Cadiz Valley.

o 1,300 sq. mile watershed - size of Rhode Island. o Approx. 20 million AF stored in the alluvial aquifers, comparable to Lake Mead. o Estimated average natural recharge 32,500 AF/year. o Cadiz-owned land & water rights at base of watershed. o Groundwater flows to dry lakes at base, where it is lost to evaporation. The Cadiz Valley Cadiz Dry Lake Bristol Dry Lake 5 Miles 66 Fenner Valley Orange Blossom Wash Granite Mountains Providence Mountains New York Mountains 4

Project Design o Intercept and conserve groundwater before it reaches dry lakes. o Put conserved water to beneficial use in So. Cal. water system. o Without intervention, billions of gallons of water would be lost. 5

Conservation & Recovery (CEQA Approved) o Complete construction of wellfield, natural gas power source and ancillary facilities. o Construct 43-mile buried pipeline to Colorado River Aqueduct within Arizona & California Railroad right-of-way. o Deliver an average of 50,000 AF/year to water providers over the 50-year project term, subject to management plan. o New, reliable supply for 100,000 families every year for 50 years. Project Description – Phase 1 6

Phase 1 Project Participants o Santa Margarita Water District – 155,000 water customers in South Orange County o Golden State Water Company – OC operations: Buena Park, Cowan Heights, Cypress, Garden Grove, La Palma, Lemon Heights, Los Alamitos, Orange, Placentia, Rossmoor, Santa Ana, Seal Beach, Stanton and Yorba Linda o Suburban Water Systems – LA, Ventura o Three Valleys Municipal Water District – San Gabriel Valley o Jurupa Community Services District and City of Coachella – Riverside County o Lake Arrowhead CSD – San Bernardino County o Many others are considering purchases 7

Phase 1 Status  Environmental Impact Report certified by Santa Margarita Water District  Groundwater Management, Monitoring and Mitigation Plan approved by San Bernardino County Board of Supervisors  All CEQA litigation not already dismissed or settled has been dismissed in Superior Court ruling  Use of railroad right-of-way for pipeline under review by Department of Interior  Discussions with MWD regarding use of Colorado River Aqueduct will begin upon finalization of all Purchase & Sale Agreements  Construction start:

o Upon design and approval, would import water from State Water Project or Colorado River Aqueduct in wet years and store in the aquifer system for later use in dry years. o Required facilities: Convert existing 96-mile pipeline from Cadiz to Barstow to water conveyance Construct recharge basins and a pump station on Cadiz property. o Total storage capacity = 1 million acre-feet. Phase 2 – Imported Water Storage 9

Water supply Reliable 50,000 AF/year in So Cal water system, plus salinity management and storage offsets. – PhD Economist Rod Smith estimates value of water supply benefit at $6.1 billion. Local Economy Dr. John Husing estimates construction will contribute: $878 M total benefit to local economy 5,900 jobs created. $19.6 million in new state and local tax revenues in Phase 1 construction, plus – 6 million/year in local tax revenue once operational. Benefits 10

Support Orange County Business Council O.C. Taxpayers Association Chambers of Commerce: South Orange County, Adelanto, Needles, Twentynine Palms, Rancho Cucamonga, Fontana, & Redlands Laborers International Union, Local 783 Union of Operating Engineers, Local 12 Building Industry Association of Southern California Engineering Contractors Association Inland Empire Economic Partnership The Morongo Basin Regional Economic Development Consortium City of Industry Manufacturer’s Council 11

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Earlier Plan Vs. Current Plan

o Aquifer productivity/recharge models (using USGS )-(CH2MHill) o Groundwater modeling and impact analysis - (Geoscience) o Local desert spring impact assessment - (CH2MHill) o Dry lake impact assessment - (HydroBio/Groeneveld) o Biological resources assessment - (Circle Mountain) o Dry lake evaporation rate analysis - (Desert Research Institute) o 10 new wells at the Project site drilled to up to 2,000 ft.  Cavernous limestone carbonate strata deep below ground  Geological characteristics corroborate recharge and project design $10M Investment in Science

o 13-member unpaid panel from diverse fields peer-reviewed Project’s scientific and technical reports and guided design of operating and monitoring plan. o Panel found Project could be operated without significant impacts. “I find the project to be viable and capable of being implemented and administered without deleterious effects on the environment. The monitoring plan will ensure that any unanticipated effects are detected and dealt with.” Dr. Charles Groat, GSC Member Former Director of the U.S.G.S. Professor of Geological Sciences, University of Texas at Austin Groundwater Stewardship Committee

o Independent enforcement by San Bernardino County under Desert GW Ordinance. o Over 40 monitoring features throughout watershed, including –  Measured water levels in private wells  Air quality monitoring installations  Subsidence monitoring devices o Regular monitoring reports prepared by technical experts will be reviewed and posted online. o 80 ft floor on Project operations and multiple additional “action triggers” with strict corrective actions, including shutdown of operations. Groundwater Management Plan 16

Cadiz Southeastern Railway Proposed new entertainment attraction that will operate regularly scheduled steam train excursions between Cadiz and Parker, Arizona on the ARZC. Cadiz and ARZC entered trackage rights agreement in Sept The steam locomotives will be powered by water made available from the Project. Expected to promote local tourist economy, attract visitors to nearby national /state parks, Colorado River, etc…