Construction Cost of Monterey Desalination Project in the U.S. Rises to $825 Million

en.Wedoany.com Reported - On October 23, California American Water submitted updated cost and financing plans for the desalination facility of the Monterey Peninsula water supply project to the California Public Utilities Commission. The estimated construction cost of the project has risen to $825 million, and the company simultaneously proposed low-cost financing and water rate adjustment plans, which are expected to reduce costs borne by customers by approximately $588 million over the project's 40-year operating period. The funding and rate arrangements submitted this time will be subject to further review by regulators.

The Monterey Peninsula desalination project was approved by the California Public Utilities Commission in 2018 and subsequently underwent multiple rounds of permitting review and legal disputes, with the construction timeline continuously delayed. Rising labor and construction material prices, as well as increased expenditures on engineering design, equipment procurement, and legal affairs, have driven the project cost to be readjusted. This filing updates the construction budget and brings financing costs and future water supply rate mechanisms within the scope of regulatory review.

According to the plan submitted by the company, the project intends to adopt lower-cost financing channels and control long-term customer burden through adjusting the funding structure and water rate pricing mechanism. The $588 million in cost savings calculated by the company corresponds to the entire 40-year operating period; it is not a government subsidy obtained in this instance, nor does it represent a direct reduction of the same amount from the $825 million construction investment. California American Water will also continue discussions with state regulators and local governments on other cost control measures.

In terms of engineering configuration, the Monterey Peninsula water supply project plans to construct subsurface slant seawater intake wells, seawater conveyance pipelines, desalination treatment facilities, and brine discharge systems. The phased plan published by the California State Lands Commission in 2026 includes 4 new subsurface slant intake wells and the retrofit of 1 existing intake well. The desalination plant is planned to have a treatment capacity of 4.8 million gallons per day, approximately 18,200 cubic meters per day, and the brine is planned to be conveyed through existing submarine outfall pipelines. This plan and the current cost financing filing are different approval matters of the same water supply project.

The project's water supply system also includes aquifer storage and recovery facilities, as well as recycled water replenishment works. Information published by the Monterey Peninsula water resources management agency in September 2026 shows that the desalination project still needs to meet conditions related to coastal development permits. This financing cost filing is a regulatory milestone, and does not represent the formal commencement of construction or completion and operation of the desalination plant.