EXHIBIT 2-A

Monterey Peninsula Water Supply System Sizing

D. Stoldt, General Manager

Monterey Peninsula Water Management District

May 7, 2012

Annual Demand

This analysis examines only demand and supply related to existing Cal-Am main system customers, and does not include future demand for legal lots of record or general plan build-out. That is, it examines water supply required to replace unlawful diversions and be relieved of the Cease and Desist Order.

Cal-Am average water production for eleven-year period, 1996-2006¹ , based on water years:

Unadjusted Demand	14,710 AF
Normal Year Demand	15,095 AF
Dry Year Demand	15,474 AF
Critically Dry-Year Demand	15,858 AF

Final EIR Cal-Am normal weather demand: 15,270 acre-feet per year (afy).²

Cal-Am average water production for 5-year period, 2007-2011 was 13,740 acre-feet (AF) on a water year basis. On a calendar year basis, for the same period, Cal-Am has indicated 13,290 AF average demand and 14,640 AF maximum annual demand for 2007.³

However, the lower than historical demand in recent years may be due the economic downturn beginning 2008, as well as wet weather in 2010 and 2011.

Recently, Cal-Am has used 15,250 AF per year as its estimate of annual system demand. There is no preponderance of evidence to suggest that this number is not a reasonable measure of system demand.

Peak Demands

District data show 27 months with peak demand in excess of 16.0 million gallons per day (MGD) from 1996 to 2006, with no instances from 2007 to 2010. However, it is unclear if the reduction in peak demand may be due the economic downturn beginning 2008, or other factors.

Cal-Am’s 5-year average maximum monthly demand is 1,388 AF and highest maximum monthly demand was 1,532 AF in July 2007.³

Cal-Am in the sizing criteria for the regional desalination plant had identified a need for periodic daily flow rate of 10 MGD during peak demand months in critically dry years.⁴ In its new application, Cal-Am is seeking a 9 MGD plant.³

Sizing for Replacement

Sizing criteria:

A) Must produce water to meet average annual demand

B) Must meet peak month and peak day demands

C) Must meet dry-year demands without the full benefit of ASR

Average Annual Demand:

Average Annual Demand	15,250 AF
less Carmel River Right	(3,376 AF)
less Seaside Groundwater Basin Right	(1,474 AF)
Less ASR long-term annual yield	(1,300 AF)
less Sand City yield apportioned to Order 95-10	(94 AF)
Net Capacity Required	9,006

At an equivalent of 1,120 AF annually per MGD, this translates to an 8.46 MGD plant operating at 95% capacity, or 10.05 MGD plant operating at 80% capacity.

Peak Month/Peak Day Demand:

Using the 1,532 AF peak demand from July 2007, this translates to approximately 16.4 MGD. However, in peak summer months the Carmel Valley pumps are assumed to operate at a baseline level of 0.72 to 0.85 MGD to minimize impacts on the river, Seaside wells could operate at 2.5 to 3.0 MGD, ASR would yield 2.3 to 2.5 MGD on average, and Sand City Desal would produce at approximately 0.09 MGD.

Peak Demand	16.40 MGD
less Carmel River Right	(0.85 MGD)
less Seaside Groundwater Basin Right	(2.75 MGD)
Less ASR long-term annual yield	(2.50 MGD)
less Sand City yield apportioned to Order 95-10	(0.09 MGD)
Net Peak Capacity Required	10.21 MGD

This peak requirement can be reduced over the long-term by utilizing ASR to inject desalinated water during non-peak months and recover during peak periods. Such operations would allow the desalination plant to operate at a steady capacity factor year-round. Assuming 2 to 3 MGD available in peak months from desalination water banked with ASR, the Net Peak Capacity Required could be 7.21 to 8.21 MGD.

Dry-Year Demands Without the Full Benefit of ASR:

This scenario is of a concern in the early years of operation, assuming that once the unlawful diversions are replaced, the permits for ASR will allow carry-over or banking of Carmel River water from year to year and supplies will be built up in the Seaside basin. Strategies to address a dry year in the period before water can be banked will be to use unallocated Sand City desalination water and Seaside basin pre-2020 production limits.

Dry Year Demand	15,474 AF
less Carmel River Right	(3,376 AF)
less Seaside Groundwater Basin Right	(1,820 AF)
Less ASR dry year yield	(150 AF)
less Sand City available supplies	(290 AF)
Net Capacity Required	9,838

At an equivalent of 1,120 AF per MGD, this translates to a 9.25 MGD plant operating at 95% capacity, or 8.78 MGD at 100% capacity.

Conclusion

A 9.0 to 10.0 MGD supply will meet existing area demand under most conditions, depending on capacity factor and duration of need. The lower end of this range is attainable by the conjunctive use of ASR for desalinated water, Carmel River water, and native inflows to the Seaside Groundwater Basin.

This evaluation does not address the incorporation of groundwater replenishment (GWR), return water for Salinas Basin groundwater extractions, the decline in productivity of RO membranes, or water for future development.

Sources:

1) MPWMD Technical Memorandum 2006-02, Table 3

2) Cal-Am Coastal Water Project Final Environmental Impact Report, page 2-10

3) Testimony of Richard Svindland, CPUC Application A.12-04=019, page 21

4) Technical Memorandum: Changes to DEIR Phase 1 Project, Marina Coast Water District, California American Water, and Monterey County Water Resources Agency, October 15, 2009, page 2

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