Cadiz signs water delivery agreement with Santa Margarita Water District for Northern Pipeline

(UI) — Cadiz Inc. has signed an agreement with Santa Margarita Water District (SMWD) to deliver water from the Cadiz Water Supply and Storage project in the Mojave Desert through the company's Northern Pipeline.

SMWD's board of directors approved the agreement by unanimous vote at the agency's board meeting on June 5. The 50-year take or pay agreement with SMWD follows the previously announced term sheet entered into with SMWD in February 2024. 

SMWD's decision to contract for delivery of water through Cadiz's Northern Pipeline provides key revenue streams expected to support infrastructure financing for the pipeline project. Under the agreement Cadiz is expected to deliver 5,000 acre-feet per year to groundwater banks located along the 220-mile pipeline in the High Desert in exchange for water that can be delivered to SMWD by State Water Contractors with local water suppliers. 

In accordance with the agreement the price per acre-foot of water from Cadiz, inclusive of all capital, operating and maintenance costs, will not exceed $1,650 per AFY.

"Santa Margarita has been a leader in conservation and efficiency for the last two decades," Susan Kennedy, chairman and CEO of Cadiz, said. "Santa Margarita's agreement to take delivery of water via the Northern Pipeline will help us meet an aggressive construction schedule to have the pipeline online in 2026."

"The Cadiz project will help us diversify our water supply portfolio and reduce our dependence on Colorado River and State Water Project resources," said SMWD board member, Frank Ury. "Utilizing Cadiz' Northern Pipeline will allow us to diversify faster, keep costs down and build resilience at a regional level."

SMWD holds existing contractual rights that enable it to acquire up to 15,000 AFY from the Cadiz Project by delivery through the Colorado River Aqueduct. Now this agreement allows SMWD to obtain delivery of up to 5,000 AFY of that quantity through the Northern Pipeline without having to wait for the construction of a completely new pipeline. 

Currently, the company has signed water supply agreements for 65% of the capacity of the Northern Pipeline and is in late-stage discussions with additional agencies for the remaining capacity.

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