EXHIBIT 16-B

Quarterly Water Supply Strategy and Budget Report

California American Water Main Water Distribution System:

October – December 2020

1. Management Objectives

The Monterey Peninsula Water Management District (District) desires to maximize the long-term production potential and protect the environmental quality of the Carmel River and Seaside Groundwater Basins. In addition, the District desires to maximize the amount of water that can be diverted from the Carmel River Basin and injected into the Seaside Groundwater Basin while complying with the instream flow requirements recommended by the National Marine Fisheries (NMFS) to protect the Carmel River steelhead population. To protect the River, ASR water banked in the winter will be recovered in the summer months. To accomplish these goals, a water supply strategy and budget for production within California American Water’s (Cal-Am’s) Main water distribution system is reviewed quarterly to determine the optimal strategy for operations, given the current hydrologic and system conditions, and legal constraints on the sources and amounts of water to be produced.

2. Quarterly Water Supply Strategy: October - December 2020

On September 10, 2020 the Quarterly Water Budget Group met and discussed the proposed water supply strategy and related topics for upcoming quarter. The Group consists of staff from the District, Cal-Am, State Water Resources Control Board’s Division of Water Rights (SWRCB-DWR), National Marine Fisheries Services (NMFS), and the California Department of Fish and Wildlife (CDFW)

Carmel River Basin Cal-Am will operate its wells in the Lower Carmel Valley in a downstream to upstream sequence, as needed to meet customer demand. For this quarterly water budget, it was agreed that CalAm will continue to produce water from the Lower Valley Wells as required by the “Low Flow” regime. To the maximum extent, pumping will be shifted away from the river wells and Seaside Native Water and recovery of Pure Water Monterey will be used to meet the demand in the fall months. Any new sources of water reduce the water available to be pumped from the river on a one to one basis consistent with SBO 2016-0016. Upon the first storms, MPWMD and Cal-Am will cooperate to begin preparation for ASR season and when instream flow requirements are met, Carmel River water injection will begin. On December 1^st, ASR permits allow for diversion to injection if instream flow requirements are met.

Seaside Groundwater Basin Cal-Am will continue to produce water from the Coastal Subareas of the Seaside Basin during this period, as necessary to meet system demand and reduce pumping from the Carmel River wells. The Water pumped from this area will be a combination of Native Seaside Groundwater and Pure Water Monterey recovery. There is also a goal to produce 25 AF of treated brackish groundwater from the Sand City Desalination Plant in each of these three months. It is recognized that, based on recent historical use, Cal-Am’s production from the Laguna Seca Subarea during this period cannot be reduced to zero, as is set by Cal-Am’s allocation specified in the Seaside Basin Adjudication Decision. In this context, the production targets represent the maximum monthly production that should occur so that Cal-Am remains within its adjudicated allocation for the Laguna Seca Subarea. Under the amended Seaside Basin Decision, Cal-Am is allowed to use production savings in the Coastal Subareas to offset over-production in the Laguna Seca Subarea. However, the quarterly budget was developed so that Cal-Am would produce all native groundwater in the Coastal Subareas and Laguna Seca production would be over the Adjudication allotment.

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