EXHIBIT 12-B

Quarterly Water Supply Strategy and Budget Report California American Water

Main Water Distribution System: January - March 2022

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 Service (NMFS) to protect the Carmel River steelhead population. To accomplish these goals, a water supply strategy and budget for production within California American Water’s (Cal-Am’s) Main and Laguna Seca Subarea water distribution systems 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: January - December 2022

On December 7, 2021 the Quarterly Water Budget Group including staff from the District, CalAm, the National Marine Fisheries Services (NMFS), State Water Resources Control Board’s Division of Water Rights (SWRCB-DWR), and the California Department of Fish and Wildlife (CDFW) met and discussed the proposed water supply strategy and related topics for upcoming quarter.

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. The group discussed the early storm in October and the lower than normal rainfall in November resulting in Los Padres Reservoir filling slowly. The group discussed the construction of the Parallel Pipeline that will allow for simultaneous injection of Carmel River water and recovery of Pure Water Monterey. If rainfall occurs during this quarter and the Parallel Pipeline is completed, Cal-Am and the District will use the Santa Margarita Site to divert and inject Carmel River water. The Upper Valley wells will be used to support ASR injection once the flow triggers are reached and the Low-Flow regime is no longer in effect.

Seaside Groundwater Basin For this quarter, the Seaside Groundwater Basin will be the largest component of supply to meet system demand. Most of the production from the Seaside Basin will be Pure Water Monterey recovery. Once the Parallel Pipeline is completed, ASR 1 and 2 will be used for injection if flow triggers are reached on the Carmel River.

It is recognized that, based on recent historical use, Cal-Am’s production from the Laguna Seca Subarea during this period may not 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. On February 5, 2020 the Seaside Groundwater Basin Watermaster Board voted to allow Cal-Am to claim carryover credits to cover the pumping over the Laguna Seca allotment in the interim prior to establishing a physical solution. Because of this decision, the Quarterly Water Budget Group decided that the table presenting the Laguna Seca allotment of zero would no longer be necessary as the Watermaster is now planning to handle the pumping over allotment with a different mechanism.

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