Document:

RWE Executive Deferred Compensation Plan (B)

 Exhibit 10.11 
  

			
	RWE Rhenas	 	

 Supplemental pension scheme for senior executives in the RWE Group 
 Pension commitment based on converted 
 remuneration 
 with employer’s pension liability insurance 
 (deferred compensation) 
 In view of current demographic developments, private pension programs
are gaining more and more in importance. Especially employees whose income exceeds the assessment threshold for statutory pension insurance are facing a gap in their provision for retirement. 
 For this reason, senior executives in the RWE Group are being given the option of deferring a self-defined portion of their future remuneration in favor of later pension
benefits. 
 Benefits are paid out to employees upon retirement to supplement statutory, company and any other existing private pension plans. The program
also covers occupational disability and, possibly, death. 
 We are offering you an attractive and flexible concept to boost your individual pension
provision: a pension commitment based on deferred compensation. This is well worth your while, as you will note when you read the following pages. 
 How
does deferred compensation work? 
 The idea behind this pension concept is very simple and cannot fail to interest you: 
 Under a deferred-compensation agreement, you convert part of your gross emoluments in return for a same-value pension commitment. To finance this pension commitment,
employer’s pension liability insurance (pension plan insurance) is taken out via RWE Rhenas Versicherungsvermittlung GmbH with Allianz Lebensversicherungs-AG. The benefits under the pension commitment are equivalent to the guaranteed benefits
under the employer’s pension liability insurance. 
 [Diagramm:] 
 Agreement on deferred compensation 
 Pension commitment 
  

					
	 Employee
	  		  	                Employer
	Pledging                            
	  		  	Employer’s pension liability insurance            

 (...) 

			
	RWE Rhenas	 	

  

 Page 2 / 10 
 

 
 You can convert portions of your fixed or variable remuneration, like your profit-sharing bonus and any stock options exercised
(see also Level of conversion amounts).  
 The pension commitment can be given and increased as per 1.1., 1.4., 1.7. or 1.10. each year
(see also Submission dates).  
 As employer’s pension liability insurance (under the R8C plan with death benefit for
survivors), endowment insurance is taken out in return for payment of variable premiums. No declaration of health is required. If the death-benefit capital (Todesfallkapital) guaranteed in the pension commitment, less the conversion amount,
exceeds €100,000 per one-off deferral, a “service obligation declaration” (Dienstobliegenheitserklärung) should be submitted to the effect that you are/were capable of working at the time of submission of the
conversion agreement, and that you have been in the company’s service for at least 6 months. Only if – according to the above definition – the result is an amount in excess of €175,000 per one-off deferral does Allianz
reserve the right to require a risk assessment in the form of a declaration of health or a medical certificate. In such cases, Allianz requests any necessary forms separately. 
 Here, too, as employer’s pension liability insurance (under the R9 plan without death benefit for survivors), an endowment life insurance is taken out in return for payment of variable premiums,
although a medical is not required in principle. 
 In the final quarter of the calendar year, you receive annual update statements in the event of
any changes. These statements inform you of the current benefit amount in your pension commitment by analogy with developments in employer’s pension liability insurance. They contain deferred compensation up to and including the third quarter.

 What benefits does deferred compensation offer you? 
 The pension commitment based on deferred compensation provides you with retirement capital (Alterskapital) in the amount of the benefit under the employer’s pension liability insurance upon completion of your 65th year of
life, though at least the guaranteed capital under the employer’s pension liability insurance. 
 If you leave the services of the Company after
completing your 60th year of life but before your 65th birthday, you receive, upon application, premature payout of the retirement capital (vorzeitiges Alterskapital) at the level of the surrender benefit in the employer’s
pension liability insurance. 

			
	RWE Rhenas	 	

  

 Page 3 / 10 
 If you
receive benefits for reduced earning capacity pursuant to sec. 43(2) of Germany’s Social Security Code VI (SGB VI), the option exists of applying for disability capital (Invaliditätskapital) at the level of the
existing benefits in the employer’s pension liability insurance. The deferred-compensation portions at least are reimbursed. 
 Alternatively, you can
also claim capital benefits in the amount of the benefit in the employer’s pension liability insurance upon completing your 65th year of life. 
 Total
loss of earning capacity must be evidenced to the Company by a pension notice from the statutory pension insurance scheme or by a medical certificate. 
 In
the case of death, the pension commitment in the R8C plan provides for a one-off capital payment or, in tariff R 9, for a premium refund for 
  

	 	•	 	 the spouse; 

  

	 	•	 	 the partner in a registered civil partnership; 

  

	 	•	 	 children as set forth in sec. 32(3) and (4), sent. 1, nos. 1 to 3 of Germany’s Income Tax Law (EStG); 

  

	 	•	 	 the partner in a common-law household, provided that the employee is not married; 

  

	 	•	 	 the partner in a non-registered civil partnership, provided that the employee is not married. 

 In the event that none of the above persons entitled to a pension exist, and a benefit is paid in the form of funeral benefit, payment is made to the entitled person
whose name has been passed on by the employer to Allianz Lebensversicherungs-AG by agreement with the employee. Failing this, payment is made to the insured’s heirs. 
 The funeral benefit for survivors not entitled to a pension is limited in amount to the various maximum sums insured for burial funds permitted by the supervisory authority on the occurrence of an insured event (at
present: €8,000). Upon request, we will inform you of the maximum variously applicable limits for funeral benefit. 
 For tax reasons, other persons
cannot be beneficiaries – not even by way of succession. 
 Details of benefit amounts are given by the examples on the following pages and the attached
benefit tables per € 2,000 and € 10,000 one-off deferral. 
 In the event of suicide during the first three years of a pension commitment
or of any increase given, the survivors entitled to a pension receive at least a capital payment in the amount of the premiums paid into the employer’s pension liability insurance concerned, without deduction. 
 When do the benefits become due? 
 In the case of an insured event,
benefits are due in the settlement month of January in the year following occurrence of the event. 
 In response to a written application from yourself or
your survivors, the pension benefits are granted in up to three equal installments, plus interest from the payments under the employer’s pension liability insurance. The first installment is likewise payable in the settlement month of January
in the year following occurrence of an insured event. Each of the remaining installments is due in the settlement month of January in the following years. With each part-disbursement, the corresponding share in the employer’s pension liability
insurance is paid out. 

			
	RWE Rhenas	 	

  

 Page 4 / 10 
 The
benefits due are disbursed after deduction of any statutory taxes and social-insurance contributions that must be borne by you. For this purpose, you or the person entitled to benefits have to submit the wage-tax deduction card (Lohnsteuerkarte) for
registration. 
 What are the advantages of deferred compensation? 
 Deferred compensation offers you a whole host of advantages: 
  

	 	•	 	 flexibility; 

  

	 	•	 	 possible tax breaks; 

  

	 	•	 	 continuity in any premature ending of the employment relationship; 

  

	 	•	 	 portability in case of internal change of employer; 

  

	 	•	 	 capital payment; 

  

	 	•	 	 employer’s pension liability insurance with interest guaranteed by law and profit sharing 

 In deferred compensation, flexibility is writ large. You can decide at any time on the conversion of variable remuneration components, either
wholly or in part, or parts of your fixed remuneration or a combination of these options. Also, you yourself set the amount of any deferral – reflecting your current personal and financial situation (see Level of conversion amounts and
dates). 
 With deferred compensation, your can usually obtain tax breaks since the converted amount flows fully and without deduction of wage tax
into your old-age pension. You only pay tax on the benefit paid out upon maturity, and the tax rate will often be more favorable by then. 
 The amount of
your deferred compensation remains fully intact when you leave the Company (premature ending of the employment relationship). 
 In the event that you
change employer within the RWE Group, the pension commitment can usually be ported to the new employer. In a switch to a new external employer, too, it can be ported with the consent of the previous and the new employer. 
 In old age, you are entitled to claim a one-off capital payment. 
 The employer’s pension liability insurance is currently documented with a guaranteed actuarial interest rate of 2.25%. The non-guaranteed total interest, incl any profit shares, amounts to 5.3% at present.

 The employer’s pension liability insurance is zillmerized. 
 What’s the small print? 
 In deferred compensation, some legal details are important. You should be aware of the following before
signing on the dotted line: 
  

	 	•	 	 the agreement on income conversion is binding per deferral; 

			
	RWE Rhenas	 	

  

 Page 5 / 10 
  

	 	•	 	 no implications for rises in salary and salary-dependent bonuses; 

  

	 	•	 	 no implications for any existing company pension scheme; 

  

	 	•	 	 pledging of employer’s pension liability insurance; 

  

	 	•	 	 possible tax breaks; 

  

	 	•	 	 pensioners’ compulsory health insurance; 

  

	 	•	 	 immediate vested (non-forfeitable) pension; 

  

	 	•	 	 other regulations / data protection. 

 The agreement
on deferred compensation is binding and irrevocable for each deferral (binding nature of the agreement on deferred compensation). 
 For rises in
salaries and for the assessment of salary-dependent bonuses, the full salary remains crucial. 
 Existing further expectancies or claims to other
company pension benefits do not impact the deferred-compensation scheme. 
 To safeguard your claims under the pension commitment and to hedge any
insolvency risks, the benefits under the employer’s pension liability insurance are pledged to you and your survivors. 
 In addition to
financial security, deferred compensation can offer you interesting tax breaks. 
 Tax savings: The assessment base crucial for establishing
your wage tax is reduced by the conversion amount. This lowers your current tax burden. 
 Only the benefit from the pension commitment is subject to
taxation. Since you have already retired at that point in time and a lower tax rate will then often apply to the benefits under a pension commitment, the result may be a significant tax saving. 
 In what amount the deferred compensation will enjoy tax relief depends in a specific case on 
  

	 	•	 	 the taxable income in the active and in the pension phase; 

  

	 	•	 	 the level of the conversion amount; 

  

	 	•	 	 the maturity of the pension commitment; 

  

	 	•	 	 any changes in underlying personal conditions regarding taxation; 

  

	 	•	 	 developments in tax legislation. 

 If you are not
sure, you should seek advice from a tax consultant. 
 Pensioners’ compulsory health insurance 
 Since 1.1.2004, pensioners in the compulsory health insurance applying to pensioners (regular case after 1.4.2002) have had to pay the full general contribution rate on
their health insurance themselves from any retirement benefits received (e.g. state pension and/or capital benefits from company pension schemes). In the case of capital benefits received under a company pension scheme, the amount that has applied
since 1.1.2004 is 1/120th of the capital amount for max. 10 years as monthly income liable for contributions (= fictitious pension). In the case of pensioners who are voluntarily insured in the statutory health insurance scheme (the exception since
1.4.2002) what matters is their health insurer’s by-laws. This rule does not apply to pensioners with private health insurance. 

			
	RWE Rhenas	 	

  

 Page 6 / 10 
 Immediately vested (non-forfeitable) pension 
 If you leave the services of a company without an insured event having occurred, you retain
your full expectancy in respect of all benefits on the basis of the contributions paid in. No payout of the employer’s pension liability insurance is envisaged. 
 Other rules 
 As a matter of principle, you cannot pledge, lend on or assign benefits. 
 In the event of a change of address or any drawdown of benefits, the Senior Executive Support Service (Führungskräftebetreuung) must be informed.

 The information required for handling the deferred compensation or the pension commitment is transmitted for further processing to RWE Rhenas
Versicherungsvermittlung GmbH and to Allianz Lebensversicherungs-AG, who use and process the information solely for the purposes of the contractual relationship. 
 Who can advise you on deferred compensation? 
 The staff of the Senior Executive Support Service and RWE Rhenas Versicherungsvermittlung GmbH
are happy to provide you with any information. You will also find further details in the Executive Portal of RWE’s intranet. 
 What must be heeded
in implementing the deferred compensation? 
 Please take note of: 
  

	 	•	 	 the agreement on deferred compensation; 

  

	 	•	 	 the level of the conversion amounts; 

  

	 	•	 	 the submission dates for the agreement on deferred compensation. 

 Agreement on deferred compensation 
  

	 	•	 	 Print out the form “Vereinbarung über Entgeltumwandlung” (Agreement on Deferred Compensation) 

  

	 	•	 	 Enter company, name, personnel number, conversion date and conversion amounts 

  

	 	•	 	 For unmarried employees: possibly add name, date of birth and residence of any common-law husband/wife or of the partner in a non-registered civil partnership

  

	 	•	 	 Sign the form 

  

	 	•	 	 Send signed form to Senior Executive Support Service. 

 Level of conversion amounts 
 You may convert part your fixed remuneration and/or part of your variable remuneration, e.g. your
profit-sharing bonus and any stock options. 

			
	RWE Rhenas	 	

  

 Page 7 / 10 
 The annual
deferred compensation 
  

	 	•	 	 must amount to at least €500 per quarterly deferral; 

	 	•	 	 must not fall below €2,000 per calendar year. 

 A minimum amount of €2,000 per calendar year is required. In the case of several deferrals per calendar year, these can be announced up to four times during the year, each to the end of a quarter, and the deferred amount must not
be below €500 per quarter. The deferred-compensation amount must be denominated in full €100 increments. You are free to make new decisions on whether and in what amount further agreements on future deferred compensation are to be
concluded. 
 If you change employer during the deferral period, only those remuneration components are taken into account for the deferral amount that can
be due for disbursement as per the cut-off date of your withdrawal. 
 Submission dates for the agreement on deferred compensation 
 Please send the completed agreement on deferred compensation to your Senior Executive Support Service in good time. Your agreement must be received by the following dates
at the latest: 
  

	 	•	 	 for fixed monthly emoluments: 

 no later than the 15th of the month that precedes the month in which compensation is to be deferred; 
  

	 	•	 	 for variable remuneration components, e.g. 

 profit-sharing bonuses and disbursement amounts under the RWE Long-Term Incentive Plan Beat 2005 (Beat 2005): 
 no later than the 15th of the settlement month. 
 You receive the pension commitment in the year in which you first deferred portions of your
remuneration. The pension commitment can be given or increased at the start of any calendar quarter (1.1., 1.4., 1.7. and 1.10.) (see submission dates above). 
 Examples: 
 If you wish to convert some of your profit-sharing bonus for the last fiscal year in March of this year, you receive your
pension commitment as of the start of April 1 this year. Your deferral declaration must then be available no later than March 15 of this year. 

			
	RWE Rhenas	 	

  

 Page 8 / 10 
 If you
wish to defer part of your fixed remuneration for the month of December, please submit your deferred-compensation agreement by November 15. The pension commitment then starts on January 1 of the following year; it takes account of all the
previous year’s deferred compensation. If you wish to defer from the month of January on, submit your agreement by December 15 of the previous year. The pension commitment then commences on April 1 of the following year. The
contributions converted by April 1 flow into the commitment. Any increases are made as of the next-following quarterly cut-off date and documented annually on October 1. 
 If a disbursement is made within the scope of the LTIPs in the month of March and the deferral declaration is submitted on March 8, say, the commitment starts on July 1 of the current year. 
 The following examples and benefit tables show how high the likely pension can be when the profit share in the employer’s pension liability insurance is
unchanged. The benefit tables refer solely to the 2007 commitment year: 
 Example 1: (R8C plan, incl survivor provision on death)

 A 35-year-old male employee defers €30,000, say, on a one-off basis from the payment of the profit-sharing bonus in year 1 and, in addition,
€2,000 from the fixed remuneration in the same calendar year. In the following years, €2,000 per calendar year is regularly deferred until age 65. 
  

									
	 Entry age 1)
	 	Deferred
compensation	 	Guaranteed capital
at 65	 	Death-benefit
capital	 	Total
capital
at 65 2)
	35	 	  €30,000	 	  €53,483 €	 	€53,483	 	c.€
	35	 	€2,000 €	 	    €3,541 €	 	  €3,541	 	    c.€
	36	 	€2,000 €	 	    €3,469 €	 	  €3,469	 	    c.€
	37	 	€2,000 €	 	        €3,399	 	  €3,399	 	    c.€
	    Total capital added up from annual conversions of €2,000	 	c.€
	65	 	  €90,000	 	      €134,230  	 	€134,230 	 	c.€

 Example 2: (R9 plan with premium refund on death) 
 otherwise as in example 1 
  

									
	 Entry age 1)
	 	Deferred
compensation	 	Guaranteed capital
at 65	 	Death-benefit
capital *	 	Total capital
at 65 2)
	35	 	  €30,000	 	    €56,680	 	€0	 	c,€
	35	 	    €2,000	 	      €3,752	 	€0	 	    c,€8,828
	36	 	    €2,000	 	      €3,672	 	€0	 	    c,€
	37	 	    €2,000	 	      €3,593	 	€0	 	    c,€7,982
	    Total capital added up from annual conversions of €2,000	 	c,€
	65	 	  €90,000	 	  €140,258	 	€0	 	c,€

			
	RWE Rhenas	 	

  

 Page 9 / 10 
 Example
3: (R8C plan, incl survivor provision on death) 
 The following calculations compare how guaranteed capital and likely total capital under the
employer’s pension liability insurance differ if a 35-year-old male employee defers €10,000 of pay in a calendar year. 
 In the variant in the
first table, a deferral of €2,500 each is declared per quarter. The second table assumes a one-off deferral of €10,000 in the first quarter. 
  

									
	 Entry age 1)
	 	Deferred
compensation	 	Guaranteed capital
at 65	 	Death-benefit
capital	 	Total capital
at 65 2)
	35(01.01.)	 	     €2,500	 	        €4,432	 	  €4,432	 	€11,070.30
	35(01.04.)	 	     €2,500	 	        €4,432	 	  €4,432	 	€11,070.30
	35(01.07.)	 	     €2,500	 	        €4,432	 	  €4,432	 	€11,070.30
	36(01.10.)	 	     €2,500	 	        €4,343	 	  €4,343	 	€10,517.30
		 	   €10,000	 	    €17,639	 	€17,639	 	€43,728.20
					
	 Entry age 1)
	 	Deferred
compensation	 	Guaranteed capital
at 65	 	Death
capital	 	Total capital
at 65 2)
	35	 	   €10,000	 	€17,810	 	€17,810	 	€44,482.10

 Example 4: (R9 plan with premium refund on death) 
 otherwise as in example 3 
  

									
	 Entry age 1)
	 	Deferred
compensation	 	Guaranteed capital
at 65	 	Death-benefit
capital *	 	Total capital
at 65 2)
	35(01.01.)	 	      €2,500.00	 	   €4,697.00	 	      €0	 	  €11,053.50
	35(01.04.)	 	      €2,500.00	 	   €4,697.00	 	      €0	 	  €11,053.50
	35(01.07.)	 	      €2,500.00	 	   €4,697.00	 	      €0	 	  €11,053.50
	36(01.10.)	 	      €2,500.00	 	   €4,595.00	 	      €0	 	  €10,509.90
		 	  €10,000.00	 	€18,686.00	 	      €0	 	€43,670.40

			
	RWE Rhenas	 	

  

 Page 10 / 10 
  

									
	 Entry age 1)
	 	Deferred
compensation	 	Guaranteed capital
at 65	 	Death-benefit
capital *	 	Total capital
at 65 2)
	35	 	€10,000.00	 	€18,875.00	 	€0	 	€44,396.00

  

	 1)
	 The entry age is the age at
the most recent birthday prior to start of the commitment / employer’s pension liability insurance (quarterly cut-off date). If more than 6 months have passed since then, the age on the next-following birthday applies.

	 2)
	 The total capital is
equivalent to the guaranteed capital plus the likely profit share from the employer’s pension liability insurance. For the profit share, it was assumed that the currently declared profit-share rates remain unchanged during the entire term of
the insurance. There is no legal claim to an adjustment, however. The profit share and the cited total capital cannot be guaranteed. 

	 *)
	 On the event of decease before
the contractually defined age at maturity: premium refund plus share in surplus accrued by the benefit date. 

 You can multiply the
premiums and, hence, the benefits, in the sample tables at will, thus roughly establishing the amount of the pension for the premium you want. 
 Return

 What an insurer means by return on investment is the unvarying annual rate applying to a security portfolio, say. In the case of insurance for old-age
and, possibly, survivor provision, the survival benefit upon maturity is normally used. The resulting return on survival, relative to the guaranteed capital, is lower than the cited guaranteed rate of 2.25% (2007). The reason for this is that costs
still have to be taken into account. Single-premium insurance finances these risk, acquisition and administrative costs from the single premium at the start of the policy. The longer the term, the higher the return on survival, too, since compound
interest can then unfold its effect. 
 Before the agreed survival, benefits are only payable in the event of premature death or complete disability. In this
case, Allianz has pledged the sum of the premiums paid from the very first day as minimum benefit.Settlement Agreement

 Exhibit 10.12 
 SETTLEMENT AGREEMENT 
 THIS SETTLEMENT AGREEMENT (“Agreement”) is made by and between
California American Water Company (“CAW”) and the U.S. Department of Commerce, National Oceanic and Atmospheric Administration (“NOAA”). Throughout this Agreement, CAW and NOAA are collectively referred to as the
“Parties.” 
 Recitals 
 A. CAW is the owner and operator of the public drinking water system for the Monterey Peninsula, which serves approximately 40,000 customers. CAW is regulated by the California Public Utilities Commission
(“CPUC”) and is mandated by California law to serve potable water to its customers and to comply with federal and state safe drinking water laws and regulations, as well as the Federal Endangered Species Act. A major source of CAW’s
water supply is diversions from the Carmel Valley Aquifer. CAW is currently working to develop an alternative long-term water supply to replace a significant portion of that water supply. 
 B. CAW’s operations on the Carmel River are regulated by a number of agencies pursuant to certain orders and agreements. State Water Resources
Control Board Order 95-10 mandates that CAW find an alternative supply for 10,730 acre-feet (“AF”) of water and, pending the implementation of an alternative water supply, limit its diversions from the Carmel Valley to 11,284.8 AF. Order
95-10 was amended in 2002 to incorporate certain provisions of the Conservation Agreement (described below) relating to additional limitations on CAW’s diversions at San Clemente Dam and upstream wells during low flow periods. CAW’s
operation of Los Padres and San Clemente Dams is controlled by an annual agreement among CAW, the Monterey Peninsula Water Management District and the California Department of Fish & Game. CAW’s operation of San Clemente Dam is further
constrained by a mandate issued by the California Division of Safety of Dams (“DSOD”) to institute interim safety measures that include lowering the water levels in the reservoir behind San Clemente Dam during the dry season (approximately
seven months each year). 
 C. On September 18, 2001, NOAA and CAW entered into a Conservation Agreement (“Conservation
Agreement”), which required CAW to implement certain measures to reduce the impact of its operations in the Carmel River on steelhead and their habitat. 
 D. The goals and objectives of the Conservation Agreement were as follows: 
 1. NMFS’ goal and objective
are to protect and conserve Steelhead in the Carmel River, including maximizing the Carmel River Basin’s substantial contribution toward recovering this [S]outh [C]entral California Coast Steelhead ESU [“SCCC steelhead”] and to
enforce the ESA [Endangered Species Act]. 
 2. Cal-Am’s [CAW’s] goal and objective are to supply water in accordance with its CPUC
Certificate in a manner that complies with the Federal ESA and other regulatory obligations. 
  

 -1- 

 E. The Conservation Agreement contained three tiers of activities. Tier I included short- and mid-term
actions designed to conserve steelhead in the Carmel River. Tier II described the process to be followed to address DSOD’s issues with San Clemente Dam and other mid-term measures designed to conserve steelhead in the Carmel River. Tier III
described the process to be followed to address the long-term implementation of actions designed to meet the goals identified by the Parties in the Conservation Agreement. 
 F. Since September 2001, CAW has implemented all of the measures set forth in Phase I of Tier I of the Conservation Agreement. These measures include
ceasing surface water diversions at San Clemente Dam during low flow periods, ceasing diversions from the Upper Carmel Valley Wells during low flow periods, and installing a booster station to move water from the lower Carmel Valley to the Upper
Carmel Valley. In addition, as part of an overall effort to protect and enhance SCCC steelhead, CAW and its customers have paid for additional steelhead mitigation measures for many years. These measures, implemented by the Monterey Peninsula Water
Management District, include annual fish rescues, the construction and operation of a rearing facility to hold rescued steelhead, monitoring of and improvements to the instream and riparian habitat, improvements to the Carmel River Lagoon, and
monitoring fish numbers during migration, and have cost CAW’s ratepayers over $28M to date. 
 G. Phase II of Tier I of the Conservation
Agreement required CAW to maintain a continuous surface flow in the Carmel River as far downstream as possible in AQ3 (a defined area of the Carmel Valley Aquifer) by offsetting CAW water diversions in upstream sections of AQ3 with expanded
diversion capability in AQ4, in the lowermost reaches of AQ3, and the Seaside aquifer storage and recovery (“ASR”) expansion. Phase II required CAW to increase well capacity downstream of and including the San Carlos Well by 3.0 to 5.0
cfs. CAW retrofitted the Rancho Cañada Well and increased its capacity initially by 140%. The reconditioned well was put into service on March 31, 2003. At about the same time, the California Department of Health Services opined that
extractions from the nearby San Carlos Well constitute groundwater under the influence of surface water. The San Carlos well was therefore taken out of service, as there is no means of providing surface water treatment at that location. This
resulted in no net gain in pumping capacity in the lower aquifer. 
 H. The next step in Phase II of Tier I of the Conservation Agreement was
to be the installation of a new well in the lower aquifer. Studies showed that any new well in the lower Carmel Valley would likely require surface water treatment and construction of a surface water treatment plant, which was estimated to cost
approximately $5.5 million. In light of CAW’s need to focus its financial and personnel resources on a long-term water supply project, rather than those interim measures in the Carmel River, the Parties agree that proceeding with the measures
set forth in Phase II of Tier I would not be financially prudent. 
 I. NOAA asserts that additional mid-term measures are required to
further reduce the impact of CAW’s operations in the Carmel River on steelhead and their habitat pending CAW’s development of a long-term water supply. CAW agrees that there are further interim measures that will benefit the steelhead.

  

 -2- 

 AGREEMENT: 
  

	 	I.	Continuation of Tier I Phase I Activities and Certain Tier I Phase II Activities: 

 Throughout the term of this Agreement, CAW shall continue to implement all of the measures described in Phase I of Tier I of the Conservation Agreement. 
  

	 	II.	New Tier I Phase II Activities: 

 A. CAW shall provide
funding for projects to improve habitat conditions for, and production of, SCCC steelhead and/or otherwise aid in the recovery of SCCC steelhead in the Carmel River Watershed. CAW shall provide an initial lump sum payment of Three Million Five
Hundred Thousand Dollars ($3,500,000.00) within 60 days of the execution of this Settlement Agreement (“Agreement”). CAW will further provide the sum of One Million One Hundred Thousand Dollars ($1,100,000.00) on the first anniversary of
the Agreement and again on each subsequent anniversary of the Agreement until it expires. 
 B. NOAA shall, at its sole discretion, select
and prioritize the projects to be funded with the money supplied by CAW pursuant to paragraph II. A. NOAA shall consult with CAW on all projects funded under this Agreement. 
 C. The Parties recognize that any activity on or near the Carmel River can have potentially adverse effects on CAW’s ability to serve potable water
safe for public consumption. NOAA will not undertake any projects that will affect CAW’s mandate under California law to serve potable water to its customers and to comply with federal and state safe drinking water laws and regulations.

  

	 	III.	Tier III Activities: 

 CAW has identified the CWP as its
proposed project for a long-term water supply to replace 10,730 AF of water that CAW diverts from the Carmel Valley Aquifer, plus approximately 1,000 AF to protect against overdraft of the Seaside Basin. CAW will continue to diligently pursue the
environmental review and required permits to design, build and operate the CWP. The current schedule contemplates having the CWP in operation by 2012 at the earliest. The parties recognize that the CWP will require extensive environmental review and
permits from many federal, state and local agencies over which CAW has no control. CAW will keep NOAA informed of the CWP’s schedule, progress, potential delays and the reasons therefore. 
  

	 	IV.	NOAA’s Cooperation with CAW and Other Agencies 

 The
parties recognize that the CPUC is CAW’s primary regulatory agency. CAW is obligated to serve its customers in a cost-effective manner. CAW must obtain CPUC permission to fund activities such as environmental mitigation, and the rates charged
to CAW’s customers must be approved by the CPUC. NOAA acknowledges that in CAW’s role as a CPUC regulated water provider, that it has an obligation to serve its customers. 
  

 -3- 

 California American Water (CAW) is facing a plethora of permitting and regulatory issues related to
CAW’s quest to implement a replacement long-term water supply, to comply with the ESA and regulatory requirements of other federal and state agencies. 
 Cooperation, as used herein, means providing comments on a project or course of action by writing letters, appearing at public meetings and hearings to speak or give testimony, and meeting with other government
agencies, consistent with NOAA’s mission, policies, and its ESA responsibilities, and taking into account the limitations imposed by staff time and resources. 
  

	 	A.	California Public Utilities Commission (CPUC) 

 1. NOAA will cooperate in CPUC proceedings related to approval of the Certificate of Public Convenience and Necessity for a replacement long-term water supply project by explaining the importance of the recovery of the SCCC steelhead and
the habitat of the Carmel River, and the environmental benefits of a replacement long-term water supply compared to the environmental detriment of continuing the current water supply for the Monterey Peninsula. 
 2. NOAA will cooperate in any CPUC general rate proceedings concerning the recovery in rates of costs of a replacement long-term water
supply project and funds paid for mitigation by explaining to the CPUC: (1) the benefits to steelhead of any mitigation funds paid pursuant to any agreement with NOAA; (2) the penalties applicable to violations of the ESA; and
(3) compliance with the ESA is mandatory. 
  

	 	B.	Other Agencies with Permitting/Regulatory Authority over the Coastal Water Project. 

 1. Monterey Bay National Marine Sanctuary (MBNMS) 
 NOAA will cooperate with CAW by meeting
with NOAA personnel who manage MBNMS to educate them about how a replacement long-term water supply project will benefit listed species in the Carmel River and its habitat; discuss with CAW and MBNMS any concerns of MBNMS regarding a replacement
long-term water supply project’s potential effects on MBNMS. 
 2. California Coastal Commission (CCC) 
 A Coastal Development Permit from CCC is required. NOAA will cooperate with CAW by (1) explaining the critical need for the
replacement of a long-term water supply for Carmel River to CCC and that the means of providing such a replacement water supply are extremely limited and (2) that CCC should consider the overall environmental picture for Monterey Peninsula,
including the benefit to listed species in and along the Carmel River, and not just the marine species in MBNMS. 
 3. State Water Resources
Control Board (SWRCB) 
 The second component of the CWP is aquifer storage and recovery (ASR), which will require water
rights permits from SWRCB. NOAA has supported the concept 

  

 -4- 

 
of ASR for years. NOAA will cooperate with CAW regarding the benefits of diversions to ASR during times of excess flow on the Carmel River. NOAA will meet
and confer with CAW to discuss any of its concerns with CAW’S ASR permit applications before commenting publicly. 
 4. U.S. Fish and
Wildlife Service (USFWS) 
 NOAA will cooperate with CAW regarding USFWS issues related to permits for a replacement long-term
water supply project. 
 5. California Department of Fish & Game (CDF&G) 
 NOAA will cooperate with CAW regarding CDF&G issues related to permits for a replacement long-term water supply project. 

 

	 	V.	Prosecutorial Discretion: 

 It is the responsibility of
NOAA to investigate and take appropriate enforcement action with respect to violations of the ESA involving species under its jurisdiction. In light of the substantial amounts of time and money that have been, and will continue to be, expended by
CAW on steelhead conservation measures, NOAA agrees that prosecution of CAW for ESA violations relating to its pumping operations and water withdrawals from the Carmel River is not the preferred course of action. 
 Accordingly, so long as CAW complies with the terms and conditions of this Agreement, NOAA will exercise enforcement discretion relative to any potential
violation of the ESA committed by CAW involving its pumping operations or water withdrawals from the Carmel River in the following manner: 
 A. NOAA may investigate and document each apparent ESA violation. 
 B. NOAA will exercise enforcement discretion in prosecuting
such ESA violations, if in the sole view of NOAA, CAW has fully complied with the terms and conditions of this Agreement. 
 C. If NOAA
believes CAW has not complied with any term or condition of this Agreement, NOAA shall notify CAW of said belief within five (5) business days after making this determination. 
  

	 	VI.	Term of Agreement: 

 A. This Agreement shall commence on the date of signature by the last Party executing this Agreement, and shall expire (i) on the calendar day immediately preceding the expire on the seventh (7th) anniversary of this Agreement or (ii) upon CAW’s compliance with Ordering Paragraph 2 of the State Water Resources Control Board Order 95-10,
whichever occurs first. 
  

 -5- 

 B. The term of this Agreement may be extended by mutual consent of the Parties. 
  

	 	VII.	Miscellaneous Provisions: 

 A. Although this Agreement does
not address NOAA’s ESA concerns with respect to any of CAW’s operations other than well pumping and water withdrawals, the Parties agree that they will negotiate in good faith using their best efforts to reach an agreement by
August 31, 2006, to address NOAA’s ESA concerns regarding CAW’s remaining operations. Any subsequent agreement may include an extension of the term of this Agreement. 
 B. Either of the Parties may issue a press release regarding the contents of this Agreement after the other Party has been given adequate opportunity to
review and comment on the draft press release. 
 C. The provisions of this Agreement shall apply to and be binding upon the Parties and
their respective successors and assigns. 
 D. This written Agreement and the Conservation Agreement signed by the Parties on
September 18, 2001, shall constitute the sole and entire agreement between the Parties and supersede any prior agreements and understandings whether oral or otherwise. The terms and conditions of the Conservation Agreement, except any
obligations to increase well capacity in the lower Carmel Valley as previously required by Phase II Tier I, are expressly incorporated herein by reference. Any modification of this Agreement shall be in writing and signed by the Parties. 

E. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, and such counterparts shall constitute one
and the same agreement. 
 F. Each undersigned representative of a party to this Agreement certifies that he or she is fully authorized by
that party to enter into and execute the terms of this Agreement and legally bind such party to this Agreement. 
  

 -6- 

 G. If CAW breaches section II.A of this Agreement by failing to provide any funding required under II A.
within the time period set forth in this paragraph, NOAA shall give CAW written notice of such breach and demand that the funding be provided within ten (10) business days of receipt of such notice by CAW. 
  

	
	 ACCEPTED ON BEHALF OF CALIFORNIA-AMERICAN WATER COMPANY BY:

	
	 

	
	 Paul Townsley

	 California-American Water Company

	
	 DATED: June 29, 2006

	
	 ACCEPTED ON BEHALF OF THE DEPARTMENT OF COMMERCE BY:

	
	 

	
	 Michele Kuruc

	 Office of General Counsel for Enforcement & Litigation, NOAA

	
	 DATED: June 29, 2006

	
	 

	
	 Rodney McInnis

	 Regional Administrator Southwest Region

	 National Marine Fisheries Service, NOAA

	
	 DATED: June 29, 2006

  

 -7-

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00138-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00138-of-00352.parquet"}]]