press release

Unocal supports Avila Beach community in unique 'water wheeling' project

Santa Maria, Calif., May 14, 1996 -- In an unprecedented move, Unocal has agreed to purchase Avila Beach's unneeded water for up to the next five years at full cost, thus reducing the Water District's financial burden. This is considered the first "water-wheeling" deal in California -- a term coined to describe the purchase of State Water Project water from the Avila Beach Water District and it's transfer to another user, rather than returning the water back to the state at considerable loss.

In the early 1990's, local jurisdictions throughout California negotiated with the State Water Project for the current and anticipated future water needs of their communities. In 1992, the Avila Water District agreed to purchase 100 acre-feet of water per year from the State Water Project.

If the Water District had been unable to negotiate this deal, residents water service rates could have doubled, according to Byron Briley, President, Avila Water District.

Unocal has been working with the Water District as part of it's community-wide efforts to assist Avila Beach during the company's remediation efforts of underground hydrocarbon contamination.

Unocal will provide this water, at a discounted rate, to an agricultural user located in the Tulare Lake Basin Water Storage District. Although this is a significant expense to Unocal, company officials believe the end result is a win-win for both Avila Beach and for Unocal.

"We believe our subsidy of the water is in the best interest of all concerned," stated Bill Sharrer, manager of environmental affairs for Unocal. "It assists the Water District, and that is important because like all other businesses and residents of Avila Beach, we rely on the Water District for water and fire protection services."

If during the next five years Avila Beach should need the water that has been purchased as part of water-wheeling, Unocal will cooperate in providing the required supply.

The agreement was conditionally approved today by the San Luis Obispo County Board of Supervisors, who serve as the regional administrators for the State Water Project, subject to final approval by the State Water Project authorities.

Updated: May 1996