Suburban Water Systems Joins Cadiz Water Conservation Project

  Suburban Water Systems Joins Cadiz Water Conservation Project

     Cadiz Also Updates Progress in Project’s Environmental Review Phase

Business Wire

LOS ANGELES -- October 04, 2010

Today Cadiz Inc. (NASDAQ: CDZI) is pleased to announce the addition of water
utility Suburban Water Systems (“Suburban”) to its Water Conservation &
Storage Project (“Project”). Suburban is a wholly-owned subsidiary of
SouthWest Water Company (“SouthWest Water”), a provider of water, wastewater
and municipal utilities services to a population of over one million people
from across the southern tier of the U.S.A. By entering today into an Option
Agreement with Cadiz for conserved water and related storage capacity in the
Project, Suburban joins Santa Margarita Water District (“Santa Margarita”),
Three Valleys Municipal Water District (“Three Valleys”), and Golden State
Water Company (“Golden State) as a Project participant. With the addition of
Suburban, 60% of the water to be conserved annually by the Project is now
under option. The Company is in continuing discussions with additional
potential participants.

Under Suburban’s Option Agreement, which contains terms consistent with those
previously announced for the other Project participants, Suburban will have
the right to acquire a firm, annual supply of 5,000 acre-feet of water at a
pre-determined formula competitive with its incremental cost of new water.
Suburban will also have the option to acquire storage capacity in the Project
to manage this new supply in complement with its other water resources. These
rights will be exercisable upon completion of the California Environmental
Quality Act (“CEQA”) review. Suburban has committed funds to the CEQA review
process and will share costs with the other Project participants and Cadiz.

“Suburban takes pride in our stewardship of California’s precious water
resources and we believe that the Cadiz Project can provide a sustainable new
water supply in an environmentally responsible manner. We look forward to
Suburban’s participation in the Project, which will offer additional
reliability for our customers,” said Mike Quinn, President of Suburban Water
Systems.

Cadiz and its partners are continuing to make progress in the Project’s
environmental review and permitting phase. In June, Cadiz announced that Santa
Margarita would serve as lead agency for the CEQA review of the Project.
Following that announcement, ESA Associates, a leading environmental
consulting firm, was retained to prepare the Project’s formal CEQA
documentation. Technical studies and field work are currently under way as
part of the process to prepare the CEQA documents, which are scheduled to be
released before the end of the year.

This newest round of environmental analysis follows on the heels of an
extensive pre-CEQA hydrologic evaluation of the Project’s local and regional
groundwater resources by several leading experts. Earlier this year, the
international engineering consulting firm CH2M HILL unveiled the findings of a
comprehensive study confirming the scale and recharge rate of the Project’s
aquifer system. The study, which was peer-reviewed and validated by leading
groundwater experts, has been independently corroborated by further studies.
CH2M HILL estimates that the total groundwater in storage in the aquifer
system is between 17 and 34 million acre-feet, a quantity on par with Lake
Mead, the nation’s largest surface reservoir. The study also confirmed a
large, renewable, annual supply of native groundwater in the aquifer system
currently being lost to evaporation.

“We are enthusiastic about the progress the Project is making as we enter the
public environmental review phase. We look forward to the release of a draft
environmental impact report for public comment, an open evaluation of the
massive data collection of field work and calibrated modeling that has been
compiled, and, ultimately, a positive public process for our partners and all
interested parties,” said Scott Slater, Cadiz General Counsel. “Suburban is a
great addition to the Project and we welcome their participation.”

About the Project

One of the largest water conservation efforts of its kind, the Cadiz Project
will capture and utilize billions of gallons of renewable native groundwater
that is currently being lost to evaporation through an aquifer system beneath
Cadiz’s landholdings in eastern San Bernardino County, California and yield a
sustainable annual supply for subscribers. In addition, the Project offers
approximately one million acre-feet of storage capacity that can be used to
conserve – or “bank” – imported water, without the high rates of evaporative
loss suffered by local surface reservoirs.

About SouthWest Water & Suburban

Recently acquired by institutional investors advised by JP Morgan Asset
Management and Water Asset Management, LLC, SouthWest Water Company provides a
broad range of operations, maintenance and management services, including
water production, treatment and distribution; wastewater collection and
treatment; customer service; and utility infrastructure construction
management. The company owns regulated public utilities and also serves
cities, utility districts and private companies under contract. SouthWest
Water currently serves over one million people in 9 states across the southern
tier of the U.S.A. Suburban Water Systems is a wholly-owned subsidiary of
SouthWest Water that provides high-quality water to a population of
approximately 300,000 people in a42-square-mile service area in California's
Los Angeles and Orange counties. Additional information may be found about
SouthWest Water and Suburban by visiting http://www.swwc.com.

About Cadiz

Founded in 1983, Cadiz is a publicly-held renewable resources company that
owns 70 square miles of property with significant water resources and clean
energy potential in eastern San Bernardino County, California. The Company is
engaged in a combination of water storage and supply, solar energy and organic
farming projects. Last year, Cadiz signed a wide-ranging “Green Compact” to
promote environmental conservation and sustainable management practices.
Further information can be obtained by visiting the Company’s website:
http://www.cadizinc.com.

This release contains forward-looking statements that are subject to
significant risks and uncertainties, including statements related to the
future operating and financial performance of the Company and the financing
activities of the Company. Although the Company believes that the expectations
reflected in our forward-looking statements are reasonable, it can give no
assurance that such expectations will prove to be correct. Factors that could
cause actual results or events to differ materially from those reflected in
the Company’s forward-looking statements include the Company’s ability to
maximize value for Cadiz land and water resources, the Company’s ability to
obtain new financing as needed, and other factors and considerations detailed
in the Company’s Securities and Exchange Commission filings.

Contact:

Cadiz Inc.
Courtney Degener, Investor Relations Manager
213-271-1603
 
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