The C29197T mutation is one of 4 point mutations known to cause N-gene target failure (NGTF) in the Xpert Xpress SARS-CoV-2 and Xpert Omni SARS-CoV-2 assays from Cepheid (Sunnyvale, CA). We describe a high local prevalence in January of 8.5% (CI 4.9-14.2%) for the C29197T mutation, which was over 3-fold higher than the prevalence estimated statewide in California during the same time frame, 2.5% (CI 2.1-2.8%). Using phylogenetic analysis, we discovered that this increase in prevalence was due, at least in part, to a disproportionately large infection cluster of unknown origin. This study emphasizes the importance of sequencing at the local jurisdictional level and demonstrates the impact that regional variation can have when assessing risk due to point mutations that impact clinical test performance. It also reinforces the need for diligent reporting of abnormal test results by clinical laboratories, especially during Emergency Use Authorization (EUA) periods, as additional information is gathered about the target organism and the performance of EUA-authorized tests over time.