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Carlsbad Mayor Eager for Water Authority to Approve Desalination Project

The San Diego County Water Authority is expected to vote as soon as Nov. 29 on a water purchase agreement with Poseidon Resources, the project’s developer.

The Carlsbad City Council heard an update last Tuesday on the proposed Carlsbad Desalination Project in preparation for two upcoming decisions about the project. The San Diego County Water Authority will soon vote on whether or not to approve the project, and local water agencies, including Carlsbad, will decide whether or not to purchase an additional guaranteed supply of desalinated water just for local use. 

The San Diego County Water Authority is expected to vote as soon as Nov. 29 on a water purchase agreement with Poseidon Resources, the project’s developer. An approved water purchase agreement would clear the way for Poseidon to secure financing and begin construction on the plant, which would be built next to the Encina Power Station along the Carlsbad coastline. 

“The time to approve this project is now,” said City of Carlsbad Mayor Matt Hall. “Our future economy and quality of life depend on securing more locally controlled, reliable water supplies.” Under the agreement, the desalination project would increase the region’s water supply by about 7 percent and increase water rates for Carlsbad Municipal Water District customers about $7 a month. 

The Water Authority board consists of 36 representatives from 24 water agencies in the region. Carlsbad has two representatives on the board. The other upcoming decision is whether or not water agencies in the region, including the Carlsbad Municipal Water District, want to purchase water from the plant, beyond what would be provided by the Water Authority, which is the wholesale water distributor for the county. 

According to a report presented to the City Council Tuesday, although the cost of water from the proposed Carlsbad Desalination Project would be higher than existing water supplies today, that difference would steadily decrease as the price of imported water continues to go up.  

Depending on a number of variables, the cost could be about the same as current imported water supplies in as soon as 10 years. A rate analysis prepared for the City of Carlsbad by Gordon Hess and Associates, Inc., and Water Resources Consultants, Inc., compared the desalinated water costs to Carlsbad under a 30-year purchase contract for 5,000 acre feet with the projected cost of the existing water supply. (One acre-foot is approximately 325,900 gallons, which is enough to supply two four-person households for a year.) The results of the analysis show that in the initial year of purchase, desalinated water costs more than the existing supply.

However, this cost difference begins to diminish each subsequent year, and within 10 years the cost of desalinated water crosses over and becomes more cost effective than the existing supply costs. According to City of Carlsbad Finance Director Chuck McBride, the assumptions used for the rate analysis are not guaranteed given the number of variables that affect the cost of both the imported water supply and the desalination project water.

The City Council should weigh all of these factors when deciding whether or not to purchase additional water from the project, said McBride. The City of Carlsbad originally worked with Poseidon Resources more than 10 years ago to craft an agreement that would enable Carlsbad to purchase water from the plant at a cost no higher than the price of imported water.

Other water agencies in the region then made similar arrangements with Poseidon to purchase the water directly to augment their imported water supplies. However, Poseidon could not secure financing for the project, and the San Diego County Water Authority started to work on a deal to purchase water from the desalination project and distribute it to water agencies in the region. Currently, San Diego County imports about 90 percent of its water from the Colorado River and Northern California.

Since these sources face legal and environmental constraints, the region has been exploring other ways to ensure an adequate water supply, including increased water recycling, more aggressive conservation programs, increased water storage, groundwater desalination and seawater desalination. The proposed plant is fully permitted by the California Coastal Commission and other regulatory agencies. It could be operational as early as 2016. The County Water Authority has tentatively schedule to vote on the water purchase agreement Nov. 29. The Carlsbad Municipal Water District board of directors is expected to vote on whether or not to purchase additional water from the project at its Nov. 27 meeting. 

About 85 percent of the City of Carlsbad gets water service from the Carlsbad Municipal Water District, a subsidiary district of the City of Carlsbad. The southeastern part of the city is served by the Olivenhain Municipal Water District and the Vallecitos Water District.  Members of the Carlsbad City Council also serve as board members of the Carlsbad Municipal Water District. 

–City of Carlsbad

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