City: Proposed Seawater Desalination Project Terms Changed Significantly

Carlsbad, along with water agencies throughout the region, will soon need to decide whether or not the current price of desalinated water is worth the increased reliability of the region’s water supply.

Terms of the seawater desalination project proposed to be built along the Carlsbad coastline have changed significantly from when the project was first introduced more than a decade ago, city staff reported to the Carlsbad City Council last week.

leaders worked with Poseidon Resources, the plant’s developer, in the early days of the project to develop 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.  

When Poseidon could not secure financing for the project, the region’s water wholesaler, the San Diego County Water Authority, started to work on a deal to purchase water from the project and distribute it to water agencies in the region. This deal is nearing completion. In late August, the San Diego County Water Authority is planning to release a proposed 30-year water purchase agreement with Poseidon Resources. The release will open a 60-day public review period, and the public will be invited to provide comments at two special public meetings and at regularly scheduled meetings of the Water Authority’s Board of Directors before the board takes action on the agreement this fall. 

The special public meetings, at the San Diego County Water Authority in Kearny Mesa and in Carlsbad, will be held: 

Thursday, Sept. 13, at 6:30 p.m. at 4677 Overland Ave.

Thursday, Sept. 20, at 6:30 p.m. at the , 799 Pine Ave.

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. T

here are two key decisions to be made about the desalination project in the coming months. The first is whether or not the Water Authority board will approve the water purchase agreement with Poseidon Resources. If the Water Authority Board approves the water purchase agreement, Poseidon would be authorized to finance the project and begin construction.

The Water Authority board is made up of representatives of 24 water agencies in the region. Water agencies are given board representation based on the size of the agency. Carlsbad has two members on the 36 member board.

If the project were approved, the region’s water supply would increase by about 8 percent, and all water agencies in the region would share in this benefit. The cost of the project would also be shared. Although the exact effect on water rates has not been determined, the Water Authority has estimated that an average household could see a monthly increase of about $5. 

The second decision is whether or not agencies, including Carlsbad, would like to purchase an additional portion of the desalinated water from the Water Authority as their own local supply. The price per acre-foot for the desalinated seawater, plus modifications to the Water Authority’s aqueduct required to incorporate this new supply, is still being finalized, but is estimated at between $2,000 to $2,350 per acre-foot. Although more costly than the price paid for less reliable imported water supplies, the cost of desalination is cost-competitive with other new highly reliable water supply options being considered in San Diego County.  

Already approved by the California Coastal Commission and fully permitted, the desalination plant would be built next to the Encina Power Station along Carlsbad's coastline.

–City of Carlsbad Press Release

merle Moshiri August 28, 2012 at 08:34 PM
so......you're willing to sign a 30 yr. agreement with NO cost cap? on a project that has already gone from $270 million to nearly $1 Billion? With only a filmsy Letter of Credit backing its contractual performance. That Poseidon will use the the WPA as its equity to back the peddling of tax exempt bonds. That there is no long term energy contract and a lot of trouble at San Onofre. I'd like to do business with you too!
steve bilson August 29, 2012 at 04:31 PM
Greywater reuse costs a fraction of that, and the higher water and sewer rates rise, the more a greywater reuse system is worth. It's too bad that the greywater industry doesn't have deep-pocket eastern backers to keep pumping out propaganda to con you all into biting their baited hook.
paulsavage August 29, 2012 at 07:07 PM
I must be crazy, the cost per acre foot is way too high. Doesn't it make more sense to store water in underground aquifirs until needed in the dry years. I mean you could store enough water to cover whatever number of years you felt necessary. No evaporation loss. Mega less cost per acre foot. What am I missiing
JC September 01, 2012 at 08:34 PM
The idea of adding to our water supply using desal is great, but allowing a for-profit corporation to tap into the public supply system and have a hand in manipulating water costs--turning a basic right into a commodity--will guarantee that water prices will skyrocket. Fuel, utility, insurance, medical and banking industries are examples of how this type of abusive investor-driven manipulation always ends up with the average citizen paying more for less, while being paid less for more. For a mere addition of 8% of our water supply, I am not sure we should be selling our soul to a group of profiteers who know that water is the new Gold. Surely we can conserve and recycle that 8% and not be beholden to opportunistic speculators. If and when desal or other technology for increasing fresh water supply can be employed for public benefit, at reasonable and fair cost, it would be a very wise move.
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