board rejects request for desalination help
SAN DIEGO ----
Two months after breaking off talks with Poseidon Resources, Inc.
to build a "critical" plant that would turn seawater
into drinking water, San Diego County Water Authority board
members made it clear Thursday they don't intend to help the city
of Carlsbad finish the deal.
Claude "Bud" Lewis, Carlsbad's mayor and its
representative on the Water Authority body, asked board members to
give his city a written endorsement entitling it to a special
subsidy that would lower the cost of the water the plant would
officials from the company, Connecticut-based Poseidon Inc., said
Thursday that the plant can't be built without the subsidy.
But Water Authority board members, without taking a formal vote,
told Lewis they had no intention of recommending Carlsbad get the
subsidy, which is being offered by Southern California's main
water supplier, the Metropolitan Water District.
They said the Water Authority might still use the subsidy itself
on possible future desalination projects, and said they thought
Carlsbad's deal with Poseidon would be too expensive for local
But the rejection ---- the latest twist in the plant's continuing
saga ---- also raised the question of whether the Water Authority
was trying to force Poseidon back to the negotiating table.
Poseidon has been studying building the plant for six years, and
has a long-term-lease chokehold on the Encina Power Plant site in
Carlsbad, where the desalination plant would be situated.
Three years ago, the Water Authority started negotiating with
Poseidon to build a plant that would turn 100 million gallons a
day of seawater into drinking water. The plan was for Poseidon to
use the water agency's access to low-interest financing to build
the plant, then sell it to the Water Authority after five years.
The Water Authority supplies nearly all the water that county
residents use annually. It has identified the proposed plant as a
"critical" piece of the region's future water supply,
and negotiated a deal with Poseidon for three years.
Partly because California's share of the Colorado River supply
will shrink by 2015, the Water Authority says that seawater
desalination must make up between 6 percent and 15 percent of the
county's water supply by 2020.
But negotiations between the Water Authority and Poseidon turned
ugly nine months ago.
A dispute over a confidentiality pact led the Poseidon to refuse
to give the Water Authority information that the agency says it
needs for an environmental study ---- until the water agency
signed a final deal with Poseidon.
Water Authority officials said they wanted the right to allow
competition on the project.
Board members broke off the Poseidon talks Jan. 30, saying that
the company could now try to work out a deal with Carlsbad and
Carlsbad officials immediately asked the Water Authority about the
Metropolitan subsidy ---- a $250 per acre-foot subsidy that would
reduce the cost of the water the plant produced from $800 per
acre-foot to $550 per acre-foot. That would be close enough to the
$418 to $499 per acre-foot cost of imported water to make the
The Water Authority's desalination committee told Lewis in a
letter last month that it would not recommend giving Carlsbad
access to the subsidy.
But Lewis said Thursday that he wanted the full board's response.
He said the Water Authority was talking out of both sides of its
mouth, saying it supported Carlsbad's attempt to complete the
Poseidon deal, while refusing to give up the subsidy.
"I simply want to know if you're going to let us do it (the
project) without putting these roadblocks in the way," Lewis
said. "We can't have this where we're saying we think the
project's good and then nailing us (Carlsbad) from the
A number of board members said they couldn't support endorsing
Carlsbad's bid for the subsidy until they knew more about how much
the city's deal to build the plant with Poseidon would cost
ratepayers. They said they suspected a deal with Carlsbad would
cost $200 million more than the Water Authority's proposed project
because Poseidon would build and keep the plant ---- selling the
water ---- rather than selling the plant to the Water Authority
after five years.
Others said the Water Authority could still build other
desalination sites, and should keep the subsidy for those
Others said they didn't like the idea of a private company, which
has to please shareholders rather than ratepayers, getting
involved in "their" water business.
"We're going to do nothing to facilitate private ownership of
desalination along our coast," said board member Harold Ball
of the Helix Water District.
Poseidon Vice President Peter MacLaggan said the company was
disappointed, but would continue to work with Carlsbad.
He said it was possible that the company could go forward with the
city on a project in the hopes that Water Authority board members
would change their minds.
Contact staff writer Gig Conaughton at (760) 739-6696 or email@example.com