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Carlsbad, CA desal plant near pact with Poseidon

By Michael Burge
STAFF WRITER

April 20, 2005

CARLSBAD Some county residents might be drinking desalinated water from the Pacific Ocean by 2008 as the result of an agreement announced yesterday between Carlsbad and the County Water Authority.

The agreement calls for Carlsbad to give up some rights to purified water from a $270 million desalination plant to be built here in return for greater assurance it will get water during a drought.

It also calls for the Water Authority to pay a Carlsbad redevelopment agency $5.5 million and for Poseidon Resources, which intends to develop the plant alongside the Encina Power Plant, to return to the negotiating table with the Water Authority.

The city signed an agreement with Poseidon in October to buy purified water from the plant, the first ocean-water desalination project in the county. The Water Authority broke off talks with Poseidon last August after they could not agree on how Poseidon would share private information with the authority over some aspects of plant operations.

The Water Authority's director of water resources, Ken Weinberg, said the City Council and his board must approve the agreement. The authority would then go back to the table with Poseidon to try to work out a purchasing agreement.

"Desalination is the future supply our board chose," Weinberg said. "This project is kind of our priority right now."

Poseidon's agreement with Carlsbad says the city will purchase 10 million to 25 million gallons of the 50 million gallons of desalted ocean water the plant would produce a day.

Poseidon needs other customers to buy the remainder, and the Water Authority is the likely customer because it owns much of the region's distribution system and already supplies water to area districts.

The agreement between Carlsbad and the Water Authority would reduce the amount the city buys from Poseidon, allowing more desalinated ocean water to flow into the regional system.

"We're big into the concept that this is a regional project," said Jim Elliott, the city's director of administrative services.

In return, Carlsbad would be assured of getting water during a drought, when the Water Authority reduces the amounts it supplies to other distribution agencies.

The Water Authority also agreed to:

  • Submit plant plans to the city's approval process, though it is not legally required to do.
  • Contribute $5.5 million to redevelopment projects in Carlsbad's south coast region, including road and trail improvements, park expansion, parking and other projects.
  • Apply a potential rebate of $250 an acre-foot it is likely to receive from the Metropolitan Water District to the Carlsbad plant, reducing the overall cost of producing desalinated water.
  • Guarantee to compensate Carlsbad's south coast redevelopment agency for any property taxes the agency would lose if the desalination plant is ever bought by a governmental agency.

As a private development owned by Poseidon Resources, the plant would pay property taxes based on the plant's potential value of $250 million to $300 million.

The redevelopment agency would be reimbursed to a maximum of $15.3 million, minus any taxes already paid by a private owner, if the plant is bought by a public agency, which does not pay taxes.

The Water Authority wants to develop desalinated ocean water as part of the region's long-term supply, to reduce dependence on water imported from outside the region.

Poseidon is working on an environmental impact report for Carlsbad that is expected to be released this month. The Water Authority also is working on an EIR on the plant and distribution of the water. That report is expected to be released in September.

Poseidon's senior vice president, Peter MacLaggan, said yesterday he welcomes the opportunity to reopen negotiations with the Water Authority and hopes the plant will be operating by late 2008.

"Our water purchase agreement (with Carlsbad) provided for the County Water Authority to re-enter the project, so this was anticipated," MacLaggan said. "We consider (it) a positive development."

The Carlsbad council will discuss the proposed agreement today at a meeting at 11 a.m. in the city building at 1635 Faraday Ave.

The Water Authority board will consider the agreement April 28.