Poseidon – Dire Lessons, for OC, from Carlsbad.

As the fateful Coastal Commission hearing approaches which will determine whether Poseidon Resources gets to saddle north and central Orange County with a long-controversial, $1.4 billion desalination plant in Huntington Beach, it is always instructive to check in on how the company’s previous project, a few dozen miles south in Carlsbad, is faring. John Earl, whose “Surf City Voice” is now named “SoCal Water Wars,” gives us this disturbing report:

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The San Diego County Water Authority (CWA) will no longer issue annual performance reports for its Carlsbad desalination plant, which provides 10 percent of the water it sells to 24 member-agencies but creates 20-24 percent of its water-supply expenses.

The plant was built by Poseidon Water, the company that will soon ask the California Coastal Commission for approval to build a nearly identical $1.4 billion desal plant in Huntington Beach.

In August, 2017, general manager Sandra Kerl issued the first annual performance report for the $1 billion Carlsbad facility.

“Going forward,” the report said, “staff intends to report on CDP (Carlsbad Desalination Plant) performance following the conclusions of each full contract year.” The CWA has a 30-year contract with Poseidon to buy at least 48,000 acre-feet of water a year regardless of need.

Once a year for the next three years those detailed reports were part of the official record at board meetings. (CLICK TO SEE excerpt of October 2020 report.)

But when Ray Hiemstra, representing Orange County Coastkeeper, asked for the expected 2020-2021 update in September he was told that the reports had been discontinued by CWA’s board of directors. CWA legal counsel confirmed Hiemstra’s assertion with SoCalWaterWars.

These reports have consistently been bad news for Poseidon, so I don’t blame them for trying to hide the information,” Hiemstra wrote in an email. (CLICK TO SEE excerpt of Sept 2019 report.)

Hiemstra is currently working with other environmentalists and Orange County residents to stop Poseidon’s Huntington Beach project.

But I obtained the latest performance information after CWA board member Jose Preciado helped push through my public records request.

The annual reports provide details about CDP’s water delivery, water quality, compliance with environmental regulations, and costs. They also provide a window into the future of the Carlsbad and Huntington Beach projects and ocean desalination in general in California.

The most contentious issue is the cost of ocean desalination, which in this case is about three to four times the cost of imported water sold by the Metropolitan Water District of Southern California (MET), the main supplier of water (via the Colorado River and State Water Project) in Southern California.

For example, the current price for Poseidon’s Carlsbad desalinated water, according to records released to socalwaterwars.com, is $2,767 per acre-foot, which comes to a total of $142,614,224 for the 2020-21 fiscal year.

By comparison, the CWA buys fully treated MET water for $1,104 per acre-foot then sells it to its member agencies for $1,769, almost a $700 markup. Whereas the Municipal Water District of Orange County’s markup for the same water is less than $100/AF for its member agencies.

CWA’s financial experts recently warned of an eminent decline in credit ratings that would drastically increase its cost of borrowing, thus increasing rates even more.

Given the 30-year take or pay contract CWA has with Poseidon and the relatively and disproportionately high cost of its water (10% supply share vs. a 20-24% cost share), the desal plant figures heavily in the agency’s future debt and credit rating scenario.

Canceling the performance reports will surely displease CWA member agencies who blame lack of transparency, costly and unneeded water-supply projects, and a $2 billion debt for giving their ratepayers the highest water bills in the nation…

Read the rest of this story at SoCal Water Wars!

Just SOME of our Previous Coverage of Poseidon:

About Surf City Voice

John Earl is the editor of the Surf City Voice. Frequent contributor Debbie Cook, a former Huntington Beach Mayor, is board president of the Post Carbon Institute.