Public Risk Considered For Costly Desalination Facility

Categories: Environment

PoseidonPic.jpg
Brandon Ferguson
Site of the proposed Huntington Beach desalination facility at Newland and PCH

Of the many mantras uttered by Poseidon Resources Inc. as it prepared to construct the Western Hemisphere's largest desalination facility near San Diego, one stood out: it would be built at no risk to tax payers. Though the concept was misleading in more ways than one, the company did indeed manage to finance construction of the nearly $1 billion facility, currently underway, by selling $734 million worth of tax-exempt bonds, and securing the rest from a private-equity firm.

But with Poseidon now hoping to build a facility on the shores of Huntington Beach, the mantra of no public risk may be facing a sea change.

During a committee meeting last week, the Orange County Water District (OCWD) issued a report on the Huntington Beach project and recommended a study to determine its feasability. The 50-plus page report suggested the possibility of the district personally issuing the debt for the plant's construction.

"With this option, the District would take advantage of its high credit rating and issue the necessary debt at a lower interest rate. However the District would likely need to accept the risk of the project not being successful," read the report.

If this option becomes reality, it could prove unfortunate for those in the OCWD service area--seeing as how not being successful is a significant part of the Poseidon story.

In the late 1990's, the company made a clumsy attempt at building a desalination facility in Tampa. When some of Poseidon's private financiers went bankrupt, the Tampa Water Authority intervened and pumped tens of millions of dollars into the project. Since then, the facility has been plagued with technical hiccups and has struggled to meet its projected output of 25 million gallons per day.

According to OCWD General Manager Michael Markus, the possibility of issuing debt for Poseidon water is merely being considered at this point.

"I see this more as an exercise to go through to scrutinize the numbers to see if they make sense and then report those findings back to the board," said Markus.

It remains unclear whether Poseidon is banking on the OCWD issuing the debt for the project--Markus couldn't say, and Poseidon has yet to return the Weekly's calls. However, during a May 7 meeting of the Municipal Water District of Orange County (MWDOC), Poseidon VP Scott Maloni told board members that the company would appreciate the opportunity to partner with the public agency.

Tomorrow the OCWD Board of Directors will vote on whether to enter into a confidentiality agreement with Poseidon in order to gain access to secret company information for use in the staff study.

With a final decision possibly months away, Poseidon's website still reflects a vision of no public risk.

"The facility, which will be built at no cost to the taxpayers, will use existing infrastructure, reducing construction costs," the page reads.

Perhaps in confidential meetings, Poseidon execs will chant another mantra: talk is cheap.

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4 comments
Gericault
Gericault

18-31 million gallons of fresh water every year rushes out of our Santa Ana River to the ocean. That's free water. 

One has to wonder ,where is the public demand that we spend a billion dollars in tax free bonds?  The payments get ransomed onto the hostaged ratepayers. The demand from the ratepayers is NOT THERE.

The only ones pushing for this project are , the bond sellers, the Poseidon profiteers, and the cronyist political water buffaloes being wined and dined.

If we spent $1 billion dollars capturing, storing, re-using, and captilizing on our current water resources much of the imported water needs would "evaporate".

Staring at a "new" Baldwin Lake reservior, we could have an array of water basins dotting the course all the way from the mountains to the mouth of the river. The "lakes" would have incredible public and natural benefits to the communites along the way. Waterfront home sites, wildlife preserves, slow flowing river trails, micro hydro energy opportunities, and a wide resource of natural water bodies to combat wildfires in remote locations. The potential is endless.

Instead, we are being force fed obsolete technology, that consumes enormous amounts of energy, increases green house gasses, and decimates the marine larvae,.....and costs us tons of money......all so some bond sellers can make a buck and some shucksters can make a buck on a free resource.

In other words, OC politics as usual.....makes me want to go drive on a toll road.


NotSureYet
NotSureYet

@GericaultI'm undecided on this subject, but I have a couple comments.

18-31 million gallons per YEAR for $1 billion seems a little different than 50 million gallons per DAY for the same price.  I have no idea if the numbers are correct or not, but the desal plant could easily produce vastly more water annually than is lost to the ocean.  The water lost to the ocean is storm flow, so new water basins would sit empty at least 75% of the year and would probably be a dusty eye sore.

Desal probably won't work in northern Orange County because the area has been blessed with a groundwater supply that dramatically lowers the average end-user's water rate.  That being said, there is worth to water supply reliability created by investment into multiple water supply sources.  Orange County depends on imported water (an energy intensive pumping transmission system) and over-drafting groundwater supplies, which are not sustainable ways to operate.

OCWD has a great project already operating that increases water resource reliability by treating sewage wastewater flows up to drinking water standards.  This type of project failed in San Diego due to Public Opinion, but the public there is accepting of a higher cost and less efficient desal plant.  San Diego (and southern Orange County) almost exclusively relies on imported water and is often charged large amounts of money due to upstream water wholesale agencies.  Due to the lack of water options, San Diego is desperate for more diversity in its water portfolio.

Gericault
Gericault

@NotSureYet @Gericault well,..... since I said 18-31 BILLION.....re-calculate your math and draw a different conclusion. Also I've read other reports that state up to 65 BILLION gallons.

NotSureYet
NotSureYet

@Gericault @NotSureYet Before getting too far ahead of yourself, re-read the first line of your post.

According to OCWD, the 21 year average of water lost to the ocean through the Santa Ana River is about 30 billion gallons.

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