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Carlsbad Debates Agreement Over Poseidon’s Desalination Plant

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Aired 8/23/11

The City of Carlsbad debates in closed session tonight whether to agree to a new way to finance a desalination plant on its shoreline. The plant’s operator cannot guarantee the desalinated water will be cheaper than imported water.

Carlsbad is the last of nine San Diego cities to reach agreement with the County Water Authority (CWA) on a complicated deal to subsidize the desalination plant.

The desalination project is located at the Encina Power Station in the City of Carlsbad.
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Above: The desalination project is located at the Encina Power Station in the City of Carlsbad.

The estimated cost is around $700 million.

The private company developing the plant, Poseidon, has been working on the project for a decade and has begun preparing the land near the Encino power plant in Carlsbad.

Glen Pruim, head of the city’s water department, says the agreement they originally signed with Poseidon guaranteed Carlsbad would get a share of the water and pay no more than it already pays for imported water.

But because financing for the plant evaporated, and the Metropolitan Water District of Southern California pulled its support, San Diego County Water Authority has stepped in. Pruim said if the CWA is forced to buy the plant eventually, it can’t honor the price guarantee.

“We know they wont,“ he said, “so the agreement we had with Poseidon that we shall pay no more than imported water goes away if we enter a new agreement with the County Water Authority.”

Pruim says under the agreement, CWA would let Carlsbad keep some of the tax increment from the project for the city’s redevelopment agency. The Water Authority will discuss the deal at its board meeting on Thursday.

Pruim said even though a wet year has taken the pressure off California’s water supply, desalination will be needed in the future.

The plant faces other hurdles, including a challenge from the Coastal Environmental Rights Foundation, which is suing over the plant’s intake permits.

Poseidon hopes to build the plant by 2014. The company says it would provide 50 million gallons a day, enough water for 300,000 customers, or about 10 per cent of the region's potable water.

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