The San Diego County Water Authority and the city of Carlsbad have reached an agreement that allows the Water Authority to begin negotiating with Poseidon Resources for purchasing water from the Carlsbad Desalination Project.
Under the agreement, approved today by the Water Authority’s Board of Directors and expected to be approved on September 13 by the Carlsbad City Council, Carlsbad will terminate its own water purchase agreement with Poseidon, the private developer of the seawater desalination plant, if the Water Authority approves its own water purchase agreement with Poseidon. Carlsbad’s commitment to terminate its water purchase agreement clears the last remaining hurdle for the Water Authority to begin water purchase negotiations with Poseidon under terms the Water Authority Board approved last year.
In exchange, Carlsbad will have the right to purchase from the Water Authority up to 10,000 acre-feet annually of desalinated water produced by the project at full cost. The agreement also provides Carlsbad with certain guarantees as the host city regarding continued property tax increment payments and the completion of certain public improvements and public land dedications should the project unexpectedly change ownership to the Water Authority before 10 years of commercial operation. If Poseidon were to default on its agreement with the Water Authority, the Water Authority would not pay for these obligations if it takes ownership of the plant.
“This is a great step forward for our region and for Carlsbad,” said Michael T. Hogan, Water Authority Board Chair. “We cooperatively found a way to keep making progress on this project for our region’s future water supply reliability, while addressing Carlsbad’s unique role as the project’s host city.”
Matt Hall, Mayor of the city of Carlsbad, said the agreement balances the interests of both public agencies.
“This agreement protects the integrity of financial and other commitments made by Poseidon Resources to the citizens of Carlsbad, while enabling the Water Authority to properly protect the region’s water ratepayers,” Hall said.
The Carlsbad Desalination Project, which has been in development since 1998 and has obtained all required permits and environmental clearances, will be the first large-scale seawater desalination plant in California. When completed, it will produce 56,000 acre-feet of highly reliable local water annually – enough to meet the needs of more than 110,000 average single-family households. In 2020, water from the plant would account for about 8 percent of the total regional supply.