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Carlsbad Desalination Project
What’s the latest?
After the first year of construction, the Carlsbad Desalination Project is 25 percent complete and well on its way to producing water for the region on time and on budget in 2016.
The project includes what will be the nation’s largest seawater desalination plant and a 10-mile pipeline through North County Pipeline installation is nearing completion in San Marcos and Vista; construction in Carlsbad is under way and expected to last through 2015.
The project also includes about $80 million in upgrades the Water Authority is making to its own facilities so it can deliver desalinated seawater into its Twin Oaks Valley Water Treatment Plant near San Marcos for distribution throughout the region.
Poseidon Water is developing the plant and pipeline with joint-venture contractor Kiewit Shea Desalination. The project will deliver up to 50 million gallons a day of drought-proof, highly reliable water that will become a core, day-to-day resource for the region. It is projected to meet 7 percent of San Diego County’s demand in 2020. In addition, the reverse-osmosis plant will make the region’s water supplies more reliable by reducing dependence on imported water from the Los Angeles-based Metropolitan Water District of Southern California that is vulnerable to droughts, natural disasters and regulatory restrictions.
The Carlsbad Desalination Project is an important element of the Water Authority’s long-term strategy to improve the San Diego region’s water supply reliability. It includes securing independent water transfers from the Colorado River, increasing regional water-use efficiency and developing local sources such as groundwater, surface water and recycled water. Completion of the Carlsbad project will put the Water Authority on pace for meeting its diversification goals for 2020.
In late November 2012, the Water Authority’s Board of Directors approved a 30-year Water Purchase Agreement with Poseidon, setting out terms that would allow the pioneering project to secure financing. Also in November 2012, the state court of appeals affirmed the trial court’s rejection of the last remaining legal challenge to the project (Nov. 30, 2012, Court Ruling).
Financing for the project closed on Dec. 24, 2012. Earlier that month, the Water Authority and Poseidon achieved a favorable interest rate for financing construction bonds for the plant and pipeline. The 4.78 percent rate will save an estimated $200 million in financing over three decades compared to earlier projections, trimming the price of water from the project.
Water from the plant is expected to cost between $1,849 and $2,064 per acre-foot, depending on how much is purchased. The total cost, including a major pipeline to deliver the desalinated water, is projected at $2,014 to $2,257 per acre-foot. While that is more costly than current water supplies, the water will be more reliable than imported water. Water Authority projections also show seawater desalination could become cost-competitive with imported water sources by the mid-2020s.
Water Purchase Agreement Documents
For more information on the Water Furnishing Revenue Bonds, Series 2012 (San Diego County Water Authority Desalination Project Pipeline) (Series 2012 Pipeline Bonds), including CUSIPs and the Limited Offering Memorandum, please click here.
Water Purchase Agreement (Technical appendices to the agreement are available on request)
Board memo and resolution: Potential Adoption of Seawater Desalination Water Purchase Agreement
Environmental Documents for the Carlsbad Desalination Project:
Water Authority staff members made several presentations to the Board of Directors about the Water Purchase Agreement and the Carlsbad Desalination Project, including the following. To view additional presentations, please visit the Board Meetings and Documents page and scroll to the date you are searching for.