Water Authority Board to Pursue Terms for Water Purchase Agreement with Poseidon Resources

Short Title
Water Authority Board to Pursue Terms for Water Purchase Agreement with Poseidon Resources
Board directs staff to develop recommended terms, present proposed terms July 22
June 24, 2010

After weighing a number of options designed to ensure the successful construction of the nation’s largest seawater desalination plant, the San Diego County Water Authority Board of Directors today directed the agency’s staff to return to its July 22 meeting with draft terms and conditions for purchasing water directly from the Carlsbad Desalination Project, currently being developed by Poseidon Resources.

The board’s direction followed a presentation and discussion of three recommended options for the Water Authority’s financial participation in the privately-owned seawater desalination plant.  Other options considered by the board included Water Authority grants and loans to nine member agencies that contracted to purchase water from the project.

“The Board decided that the direct-purchase option provided the greatest likelihood the project will be built, and because it ensures all member agencies share equally in the cost and benefits  of this reliable local water supply,” said Claude A. “Bud” Lewis, chair of the Water Authority Board of Directors.  “Direct purchase by the Water Authority is also the most fiscally responsible option to support the completion of this important regional project.”

Under the option selected by the board, the Water Authority would become the direct purchaser of the plant’s desalinated seawater and then sell it to its member agencies.  Poseidon and nine local water agencies, collectively known as the Desal Partners, would then terminate their current water purchase agreements. The Desal Partners are Carlsbad Municipal Water District, the city of Oceanside, Olivenhain Municipal Water District, Rincon del Diablo Water District, Rainbow Municipal Water District, Santa Fe Irrigation District, Sweetwater Authority, Valley Center Municipal Water District and Vallecitos Water District. 

The Carlsbad Desalination Project is a fully permitted, 50 million-gallon-per-day seawater desalination project located at the Encina Power Station in Carlsbad.   In 2020, the project is projected to account for 8 percent of the region’s total water supply. 

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