The San Diego County Water Authority board could vote as soon as Nov. 29 on a $3 billion water purchase agreement with Stamford, Conn.-based Poseidon Resources, the private developer of a Carlsbad, Calif. seawater desalination plant.
If the board approves the agreement it will culminate a decade-long process by Poseidon to get the $900 million desalination plant and pipeline built.
SDCWA and Poseidon received preliminary approval on Sept. 18 from the California Pollution Control Financing Authority to issue $780 million in bonds to pay for construction of the desalination plant and a 10-mile pipeline to supply water to the San Diego area.
The board plans to consider the purchase agreement at special meetings on Nov. 8 and 15, according to a SDCWA release. It just completed the second set of public hearings on the proposed contract last Thursday.
“It was great to see that the public is so interested in this project and we are taking the comments we heard to heart as we try to balance the costs of the desalination plant with the increased water reliability it offers,” Thomas V. Wornham, chairman of the Water Authority’s board of directors, said in a statement.
Of the project’s capital cost, 82% will be financed through tax-exempt bonds as a direct pass-through to the water authority at what are currently historic-low interest rates, officials said in the release. Poseidon and its investors will provide $164 million in equity to complete the construction financing.
The proposed facility would provide 48,000 to 56,000 acre-feet of desalinated seawater annually – about 50 million gallons per day -- starting as early as 2016. In 2020, the plant would account for an estimated 7% of the total projected regional supply and about one-third of all locally generated water in San Diego County.
Under the draft agreement, the total price for the desalinated water – including related upgrades to the Water Authority’s pipelines and treatment plant – is estimated at $2,041 to $2,290 per acre-foot in 2012 dollars, depending on how much is purchased annually.
An acre-foot is approximately 325,900 gallons, or enough to supply two typical single-family households of four for a year.