Bloomberg News

San Diego Approves Desalination Plant Water Purchase Agreement

November 30, 2012

San Diego’s regional water authority approved a contract to purchase all the output of a seawater desalination plant with an estimated price tag of almost $1 billion that has yet to be built in nearby Carlsbad.

Formal backing from the San Diego County Water Authority Board yesterday means construction may start within weeks adjacent to the Encina power station on what would be the Western Hemisphere’s largest plant to make potable water filtered from the ocean.

Critics including environmentalists derided the board’s backing of a 30-year contract with Poseidon Resources Corp., which plans to sell bonds to finance most of the construction costs. The plant is designed to supply water using reverse osmosis technology for about 7 percent of the region.

“Let the high billing begin,” Peter Gleick, co-founder of Oakland, California-based Pacific Institute, said on Twitter. Under terms of the contract, the agency will pay at least double what it now costs to bring water to the area from Northern California and the Colorado River.

The approval makes area water users less vulnerable to drought and assures a source of scarce supplies, project backers including San Diego’s mayor said. The San Diego agency says the average household bill may rise $5 to $7 a month when the plant, in development and debate since 1998, is operating.

Area surfers contend the plant will harm fish with the extra salty brine it pumps back into the sea. Others said the high electricity needs to desalinate the water isn’t worth the cost. The plant will use about 5 percent of the yearly output of the Encina station, according to Maxime Serrano Bardisa, a water analyst at Bloomberg New Energy Finance in London.

To contact the reporter on this story: Randall Hackley in London at rhackley@bloomberg.net

To contact the editor responsible for this story: Randall Hackley at rhackley@bloomberg.net


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