Poseidon Resources, the private company that wants to build a seawater desalination plant in Huntington Beach, won a significant decision Thursday from the San Diego County Water Authority, which said it will consider buying drinking water from the company’s proposed plant in Carlsbad.
The decision is important because without the Water Authority as a customer, the private company doesn’t have the money to go ahead with its $530 million plant.
But the county decision isn’t final. According to this North County Times story, the Water Authority vote authorized its staff to talk to Poseidon, but official negotiations won’t begin unless approved by the board. It meets again July 22.
From the North County Times story:
Desalinated water is considerably more expensive than water from other sources, but the cost would be averaged into the total cost of water for the 24 local agencies that make up the Water Authority.
So their additional cost would be proportionately less than if the entire cost were borne by the nine agencies.
Originally, those agencies were to have the cost defrayed with a subsidy from Metropolitan Water District, Southern California’s giant wholesaler, which sells to the Water Authority.
The subsidy, of up to $250 an acre-foot, would make the price competitive with other sources. An acre-foot is about 325,000 gallons, enough for two average families of four people for one year.
However, Metropolitan’s contracts with the Water Authority allow it to cancel any subsidies if it’s sued.
Earlier this month, the Water Authority sued Metropolitan over what it said is an unfair rate structure that causes the authority to pay too much for Metropolitan’s water.
With the subsidy in jeopardy, Poseidon hasn’t been able to raise the $530 million it needs to build the plant.