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When it comes to cellular and cable companies, consumers have choices. Not so with water: we’re stuck with the utilities that service our address. In these kinds of natural monopolies, it is essential for suppliers to keep the concerns of ratepayers in mind, and keep costs down. Unfortunately, water suppliers are susceptible to corporate lobbying, just like other groups, and we are seeing a prime example of corporate interests trumping the public good in the Poseidon desalination negotiations.
Privately owned Poseidon Water sees a chance to make big money selling desalinated water in Orange County. They are proposing to build a 50 million gallon per day plant in Huntington Beach. They will cover the construction costs, but are counting on a $450 million public subsidy, and want a contract that requires local residents to buy 100 percent of their water for 30 years at a rate that guarantees a nice profit for Poseidon’s investors. That is true even in wet years, when rain and groundwater can supply all our needs far more affordably. It’s a sweet deal for Poseidon, but a lousy one for ratepayers.
So how did we get here? Poseidon is spending millions to sell desalination as the solution to Orange County’s drought fears. But the facts just don’t support their story. First, Orange County has enough water to go around, thanks to smart investments like our state-of-the-art Groundwater Replenishment System that recycles more than 100 million gallons of water per day. And second, while appropriately sized and well-designed seawater desalination plants will be part of our future, Poseidon’s plant is neither of those things. But they are dangerously close to winning approval for their project, nonetheless.
Orange County Water District released the proposed terms of the Poseidon deal last month, and will vote on the terms at a July 18 meeting. You can review the full document here, but we’ll save you the time of wading through 25 pages of legalese: the gist is that local ratepayers assume all the risk, and Poseidon reaps all the rewards.
In exchange for building this plant—an oversized and overpriced monstrosity designed to maximize profits as opposed to meet actual water needs—Poseidon will get a guaranteed buyer for its product for the next 30 years, and a guaranteed return on investment for its wealthy backers. Oh, and if electricity rates rise along with water costs, as they likely will with this plant using enough energy to power 30,000 homes, consumers, not Poseidon, will cover increases in operating costs.
This proposal has raised major red flags for environmental justice groups, who are concerned about the impact of a $5 to $10 rate increase on low-income families. Especially when the rate increase from Poseidon will come on top of an even larger increase to cover the cost of the Delta tunnels. But if families are paying $10 per month, what about hotels with 200 rooms that launder sheets and towels after every guest? What about restaurants with 50 or 100 seats that are washing dishes all day long? What kind of increases could these small businesses see to their water bills?
Since Orange County residents and businesses don’t get to choose our water companies, we have to hold suppliers accountable for protecting our interests, and keeping bills affordable. We have an opportunity to do that on July 18, when the Orange County Board of Directors meet to vote on Poseidon’s new terms. Make sure your voice is heard!
Garry Brown is founder and president of Orange County Coastkeeper. Steve Bone was the founding chairman and chief executive for Huntington Beach Marketing and Visitor’s Bureau.
Opinions expressed in editorials belong to the authors and not Voice of OC.
Voice of OC is interested in hearing different perspectives and voices. If you want to weigh in on this issue or others please contact Voice of OC Involvement Editor Theresa Sears at TSears@voiceofoc.org