Should investors in a controversial seawater desalting plant be allowed to make a profit before the plant makes up for any environmental damage it triggers in local waters?

Poseidon water company representatives warn that requiring them to immediately mitigate any marine life loss, pollution or ecosystem disruption their project causes — before they can begin discharging wastewater — would never cost out and would effectively kill their project.

However, local environmentalists argue it makes no sense to risk damage to sensitive habitats in the era of Climate Change, all while getting expensive drinking water that can be obtained through other projects with little to no risk for local marine wildlife. 

Last Friday, California’s Coastal Commission staff showed up in Orange County to say they regretted not requiring mitigation alongside desalting when they approved the project in 2007 — noting they are still waiting for Poseidon to offset the environmental impact on local marine wildlife near the Carlsbad desalting plant that is so often showcased as an example of what’s possible. 

As the controversial water project nears what could be final consideration, issues like this are what local water regulators are grappling with Thursday.

The issue of immediate-vs.-later mitigation of environmental damage arose as a key point of contention during hours and hours of deliberation and public hearings at the Governor-appointed, Santa Ana Regional Water Quality Control Board’s meeting last Friday.

A continuation of that hearing is set for today. Click here to watch it remotely.

Much of the uncertainty lies in whether regulators will decide to hold up Poseidon’s ability to operate its plant until the company nails down and obtains the permits for its mitigation plans.

Specifically, the plant’s intake of seawater could kill 108 million organisms per year, according to initial and non-comprehensive studies. 

There’s also uncertainty on whether the mitigation ideas Poseidon has already drawn up are adequate and close enough to the body of water that the plant will most impact. For example, the company has proposed an artificial reef miles and miles further north up the coast by Palos Verdes.

Meanwhile, some water board directors at last Friday’s meeting indicated they could be nearing the final stretch on a vote, which could happen tomorrow though another hearing date has already been set for May should deliberations drag on.

If the water board approves Poseidon’s needed permit, the project goes next to the state Coastal Commission, which is seen as a bigger hurdle.

At the last Friday meeting, water regulators still had questions about whether to prohibit Poseidon from discharging wastewater until they can ensure the company’s mitigation projects are solid.

Poseidon fought against the condition last Friday, saying it could hold up financing and essentially kill the project — leaving an entire section of the county without the daily, 50 million gallons of potable water they argue Orange County needs to combat droughts and climate change.

The company has proposed alternative conditions, such as paying fees for every day the company lags on its mitigation progress and speeding up certain mitigation timelines.

Staff at the water agency cast doubt on Poseidon’s proposed alternatives:

“While we wish we could report that Poseidon has made good progress, Poseidon has apparently decided to wait until it receives the regional board’s and coastal commission’s approval of the project before it gets started on the mitigation projects,” said the agency’s assistant executive officer, Jane Joy. 

And while Poseidon’s proposed late penalties “definitely makes sense in concept,” Joy said, “even if Poseidon did no work whatsoever on the mitigation project planning, the total stipulated penalties would be less than $1.3 million per year.”

A small fraction, Joy said, “of the annual average costs for what staff expects that Poseidon would be spending if they were promptly pursuing the mitigation project planning in good faith.”

Poseidon Vice President Scott Maloni, who has represented the company at the water board hearings, pushed back by saying the discharge prohibition isn’t required by state law and would essentially kill the project because it would hold up financing. 

“The mitigation permit cannot be successfully attained in a reasonable period of time.The condition also renders the entirety of the project infeasible because of the inability to operate the plant for a prolonged and indeterminate period of time would prevent Poseidon from obtaining financing for the construction of the facility,” Maloni said.

It wouldn’t be the first time the company was allowed to operate a facility before finalizing its mitigation plans. The state Coastal Commission made that decision when it approved the company’s desalination plant in Carlsbad. 

Staff at the commission showed up to Friday’s hearing to voice their regrets about it.

“This is an issue that we, the Coastal Commission, had learned the hard way,” said staff member Kate Hucklebridge, saying that since the commission approved the Carlsbad project in 2007, Poseidon’s mitigation won’t be constructed until “this Fall.”

Though Hucklebridge said not all the delays were Poseidon’s fault.

Maloni said that if such a discharge prohibition had been included for the Carlsbad facility, it “would never have been built” and “Southern California would have been without the over 72 billion gallons of drought proof water the plant has produced since it came online in 2015.”

Maloni also said the condition would be “unprecedented” as it’s “never been required by a water board or any other state agency, including the coastal commission.” 

That struck board members like Kris Murray — though critics have raised concerns about her past political ties to Poseidon — and Daniel Selmi. 

“If we’re going to treat this applicant differently than any other applicants statewide for any project statewide, then there needs to be justification for that,” Murray said. “If the state’s going to move in that direction, I think it should be at a much higher level than a regional board setting the precedent.”

Murray also questioned whether that condition is just a de facto way to kill the project — “and if it is … we should be upfront about that.” 

Supporters of the project say that with the threat of climate change, desalination presents a surefire solution to problems like drought that pose risks to Californians’ water supply and availability. 

“There are voices that say we don’t need this water source. And everyday we hear the warnings that we may be facing a mega drought,” said Jim Leach, director of external affairs for the Santa Margarita Water District, supporting the project during public comment. “We need this water sooner than later. We need to start now.”

Once built, the plant would suck in more than 100 million gallons of ocean water per day, desalt half of it, and send the remaining 50 million gallons of saltier, concentrated brine back out into the ocean. 

Opponents say the plant isn’t needed; some features of the project — such as its surface-level intake pipe — present huge hazards to marine life in the affected body of water despite the company’s promise to install mesh screens to prevent some animals from getting sucked in; and that Poseidon’s promises to mitigate its environmental damage aren’t adequate.

Critics also say the desalinated water, because it is more expensive, will hike water bills for surrounding households — low income ones, specifically — that can’t afford it.

“What’s been alarmingly absent from the Regional Water Board’s deliberations today is the project’s impact on low-income ratepayers,” said Andrea León-Grossmann of environmental justice group Azul, in a statement after the hearing. 

She added:

“Orange County families are doing their part to conserve water and protect the environment. Forcing them to pay (more) for water … so that Poseidon’s investors can walk away with tidy profits is cruel and unjust.”

Brandon Pho is a Voice of OC reporter and corps member at Report for America, a GroundTruth initiative. Contact him at or on Twitter @photherecord.

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