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After 14-Year Adventure, Poseidon Getting Close to Building Plant

Poseidon Resources’ prospects for building a desalination plant in Carlsbad are moving into the home stretch, with a draft water purchase agreement on the table with the San Diego County Water Authority.

After 14 years in the planning stages, the proposed Carlsbad Desalination Project has received final approvals from every required regulatory and permitting agency in the state, including the California Coastal Commission, State Lands Commission and Regional Water Quality Control Board. The viability of building the desalination plant next to the Encina Power Station now rests largely with making water purchase arrangements with the Water Authority, which is considering a plan to buy 56,000 acre-feet of water annually — the plant’s production capacity of making 50 million gallons of fresh water a day.

Ken Weinberg, director of water resources for the San Diego County Water Authority, said they are working on the fourth draft of the purchase agreement, which proposes a price of $1,865 an acre-foot based on the recommendations of Stamford, Conn.-based Poseidon Resources. The Water Authority’s board of directors will be considering the proposal in a series of workshops being scheduled for this spring and summer. Reaching an agreement on whether to purchase water from the desalination plant is tentatively scheduled for late summer or early fall.

“We need to finalize the agreement and the price and do our due diligence before we’re able to do that,” Weinberg said.

Distributing the Water

Among the considerations is the additional cost the Water Authority would incur to modify its facilities to be able to distribute the water to its 23 member retail water agencies in San Diego County. The connection of a pipeline from the desalination plant to the Water Authority’s regional conveyance system will require the reoperation of the Water Authority’s Pipeline 3, one of five major pipelines delivering imported water into the region. The pipeline would deliver desalinated water north to the Water Authority’s Twin Oaks Valley Water Treatment Plant in San Marcos for blending and distribution throughout the region. Cost estimates for the infrastructure improvements have not been tallied yet.

“That’s one of the pieces we’re still working on,” Weinberg said. “There’s a lot of moving parts in this project.”

If the Water Authority approves the water purchase agreement, then Poseidon Resources can start private financing arrangements, followed by construction. Although earlier news reports have estimated the cost at $360 million, Poseidon Senior Vice President Peter MacLaggan said the final cost to construct the desalination facility will not be known until the water purchase negotiations are complete.

Joint Venture

In the summer of 2011, Poseidon selected the joint venture of Kiewit Infrastructure West Co. and JF Shea Construction for the design and construction of the plant and conveyance pipeline if the project moves forward. Poseidon has contracted with Israel Desalination Engineers to operate the plant, according to a Water Authority news release.

The project’s construction schedule is subject to the negotiations of the water purchase agreement terms and conditions. However, Poseidon estimates that the project could take nearly three years to build and the Water Authority is anticipating water deliveries to begin in 2016.

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