A rendering of the Carlsbad Desalination Project shows the plant that is expected to provide 50 million gallons of water per day to the region.

A rendering of the Carlsbad Desalination Project shows the plant that is expected to provide 50 million gallons of water per day to the region.

With Poseidon Resources’ Carlsbad Desalination Project officially approved and under way, the city of Carlsbad and builders of the plant say investing in an extra supply of the more costly desalinated water will guard Carlsbad businesses against future droughts and water shortages.

Having a reliable water source is a key issue for businesses in the state.

The city plans to buy an additional 2,500 acre feet of water each year for the next 30 years from the plant. Carlsbad users will see an estimated $11.40 a month increase in water bills when the plant comes online in 2016, according to the city. Nearly $8 would be going to pay the water authority for the regional supply of desalinated water, and nearly $3.50 would be for the extra local supply of water purchased by Carlsbad. One acre-foot is nearly 325,900 gallons, enough to supply two households of four annually.

Businesses will likely see a greater increase in their monthly water bill, depending on their water usage, said Kristina Ray, communications manager for the city of Carlsbad. She said the city didn’t have estimated water rates for businesses.

Supporters of the project say that increasing our water supply is a smart long-term investment, given the ever-shrinking supply of imported water from the Colorado River and Northern California.

“Carlsbad is home to thriving tourism, high-tech and life sciences industries, all of which depend on a reliable water supply,” said Carlsbad Mayor Matt Hall. “Committing to purchase our own local supply of desalinated water, in addition to the regional supply, is like an insurance policy against future water shortages,” Hall said.

Selling Bonds

The California Pollution Control Financing Authority reportedly granted permission to sell roughly $900 million worth of bonds to finance the desalination project, according to Forbes magazine. This follows a 10-year long legal battle to get the project approved.

When the plant becomes operational in 2016, it will provide 50 million gallons per day of drinking water converted from seawater to the region.

Under the agreement, the San Diego County Water Authority will buy all of the plant’s output — which is expected to provide 7 percent of the region’s water supply in 2020 — from Poseidon Resources. The water authority will then distribute the water to its 25 member agencies, including the Carlsbad Municipal Water District.

In addition to receiving the regional supply, the water agencies were given the option to buy drinking water directly from the plant. The supply would be exempt from mandatory cutbacks during times of drought.

Although San Diego County Water Authority will possibly be paying nearly double what it does now for freshwater supplies from the Colorado River and Northern California for the new source, defenders of the project consider it an investment for future economic development.

“A reliable water supply is not only good for our existing businesses, it gives us a leg up in terms of future economic development,” Hall said.

Ted Owen, president and CEO at the Carlsbad Chamber of Commerce, said the dedicated extra water supply ensures that local businesses will continue to thrive.

“This will provide between 10 and 12 percent of water (supply) that we didn’t have before,” Owen said. Most of all, he said, it will protect businesses in the future.

He recalled the devastation felt by North County farmers when in the last drought, the state of California restricted the water that growers could use to irrigate their fields.

“I saw a lot nurseries complaining,” Owen said. “That will not happen the day the desalination plant opens.” He said having the desalination plant operational during that drought would have saved the region a lot of money.

Peter MacLaggan, senior vice president of project development for Poseidon, also said that the increased monthly water bills for residents and businesses offers them in return a locally controlled and guaranteed water supply.

“The problem with imported water is that it becomes subject of intense competition and poses regional and management issues,” MacLaggan said. “It is difficult to predict what the water supply will be in the future. This (new supply) is locally controlled.”

Opponents of desalination say the conversion harms marine life and delivers toxins back into the sea. Others say the high costs of converting seawater into drinking water prevent U.S. cities from using existing facilities. For instance, Tampa and El Paso run large desalination plants that seldom run at full capacity, according to a report in Forbes magazine.

Local proponents, however, say the project creates jobs and economic growth.

The project construction will create 2,400 new jobs, some of which have been filled, according to MacLaggan. A Poseidon statement said plant operations will support about 575 jobs.

Hall pointed to the long-term economic benefits to the city of Carlsbad.

“This project represents a nearly billion dollar private investment in the city of Carlsbad,” Hall said. “The construction will bring jobs and the project itself will provide significant property taxes that will help fund city services.”

Marion Webb is a freelance writer for the San Diego Business Journal.