Huntington Beach's Poseidon Mis-Adventure

If Poseidon Resources Inc. succeeds in its plan to create 50 million gallons of potable water pumped directly from the Pacific Ocean off Huntington Beach, it should send a thank-you letter to The Orange County Register. Last week, the newspaper published an article illustrated with Poseidon-provided graphics that touted the company's popularity with local water agencies.

Under the headline “Desalinated Water In High Demand,” the Jan. 22 article declared that local need for the liquid bounty of the proposed facility, which would be located behind the AES Power Plant at Pacific Coast Highway and Newland Street, will exceed supply by 43 percent. This estimate, the paper claimed, is based on the fact that 18 local water agencies have recently signed nonbinding letters of intent indicating their interest in purchasing desalinated water from Connecticut-based Poseidon.

However, the Weekly has learned, those letters expired a year ago. And although the article claimed 23 water agencies are part of a work group discussing the project, three agencies are no longer in that group. “No one has signed a nonbinding purchase agreement,” says Kevin Hunt, general manager of the Municipal Water District of Orange County (MWDOC), a wholesale purchaser of water that serves 28 districts throughout Orange County. “There's still a lot of hurdles to overcome in the next year before we get a signed agreement.”

The city of Fullerton was among the 23 agencies that had been part of the desalination working group. David Schickling, a water-systems engineer for that city, says Fullerton walked away from the table more than a year ago when it realized it wouldn't actually be receiving any desalinated water, but rather a possible subsidy from the Metropolitan Water District for using non-imported water.

Poseidon's presence in Orange County can be traced to the decades-long search for alternatives to importing water from the Colorado River aqueduct, thus solving Southern California's chronic water shortage. When the project was first made public in 2001, it enjoyed widespread support among local environmentalists. But by 2003, concerns about the release of 50 million gallons of concentrated brine into local ocean waters, as well as possible harmful effects on local sea life, stalled the project. Poseidon had hoped to win approval from the Huntington Beach City Council that year, but it would take three more years to get one.

Former mayor Debbie Cook, then a councilwoman, spent much of 2003 traveling around the state and visiting various facilities and pilot projects on behalf of the California Desalination Task force (CDT). Based on what she learned, she voted against Poseidon's proposed facility in Huntington Beach when it came up for another vote in 2006. But Cook was in the minority; the project passed the council four to three.

“[Poseidon] did a good job of greasing the skids, doing all the lobbying and behind-the-scenes work that these guys do,” says Cook. “They had gone up and down the state. And you have papers like The OC Register that takes these press releases and just prints them.” (The Register is not alone; KPCC-FM 89.3 recently published on its website a report stating that a poll of local residents showed overwhelming support for Poseidon's proposed plant. Who conducted the poll? Poseidon.)

While learning about desalination on the state task force, Cook says, she came to a stark conclusion about the Poseidon deal. “It wasn't ready for prime time,” she says. “California wasn't even close to needing to embark down this road, especially with the energy situation we're facing.”

Indeed, agencies such as the Surfrider Foundation, whose primary mission is ocean and coastal protection, believe the strongest argument against desalination is the vast energy required to create potable water from the ocean—a cost that will be passed on to ratepayers. “As energy prices go up, the price of desalination is going to go up,” says Joe Geever, Surfrider's water-programs manager. “Not only do I think it will be dramatically more expensive than imported water at the outset, but the cost of desal will increase faster than imported [water].”

The process of turning salt water into potable tap, for example, requires much more electricity than simply treating wastewater. Currently, the Orange County Ground Water Replenishment System—which treats wastewater that would normally be dumped into the ocean before storing it in underground reservoirs and pumping it out as drinkable water—serves 600,000 customers with 70 million gallons per day.

A Poseidon representative speaking to the Register (the company didn't return calls from the Weekly) acknowledged that the price would be higher, but he argued it was worth providing Orange County water customers with a drought-proof, reliable source of water. “What is the value of that reliability to them?” asked Poseidon Vice President Scott Maloni. “That is the question they have to ask themselves.”

In February 2012, the project received approval from the Santa Ana Regional Water Quality Control Board. Poseidon is currently awaiting approval from the California Coastal Commission. Meanwhile, the company is building a $900 million facility in Carlsbad and signed a 30-year “take or pay” water-purchase agreement with the San Diego County Water Authority.

According to Surfrider's Geever, under the terms of the agreement, ratepayers will be on the hook for Poseidon's water whether they need it or not, which is what just happened in Australia, where officials shut down desalination plants due to recent rains. “It started raining, and the reservoirs filled up. They use the reservoir water that is dramatically cheaper. They shut the desalination facility down, but [ratepayers] still have to pay for the water,” Geever explains.

According to a Jan. 2 report by KPBS-San Diego, government officials are already bracing area residents for increased bills. “The reality is that the cheap water supplies, the state water project, the Colorado River . . . that's over,” Gary Arant, general manager of the Valley Center Water District, told the public-radio station. “Make a copy of your water bill and stick it in a drawer, and pull it out in 10 years. It'll look very cheap.”

But while San Diego imports as much as 90 percent of its water from outside the county, Geever says, there are plenty of opportunities for OC to wean itself off imported water locally.

“Orange County has enormous opportunities to reuse [its] groundwater resources and a laundry list of ways of resolving their water scarcity problems,” he says, adding that water reclamation, storm-water capture and conservation programs should be the focus of a portfolio that could someday include desalination. “You [should] start with the most beneficial and cheapest projects. That's not the way things are going.”

In addition to increased monthly rates, there are also concerns about the cost of the plant's construction. In Poseidon's initial proposal to Surf City, it estimated the plant would cost $270 million. That's less than one-third of the current price tag for the similarly conceived San Diego plant and a good $125 million less than the latest published numbers for the Huntington Beach project. (A similar project in Tampa went $40 million over budget and took five years longer than promised and is now delivering only half the promised water).

Almost a week after the Register article hit newsstands, the Municipal Water District of Orange County [1] communications team rolled out a press release providing new details about the increased cost of the project being discussed by the work group. A draft term agreement estimated the cost of drinking water produced by the plant to be $1,424 per acre foot—almost twice the original, 2003 estimate. “At this point in time,” the release stated, “the participating agencies have made no commitments to purchase water from Poseidon.”


[1] The name of the water district was incorrect in the original. Modified on Feb. 6, 2013.

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