San Diego Water Board Rejects Desalination Plant Project

SAN DIEGO —  The San Diego County Water Authority governing board voted unanimously Thursday to back away from a proposed project to build the nation’s largest desalination plant, able to provide 50 million gallons of fresh water daily.

Board members cited financial and technical issues, as well as a deteriorating relationship with the project’s sponsor, the Connecticut-based Poseidon Resources Corp.

What just months ago was touted as a smart private-public match has soured so badly that Poseidon employees have recently blocked water authority employees from visiting the project site at the Encina Power Plant along Pacific Coast Highway in Carlsbad.

“We just did not feel the urgency to sit down and write the precise wording of a contract,” said Ken Weinberg, director of water resources for the water authority. Weinberg has urged the governing board to distance itself from Poseidon while preserving the option to resume the partnership.

The decision to suspend negotiations neither surprised nor displeased Poseidon officials.

In fact, Poseidon Senior Vice President Peter M. MacLaggan said the company was eager to find a new partner, possibly Carlsbad or Oceanside.

“This hasn’t shaken our faith” in desalination, said MacLaggan. “Everybody agrees that desalination is the future. The only difference is how we get it done and with what partners.”

If nothing else, the setback shows that, although desalination is often seen as the answer to California’s water supply problems, the difficulties of designing, building and operating a plant can be daunting. Several plants are in the planning stage, although none has advanced as far as the Carlsbad project.

The Carlsbad plant was to have been twice the size of the nation’s largest plant, which was built by Poseidon in Tampa, Fla.

Once considered a showpiece of water technology, the Tampa plant helped attract San Diego officials five years ago to Poseidon’s unsolicited offer of a partnership.

But in recent years, the Tampa plant has encountered a series of technical, financial and political problems, and San Diego officials began to worry that the same difficulties could occur here.

Two issues in recent months have emerged as sticking points: Poseidon’s interest in finding other partners, and Poseidon’s refusal to allow the water authority to look at environmental documents involving the process to be used to, in effect, strain salty water through filters to make it potable.

“They’re really making a big deal and saying we’re doing something unethical by having dual negotiations,” MacLaggan said.

“The truth is that Oceanside and Carlsbad have always expressed interest in being part of this project.”

Water authority officials liken that approach to entering into a marriage while continuing to seek outside relationships. “We’re not into threesomes,” said one official.

Before the bloom wore off the romance, the plan was for Poseidon to build and operate the $270-million plant -- taking the financial risk inherent in such ventures -- and, if the project succeeded, sell controlling interest to the water authority.

MacLaggan estimated that Poseidon had spent $10 million in five years preparing the plant for operation, including getting the permits from myriad public agencies. Water authority officials were dubious about Poseidon’s assertions of having spent millions on the project.

“That figure seems to be growing exponentially,” Weinberg said. “We’re not sure what it’s based on.”

Though nature blessed San Diego with balmy weather and a sandy coastline, it included only a tiny supply of ground water, and the region is on a continual hunt for new sources. Water officials had hoped that, by 2020, as much as 15% of the county’s supply could come from desalination.

With the Poseidon deal on indefinite hold, water officials hope to explore deals involving either the San Onofre nuclear power plant north of Oceanside or a coastal power plant south of San Diego.