CARLSBAD DESAL PLANT NEEDS $159M IN UPGRADES
Regional water officials say state-mandated improvements could increase cost of desalinated water by as much as 10%
The Poseidon desalination plant in Carlsbad — by far the San Diego region’s most expensive supply of water — is about to get even more costly.
Under pressure from state environmental regulators, the company is now scrambling to complete an estimated $159 million overhaul of its system for pulling ocean water from the Agua Hedionda Lagoon up to its $1 billion reverse-osmosis facility perched atop a nearby hill.
Poseidon thought it had settled on a blueprint to meet California’s strict standards for protecting fish and other marine life, envisioning four new 900-foot pipelines from the shore to the middle of the lagoon.
Then came the mussels and gooseneck barnacles.
Divers recently discovered up to 6 inches of marine life growing on the inside of the facility’s main intake pipeline, requiring days of tedious underwater scraping and removal.
Poseidon officials quickly realized that the proposed design would require shutting down what’s officially known as the Claude “Bud” Lewis Carlsbad Desalination Plant for about a month every year so that divers could clean the new lines, creating a huge and unforeseen expense.
“As we further investigated the lagoonbased intake design, we ran into some challenges,” Michelle Peters, compliance manager for Poseidon Water, said on a recent morning, standing on the concrete intake structure built into the lagoon’s shoreline.
“In our existing intake, over a period of less than 10 months,” she explained, “we saw a significant amount of marine growth, from 1 inch to 6 inches.”
Now the company has a proposal that includes building a large screening system near the shoreline that could be removed with cranes and scrubbed down. Officials said the project will have a higher upfront
cost but hopefully less annual maintenance.
The company has until September 2023 to complete construction of the new intake system under its permit with the San Diego Regional Water Quality Control Board.
“It’s going to be a very, very busy, active time,” Peters said. “We will not be bored.”
Ratepayers will ultimately pay for the statemandated overhaul.
Future upgrades are estimated to cost about $110 million, on top of $46 million already allotted for an initial phase of modifications, according to a report from the San Diego County Water Authority. The region’s wholesaler, which serves 24 member agencies, has agreed to purchase the drought-proof supplies from Poseidon at least until 2045.
As a result of the overhaul, rates for desalinated water could increase between 5 percent and 10 percent, said Jeremy Crutchfield, resources manager with the water authority.
The project’s final price tag is hard to determine this far ahead of next winter, when the new intake system is expected to come online, he cautioned.
“There’s just so much in the air with material prices, market rates, any number I would throw out right now would not be right,” he recently told the agency’s 36member board, when asked for an official cost estimate.
Poseidon hasn’t had to directly deal with such state
regulations in the past. The Encina Power Plant, which was decommissioned in 2018, previously pulled in the ocean water for its cooling process, providing it for desalination to Poseidon as an afterthought.
With the plant now demolished, it’s up to Poseidon to meet strict rules for protecting ocean life as it sucks in roughly 300 million gallons of seawater a day. The company must not only install new 1-millimeter mesh screens, for example, it also has to limit the rate at which water is drawn into the system so that fish can easily escape its pull.
That’s so it can send about 100 million gallons of the intake to the desalination plant, turning nearly half into drinking water. The other half becomes a highly concentrated byproduct that’s poured into a mixing pond with the remaining 200 million gallons to reduce salinity levels before being discharged back into the ocean.
The cost of desalinated water from the plant is currently around $2,750 an acre
foot, a price directly impacted by rising energy costs. (An acre foot is enough water to cover an acre a foot deep, or 325,851 gallons.)
By comparison, untreated water purchased from the Metropolitan Water District of Southern California, which serves 19 million people across six counties, costs the water authority about $855 an acre foot, according to a recent independent cost of service study.
Dan McMillan, board member for the Helix Water District, recently suggested that the water authority look into purchasing the Poseidon plant just so it could scale back its operations. Right now, the wholesaler has what’s known as a takeor-pay contract in which it’s obligated to buy the water whether it needs it or not.
“It cost us about $90 million extra a year for this water versus buying it from (Metropolitan). Have you ever looked at the idea of just buying the plant?” he asked agency staff during a recent public hearing.
The water authority has a provision in its contract that allows it to buy the facility for $1 after its contract term expires in 2045. The agency could explore striking a deal sooner, but staff said that such a move wouldn’t be wise until Poseidon completes the state-mandated upgrades and improves its BBB bond rating.
“We want it to be at least a single-A rated, complete project before we want that on our balance sheet,” Lisa Marie Harris, the agency’s finance director, said at the meeting.
The California Coastal Commission recently rejected a proposal by Poseidon to build a similar desalination facility in Huntington Beach. Agency staff cited environmental as well as cost concerns.
The water authority’s top brass has stressed that the deal with Poseidon is critical for ensuring reliability during drought.
However, unanticipated conservation by San Diegans over the last decade has left the region with ample supplies, according to the water authority. Now water managers fear that recent pressure from the state to cut back even further could exacerbate the region’s most salient water issue — soaring rates.
As people have conserved, agencies saw their revenue plummet. Local retailers, as well as the water authority, have had to hike the cost of water to cover an array of fixed costs, from basic maintenance to take-orpay water contracts, including with Poseidon.