Poseidon wins key permit for seawater desalination plant

Company still needs approval from coastal panel and a deal to buy purified water.

Poseidon Water won a key approval Thursday in its long quest to build a seawater desalination plant on the Orange County coastline.

But the permit from the Santa Ana Regional Water Quality Control Board does not ensure that the $1-billion ocean desalter will rise on the grounds of an old power plant in Huntington Beach.

Poseidon still needs a construction permit from the California Coastal Commission and, most critically, a binding deal with a public agency to buy 50 million gallons a day of purified seawater.

The board’s consideration of the Poseidon proposal has stretched over years, touching on questions of harm to the marine environment, need for the supply and its cost.

Those issues arose again during Thursday’s virtual hearing. But most of the board’s discussion dealt with how it could make sure Poseidon carries out required environmental mitigation projects in a timely fashion.

The board last summer signaled support for a condition that would bar the company from running the plant — and thus selling water — until it obtained the necessary government approvals for all the environmental work.

Poseidon vehemently objected to the condition, saying it would make it impossible to obtain construction financing, effectively killing the project.

Thursday, the board settled on a compromise that would maintain the prohibition on plant operation until the board has signed off on design plans, cost estimates and timelines for 60% of the mitigation work.

“It’s as far as I’m going to go,” said board member Daniel Selmi, arguing that it

was imperative to keep pressure on Poseidon to avoid years of delays in starting the work.

“We need to do our job on this,” he said, calling the desalter “a large, environmentally damaging project.”

The harm would come from the plant’s ocean intake and discharge, which state scientists say would kill significant quantities of algae, plankton and fish larvae at the base of the marine food web.

Environmental requirements include dredging of an ocean inlet to the Bolsa Chica wetlands, restoration of Bolsa Chica cordgrass marsh and creation of artificial reef habitat for fish off the Palos Verdes Peninsula.

The board approved Poseidon’s discharge permit with the compromise language in a 4-3 vote. Selmi, Chair Lana Peterson, Tom Rivera and William Ruh voted yes. Board Vice Chair Kris Murray, Joe Kerr and Letitia Clark voted no.

The board’s review of the proposal has been clouded by allegations of political interference by Gov. Gavin Newsom’s administration, which was lobbied by Poseidon.

In 2019-20, the company spent $575,000 on lobbying by Axiom Advisors, whose principal, Jason Kinney, is a longtime friend of Newsom’s.

Murray, Peterson and Kerr disclosed in February that they had received phone calls and text messages from California Environmental Protection Secretary Jared Blumenfeld during Poseidon hearings last summer. When the board reopened the Poseidon hearing last week, they said that Blumenfeld had not attempted to sway their votes and that they did not need to recuse themselves.

Thursday, Selmi and Peterson said the governor’s office had recently contacted them, asking them whether they were going to reapply for their board positions when their terms expired in September.

A board attorney said the calls were not an ex parte communication because they did not involve the Poseidon project.

But the topic harked back to last year, when Newsom let William von Blasingame’s term expire, replacing him with Clark.

A retired power company executive with extensive infrastructure experience, Von Blasingame had been the board’s most vocal Poseidon critic.

The administration has denied any improper meddling on Poseidon’s behalf, noting that seawater desalination would help diversify California’s water supply.

Labor groups have strongly supported the Huntington Beach project as a job source, while Poseidon has promoted it as a drought-proof source of water in a drought-prone state.

But some major Orange County water officials have questioned the need for the costly water, which would be roughly twice as expensive as imported supplies provided by the Metropolitan Water District of Southern California.

Several board members raised the issue again Thursday, questioning why a smaller, less environmentally harmful desalter wasn’t sufficient.

But they didn’t press the matter, devoting most of the nearly 10-hour hearing to environmental mitigation.