By Tom Pankratz
Last week, San Diego County Water Authority’s staff told its Board of Directors that it was making progress towards finalizing a draft agreement with Poseidon Resources to purchase water from the Carlsbad Desal Project. Ken Weinberg, the Authority’s Director of Water Resources, said he expects that a draft water purchase agreement (WPA) will be released to member agencies and the public this spring. The agencies will then have 60 days to review the agreement and declare how much of the 50 MGD (189,250 m3/d) of desalted water they intend to purchase.
In November 2011, the Water Authority and Poseidon began direct negotiations on the draft WPA, and Poseidon is now reviewing a second draft of the agreement. The parties plan to have their next negotiating session in mid-February. At least two public workshops, which could take place in May and June, will be part of the review process, and the WPA could be presented to the board for consideration at its June or July board meetings.
The Water Authority staff and consultants are also conducting a due diligence review of financial and other project documents as part of the project’s bond rating process, including the following agreements between Poseidon and its contractors:
- An agreement between Poseidon and a Kiewit Infrastructure–JF Shea Construction joint venture to construct the facility and conveyance pipeline,
- An agreement between the joint venture and IDE Technologies to design the desal plant, and,
- An agreement between Poseidon and IDE to operate the plant.
At last week’s meeting, the Board also agreed to approve consultant contract amendments and to increase its current budget from $2 million to $4.8 million to reflect the current WPA negotiations.
The project’s current cost of water is estimated at $1,865/AF ($1.51/m3; $5.72/kgal) and its capital cost is estimated at $780 million.
If the Water Authority approves the WPA this summer, desalted water from the Carlsbad project should be available by 2016 – 18 years after Poseidon began to develop the project – and will comprise seven percent of the total regional supply.
Posted on Mon, January 30, 2012
by Ame Stanko filed under