**News Release** - 09/16/09

Carlsbad Desalination Project now ready for Coastal Commission construction permit


City of Carlsbad Community Update

The City of Carlsbad approved minor changes to the Carlsbad Desalination Project, enabling the project's developer, Poseidon Resources Corp., to proceed with obtaining construction permits from the California Coastal Commission. This approval allows the project to begin construction before the Coastal Commission approval expires Nov. 14.

The addendum to the certified Environmental Impact Report, minor site plan changes to the desalination plant, and reconfiguration and consolidation of the pipeline network were proposed by Poseidon Resources.

In August, the Carlsbad Municipal Water District, a subsidiary district of the City of Carlsbad, approved a plan that establishes how purified ocean water from the project will be delivered to the city and the region as soon as 2012. The desalinated water will be delivered via a proposed pipeline network in Carlsbad and nearby cities.

When complete in 2012, the plant will supply the Carlsbad Municipal Water District with the majority of its drinking water. The project will be the first large-scale desalination plant on the West Coast and the largest of its kind in the Western Hemisphere. In May, the San Diego Regional Water Quality Control Board unanimously approved the project, which means the project has cleared the major regulatory hurdles needed to start construction.

The 50-million gallon a day seawater desalination plant will supply the San Diego region with approximately 10 percent of its drinking water needs. The three water agencies serving Carlsbad (Carlsbad Municipal Water District, Vallecitos Water District and Olivenhain Municipal Water District) have committed to purchase water from the project to supplement existing water supplies. Water agencies in Oceanside, San Marcos, San Diego, Encinitas, Solana Beach, Rancho Santa Fe, Escondido, Chula Vista, National City, Rainbow, Bonsall and Fallbrook also plan to use the plant's water.

Recognizing the importance of securing a sustainable future water supply that is locally controlled, more than 10 years ago Carlsbad officials took a leadership position in working with Poseidon Resources to develop a desalination project in Carlsbad.

The Carlsbad Municipal Water District, a subsidiary district of the City of Carlsbad, was the first water agency in San Diego County to negotiate a contract with Poseidon Resources to purchase water from the project. The landmark deal, called a water purchase agreement, cleared the way for the public-private partnership between the city and Poseidon Resources that enabled the project to become a reality. The terms of the agreement ensure the Carlsbad community will have a reliable, drought-proof water supply developed at no expense to the region's taxpayers.

The Carlsbad Desalination Project is estimated to cost about $320 million. This cost will be borne totally by Poseidon Resources. Under the water purchase agreement, the Carlsbad Municipal Water District will never pay more for the desalinated water than the current price of imported water from the San Diego County Water Authority, Carlsbad's current water supplier.

Although water from the desalination plant will make up the majority of the Carlsbad Municipal Water District's supply, the water district will continue to purchase some water from the San Diego County Water Authority, the region's water wholesaler. This arrangement allows the water district to remain a member of the water authority and have another supply of water available in case of an emergency.

The Carlsbad Municipal Water District, which serves about 85 percent of the City of Carlsbad, declared a Level 2 Drought Alert condition May 12, triggering mandatory water conservation measures for homes and businesses. The move was in response to severe water shortages affecting the entire state. After the desalination project is complete, when water restrictions are imposed on the region, the effect on Carlsbad will not be as drastic as on other water agencies that rely more heavily on imported water sources.



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