Report raises concerns for Poseidon’s Huntington Beach desalination proposal

For Immediate Release: September 26, 2019

Contact: Rachele Huennekens, rachele@resource-media.org

Carlsbad, Calif. – The San Diego County Water Authority’s 2019 fiscal year report on the Carlsbad ocean desalination plant shows poor performance at the facility. According to the report, Poseidon paid a penalty of almost $2 million for non-delivery of water, reaffirming concerns around affordability and reliability raised by community advocates in Orange County over the company’s proposal to build a similar desalination plant in Huntington Beach.

The report showed that water from the Carlsbad facility was far more costly than average, at a cost of $2,685 per acre foot, and is expected to increase 5 percent next year. The Authority (SDCWA) paid an astonishing total of $121 million for Poseidon’s desalinated water.

Alarmingly, the report also showed that Poseidon received five citations for violating its wastewater discharge permit at the Carlsbad plant over the last year. Desalination plants like Poseidon’s discharge extremely salty, chemical-laden brine into the sea that can harm ocean plants and animals.

Poseidon also failed to deliver enough water to meet the area’s needs during the 2018-2019 contracted period, falling short by more than 5,000 acre feet. Despite this, the report indicated that Poseidon received a ‘Management Fee’ from the Water District based on their performance and the amount of the fee has not been disclosed.

“This is more evidence that Poseidon dealt Carlsbad a bad deal with its desalination plant and is trying to repeat the corporate boondoggle in Huntington Beach,” said Ray Hiemstra, Associate Director of Programs of Orange County Coastkeeper. “Orange County and state leaders should take a hard look at this report as a cautionary tale and really consider what it would do to working families in Orange County who need affordable drinking water.”

Poseidon’s proposal for a $1 billion desalination plant in Huntington Beach is currently before the Santa Ana Regional Water Quality Control Board, who will likely issue a tentative decision in late November or early December. UCLA recently found that the Huntington Beach plant would make water less affordable for low-income households in Orange County, causing moderate to severe rate increases. A study by the Municipal Water District of Orange County found that the Poseidon’s desalination plant would be the most expensive of all water supply options for Orange County, and the most financially risky.   

“All signs indicate that Poseidon’s desalination plant is a terrible idea. UCLA’s study shows it will raise water bills for Orange County families, and this report confirms that Carlsbad communities are already paying the price,” said Andrea Leon-Grossmann, Deputy Director of Azul. “It is an injustice to ask working-class families to pay more for water, only to benefit Wall Street investors.”

Poseidon’s recent corporate behavior has also been raising questions. While the $1 billion sale of the Carlsbad plant to international investment corporation Aberdeen Standard was reported in May, the sale was left unmentioned in the SDCWA report. The terms of the sale remain unknown, raising an important question of how to reconcile the profit from the sale against the $400 million public subsidy Poseidon has applied for in Huntington Beach.   

Moreover, Poseidon has been spending millions lobbying state officials and making campaign contributions, as well as hiring influential lobbyists including former Senator Barbara Boxer and Axiom Advisors, a lobbying firm with ties to Governor Newsom. Poseidon is also funding a front group called OCWISE.

“Orange County doesn’t need—and shouldn’t have to pay for—Poseidon’s boondoggle,” said Susan Jordan, Executive Director of California Coastal Protection Network. “Orange County should look for cleaner, cheaper and commonsense solutions like recycling water and capturing rainwater.”