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FOR IMMEDIATE RELEASE
November 5, 2009
4:13 PM

CONTACT: Food & Water Watch

Renee Maas: 213-220-7563

Proposed Carlsbad Desalination Project to Cost Up to Three Times More Than Claimed

Coalition Urges Rejection of $350 Million Ratepayer Subsidy

LOS ANGELES - November 5 - Water produced at Poseidon Resources proposed desalination facility in Carlsbad, Calif. could cost up to three times more than previously claimed by the company, according to an independent expert analysis released today by Food & Water Watch, a consumer advocacy group. This finding comes as the Metropolitan Water District is poised to decide whether to grant Poseidon $350 million in subsidies for their proposed $534 million, 50 MGD desalination facility in Carlsbad.

Records obtained by Food & Water Watch from Tampa Bay Water, the public utility that owns the Poseidon-built desalination plant in Tampa, Fla., have yielded new information about the cost and reliability of Poseidon's desalination projects. Analysis conducted based on data from the Tampa Bay facility reveals that if Poseidon's proposed Carlsbad desalination project performed at the relative same level that the one in Tampa Bay has over its seven year operational life, the marginal cost of the water produced would be $3,507 per acre-foot. This estimate is more than three times higher than the $950 per acre-foot claimed by Poseidon to the California Coastal Commission in 2008.

"Poseidon Resources is dramatically underestimating its costs," said Mark Schlosberg, Food & Water Watch western regional director. "Ratepayer money is better spent on robust conservation programs that will provide real water savings and benefit consumers - not subsidies for Poseidon's absurdly expensive water."

"Even under the best-case scenario - with the proposed project performing as well as the one in Tampa Bay has over the past two years after major rehabilitation of design and construction flaws, and with no cost overruns - cost would still reach $1910 per acre-foot," noted James Fryer, a respected environmental scientist and water management expert who performed the new analysis for Food & Water Watch. 

On November 9 and 10, the Metropolitan Water District Board of Directors will decide whether to guarantee $350 million in subsidies for Poseidon's desalted water. Later this month Poseidon is expected to submit an application to the California Debt Allocation Limit Committee for $534 million in tax-free bonds. A coalition of over 25 groups is opposing public subsidies for the proposed facility due to its high costs and expected environmental impacts. Energy intensive and polluting, desalination has been shown to harm marine environments and contribute to global warming.

"Poseidon claims that their Carlsbad desalination water will come at ‘no expense to the region's taxpayers,' yet they are counting on Metropolitan Water District ratepayers and taxpayers to underwrite the project," said Renee Maas, water program organizer for Food & Water Watch. "Policymakers should learn from Poseidon's failed Tampa Bay facility and only use public funds for effective and responsible projects."

Cost over-runs and bankruptcy marked Poseidon's previous foray into the desalination business. The Tampa Bay plant opened over a year behind schedule, and then required immediate rehabilitation. As a result, he project ran 44 percent over projected capital cost and has never produced the 25 MGD originally promised by Poseidon.

Fryer's analysis of the proposed desalination facility in Carlsbad is based on detailed capital, operations, maintenance, energy, financing, and relevant local water-quality data to develop a marginal cost analysis of the water produced by the Tampa Bay facility. This information was used to develop cost projections for the proposed Carlsbad desalination project based on local conditions in Carlsbad. It is available online at: http://documents.foodandwaterwatch.org/carlsbad-desal-analysis.pdf

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Food & Water Watch is a nonprofit consumer organization that works to ensure clean water and safe food. We challenge the corporate control and abuse of our food and water resources by empowering people to take action and by transforming the public consciousness about what we eat and drink.


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