Desalination Project Awaits Crucial Vote

A $250-million desalination plant proposed in Huntington Beach is headed for a critical City Council vote Monday amid increasing concerns about the project’s environmental effects and whether it can succeed economically.

Poseidon Resources, a private company based in Connecticut, plans to build the facility next to the AES generating station on Pacific Coast Highway, giving the company access to the private power plant’s water intake and discharge system.

Supporters say the desalination plant, which would produce up to 50 million gallons of fresh water daily, will help accommodate population growth, protect the county’s vast groundwater basin from overuse, and provide a reliable source of water during droughts. The plant, which would remove salt from water with filters and chemical processes, would be one of the largest in the nation.

Poseidon officials say they have a potential customer for half of the water and believe they can sell the rest as water prices rise and the state is forced to reduce its reliance on the Colorado River.

Opponents worry that the private project is not economically feasible and could further damage the waters off Huntington Beach, which have been plagued with high levels of bacteria for years. They question whether a public resource -- ocean water -- should be used for private gain.

“Our project has become a lightning rod for a lot of different agendas,” said Billy Owens, a Poseidon vice president based in Long Beach. “The opposition is coming from advocacy groups that assume our water plant will perpetuate the power plant. That’s not the case.”

Questions about the desalination project, Owens said, were “fully answered” during 28 hours of hearings before the Huntington Beach Planning Commission earlier this year.

The panel certified the required environmental report on the plant and forwarded the project to the City Council without a recommendation. Council members are scheduled to decide Monday night whether to approve the project and the environmental report.

If the city accepts the proposal -- now running about a year behind schedule -- other regulatory agencies must also give their approvals. They include the U.S. Environmental Protection Agency, the Santa Ana Regional Water Quality Control Board, the California Coastal Commission and the state Department of Health Services.

The California Energy Commission has recommended that the city reject the Poseidon project because the environmental report is incomplete and based on inaccurate assumptions and obsolete marine studies.

The commission and environmental groups, such as the Surfrider Foundation, say the document seriously overstates the amount of time that the AES plant is in operation, which would coincide with operations of the desalination plant. The report, they say, failed to analyze the effects of the project on encouraging growth and development in Orange County and the effects on marine life that could be sucked into the intake system.

The energy commission noted that Poseidon’s environmental review mistakenly assumed maximum output by the power plant -- resulting in maximum intake of cooling water -- to meet water production goals.

“The desalination facility will need to operate at full capacity, 24 hours a day over 90% of the time,” the commission wrote. “In contrast, the AES power plant cooling system frequently runs at 25% generating capacity and is subject to seasonal variations in energy demand.”

“The EIR was done too quickly and is inadequate,” said Marco Gonzalez, an environmental attorney and chairman of the San Diego chapter of the Surfrider Foundation. “This is a private water development. They are just worried about the bottom line. That concerns us.”

In August, state Coastal Commission officials warned that tapping the ocean for drinking water could lead to the destruction of significant amounts of marine life and turn a public resource into a private commodity.

When running at full throttle, the power plant pulls in about 240 million gallons of water daily; the Poseidon plant would draw an additional 100 million gallons.

Powerful intake systems pose a substantial threat to fish and small organisms, such as plankton, larvae and fish eggs. The problems can be reduced with proper design, positioning and operating procedures, commission officials said.

Environmental activists, such as Jan Vandersloot, also worry that the water plant would aggravate bacterial contamination along the shore that he believes is linked to the AES power plant. In addition to the AES discharge of cooling water, the Poseidon facility would dump up to 50 million gallons of treated wastewater and brine into the ocean every day.

Critics and public officials question whether the plant will have a market for its product and be able to buy electricity at lower than normal wholesale prices to hold down costs.

Poseidon’s water, critics say, will cost twice as much as conventional supplies, making it unattractive to customers unless the plant is heavily subsidized.

Company officials estimate that their water will cost about $800 an acre-foot. Groundwater from the county’s aquifer costs about $150 an acre-foot, while the price of imported supplies is about $500 an acre-foot. An acre-foot is 326,000 gallons, enough water for two families for a year.

Critics say the plant’s success also hinges on the ability to buy electricity at 5 cents a kilowatt hour, well below the standard wholesale price of 8 to 11 cents. Such a low price would require exemptions from state surcharges.

The plant will need to buy about 35 megawatts of electricity a day, enough for 35,000 homes, off the statewide power grid. Some water agency officials say the inability to secure a cheap power source might be a deal-killer.

“This thing is very shaky,” said Huntington Beach Councilwoman Debbie Cook, who sits on the state Water Desalination Task Force. “All the modeling is based on 5-cent-a-kilowatt-hour pricing. It doesn’t pencil out otherwise.”

Just as significant, skeptics point to Poseidon’s project on Tampa Bay in Florida, where the company has boasted of its “extensive experience” building the largest desalination plant in the nation. The intended capacity is about 25 million gallons a day, half the output of the proposed Huntington Beach plant.

The $110-million Tampa Bay project has been marred by undercapitalized business partners and technical problems. So far, three contractors, including two of the main builders, have gone into bankruptcy proceedings.

If the glitches cannot be overcome, utility officials fear that the cost of the project might increase by $75 million over the next 30 years -- an expense that would have to be passed on to customers.

The Long Beach Water Department let expire its agreement with Poseidon to study a 20-million to 25-million-gallon-a-day facility similar to the Tampa Bay operation. City officials declined to comment on why the relationship ended, except to say they wanted to proceed at a slower pace.

Long Beach opened an experimental desalination plant two years ago with a capacity of 9,000 gallons of fresh water a day. Last week, the city broke ground on a $7-million prototype that can produce 300,000 gallons a day, enough for the needs of 2,000 people.

“There are lots of unanswered questions about desalination -- technical, economic and environmental,” said Kevin Wattier, general manager of the Long Beach Water Department. “We want to have the answers before we decide to go to a full-scale plant.”

In San Diego County, however, Carlsbad is pursuing plans with Poseidon to build a 50-million-gallon plant.

Poseidon, which arranges financing and contracts with companies to build and manage water facilities, defends its record, particularly its Tampa Bay project, the firm’s only desalination plant in the United States.

Company officials describe the plant as a financially sound operation that has produced about 2 million gallons of fresh water during test runs.

The project, Owens said, has been hampered by the financial problems of contractors. He said that troublesome honeycomb filters that failed to block marine organisms from getting trapped in the intake system were installed by a contractor after the faltering project was taken over by the Tampa Bay Water District.

Owens dismissed concerns about the project’s effect on marine life and the plant’s economic viability.

If built, the Huntington Beach plant would produce about 7% of Orange County’s demand of 700,000 acre-feet of water per year.

About half of the county’s water comes from the groundwater basin, which has been degraded by saltwater intrusion caused by overuse. The rest comes from the Colorado River and Northern California.

The northern part of the county, where groundwater is available, uses about 25% imported water.

South Orange County, with little groundwater, imports 90% of its water.

Documents show Poseidon is “soliciting interest” from agencies to buy water and discussing a sale of half the plant’s output -- 25 million gallons a day -- to the Santa Margarita Water District in southern Orange County. The water would be distributed using new and existing pipelines.

The benefit to Huntington Beach would include having a large reservoir at the plant available to the city and surrounding areas during emergencies, city and company officials say.

The city also would get property tax revenue from the plant and improvements to Newland Street.

Other financial compensation for Huntington Beach has not been decided.

As long as the venture continues to involve a private company and a privately owned power plant, the city and taxpayers would not be financially responsible if the project failed.

Unresolved is whether the facility can be connected to the city’s water pipelines without serious problems and significant cost.

Among other things, the flow of the municipal distribution system would have to be reversed to move the plant’s water, subjecting the pipes and mains to higher pressure.

“Company representatives say this can be done safely,” said Huntington Beach Public Works Director Robert Beardsley, “but we don’t have all the facts yet. We still need to do the engineering.”

Nevertheless, the proposal remains “a very sound project,” said Virginia Grebbien, general manager of the Orange County Water District, who was a Poseidon vice president when the project was proposed for Huntington Beach.

“The science supports the project and it’s perfectly located,” Grebbien said. “The real issue is: Do we want a desalination plant?”