Poseidon water desalination permit awarded on 4-3 vote

Poseidon Water came a step closer to building its controversial $1.4-billion water desalination plant on Thursday.

Following hours of deliberation, the Santa Ana Regional Water Board agreed to grant Poseidon a wastewater discharge permit that would allow the project adjacent to the AES power station on Newland Street to move ahead.

On Thursday night after a 10-plus hour meeting, the board voted 4-3 to issue the permit, a compromise proposed by board member Daniel Selmi and dubbed “prohibition with an off-ramp.” The permit would allow the company to operate the facility before all of its permits are granted, a process that would more than likely take years to complete. But Poseidon would have to check several boxes on all five of its proposed mitigation projects before the discharge prohibition is lifted.

Selmi, board members Tom Rivera and William Ruh and Chair Lana Peterson voted to support the permit as proposed. Vice Chair Kris Murray and board members Joe Kerr and Letitia Clark voted against it.

The vote was tied 3-3 before Peterson cast the deciding vote, effectively ending more than 20 hours of deliberation in two recent meetings and years of deliberation overall.

The permit conditions and Poseidon’s mitigation requirements were topics that dominated Thursday’s meeting. In the end, board members moved away from staff’s original recommendation that Poseidon be required to obtain permits for its mitigation plans before it can operate the facility.

Poseidon Vice President Scott Maloni has continuously said that condition would make the project infeasible, as the plant would be unable to obtain funding from lenders. Poseidon had issued its own mitigation proposal before Selmi countered with the compromise proposal that emerged as the favorite of the three on the table.

“My job is to trust but verify, and that’s what this does,” Selmi said. “It [requires] more milestones before the discharge prohibition is lifted. My preference is the staff’s initial position. I think that’s just fine ... but I put this forward in a spirit of trying to compromise. [Poseidon] can do everything they need to do to get to the point of lifting the mitigation here. It’s not going to jeopardize the funding for the project itself. Once the discharge prohibition is lifted, they can get the funding for both the construction and the mitigation.”

Ruh made the motion to pass Selmi’s compromise permit proposal, and it was seconded by Selmi.

Selmi’s proposal originally included an additional contingency, equal to 5% of facility construction and operation and maintenance costs, to be set aside and collected by the water board. That money would be returned to Poseidon after the mitigation projects were seen as meeting their performance standards.

However, Murray made an amendment to remove the 5% withdrawal — which Maloni argued would substantially drive up water prices — from the permit.

The Claude “Bud” Lewis Carlsbad Desalination Plant was built by Poseidon. A similar desalination plant is proposed in Huntington Beach.

(Courtesy of Poseidon)

“We don’t need a duplicate account,” Murray said. “There’s no reason to escalate the cost of water further. I still am not hearing a public benefit.”

Ruh offered another compromise, saying he would make an amendment to 2.5% withheld instead of 5%. That percentage made it into the final permit.

Murray’s motion to eliminate the withholding altogether failed 4-3, with Peterson, Ruh, Selmi and Rivera voting no.

Though it received approval from the Santa Ana Regional Water Board, Poseidon still has to obtain a permit from the California Coastal Commission before it can negotiate a contract to sell desalinated water to the Orange County Water District and begin construction of the facility. Poseidon anticipates consideration of a coastal development permit later this year, Maloni said.

Some see the Poseidon project as a needed resource, as recent numbers show much of the state in moderate to extreme drought.

“Today’s vote was an important test of the principles behind Gov. Newsom’s climate change policies and Water Resilience Portfolio,” Maloni said in a statement Thursday night. “Regional solutions to the effects of climate change are essential, and we are grateful for the regional board’s thoughtful deliberations, and its approval is a critical step toward bringing Orange County one step closer to achieving its vision of a drought-proof water supply.”

Local environmental advocates, meanwhile, expressed disappointment in the regional board’s decision and say they fail to see a need for the pricy water. Some have pointed toward Poseidon’s water desalination plant in Carlsbad, which has yet to see any mitigation work since the facility opened in December 2015.

Additionally, board members Selmi and Peterson said during Thursday’s meeting they were contacted by Newsom’s office this week, asking if they would seek reappointment to the board.

“From day one, Orange County residents saw this project for what it was: a corporate boondoggle for expensive water we don’t need and shouldn’t have to pay for,” Orange County Coastkeeper associate director of programs Ray Hiemstra said in a statement. “Gov. Newsom’s continued pressure on board members this week through thinly veiled threats to their reappointments flies in the face of laws to keep politics out of our water quality decisions and undermines the voices of hundreds of community members who have shown up to contest the project at every step. We are not giving up on making sure local residents’ voices are heard and will appeal this flawed decision to the state board.”

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