The Municipal Water District of Orange County (MWDOC) has made public the terms for a potential deal to buy drinking water from the yet-to-be-constructed Huntington Beach Seawater Desalination Project. Poseidon Resources, the Connecticut-based developer that hopes to construct and operate the desalination facility, submitted the draft of terms, which will now serve as a framework on which to base discussions about signing a future deal.
Along with the draft of terms, Poseidon also included a letter of intent and a technical report, which delineates potential distribution costs that might be associated with the project. All three documents are currently available on the municipal water district’s website. At this stage, however, the MWDOC insists that it has not committed to any sort of water-purchasing agreement with Poseidon.
“The draft term sheet enables MWDOC and participating agencies to begin negotiations with Poseidon,” said Joan Finnegan, MWDOC board president. “Its release to the public signifies our continued commitment to transparency throughout the process.”
According to Poseidon’s proposal, desalinating seawater at the Huntington Beach facility will cost nearly $1,500 for every 325,000 gallons. That figure does not include the costs of conveyance and delivery, which the proposal estimates will range between $90 to $140 dollars for every 325,000 gallons. While these projected costs are higher than those the MWDOC currently pays to import water from outside the county, advocates point out that, despite the expense, the desalination facility could provide the county with a local, drought-proof water source.
Now that Poseidon has put forth the tentative terms for an agreement, it will be up to the county’s various cities and water agencies to pursue approvals from their local governing bodies in order to move forward.
“We will continue to work with our member agencies to determine the role this water supply may play in continuing to provide a robust and reliable water resource portfolio for Orange County,” Finnegan said.
Poseidon is no stranger to the uphill battles associated with opening a desalination facility. A similar compound in Carlsbad took nearly 10 years to complete the approvals process. Late last December, however, Poseidon confirmed that it had secured the necessary financing to proceed with the construction of its Carlsbad facility. That production plant is expected to be fully operational by 2016. Poseidon also operates five water reclamation facilities in Mexico and one in Rhode Island.
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