Huntington Beach, CA – Late yesterday evening, the Orange County Water District (OCWD) Board of Directors voted to approve a Water Reliability Agreement term sheet with Poseidon Water that will allow OCWD to secure the single largest source of new, local water supply available to Orange County – 56,000 acre-feet of water annually from the proposed seawater desalination project in Huntington Beach.
The Water Reliability Agreement term sheet between Poseidon Water and OCWD, for the Huntington Beach Desalination Project, establishes the framework and parameters for negotiating a final contract. The term sheet includes a 50-year purchase period with Poseidon assuming the financial responsibility for financing, constructing and operating the desalination facility. Under the term sheet, OCWD only pays for water that is delivered to the specified delivery point, meeting contractual specifications for quantity, quality, reliability and price.
The term sheet links the purchase price of desalinated water to the avoided cost that Orange County would otherwise pay for the imported water that is being replaced. It also contemplates pricing reviews throughout the contract to ensure the water price OCWD is paying is in line with project costs. Based on the term sheet’s pricing structure, it is anticipated that over the life of the contract, Orange County’s ratepayers may realize significant savings compared to the purchase of less reliable imported water.
“The pricing structure requested by the Orange County Water District is fair and equitable,” said Maloni. “It provides the ratepayers with the lowest cost water in the early years and price controls on future costs. The agreement protects water agencies and ratepayers from financial risk associated with plant operations, including electricity cost escalation, inflation and changes in law.”
Poseidon’s Huntington Beach Desalination Project is awaiting discretionary permit approval from the California Coastal Commission to proceed with construction. A hearing before the Coastal Commission is anticipated later this year and commencement of construction is expected in 2016. Approval of the Coastal Commission permit is a condition precedent for OCWD to execute a final water purchase agreement.
Poseidon’s landmark 50 million-gallon per day seawater desalination project in Carlsbad, CA is scheduled to be in operation early fall 2015. Once completed, it will be the largest, most technologically advanced, energy efficient and environmentally responsible seawater desalination project in the Western Hemisphere.
What Others Are Saying…
“I compliment the OCWD staff for approving an excellent agreement, one where Orange County further reduces its reliance on imported water that continues to be challenged by drought, environmental restrictions, agricultural needs, competition and aging infrastructure. Thanks to the project, Orange County residents and businesses will have a reliable, affordable, local water resource for decades to come.” - Dr. Allan Bernstein, Chairman, OC WISE
“This is a great day for Orange County workers and residents. The Huntington Beach desalination project will not only create more than 3,000 construction, maintenance, and operational jobs for a skilled labor workforce, it will result in a solid, lasting local economic benefit for our community and our families by providing a local water source.” - Ernesto Medrano, Council Representative, LA/OC Building Trades Council
“As other states are increasingly affected by the drought, California’s imported water is in danger of dramatically increasing in cost. That is why our customers are demanding new locally-controlled water supplies, like seawater desalination.” - Doug Davert, Director, East Orange County Water District
“It’s crucial that California looks for ways to provide clean and reliable drinking water for our residents for decades to come. Through proper planning for our future, including the development of desalination projects like the one in Huntington Beach, we can ensure a viable future for all Californians.” - Kevin Wen, Millennials for New Water
“Beyond supporting the current residents and businesses in the area with clean, safe drinking water, the jobs that this desalination project will provide can help boost the economy throughout Orange County and ensure that our businesses can continue to grow.” - Wayne Brown, Director of Government Affairs, South Orange County Economic Coalition
Poseidon Water specializes in developing and financing water infrastructure projects, primarily seawater desalination and water treatment plants in an environmentally sensitive manner. These projects are implemented through innovative public-private partnerships in which private enterprise assumes the developmental and financial risks. For more information on Poseidon Water and the Huntington Beach desalination facility, visit http://HBfreshwater.com.