Poseidon Resources Ups Carlsbad Desal Cost to $550 Million: Asks State for Additional Subsidy for Proposed Project
2009-10-30
Contact:
Renee Maas, Food & Water Watch: (213) 220-7563
Conner Everts, Desal Response Group: (310) 804-6615
Gabriel Solmer, San Diego Coastkeeper: (619) 933-1134
Poseidon Resources Ups Carlsbad Desal Cost to $550 Million: Asks State for Additional Subsidy for
Proposed Project
Carlsbad, Calif.--This week, Poseidon Resources, which is seeking a tax-free bond from the state to pay for its proposed Carlsbad desalination plant, increased its request by $70 million to $550 million. This change comes just weeks before the request goes before the three-member committee that will decide if a taxpayer subsidized bond will be approved. Poseidon has not provided any explanation on what caused the plant’s estimated cost to rise.
Critics question why the state would allocate tax-free state bonds to finance Poseidon Resources’ proposed desalination plant in Carlsbad.
“The state should not reward Poseidon’s track record of failure,” said Renee Maas, Food & Water Watch Water program organizer. “Their only other desalination plant in Tampa Bay, Florida, was riddled with problems and ultimately had to be taken over by the Tampa Bay Water Authority. That project came in $40 million over budget and has never produced its promised 25 million gallons of water per day. Now Poseidon wants subsidies to build a plant using the same technology, but twice the size in Southern California.”
Poseidon is applying for $550 million in tax-free Private Activity Bonds to finance construction of the plant. Each year the California Debt Limit Allocation Committee, made up of the State Treasurer, Comptroller, and Director of Finance, divides the state’s IRS allocation of tax-free bonds among proposed projects.
“We agree with State Treasurer Bill Lockyer’s October 1 assessment that, ‘California needs a smarter, more strategic approach to capital investment,’” said Conner Everts, Southern California Watershed Alliance, Desal Response Group co-chair. “This strategic approach should include protecting the public and the environment, reducing greenhouse gases, protecting marine life, conserving energy, and promoting water security. The proposed desalination plant is a bad use of the limited funds available in the tax-exempt private activity bond program.”
In addition to the state bond, Poseidon is seeking a $250 per acre-foot ($14 million per year at full capacity) subsidy from the Metropolitan Water District.
“The desalination plant proposed by Poseidon will devastate marine life, increase our energy demand, and add to our global warming woes. This project is a distraction from the real solutions to securing a safe and sustainable water supply: conservation and reuse,” added Gabriel Solmer, San Diego Coastkeeper Legal Director. “Tax exempt bonds and subsidies should encourage the best water practices, not the worst.”
Poseidon’s tax-free bond request will be considered by the CDLAC board on November 18, 2009. The Metropolitan Water District Board will take up the question of a $14 million per year subsidy at its November 9-10 meetings.
Food & Water Watch is a non-profit organization working with grassroots organizations around the world to create an economically and environmentally viable future. Through research, public and policymaker education, media, and lobbying, we advocate policies that guarantee safe, wholesome food produced in a humane and sustainable manner and public, rather than private, control of water resources including oceans, rivers, and groundwater. For more information, visit www.foodandwaterwatch.org
The Desal Response Group brings together many environmental organizations working on diverse issues such as water conservation, watershed management, drinking water quality, beach pollution, marine issues (including fisheries and sanctuaries) and ocean water quality, to discuss the potential for desal plants in Southern California. www.desalresponsegroup.org
San Diego Coastkeeper protects the region’s bays, beaches, watersheds and ocean for the people and wildlife that depend on them. We balance community outreach, education, and advocacy to promote stewardship of clean water and a healthy coastal ecosystem.
www.SDCoastkeeper.org
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