From Channel 10:

SAN DIEGO — A three-judge state appellate court panel ruled Friday in favor of the desalination plant under construction in Carlsbad, saying the developer does not need to conduct more environmental studies.

 The ruling by the Fourth District Court of Appeal affirmed a ruling by Superior Court Judge Judith Hayes that rejected arguments in a lawsuit filed by San Diego Coastkeeper against the California State Lands Commission.

Coastkeeper claimed that the lower court should have found that the commission was supposed to have required a supplemental environmental impact report. However, the justices agreed with Hayes that the environmental studies already completed were sufficient.

Poseidon Resources, the firm building the facility next to the Encina Power Plant, said in a statement that environmentalists are filing lawsuits to delay the project, which will convert 50 million gallons a day of ocean water into drinking water.

The ruling was the 10th to favor Poseidon, according to the company.

“The ruling is definitive and is the latest in a series of independent determinations that the project complies with state environmental law,” said Peter MacLaggan, a Poseidon senior vice president.

San Diego Coastkeeper believes the plant will devastate local fisheries and habitat.

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Here is a link to the full story, discussing both of the Poseidon desal projects underway in  Carlsbad and Huntington Beach, where they are now relying on government subsidies, due to cost overruns:

http://www.surfcityvoice.org/2010/06/poseidon-desal-deal-govt-may-rescue-junk-bond-project/

An excerpt:

If the CWA does decide to take over the Carlsbad desalination project, it won’t be the first time that Poseidon—which has yet to build a single desalination plant—failed to finish a project or have taxpayers pick up after it.

It happened before in Tampa Bay, Florida, where Poseidon was supposed to build a desalination plant about half the size of its proposed Carlsbad and Huntington Beach plants.

With the infusion of $99 million in tax dollars (90 percent of the total estimated cost of $110) for construction of the plant and accompanying water pipeline, the Tampa desalination plant was supposed to be a privately owned and operated facility. It didn’t end up that way, however, due to financial difficulties and construction failures by Poseidon’s business partners.

Three bankruptcies by Poseidon’s partners had to occur before the Tampa Bay Water Authority (TBWA) actually took control of the project, two years after its planned start date. TBWA bought out Poseidon and its partners between the first and second bankruptcies due to the poor bond rating of the partners and their inability to acquire financing for the project. But Poseidon’s partner, Covanta, was left in complete charge of building and operating the plant.

Operational failures-including clogged filters-stemmed from cost cutting measures taken during construction. Poseidon and partners were in complete control of construction during that time. Simply put, the plant could not finance itself even with tax dollars, nor could it function properly after multiple attempts by private companies–not even in a much better economic climate than exists today.

The plant had to be shut down by TBWA pending repairs.

That’s when TBWA took over complete control and for $29 million more hired American Water/Pridesa, to get the plant running.

In late 2007, more than 7 years after construction began, the plant finally became operational. But the price of construction rose to $158 million and the cost of water from the plant for consumers went from an estimated $677 to $1,100 per acre foot at that time, still far cheaper than independent experts expect it to be in California ($1,500 – $8,000 per acre foot) where salt water levels and other factors are different.

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Jim the Realtor
Jim is a long-time local realtor who comments daily here on his blog, bubbleinfo.com which began in September, 2005. Stick around!

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