Poseidon Water’s controversial proposal for a desalination plant in Huntington Beach won a key permit Thursday, April 29, when the Santa Ana Regional Water Board cast a split vote approving a compromise less stringent than the environmental terms proposed at board’s April 23 hearing.
Poseidon, which has been working on the project for 22 years, now needs a permit from the state Coastal Commission before it can negotiate a final contract with the Orange County Water District to buy the water. And, in the wake of the regional board’s decision, there’s likely an additional obstacle, as opponents of the project said they plan to appeal.
Proponents view desalted ocean water as insurance against worsening droughts brought on by climate change and the possibility that Orange County might get less imported water from northern California and the Colorado River. Poseidon says its project would produce enough potable water for nearly a half million Orange County residents.
Though the terms approved Thursday wasn’t as harsh as previously proposed by the board, it still drew objections from Poseidon — and from three dissenting board members who wanted less onerous requirements. But the company applauded the outcome nonetheless.
“We are grateful for the regional board’s thoughtful deliberations, and its approval is a critical step towards bringing Orange County one step closer to achieving its vision of a drought-proof water supply,” said Poseidon Vice President Scott Maloni.
Environmentalists have been the most vocal opponents of the desalination project, citing the millions of marine organisms that would be killed each year by the plant’s ocean intake pipes. They also argue that the additional water is not needed and will cost twice as much as the imported water it would supplant.
They say the regional board fell short of its regulatory duty Thursday when it approved the $1.4 billion project.
“Today’s decision cements the regional water board’s failure to meet its responsibility to the public, and sets a horrifying precedent for what developers can get away with despite the laws and regulations California put in place to protect our coast,” said Susan Jordan, executive director of the California Coastal Protection Network.
Sean Bothwell, executive director of the California Coastkeeper Alliance, said his group would appeal the decision. Other opponents include the Surfrider Foundation, the Sierra Club, Residents for Responsible Desalination, Orange County Coastkeeper and the environmental justice group Azul.
Board discord
The primary sticking point for the regional board over the past nine months as been the terms of the environmental mitigation Poseidon must provide for the damage its plant will inflict on marine life.
Last summer, regional board members directed staff to increase the mitigation requirements, which at the time included much needed funding for the near-annual dredging of the tidal inlet at the Bolsa Chica wetlands and restoration projects at that estuary. The permit approved Thursday added more restoration work in those wetlands as well as a 41-acre artificial reef off the Palos Verdes Peninsula.
Also, because of concern that environmental mitigation could be delayed, staff proposed that Poseidon get all necessary approvals for the environmental projects before it could begin desalination operations.
But Poseidon — along with two prospective financiers — successfully argued that the condition would make the project infeasible, because the uncertainty involved in those approvals would leave lenders uncertain when operations would begin generating revenue to pay off bonds.
Thursday’s compromise requires Poseidon to set up an escrow fund to cover eventual mitigation costs, an additional “incentive” fund that’s to be returned to the company when the mitigation is complete, and a requirement that the mitigation designs be 60% completed before the plant begins operations.
Poseidon wanted a 30% design threshold instead and objected to the incentive fund, initially proposed at 5% before being rolled back to 2.5% as an additional compromise. Water Board member Kris Murray tried to eliminate the incentive fund entirely but lost that bid in a 4-3 vote in which she was joined by members Letitia Clark and Joe Kerr.
Kerr suggested reducing the 60% threshold to 30%, but withdrew the idea when it was clear there was insufficient board support.
Murray, Kerr and Clark opposed the final permit conditions, which included the 2.5% incentive fund and 60% threshold. Board members William Ruh, Daniel Selmi, Lana Peterson and Tom Rivera supported the measure.
Next hurdle
Opponents have pointed to a 2018 analysis that shed doubt on the need for Poseidon’s water. The area that would be served by the water gets about 77 percent of its supply from local groundwater and the Santa Ana River, with the rest imported. The Municipal Water District of Orange County study found that in a worst case crisis, less than half the Poseidon water would be needed. And none of it might ever be needed, the analysis found.
Regional board members Ruh and Selmi said they were also concerned that marine life might be damaged in order to desalinate unneeded water, but ultimately decided to defer to the Orange County Water District’s desire to diversify its water sources.
Poseidon could face an even stiffer challenge when it tries to win approval from the Coastal Commission, with Maloni acknowledging Thursday that the agency was likely to impose additional conditions. Commission staff has already raised concerns that more environmental mitigation may be appropriate and that the plant’s location, next to the AES power plant, may be vulnerable to sea level rise and tsunamis.
