HBCOC Urges OC Water Distric to Approve Poseidon Term Sheet
May 18, 2015
Release Date: May 13, 2015
The Huntington Beach Chamber of Commerce (Chamber) is writing to urge the Orange County Water District (OCWD) to approve the pending Term Sheet between the Board and Poseidon Resources (Surfside) LLC (Poseidon) at the upcoming May 14, 2015 board meeting.
In his Executive Order, issued April 1, 2015, Governor Brown not only focused on the severity of the on-going drought California and Orange County are facing but specifically called for: "the prioritizing and approval of water infrastructure projects and programs that increase local water supplies Including….. desalination plants". Over the past two years the District has conducted a comprehensive, financial assessment of the proposed Huntington Beach project and found no better alternative than the 50 million gallons per day (56,000 acre-feet a year) of local drought-proof new water which Poseidon's project can provide for the District.
In this context, any call for continuing to study alternatives to desalinated water is unreasonable; the alternatives have been studied and found lacking from the perspective of creating water independence for the OCWD. The Governor's Order specifically points out that voluntary conservation measures did not work (reaching only 9.7% state-wide instead of the 20% he called for). The OCWD is facing a 75,000 acre-foot a year short fall of water by 2035. Orange County imports approximately 50% of its water from the Sierra snowpack (the State Water Project) and the Colorado River. The Snowpack is now at 5% of normal, its’ lowest ever; and Colorado River allotments are contested and at an all-time low. Rather than gamble on rain, in the midst of the worst drought in California history, we believe it is prudent to move forward with negotiations.
We have reviewed the financial terms of the potential relationship with Poseidon. We find them acceptable. Under the Term Sheet the financial risks of building and operating the desalination facility are assumed by Poseidon. The cost of the water would be less than a penny per gallon. The costs of imported water, which will continue to rise, make the additional costs to rate payers, of between $1.00 and $2.00 a very good insurance policy against the 2035 water shortfall projected by the District.
The Huntington Beach Chamber of Commerce (Chamber) is writing to urge the Orange County Water District (OCWD) to approve the pending Term Sheet between the Board and Poseidon Resources (Surfside) LLC (Poseidon) at the upcoming May 14, 2015 board meeting.
In his Executive Order, issued April 1, 2015, Governor Brown not only focused on the severity of the on-going drought California and Orange County are facing but specifically called for: "the prioritizing and approval of water infrastructure projects and programs that increase local water supplies Including….. desalination plants". Over the past two years the District has conducted a comprehensive, financial assessment of the proposed Huntington Beach project and found no better alternative than the 50 million gallons per day (56,000 acre-feet a year) of local drought-proof new water which Poseidon's project can provide for the District.
In this context, any call for continuing to study alternatives to desalinated water is unreasonable; the alternatives have been studied and found lacking from the perspective of creating water independence for the OCWD. The Governor's Order specifically points out that voluntary conservation measures did not work (reaching only 9.7% state-wide instead of the 20% he called for). The OCWD is facing a 75,000 acre-foot a year short fall of water by 2035. Orange County imports approximately 50% of its water from the Sierra snowpack (the State Water Project) and the Colorado River. The Snowpack is now at 5% of normal, its’ lowest ever; and Colorado River allotments are contested and at an all-time low. Rather than gamble on rain, in the midst of the worst drought in California history, we believe it is prudent to move forward with negotiations.
We have reviewed the financial terms of the potential relationship with Poseidon. We find them acceptable. Under the Term Sheet the financial risks of building and operating the desalination facility are assumed by Poseidon. The cost of the water would be less than a penny per gallon. The costs of imported water, which will continue to rise, make the additional costs to rate payers, of between $1.00 and $2.00 a very good insurance policy against the 2035 water shortfall projected by the District.
