Desalinated Water: A Predictable Source, Unpredictable Costs

Water UNVEILING THE UNSEEN

Desalinated Water Will Mean a Predictable Source With Unpredictable Costs

The San Diego County Water Authority, which is responsible for buying and reselling desalinated water from the new Carlsbad plant, expects the average customer’s rates to increase by $5 to $7 a month in the first years of the plant’s operation. That is only the first increase; there will be others.

The big selling point of the new desalination plant in Carlsbad is that it’s reliable – instead of waiting for rain or snow like we do now, it uses the dependable Pacific Ocean. What we can’t yet be sure of is what it will cost.

Because of the power and the chemicals needed to remove salt from ocean water, desalinated water is expensive. Rates have gone up and will keep going up because of the plant, which is expected to open this fall.

The San Diego County Water Authority, which is responsible for buying and reselling the desal water, expects the average customer’s rates to increase by $5 to $7 a month in the first years of the plant’s operation. That is only the first increase; there will be others.

Water officials say they don’t know how much the water will end up costing average users in the long run. Water Authority officials are in the midst of preparing a long-term financial forecast, which may shed some light on the future costs when it’s finished in the next few months.

Desalinated water is one the driving forces behind rate increases being proposed across the county. About a dozen water agencies in San Diego County have recently approved price increases or are likely to in the near future.

Lee Ann Jones-Santos, a deputy director in the city of San Diego’s water department, said the city can’t say how much the desalinated water will hike prices. She said the estimated $5 increase was a talking point from the Water Authority that she couldn’t confirm for city customers.

The city, like 23 other local water agencies, buys most of its water from the Water Authority.

The Water Authority is buying the desalinated water from the plant’s owner, Poseidon Resources. The plant is cornerstone of the Water Authority’s years-long efforts to decrease its dependence on water piped into the region by the Metropolitan Water District of Southern California.

A contract between Poseidon and the Water Authority, signed in 2012, puts some limits on how much the rates can increase: no more than 30 percent over the 30-year lifespan of the deal. But that limit doesn’t apply to increases related to the price of electricity, which is a big part of the cost of desalinated water.

The Water Authority estimates that somewhere between 2027 and 2042, the desalinated water will become cheaper than the water it imports from Northern California and the Colorado River. The water that most of will use in our homes will be a blend of all those sources. The rates we pay will reflect that blend.

Two water agencies right next to the plant will be taking some of their water directly from the plant and will pay a good chunk of money for it.

One of those districts, Vallecitos Water District, plans to use about $1 million in onetime money from its reserve accounts to cushion the rate increase its users will face next year. The Water Authority, likewise, cushioned this year’s rate increase with onetime money.

You can see the costs Vallecitos’ customers will now bear: It will be buying 3,500 acre feet of desal water for about $2,400 an acre foot. The water it normally buys from the Water Authority is about $1,100 an acre foot. (An acre foot of water is about 325,000 gallons.)

“There’s a price for it, with the rate going up, but everybody will benefit to some degree from the desal,” said Tom Scaglione, Vallectios’ chief financial officer.

The way the costs of the desal water will be divvied out took some time to sort out: Water officials from across the county considered about a dozen proposals before they settled on a compromise plan offered by Olivenhain Municipal Water District.

Some local agencies are looking to reduce their dependence on the Water Authority by creating their own water supplies, mostly by building plants to recycle water. Those agencies had wanted to avoid the cost of desal as much as possible, or else they’d have to raise rates to pay both things at once.

The city San Diego, for example, is planning to invest $2.85 billion in a multi-part project to make its wastewater drinkable. It didn’t want to ask customers to pay for that project at the same time it was asking them to pay for the desal water.

In the end, the agencies reached a deal that distributes costs in a way officials could agree on. But that deal will be reviewed in years to come and could even be changed by another group of officials meeting sometime down the road, adding a bit more uncertainty to the costs and who will bear them.

Correction: An earlier version of this post misstated the price the Vallecitos Water District currently pays for water. It pays about $1,100 for an acre foot. Also misstated was the year in which desal water would become cheaper than other water.

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