Carlsbad water purchase agreement

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Work has started on the construction of the Carlsbad Desalination Project, which by 2012 will provide nearly all of the city of Carlsbad's water supply and 10 percent of the water supply for the region.
City officials joined representatives of Poseidon Resources Corp., the project's developer, at the site in early November to oversee this important milestone 11 years in the making.
Through the end of the year, construction crews will remove an old fuel storage tank and prepare the site for building the 50-million-gallon-a-day desalination plant. Full-scale vertical construction of the plant is expected to begin in early 2010, and the large pipeline from the plant to the Carlsbad Municipal Water District storage reservoir and San Diego County Water Authority Aqueduct will begin construction in mid 2010.
The desalination project is located on the site of the Encina Power Station, a 55-year-old power plant on Carlsbad Boulevard between the Agua Hediona Lagoon and Cannon Road. Although the desalination plant is located next to the old power plant, it does not depend on the plant to operate.
The project will be the first large-scale desalination plant on the West Coast and the largest of its kind in the Western Hemisphere. The three water agencies serving Carlsbad have committed to purchase water from the project.
Water agencies in Oceanside, San Marcos, San Diego, Encinitas, Solana Beach, Rancho Santa Fe, Escondido, Chula Vista, National City, Rainbow, Bonsall and Fallbrook also plan to use the plant's water.
The Carlsbad Municipal Water District, a subsidiary district of the city, was the first water agency in San Diego County to negotiate a contract with Poseidon Resources to purchase water from the project.
The landmark deal, called a water purchase agreement, cleared the way for the public-private partnership between the city and Poseidon Resources that enabled the project to become a reality. The terms of the agreement ensure the Carlsbad community will have a reliable, drought-proof water supply developed at no expense to the region's taxpayers.
The construction costs for the project and its distribution facilities are estimated at $350 million. This cost will be borne totally by Poseidon Resources.
Under the water purchase agreement, the Carlsbad Municipal Water District will never pay more for the desalinated water than the current price of imported water from the San Diego County Water Authority, Carlsbad's current water supplier.
Although water from the desalination plant will make up the majority of the Carlsbad Municipal Water District's supply, the district will continue to purchase some water from the San Diego County Water Authority, the region's water wholesaler. This arrangement allows the district to remain a member of the water authority and have another supply of water available in case of an emergency.
The district, which serves about 85 percent of the city of Carlsbad, declared a Level 2 Drought Alert condition May 12, triggering mandatory water conservation measures for homes and businesses. The move was in response to severe water shortages affecting the entire state.
After the desalination project is complete, when water restrictions are imposed on the region, the effect on Carlsbad will not be as drastic as on other water agencies that rely more heavily on imported water sources.