HUNTINGTON BEACH, CA, May 15, 2015 -- On Thursday, May 14, the Orange County Water District (OCWD) Board of Directors voted to approve a Water Reliability Agreement term sheet with Poseidon Water that will allow OCWD to secure the single largest source of new, local water supply available to Orange County -- 56,000 acre-feet of water annually from the proposed seawater desalination project in Huntington Beach (see "OCWD enters negotiations to secure single largest source of new water").
The Water Reliability Agreement term sheet between Poseidon Water and OCWD, for the Huntington Beach Desalination Project, establishes the framework and parameters for negotiating a final contract. It includes a 50-year purchase period with Poseidon assuming the financial responsibility for financing, constructing and operating the desalination facility. Under the sheet, OCWD only pays for water that is delivered to the specified delivery point, meeting contractual specifications for quantity, quality, reliability, and price.
The term sheet links the purchase price of desalinated water to the avoided cost that Orange County would otherwise pay for the imported water that is being replaced. It also contemplates pricing reviews throughout the contract to ensure the water price OCWD is paying is in line with project costs. Based on the sheet's pricing structure, it is anticipated that over the life of the contract, Orange County's ratepayers may realize significant savings compared to the purchase of less reliable imported water.
Poseidon's Huntington Beach Desalination Project is awaiting discretionary permit approval from the California Coastal Commission to proceed with construction. A hearing before the Coastal Commission is anticipated later this year and commencement of construction is expected in 2016. Approval of the Coastal Commission permit is a condition precedent for OCWD to execute a final water purchase agreement.
Poseidon's landmark 50-million-gallon-per-day seawater desalination project in the city of Carlsbad, Calif., is scheduled to be in operation early fall 2015. Once completed, it will be the largest, most technologically advanced, energy efficient and environmentally responsible seawater desalination project in the Western Hemisphere.
About Poseidon Water
Poseidon Water specializes in developing and financing water infrastructure projects, primarily seawater desalination and water treatment plants. These projects are implemented through innovative public-private partnerships in which private enterprise assumes the developmental and financial risks. For more information on Poseidon Water and the Huntington Beach desalination facility, visit www.hbfreshwater.com.