Millions in subsidies approved for Carlsbad seawater desalination project

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Southern California’s first major seawater desalination project moved forward today when regional water managers approved a subsidy for the operation that could ultimately grow to $350 million.

The privately owned plant, which would be built next to the Encina power station in Carlsbad, would annually produce enough water for roughly 100,000 households in San Diego County.

Poseidon Resources officials said the subsidy approved by the board of the Metropolitan Water District of Southern California was key to obtaining financing for the project, which they are about to start building.

The payments will go to the nine water districts buying the supplies to offset the water’s high cost. Over the life of the 25-year agreement, the annual subsidies could amount to $350 million, according to water district staff.

Poseidon is also applying for tax-free status for more than $500 million in bonds it plans to issue to finance the plant.

Years in the planning, the Carlsbad venture has obtained major state approvals. But coastal groups continue to challenge it, arguing that the same amount of water could be gained through conservation measures that would be cheaper, less energy intensive and friendlier to the environment.

-- Bettina Boxall