Twenty years ago, the elected officials who served on the boards of the Orange County Sanitation District and Orange County Water District had a visionary idea to recycle treated wastewater to drinking water standards and percolate that water into our underground aquifer where it could eventually be used again for drinking water.
The project — which would be known as the Groundwater Replenishment System — was not without opposition, much of it surrounding the cost of the project and the water it would produce. I served on the OCSD board at the time in my position as a council member in the city of Orange and I took my position of fiscal responsibility seriously. Being fiscally responsible means forecasting not just the value of the project in today’s dollars, but the value of building infrastructure for future generations.
Admittedly, when GWRS came online in 2008, the cost of the water it produced was more expensive than the alternative of buying imported water from the Metropolitan Water District of Southern California. However, as imported water continued to increase in cost over the past decade, the GWRS water became less expensive and we now have local reliability at a lower cost.
Today, Orange County is considering the same investment with seawater desalination, and there is a value to building a project that will provide drought-proof, reliable, high-quality drinking water.
In Carlsbad, Poseidon Water built a 50 million gallon per day seawater desalination plant for $1 billion in private financing. The Carlsbad Desalination Plant has produced and delivered over 20 billion gallons of drinking water since December 2015 at a cost of approximately $.007 (just over half-a-penny) per gallon. The public-private partnership project delivery method allowed for the San Diego County Water Authority to develop new, capital-intensive public-serving infrastructure without incurring debt or negatively affecting bond ratings. Successful delivery of the project without significant impact to water rates or debt burden was a factor that led to improvement in the San Diego County Water Authority’s credit rating. On the flip side, because the price of desalinated water was determined prior to construction of the plant, public water agency customers have a greater certainty in projecting long-term water rates. In contrast, since 1978, the cost of water imported into Southern California by the Metropolitan Water District of Southern California has escalated annually by average of 6.4 percent.
The San Diego ratepayers only pay for that water if it is produced at the quality and quantity specified in Poseidon’s contract with the San Diego County Water Authority. While it is slightly more expensive than imported water today, by 2025 — after 10 years of operation — that water is expected to be less expensive than treated imported water.
In addition to providing an affordable new local water supply, the project would create more than 300 on-site jobs over its three-year construction process and nearly 10 times that amount in indirect jobs. The project would also provide tens of millions of dollars in tax revenue to the city of Huntington Beach and the county of Orange. At a time when companies are fleeing California, we need to embrace companies willing to invest in quality infrastructure projects that benefit us all.
As the CEO and president of the Orange County Taxpayers Association, I will be looking closely at the final water purchase agreement between Poseidon Water and the Orange County Water District to ensure the protection of the ratepayers. But — as with GWRS — it is critical to understand the difference between cost and value. And there is a significant value to Orange County becoming more water independent and less susceptible to California’s “boom and bust” climate that is prone to long-term droughts.
Carolyn Cavecche is CEO and president of the Orange County Taxpayers Association.