7 Dec 2009

Carlsbad's perfect storm of incompetence?

[Addendum: I'm incompetent at spelling -- post title fixed -- but NOT analysis :).]

Many people are paying attention to the desalination plant now being built in Carlsbad California. It will be the largest in the Western hemisphere. It will be built by a private corporation (Poseidon, Inc.), which will then sell water to the City of Carlsbad and neighboring cities.

Although I think this plant is a waste of money (Carlsbad residents use a LOT of water;* conservation would be cheaper than desalination, but building more is easier than asking constituents to use less), I support it as a pilot, to see how desalination does on the West coast.

Some people worry about Poseidon's track record. They failed when building/running the Tampa Bay desal plant.

Some people worry about Poseidon's request for $550 million in tax-favored public bonds.

Some people worry about the HUGE energy costs of the expected technology.

Some people worry that the $700 million plant will end up costing ratepayers and taxpayers (NOT Poseidon) way more than the promised price.

Although these things concern me,** I worry more about Poseidon's partner, Carlsbad MWD, which has the dubious honor of being the least-competent manager of wastewater in the State. This graphic is from the NY Times (via JG):



With partners like that, I wonder if Poseidon is really facing a worthy contractual partner that can push back when/if push comes to shove. (This is especially relevant given Poseidon's friendly relations with local politicians.)

Bottom Line If Poseidon screws up, will Carlsbad MWD be competent enough to catch them or make sure they pay?

* 126 homes are not representative, but my eyeball estimate is an average of 40 units/month/meter, or about 1,000 gallons/day.
** I worry about all of the things above, but only if Poseidon avoids responsibility for them. If Poseidon screws up, it should pay up or go bankrupt.

3 comments:

  1. So, looking at the old energy use link, Carlsbad's energy cost is going to be $190-$275 per AF.

    5.476mW per AF
    Range of electricity price of $34-$50 per mW (per today's Bloomberg).

    What percent of total cost is energy cost for a desal plant?

    I think they're claiming $1000/AF total cost and a $250/AF subsidy from MWD for a "price" of $750/AF.

    So that energy cost is 19%-27.5% of their claimed costs.

    Is that right?

    ReplyDelete
  2. Excellent! Great analysis, great case study. I would be interested in knowing how much sewage the top spillage producers leak - just how bad is Carlsbad Municipal Water?

    ReplyDelete
  3. WaterSource/WaterBank8 Dec 2009, 17:47:00

    Please correct me where I am wrong...

    Carlsbad will produce 50M gallon/day at an initial cost of $550M

    Isn't that an initial cost of $9821/AF plus operation and maintenace costs for energy, etc ?

    ReplyDelete

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