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LEGAL BATTLE AGAINST CARLSBAD DESALINATION CONTINUES AS POSEIDON IS STILL SEARCHING FOR FUNDING

August 19 2011 | Know Your H20, Desalination, Legal,

Yesterday, on August 18, 2011, Surfrider Foundation filed an appeal from a June decision by Judge Judith F. Hayes  of the Superior Court of California, County of San Diego.  In pursuing legal actions such as this one, Surfrider is striving to promote and achieve the goals of our Know Your H2O program .  There are many opportunities for increased conservation and reuse of wastewater that can be had before it would be necessary to turn to an inefficient water supply method such as ocean desalination.  Compared to wastewater recycling, for example, the CDP is likely to use five times more water (with a large waste flow) and twice as much energy  to produce the same amount of drinking water.

 

Specifically, Surfrider is challenging the California Regional Water Quality Control Board in San Diego (the “Board”) for their approval of the National Pollutant Discharge Elimination System (NPDES) permit for the Carlsbad Desalination Plant (CDP).  Surfrider is specifically challenging the Board’s interpretation of section 13142.5(b) of the Porter-Cologne Water Quality Control Act, which requires a coastal industrial installation to use the “best available site, design, technology, and mitigation measures feasible to minimize the intake and mortality of all forms of marine life.”  The ruling was the third time Judge Hayes ruled in favor of the CDP, after previously upholding challenges to approvals by the California Coastal Commission  and the State Lands Commission.  There are no published court opinions on the interpretation of section 13142.5(b).  Given that this was a case of first impression, and Judge Hayes’ record with regards to this project, the case should be considered by a Court of Appeals.

The CDP  is a proposed 50 million gallon per day seawater desalination plant in City of Carlsbad, which purports to be able to meet 10 percent of the San Diego region’s needs at a cost of over $350 million and possibly up to $630 million.   Poseidon is still searching for ways to meet the financial needs of the project (see below).  The site was chosen because of cost advantages associated with being adjacent to the Encina Power Station’s once-through cooling seawater intake structure (once-through cooling is another issue of contention on which Surfrider is urging members to Take Action). 

At issue in the appeal by Surfrider is the Flow, Impingement and Minimization Plan (the “Plan” ), required by the NPDES to protect coastal marine life.  The Plan violates, rather than implements, section 13142.5(b) of the Porter-Cologne Water Quality Control Act, because it does not require the plant to use the “best available site, design, technology, and mitigation measures feasible to minimize the intake and mortality of all forms of marine life.” Additionally, the Board impermissibly allowed the CDP  to use after-the-fact habitat restoration in place of site, location, design, technology, and mitigation, as required by Section 13142.5(b).

Instead of choosing alternate intake designs to lessen impact to wildlife, Poseidon proposed creating and restoring off-site wetlands in an attempt to offset the losses of fish impinged  and entrained  by the intake structures.  This proposed solution does not satisfy the plain language requirements of Section 13142.5(b) “to minimize the intake and mortality of all forms of marine life.”  In its feasibility analysis of the Plan,  the Board narrowed its scope of review to the specific project goals of treatment capacity (volume) and proposed costs in order to ignore consideration of alternate project sites or deviations in plant design.  This has been a common tactic used by developers, since Citizens Against Burlington v Busey, 938 F.2d 190 (D.C. Cir. 1991), to avoid proper consideration of all reasonable alternatives, such as building a smaller facility or just not building one at all.

Surfrider also contends that the interpretation of the Porter-Cologne Act should be guided by case law interpreting Clean Water Act (CWA) Section 316(b), which contains similar language to Section 13142.5(b) of the Porter-Cologne Act.  Case law interpreting CWA Section 316(b), in the U.S. Second Circuit Court of Appeals, has barred the use of off-site restoration as ‘mitigation’ under Section 316(b).  Riverkeeper, Inc. v. U.S. E.P.A., 358 F.3d 174, 189 (2d Cir. 2004).  Surfrider has been involved in a suit and subsequent settlement forcing EPA to issue new regulations  for Section 316(b).

As Surfrider continues the legal challenges to the CDP, Poseidon continues to struggle to secure funding for the project.  The site has been prepared for construction, but Poseidon “is now trying to secure financing to build the plant and related infrastructure, estimated a year ago to cost nearly $700 million.”   Years ago, nine local water agencies agreed  to guarantees with Poseidon to not pay the true cost of the water until the costs of imported water was even greater. At that time, that meant sharing the splitting the costs with Poseidon for up to 30 years once the plant was up and running.  But the proposed cost sharing was too good to be true, as the financial feasibility of such a deal resulted in a “near junk bond rating last year as Poseidon prepared to float $530 million in tax-exempt private activity bonds.”   

In an ongoing dispute between the Metropolitan Water District of Southern California (MWD) and the San Diego County Water Authority (SDCWA), the MWD has moved to terminate  an agreement to pay a subsidy of $250 per acre foot (potentially $14M annually) to Poseidon and the SDCWA for water produced from the CDP.  It is unclear, however, if the MWD actually terminated the agreements for the CDP.   Poseidon may need to wait until the MWD and the SDCWA clear up other longstanding disagreements about water transportation rates  before the MWD will clarify their position regarding the CDP.

Apparently with the support of the City of Carlsbad, “Poseidon Resources in now in discussions with the San Diego County Water Authority on a possible new water purchase agreement.  Under such an agreement, the Water Authority would buy all the water from Poseidon and deliver it to water agencies, including the City of Carlsbad, instead of water agencies buying it directly from Poseidon.”

For more information on Opposing Carlsbad Ocean Desalination, visit the San Diego Chapter Campaign page.

Written by Legal Intern Kirk Tracy

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