By John Earl
Surf City Voice
Part III of a series. Originally published May 5, 2009
Poseidon Resources Inc.’s website claims that the desalination plant it wants to build in southeast Huntington Beach, at Newland and Beach avenues, will be a “cost-effective solution to provide residents with a safe and reliable water supply by using existing structures—at no cost to taxpayers.”
Elected officials who voted to approve the desalination plant three years ago have consistently echoed Poseidon’s claim: Poseidon would privately own and operate the plant for its own profit and for its investors—a strictly free market affair with no taxpayer investment or risk, they said.
City council representative Don Hansen praised the project’s supposed free market values to a crowded city council chamber before he gave Poseidon his vote along with three other council members, Keith Bohr, Gil Coerper and Cathy Green.
“My belief is that the market is going to drive the majority of these decisions. I truly believe that,” Hansen said.
If the Poseidon desalination plant is not profitable, he added, it “will never see the light of day. And it’s purely born on private investment dollars, the risk that they [Poseidon] are going to take.”
In a candidates’ debate last year, Hansen warned that “We’re going to need the water” and reassured again that “It’s not us building the plant. It’s all private investment.”
If all goes well for Poseidon, its Huntington Beach plant will produce 50 million gallons of drinking water per day by sometime in 2011. It still needs to obtain additional government permits and must work out a franchise agreement with the city first.
Poseidon plans to build an almost identical desalination plant in the city of Carlsbad. That project is further along in the permit process and if financing comes through it could start construction this summer. Poseidon’s CEOs dream of building large desalination plants at other California coastal locations as well.
Hansen’s appeal to the free market instincts of the voters is persuasive in a city where the call for smaller government is almost a religious doctrine. But attributing either Poseidon project to to free-market karma is misleading because the company could benefit from as much as $1 billion in taxpayer supplied subsidies that would make it easier for Poseidon to attract the private sector financing that it also needs but still lacks in order to build and operate the two plants. Continue reading ‘No Cost’ Desal Costs A Lot: How your tax dollars created the desalination industry