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Executive Summary for December 15th

For an overview of the latest news on the California drought, we’ve organized the most recent developments in a curated summary, including the most important stories, analysis and data. Our goal is to keep you informed of the day’s most significant events in the field.

Published on Dec. 15, 2015 Read time Approx. 4 minutes

Billion-Dollar Desalination Plant Ready to Open

The largest seawater desalination project in the Western Hemisphere is at last ready to open, after $1 billion spent on construction and more than a decade of effort.

The actual opening of the Carlsbad Desalination Project will come in the next few days. But on Monday, a flotilla of dignitaries spent several hours celebrating the milestone.

“We’ve now established a model, not just for San Diego County but for other plants up and down the coastline, so that we can make sure California’s future is bright and that we have the water we need,” said state assembly speaker Toni Atkins, D-San Diego, according to the San Diego Union-Tribune.

It might be model no one else wants to follow. Construction and approval of the project took 15 years, and it endured more than a dozen lawsuits from environmental groups.

The project did, however, blaze a path through California’s complex regulatory system for other desalination projects. This will certainly help the next proposal to come along – if there is one.

Poseidon Water, a Boston-based company, is the owner and operator of the Carlsbad plant. It was made possible by signing a 30-year contract with the San Diego County Water Authority, which requires the authority to buy water from the plant whether it needs it or not.

In fact, it does not need the water even now, deep into the fourth year of the worst drought in state history. The San Diego region, ironically, has a surplus of water, partly because of strong conservation efforts and other projects to diversify its water supplies, including a deal to purchase Colorado River water from farmers in the Imperial Valley. The goal was to reduce dependence on water imported from the Sacramento-San Joaquin Delta in Northern California. And at that it has succeeded.

But the desalination plant will meet only about 7 to 10 percent of the San Diego region’s water demand while saddling ratepayers with the most expensive water in California, resulting in rate increases of $5 or more per customer each month.

The success of the project will be tested in the coming months. If the drought ends next year, will ratepayers still be comfortable paying for this expensive supply? And if the drought continues, will other communities choose cheaper options, such as wastewater recycling, leaving the Carlsbad plant as a white elephant in California’s water portfolio? Or will it seem like the smartest investment in water infrastructure of the era?

What is clear now is that deep pockets and smart lawyers are still going to be necessary for the next new desalination project. Because none of the regulatory hurdles that challenged Carlsbad have gone away. The project has only pressed those challenges into hard focus.

One of the early investors in the Carlsbad project, Rob Deutschman, vice chairman of Cappello Group, Inc., told Bloomberg News that similar projects won’t be attractive to investors unless the regulatory path is eased.

“We’re hoping the state works on some of those issues,” Deutschman said. “It required far more equity capital and development capital than we anticipated. In hindsight was it a good investment? Probably not.”

Taste of Winter Brings Tourists Flocking

Californians are apparently so starved for a taste of winter that they are voraciously snapping up hotel rooms around Lake Tahoe and elsewhere in the snowy Sierra Nevada.

Winter doesn’t officially begin until December 21. And only a couple of storms have moved through the mountains so far. But it’s been sufficient to allow most ski areas to open for the holidays, which is enough evidence of winter for most people.

Hotels rooms from lavish to low-down are getting snatched up all over the Lake Tahoe region, according to the San Francisco Chronicle. One of the most ritzy lodges in the region, the Ritz Carlton at Northstar, near Truckee, had five no-view rooms left for New Year’s weekend – at $1,169 per night. A bargain-basement Motel 6 in South Lake Tahoe had no rooms left for New Year’s and only five left for Christmas weekend, at $135 per night.

Other mountain locations have a bit more availability, including the Yosemite and Mt. Shasta areas. But that probably won’t last long.

It’s all a blessing for snow-dependent mountain areas that have been hard-hit by four years of drought. Every year, they pray for storms sufficient to open for the holidays. Although the snowpack is only 70 percent of average for this early season date, it is enough to grant their wish.

Top image: A sign on a valve warns of testing in progress at the Carlsbad Desalination Project Tuesday, Sept. 22, 2015, in Carlsbad, Calif. America’s largest seawater desalination plant was officially unveiled on Monday, and is expected to start regular operations within days. (Gregory Bull, Associated Press)

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