Anyone who’s driven past the Encina Power Station, a coastal Carlsbad landmark since the 1950s, can’t miss the changes in recent weeks.
Demolition of the old power plant is finally underway. Scaffolding lines the seaward side of the boxy concrete building, and there’s more at the top of its distinctive 400-foot-tall smokestack.
Water agencies across San Diego County are doing their part to stabilize the state’s power grid during this week’s heatwave by generating hydropower and altering operations to trim electricity demands – and they are offering long-term solutions to reduce future energy shortages.
The California Independent System Operator issued a statewide Flex Alert from Sunday through Wednesday, calling for reduced electricity use in the afternoon and evening to limit power outages. Blackouts could affect hundreds of thousands of San Diego County residents, if extreme heat persists.
At Lake Hodges, the Water Authority is running its pumped energy storage facility to meet peak demands. As water flows down the pipeline from Olivenhain Reservoir into Lake Hodges, it generates up to 40 megawatts of energy on demand, helping to manage temporary peak electrical demands or unplanned outages. Then, the water is pumped back to Olivenhain Reservoir when power demands are low to restart the cycle.
In addition, water agencies are taking numerous actions to conserve energy. For the Water Authority, the strategy includes temporarily reducing drinking water production at the Claude “Bud” Lewis Carlsbad Desalination Plant in collaboration with Poseidon Water.
The Carlsbad Desalination Plant is the largest, most technologically advanced and energy-efficient desalination plant in the nation, and it has produced more than 62 billion gallons of drinking water for San Diego County since it began operations in December 2015.
Starting Monday, the plant ramped down operations, making an additional 8 megawatts of power available for other uses. If more load reductions are necessary over the next several days, additional curtailment may be considered at the plant. The power provided by the plant could help offset current energy shortages.
“This partnership by the Water Authority and Poseidon is another reminder of the value of the cutting-edge technology and local control at the Carlsbad plant,” said Jim Madaffer, chair of the Water Authority’s Board of Directors. “Operations are flexible and the technology is nimble, so production can be ramped up and down in response to local needs.”
In addition, local and regional water agencies are temporarily shutting down or reducing flows at pump stations and turning off HVAC systems in the afternoons. Some agencies also have the ability to convert to less energy-intensive treatment, for instance, by replacing ozone with chlorine.
Local water agencies also are tapping their significant backup power generation capacity – at their own expense – to ease the strain on the energy grid, following Governor Newsom’s executive order that suspends some regulatory requirements for those units during this emergency event. Local agencies are also looking to work with the administration to ensure that their backup generation capacity can be used proactively to help avoid future energy shortages.
Pumped energy storage facilities are part of an integrated and sustainable energy system that
includes the production, storage and distribution of clean energy.
Beyond the immediate concerns, this week’s heat wave has highlighted the need to increase large-scale energy storage as the state moves toward a goal of 100% renewable energy by 2045. Put simply, the sun doesn’t always shine and the wind doesn’t always blow enough to meet demands, so the state needs more capacity to store peak renewable energy production for peak demand periods.
The Water Authority has proposed building a large-scale pumped storage project at the San Vicente Reservoir near Lakeside. Pumped energy storage projects are designed to store excess renewable energy from solar and wind when it’s available, and then discharge that energy when energy demands increase and renewable energy is scarce.
A 2019 white paper highlighted the importance of pumped energy storage to California’s future.
“Our current situation is the direct result insufficient planning; the state clearly needs additional energy storage now and will need much more in the future,” said Gary Bousquet, energy program manager for the Water Authority. “Environmentally friendly pumped storage projects should be started immediately to address this shortfall, or power reliability will get significantly worse. The San Vicente project can be started now at no cost to taxpayers – users only pay when the project comes online.”
Four elected officials representing area water districts expressed frustration with state laws aimed at water conservation during an American Liberty Forum of Ramona informational meeting Saturday, June 27.
Roughly 50 attendees gathered at Ramona Mainstage to hear the “Water Regulations Today and Tomorrow” presenters discuss the pending impacts of Senate Bill 606 and Assembly Bill 1668, which were signed into law by former Gov. Jerry Brown in May 2018.
Following a public hearing, the San Diego County Water Authority’s Board of Directors today adopted rate increases for 2021 that are 30% lower than proposed last month following a series of refinements by staff. In addition, the Board directed staff to return in September or October with any further opportunities to reduce the 2021 rate increases, such as a decrease in rates set by the Metropolitan Water District of Southern California or the acquisition of federal or state economic stimulus funds.
As adopted June 25, the all-in rates charged to the Water Authority’s 24 member agencies will increase by 4.8% for untreated water and 4.9% for treated water in calendar year 2021. The new rates take effect January 1, 2021.
Rate increases are driven by reduced water sales, higher rates and charges from MWD and continued regional investments in supply reliability.
Since the staff’s rate proposal was released in May, the Water Authority re-evaluated several assumptions driven by COVID-19 recessionary pressures based on new economic data and forecasts. The Water Authority also funded some costs related to the Carlsbad Desalination Plant this year instead of in 2021. The 2021 rates and charges may be further reduced if MWD makes material changes when revisiting its budget and rates this fall.
“We’ve taken a series of strategic steps to minimize rate impacts during this pandemic-induced recession, despite numerous factors putting upward pressure on rates,” said Water Authority Board Chair Jim Madaffer. “At the same time, the Water Authority is maintaining its long-term fiscal stability while ensuring a safe and reliable regional water supply for residents and businesses that will be the foundation of our economic recovery.”
In 2021, the Water Authority will charge its 24 member agencies an all-in municipal and industrial rate of $1,474 per acre-foot for untreated water, or $68 more per acre-foot than they currently pay. Charges would be $1,769 per acre-foot for treated water, or $83 more per acre-foot than in 2020.
Actual figures will vary by member agency, and each member agency will incorporate costs from the Water Authority into the retail rates it charges to residents, businesses and institutions. (Note: An acre-foot is about 325,900 gallons, enough to serve the annual needs of 2.5 typical four-person households in San Diego County.)
In addition, the rates package includes new Permanent Special Agriculture Water Rates, following the Board’s decision late last year to make the temporary program permanent. The program provides farmers with lower rates that correspond to a lower level of water supply reliability. In 2021, the untreated PSAWR will increase from its current level of $755 per acre-foot to $777 per acre-foot and the treated PSAWR will increase from $1,035 per acre-foot to $1,072 per acre-foot.
The fiscal pressures faced by the Water Authority include:
The Water Authority’s 2021 rates were developed in conjunction with an independent cost-of-service study to ensure rates and charges comply with state law, legal requirements, cost-of-service standards and Board policies, and strategic tools such as the Long-Range Financing Plan.
In addition, the 2021 rates are designed to ensure Board-adopted debt coverage ratios that support the Water Authority’s strong credit ratings and minimize the cost of borrowing money for construction projects. The Water Authority has credit ratings of AAA with a stable outlook from S&P, AA+ from Fitch, and Aa2 with a stable outlook from Moody’s.
The rates adopted by the Board are the result of strategic measures that include:
A 10-person crew is in the midst of a three-week shelter-in-place shift at the Claude “Bud” Lewis Carlsbad Desalination Plant, relieving an initial crew that self-quarantined on site for three weeks to continue producing clean drinking water for county residents amid the COVID-19 pandemic.
Starting March 19, the first crew of 10 “mission-critical employees” was stationed at the plant to continue operations, working two 12-hour shifts each day and sleeping in RVs in the plant parking lot, according to Poseidon Water, which manages the plant. Food and other supplies were delivered on a daily basis.
The crew was relieved last Thursday and the current crew will remain at the plant until April 30.
Expressions of gratitude and support have poured in from a grateful community to the ten volunteers sheltering in place at the Claude “Bud” Lewis Carlsbad Desalination Plant in San Diego County. As people learned about their effort to maintain plant operations and keep the water flowing during the COVID-19 pandemic, residents responded by expressing their heartful thanks through messages, photos and artwork.
“The desal plant employees were overwhelmed with the community support they have received,” said Jessica Jones, Poseidon Water director of communications. “They read and enjoyed every message, photo, and drawing. The support was just the boost in morale that they needed to finish out their 21-days onsite.”
The on-site crew has sustained plant operations and maintenance since March 19 to ensure continued production of high-quality drinking water, in compliance with all state and federal drinking water standards.
Lori, a resident of Rancho Carlsbad, put her artistic skills to use with this entertaining thank you. Courtesy: Poseidon Water
Rachel Welland, Bay Park: “Each day I think about how crucial our water supply is, as we are all quarantined in our houses. I appreciate what you are all doing to keep us hydrated during these crazy times!”
Lucy Lusk, South Carlsbad: “Well I will never take that water that comes out of the faucet for granted again. Thanks for volunteering to stay at the desal plan to keep it running, we are grateful to you for your service to our community.”
Diane, Spring Valley: “Thank you for providing us clean water. I know how important your job is, because when I was growing up in the Philippines, there was no water, and we have to buy water by the drum. I’m sure your loved ones miss you terribly.”
The Adams Family including Mom, Dad, and three kids ages 7, 10, and 12: “Thank you for your personal sacrifice serving the surrounding communities. Water is precious. Water is life. Thank you for committing to keep our water safe and available.”
Kids got out their paintbrushes, pens, and even sidewalk chalk to let the workers know how much they were appreciated.
Miles Antoine, age 7, Chula Vista: “Thank you for helping everything grow!”
Miles Antoine, age 7, Chula Vista: “Thank you for helping everything grow!” Courtesy: Poseidon Water
Dylan, age 21 months, Carlsbad: “Thank you for helping provide us fresh water.”
Dylan, age 21 months, Carlsbad: “Thank you for helping provide us fresh water.” Courtesy: Poseidon Water
Zoe, age 10, Encinitas: “Thank you for being away from your families and keeping our water safe.”
Zoe, age 10, Encinitas: “Thank you for being away from your families and keeping our water safe.” Courtesy: Poseidon Water
Colson Hanson, age 6, Scripps Ranch: “Thank you for the hard work and staying at the plant so we have clean water.”
Colson Hanson, age 6, Scripps: “Thank you for the hard work and staying at the plant so we have clean water.” Courtesy: Poseidon Water
One resident was moved to write a poem for the desal plant workers.
Samantha, Carlsbad:
“Claude ‘Bud’ Lewis Desal Operators and techs showing some grace,
Changing your lives to Shelter in Place.
Missing your families and your comfortable bed,
I hope the City of Carlsbad keeps you well fed.
Toiling with coworkers for 12 hour shifts,
I only imagine there could be some rifts.
50 million gallons per day you give,
Without this water we could not live.
How long to stay? The time isn’t clear,
For your courage and hard work, I send you good cheer!”
A 10-month old pup in Little Italy named “Archie Moore” had his owner provide a photographic thank you.
With a little help from his owner, this happy pup is thankful for a full water dish. Courtesy: Poseidon Water
Yen Linh Huynh, California: “Our hearts go out to you at the desal plant. It’s heroes like you that give humanity hope for a better day. Thank you from this family of 4.”
Barbara Blash, Oceanside: “Thank you so much for your efforts to keep our little corner of the world turning. Hope my small note will generate a warm smile until the time when a heartfelt handshake or hug will be delivered.”
Paul Maxwell, San Diego: “Hey Operators I’m a Paramedic in San Diego and you are my hero! Thanks for stepping up!”
Martie Hatcher, Carlsbad: “Please let your families know that they are so appreciated for this gift of you. I know they really miss your hugs, smiles, laughter and company!! On behalf of my husband and I, ‘Tussen tac,’ Norwegian for ‘a thousand thanks!”‘
Melanie, Carlsbad: “The world is better for having people like you in it.”
Another group of employees stands ready to relieve the ten workers later this week when their 21-day commitment ends.
The San Diego County Water Authority purchases up to 56,000 acre-feet of water from the Carlsbad plant per year – enough to serve approximately 400,000 people annually. The plant is a major component of the Water Authority’s multi-decade strategy to diversify the county’s water supply portfolio and minimize vulnerability to drought or other water supply emergencies.
Poseidon Resources received a one-notch upgrade to BBB from Fitch Ratings ahead of plans to privately place a $45 million note to finance construction of a new intake system for its desalination plant in Carlsbad, California.
Bank of America Merrill Lynch won the right to purchase the three-year note, expected to close in November, according to sources close to the deal.
Bonds from the Carlsbad Desalination Plant and pipeline were upgraded to BBB and given a stable outlook in a new report from Fitch Ratings, affirming the project’s sound management and its ability to provide a stable, reliable source of drinking water to the San Diego region.
As the largest, most technologically advanced and energy-efficient plant of its kind in the nation, the Claude “Bud” Lewis Carlsbad Desalination Plant’s stability stems from an effective collaboration between Poseidon Water and the San Diego County Water Authority.
That partnership will continue under a transfer of ownership from Orion Water Partners to Aberdeen Standard Investments approved Thursday by the Water Authority’s Board of Directors. The transfer – made public in June – will not alter day-to-day operations at the Carlsbad facility or create a fiscal impact to the Water Authority.
The plant will remain governed by terms of the 2012 Water Purchase Agreement between Poseidon Water and the Water Authority. That 30-year agreement requires Poseidon to obtain the Water Authority’s written consent of the transaction and to reimburse the Water Authority for its costs related to consideration of the consent request. Under the WPA, the Water Authority agreed to purchase between 48,000 acre-feet and 56,000 acre-feet of water from the desalination plant each year at a price established by the contract. At the end of the 30-year term the Water Authority can assume facility ownership for $1.
“We are honored that maintaining Poseidon Water as the facility manager was integral to the Water Authority’s approval of the ownership transfer and by the Water Authority’s acknowledgement of our exemplary stewardship of this valuable resource,” said Carlos Riva, CEO of Poseidon Water. “We look forward to working alongside our new partners to continue providing the San Diego region with a climate-resilient drinking water supply and ensuring the plant continues its strong operations.”
Water Authority Board Chair Jim Madaffer said the desalination plant is a valuable asset that provides high-quality water, a hedge against drought and insurance against earthquakes that could disrupt imported water deliveries. “With more than 50 billion gallons of water produced and counting, the Carlsbad plant is a critical part of our region’s infrastructure – and we don’t expect the sale to change that in any way,” he said. “In fact, we anticipate many more years of productive partnering with Poseidon.”
The Carlsbad Desalination Plant has met approximately 10% of the San Diego region’s water needs. The planned construction of new, technologically advanced and environmentally sensitive intake and discharge facilities will further enhance operations.
Plant partners also praised the improved ratings for the desal plant and the associated pipeline by Fitch Ratings, which upgraded bonds from BBB- to BBB based on the plant’s strong operational record, updated financing projections for capital improvements, and Fitch’s expectation that the positive trend in financial and operational performance will continue.
Also this week, Moody’s affirmed its Baa3 rating for the plant and pipeline bonds. When those bonds are refinanced, higher ratings are expected to save ratepayers money by lowering the interest rate paid on the debt.
Since its inception as a public-private partnership, the Carlsbad facility has received numerous national and international awards.
The P3 approach allowed the Water Authority to develop new, capital-intensive, public-serving infrastructure without incurring debt or negatively affecting bond ratings, a fact recognized in 2016 when S&P raised the Water Authority’s credit rating to AAA citing, in part, the successful delivery of the Carlsbad facility.
