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**NEWS RELEASE** - 12/20/05
Valley Center Municipal Water District and Poseidon Resources Announce Water Purchase Agreement
Valley Center – The Valley Center Municipal Water District (District) and Poseidon Resources Corporation (Poseidon) today announced the District’s approval of a landmark Water Purchase Agreement. Under the agreement, Poseidon will provide Valley Center with 7,500 acre-feet per year of water from its Carlsbad desalination plant. Poseidon is building a 50 million gallon-per-day (56,000 acre-feet annually) desalination plant at the site of the Encina Power Station in Carlsbad. Earlier this month, Poseidon announced the Final Environmental Impact Report (FEIR) for the Carlsbad desalination plant had been published by the City of Carlsbad. The proposed $270 million desalination project is scheduled to be completed by 2008.
The Valley Center Municipal Water District is the largest agricultural water district in the County. The District’s board of directors unanimously approved the Water Purchase Agreement at its regularly scheduled Monday meeting. “Seawater desalination is an important part of the solution to the region’s long-term water reliability needs,” said Valley Center Water District president and San Diego County Water Authority board member Gary Broomell.
“The Valley Center Water District is now ensured a locally-controlled, drought-proof supply of water,” said Poseidon Senior Vice President Peter MacLaggan. “The Water Purchase Agreement guarantees Valley Center will receive a reliable supply of water at a cost never to exceed the price of water it would otherwise purchase from the San Diego County Water Authority,” said MacLaggan.
Highlights of the Water Purchase Agreement include:
- The District will receive a certain quantity of drinking water that is delivered reliably over a 30-year period, with the District having the unilateral option to extend the agreement for two additional 30-year terms.
- Poseidon Resources will deliver the District’s non-agricultural requirement - up to 7,500 acre feet per year, and assume all risks associated with the financing, development, construction and operation of the plant.
- Water produced by the desalination plant will be delivered to a coastal water agency that will then enter an exchange agreement with the District. The water will meet or exceed all drinking water regulatory standards under the law, and the District will never be obligated to accept or pay for water that does not meet the quantity, quality and reliability standards specified in the Agreement.
- The agreement will not reduce the District's access to reduced pricing offered by the Metropolitan Water District of Southern California to qualifying agricultural customers.
The Valley Center Water District is the second San Diego County Water Authority member to reach a Water Purchase Agreement with Poseidon Resources. In September 2004, the City of Carlsbad approved its own Water Purchase Agreement with Poseidon, providing the City with 21,000 acre-feet per year of high-quality drinking water from the plant. To date, over one-half of the desalination plant’s annual capacity of 56,000 acre-feet has been committed through Water Purchase Agreements.
In 1954, local citizens took action to secure a more reliable source of water by forming the Valley Center Municipal Water District. The District’s mission is to “ensure customer satisfaction through quality service at the lowest possible cost." For more information about the Valley Center Municipal Water District, visit our website at www.vcmwd.org.
Poseidon Resources specializes in developing and financing water infrastructure projects, primarily seawater desalination and water treatment plants. These projects are implemented through innovative public-private partnerships in which private enterprise assumes the developmental and financial risks. For more information on Poseidon Resources visit our website at www.carlsbad-desal.com
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