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Day after desal decision, financing plans moving forward

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The decision of the San Diego County Water Authority’s board of directors to approve on Nov. 29 a 30-year water purchase agreement between it and Poseidon Resources, is having an effect.

Approval of the agreement was essentially the only thing remaining to be done to get the proposed seawater desalination project built, as the agreement outlined a financing mechanism for its construction. Fewer than 24 hours after the board cast its vote, the California Pollution Control Financing Authority unanimously approved on Friday the issuance of up to $840 million in bonds to finance the project. CPCFA administers and allocates the state’s annual allotment of federal tax-exempt private-activity bonds for the financing of private development projects that benefit the public.

The approval allows the project to proceed with the sale of tax-exempt private-activity and municipal-purpose bonds to fund the construction of the desalination plant, auxiliary water-delivery-system infrastructure and environmental mitigation projects.

Poseidon, the developer of the proposed Carlsbad Desalination Project, expects the bond sale to take place in mid-December, with construction to commence shortly thereafter, the company said in a release.

Coinciding with the bond sale approval, a Friday decision by the 4th District Court of Appeals shot down an attempt by the Surfrider Foundation to thwart project construction. Surfrider had appealed the earlier California Superior Court decision upholding the project approval by San Diego Regional Water Quality Control Board. The group alleged the project did not comply with California Water Code requiring new industrial facilities using seawater for processing to use the best available site, design, technology and mitigation measures feasible to avoid the intake and mortality of marine life.

In its decision, the Court of Appeal rejected Surfrider’s arguments and concluded that the Regional Board complied with the California Water Code. The decision ends the 14th and final remaining legal challenge to the project.

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