Poseidon Water could receive millions in state bonds for Huntington Beach plant

The controversial Poseidon Water seawater desalination plant in Huntington Beach could be in line to receive millions in state funds from the California Debt Limit Allocation Committee.

The committee met Wednesday, a three-hour meeting during which it partially decided how to divide up more than $4.3 billion in tax exempt Private Activity Bonds that are available for distribution in 2022.

Most of the money — about $3.7 billion — will go to qualified residential rental programs, which would fund affordable housing. However, the committee also voted to allocate about $510 million to other exempt facilities, which include Poseidon.

The $510 million will be divvied up in three rounds of funding.

Poseidon Water LLC sent an initial application for $1.1 billion in funding through the California Pollution Control Financing Authority in 2019.

State Treasurer’s Office spokesman Noah Starr said the next step is for Poseidon to request a final resolution from CPCFA, which requires committee approval, before the committee would apply to CDLAC as the issuer of Poseidon’s bond.

“As far as we are aware, there is no application yet, nor has Poseidon indicated a timeline,” Starr said in an email.

CDLAC has yet to reveal which projects will receive the funds or exactly when voting on that would occur.

The state loans are often distributed by CDLAC to private companies whose projects offer public benefits. Poseidon’s plant, which received a key permit from the Santa Ana Regional Water Board last April, is expected to go before the California Coastal Commission in March to receive another permit needed before construction could begin.

“It is the state’s authority to determine how it will allocate its share of Private Activity Bonds,” Poseidon Water director of communications Jessica Jones said in a statement. “We are encouraged that California continues to allocate a portion of this limited resource to its Exempt Facilities Program that benefits projects like the Huntington Beach Desalination Facility to help deliver a safe, reliable, climate-resilient water supply to all Californians.”

Poseidon Vice President Scott Maloni has argued that climate change has made seawater desalination a necessity and that the bonds would lower Poseidon customers’ prices. But opponents say the bonds that could be earmarked for Poseidon would be better used toward helping the state’s housing crisis.

Andrea Leon-Grossman of environmental advocacy group Azul spoke at Wednesday’s meeting in opposition of Poseidon. She noted that numerous callers into the meeting stated they wanted CDLAC to allocate all of the $4.1 million to affordable housing.

“Not only would it be better used, but we’d get even more money,” Leon-Grossman said in a phone interview. “For each dollar that California spends building housing, we get an additional subsidy from the federal government, up to 80 cents on the dollar. That not only means more money, but it means more housing, and it also means more jobs ... For every dollar that CDLAC allocates to anything but housing, Californians lose big-time.”

Leon-Grossman said she is asking CDLAC to deny the funds, especially to Poseidon, or for Poseidon to withdraw its application.

Oscar Rodriguez, a Huntington Beach resident and member of the city’s planning commission, called into the meeting to voice his own personal reservations about the desalination project.

Rodriguez lives in the primarily low-income Oak View community.

“Most people in Orange County, particularly in low-income communities like Santa Ana and Anaheim, they don’t know about this project and the negative economic impacts it will have on them,” Rodriguez said. “We already know that desalination is the most expensive form of fresh water production ... we’d like for you to really look at this project and communities like ours.”

The Poseidon plant would be located at 21730 Newland St. in Huntington Beach. It would produce approximately 50 million gallons of potable drinking water per day while discharging roughly the same amount of brine concentrate back into the ocean.

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