The plant had to shut down operations to make state-mandated upgrades, but the San Diego County Water Authority still must pay for the water it would have been making during that time.
By Mackenzie Elmer, Voice of San Diego
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San Diegans owe a privately-owned desalination plant over $35 million for water the company couldn’t make.
That water will only grow more expensive the longer the San Diego County Water Authority waits to buy it. And the tab came due as the region frets over ever-growing water prices and debates whether it even needs this water at all.
San Diego County Water Authority staff revealed Thursday that the region’s biggest water seller has 10,105 acre-feet of water it needs to buy from Channelside, the owner of the Carlsbad plant that de-salts ocean water to make it drinkable. (One acre-foot is a year’s supply of water for two households). The cost of that unmade water is expected to increase by about 2.5 percent per the contract.
The agency must already buy 48,000 acre-feet of water from the plant each year until 2045 under its contract with the company. But if Channelside can’t produce water for some unforeseen circumstance outside the company’s control – like a power outage or new laws that require upgrades to the facility that disrupts water-making – the Water Authority is on the hook for buying that water, too.
At $3,500 per acre-foot, de-salted ocean water is the region’s most expensive water source, a fact that attracts critics of San Diego’s spiking water prices.
Jeremy Crutchfield, a water resources manager at the Water Authority, told governing board members on the agency’s audit committee that much of the banked, unmade water is due to construction on the plant’s ocean water intake system. The company had to shut down operations for a period of time due to a new state requirement that the intake system be upgraded to protect marine life. But there were also power outages in 2023 and 2025 as well as other repairs in the first 10 years of the plant’s operation that added to the tab.
Water Authority staff suggested Thursday to the Water Authority board’s audit and finance committee that now might be the time to pay it off. The committee didn’t make any decisions. That requires an action by the full governing board.
“At some point, we’re on the hook to pay for that water,” Crutchfield said.
Steve Castaneda, who represents South Bay Water on the board, questioned whether the region needed the desalination plant at all.
“I have not heard anything about this plant that leads me to believe it’s needed or that it’s a great deal for ratepayers,” Castaneda said.
This isn’t the first time the agency had had to pay off a hefty desal tab. The Water Authority had to pay Channelside another $54 million for desal water it didn’t have space to store over a rainy 2023 and 2024, confirmed spokesperson Mike Lee.
The Water Authority has been struggling to defend its long-term contracts like the one with Channelside, which requires the agency to buy more water than the region needs. The agency’s biggest and most powerful customer has been calling on the Water Authority to find ways to save San Diegans money on water bills. Water rate increases have grown so unpopular, the region’s boundary referees are studying whether San Diego needs a Water Authority at all.
Lindsey Leahy, committee member and soon-to-be general manager at Valley Center Municipal Water District, rebutted Castaneda’s comment.
“The plant has a purpose in regards to local supply and reliability,” she said. “I don’t want to dismiss the value of an asset while it is expensive and we’re not using it as originally planned.”
The Water Authority’s leader, Dan Denham, has suggested that the agency should actually expand the desalination plant and make more desal water. Denham is trying to position San Diego to be able to sell water on a broader marketplace across the West to help reduce demand on the drought-stricken Colorado River. It’s part of a larger move to position San Diego to be a water dealer.
