Many people believe that desalination of seawater is the ultimate solution to California (and the planet's) water problems. I've written about desalination in previous posts (see here and here), and have made it clear that I love the idea. In theory. And in select locations.

In practice, however, desalination in California is an idea whose time has not yet come. It remains too expensive, compared to untapped conservation and efficiency, recycled water, capturing stormwater, and smart trades with agriculture. The Institute wrote about the pros and cons of desalination in one of our most downloaded studies.

Even worse, the first effort to build a major desalination facility for urban water supply in California, by the private group Poseidon Resources, is poorly designed, badly financed, and environmentally unsatisfactory. It is going to become the new case study in how NOT to do desalination, replacing the previous case study (also of a Poseidon effort) of how not to do desalination - Tampa Bay, Florida.

What is the latest problem? The money. The desperate drive to do a desalination project in California is leading to a set of financial travesties. Despite their initial claim that Poseidon would bear all of the financial burden and risk associated with the private plan to desalinate ocean water at an old power plant in Carlsbad and sell it to public water agencies, Poseidon now says it needs massive public subsidies. Here are two of them.

Water Number: Poseidon wants at least $530 million in tax-free state bonds for Carlsbad, and they want a $250 per acre-foot per year subsidy from the Metropolitan Water District (MWD). These are both huge public subsidies to fund a private project designed to produce profits for private investors. Interestingly, Poseidon originally said the plant would cost around $270 million. It now appears that it will cost at least twice that, with the public bearing substantial costs.