November 2012 was desalination month in California. The San Diego County Water Authority approved a 30-year agreement with Poseidon Resources to buy up to 56,000 acre feet (AF) per year of desalinated seawater produced from the Carlsbad Desalination Plant. With the annual price tag of water set at $2,041/AF to $2,295/AF (later reduced to $1,917/AF to $2,165/AF when San Diego secured project financing at unexpectedly favorable terms), there is buzz about what the deal says about the value of water. As with any venture, the project also has critics about the cost of water, skeptics about risk allocation, and cynics about the role of a private party. Continue reading
Author Archives: Rodney T. Smith
Project Evaluation I: Don’t Underestimate Capital Investment
The year 2013 will be busy with project evaluation. In California, the Bay Delta Conservation Program (“BDCP”) will roll out an economic cost/benefit study. In Texas, the Legislature will engage in its biennial exercise of trying to fund the Texas Water Plan. Any state funding plan must evaluate projects. Local agencies and the private sector throughout the west are developing and accessing their next water investments.
In my more than three decades of experience, I have seen many project evaluations. Many miss the mark. Starting with this post and continuing every Friday through February 8th, I share my views on issues that are sometimes handled properly, but often not or incompletely. Continue reading
Introduction to the Water Strategist Community Blog
Welcome to the Water Strategist Community (“WSC”) Blog sponsored by Stratecon Inc. Our industry is known for its diverse set of (often conflicting) interests where people have different perspectives, knowledge and information. While varied interests are sometimes viewed as an impediment to progress, the WSC Blog’s objective is to harness this diversity through open and respectful dialogue to improve the solutions developed and inform the political choices confronting our industry. Continue reading