Seawater Desalination Project at Huntington Beach Local, Drought-Proof Source of Drinking Water for Orange County By: Poseidon Water April 28th, 2016

1. © POSEIDON WATER 2015 1
Seawater Desalination Project
at Huntington Beach
Local, Drought-Proof Source of Drinking Water
For Orange County
American Society of Civil Engineers
April 28, 2016

2. © POSEIDON WATER 2015 2
Poseidon at a Glance
 Founded in 1995 to develop water infrastructure projects through a Public-Private
Partnership approach
 Use best available technology in an environmentally sensitive way
 Senior management team has collectively developed, financed and constructed over
$10bn in infrastructure projects
 Primary focus on seawater desalination project development but, with experience in
other water treatment project opportunities
 Headquartered in Boston, MA with regional offices in California, Florida and Texas
Leading water infrastructure developer and manager with significant experience partnering
with water agencies to deliver essential water infrastructure projects

3. © POSEIDON WATER 2015 3
Future 2035 OCWD Water Supply Sources
Total Water Demand 515,000 af/y without desalination
SAR Baseflows,
100,000, 19%
SAR Stormflows,
70,000, 14%
Natural Incidental
Recharge, 60,000,
12%
GWRS including
Final Expansion,
130,000, 25%
Misc, 25,000, 5%
Imported Water,
130,000, 25%
Orange County Water District
Water Issues Committee
July 17, 2013

4. © POSEIDON WATER 2015 4
Future 2035 OCWD Water Supply Sources
Total Water Demand 515,000 af/y with desalination
SAR Baseflows,
100,000, 19%
SAR Stormflows,
70,000, 14%
Natural Incidental
Recharge, 60,000,
12%
GWRS including
Final Expansion,
130,000, 25%
Misc, 25,000, 5%
Imported Water,
74,000, 14%
Ocean Desalination,
56,000, 11%
Orange County Water District
Water Issues Committee
July 17, 2013

5. © POSEIDON WATER 2015 5
Huntington Beach Site Existing

6. © POSEIDON WATER 2015 6
Huntington Beach Desalination Project

7. © POSEIDON WATER 2015 7
Huntington Beach Desalination Project

8. © POSEIDON WATER 2015 8
Permitting Status
Local Land Use
Permits:
EIR Certified – Sept 2005
SEIR Certified – Sept 2010
HB Conditional Use Permit – Feb 2006/10
HB Coastal Development Permit- Feb 2006/10
NPDES Permit Permit Issued –Aug 2006
Permit Renewed – Feb 2012
Department of Public
Health Services
Conceptual Approval –
August 2002
State Lands
Commission
Lease for Intake and Discharge Piping –
Approved - October 2010
California Coastal
Commission
Coastal Development Permit – Pending

9. © POSEIDON WATER 2015 9
Intake Technology
• Non-swimming Planktonic
organisms (i.e., fish eggs)
need to float within 15-yards
of the intake to be at risk of
entrainment.

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Minimizing Fish Egg Entrainment
• Less than two plankton will be
entrained per 1,000 gallons of
seawater withdrawn. This
equates to roughly 0.03% of
the plankton in the source
water.

11. © POSEIDON WATER 2015 11
Discharge Technology
• The elevated salinity levels in the concentrated seawater discharged by the
desalination plant comply with state regulations and will not impact water
quality or marine life.
• There are over 15,000 desalination plants operating around the world today.
Studies and data from these plants show the concentrated seawater is being
diluted without impacts to marine life or the ecology.

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WHAT IS A SEAFLOOR INFILTRATION GALLERY?

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CONCEPTUAL DESIGN - LOCATION
Water Depth at Gallery:
Approx. 40’ Deep
Distance Offshore:
Approx. 2, 500 LF

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CONSTRUCTION HIGHLIGHTS

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SIG vs. Screened Intake Pipe
SIG Existing Pipe
Construction Time 7 years 1 year
Construction Cost $1.5 billion $0
Seafloor Excavation 500,000 cubic yards 0 cubic yards
Seafloor habitat 30 acres removed 0 acres removed
Impact on Public
Beach Access
Yes No
Increased GHG Yes No
Environmental
Impacts at the Beach
Yes No
Impingement of Fish No No
Entrainment of
Microscopic Fish Eggs
No Yes – 2 per 1,000
gallons

16. © POSEIDON WATER 2015 16
Commitment to Carbon Neutrality and GHG Reduction
 Clean Air: The Reverse Osmosis process produces no
greenhouse gases
 Renewable Power: Poseidon is exploring powering
project with 100% green power
 Energy Minimization and GHG Reduction Plan: If green
power cannot be procured, Poseidon will purchase carbon
offsets to make the project carbon neutral

17. © POSEIDON WATER 2015 17
Project Risk Allocation – Original Proposal
Risk Description Poseidon OCWD
Permitting
Project Financing
Construction
Interest Rate
Change in Law
Technology
Water Demand
Operations & Maintenance
Efficiency and cost basis Inflation
Pipeline Distribution System
Electricity Consumption & Price
Consumption Pricing

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Risk Allocation – Staff Negotiated Term Sheet
Risk Description Poseidon OCWD
Permitting
Project Financing
Construction
Interest Rate
Change in Law
Technology
Water Demand
Operations & Maintenance
Pipeline Distribution System
Electricity Consumption & Price

19. © POSEIDON WATER 2015 19
Key Term Sheet Issues
 Linking price of desalinated water to
avoided cost of MWD
 50-year contract term
 Pricing adjustment at year 15
 Substantially all financial risks are
Poseidon’s responsibility

20. © POSEIDON WATER 2015 20
Project Progress
• Orange County Water District approved term sheet
‒ May 14, 2015
• Independent review process of subsurface intakes
‒ Two year process concluded / SIG determined “infeasible”
• Coastal Commission Development Permit application
pending
• Coastal Commission Hearing
‒ July 2016
• OCWD / Poseidon Water Reliability Agreement
‒ Q3 / Q4 2016

21. © POSEIDON WATER 2015 21
Carlsbad Project

22. © POSEIDON WATER 2015 22
Carlsbad Project – Dedication Ceremony – 12/15/15

23. © POSEIDON WATER 2015 23
Seawater Desalination Project
at Huntington Beach
Local, Drought-Proof Source of Drinking Water
For Orange County
American Society of Civil Engineers
April 28, 2016