Project cost & term sheet agreement
After years of careful review and input from multiple agencies and organizations, OCWD approved a term sheet that indicates a desire to evaluate, in much greater detail, the ideal terms of a final agreement with Poseidon Water that could make it economically feasible to purchase water from the Huntington Beach Desalination Facility. Modifications to the May 2015 term sheet were presented to the board on June 6, 2018. The board of directors voted to postpone a vote following public comments requesting additional time, and further discussion and questions raised by board members. The new nonbinding term sheet will be considered again on July 18.
A term sheet does not commit either party to future actions. It serves as the framework to develop an actual water purchase agreement with Poseidon Water. Many issues must be worked out, including setting an agreed-to price for the water and finalizing the roles and responsibilities of OCWD and Poseidon Water during the life of the project. OCWD is evaluating different ways it could distribute the desalinated water and will seek commitments from other local water agencies to purchase the finished water. As part of any agreement, OCWD will ensure that clear expectations on maintenance and condition of the facility at the end of the agreement are established. A water purchase agreement would also be thoroughly reviewed and receive public input before OCWD would consider approval of such a document.
On average, local water agencies in north and central Orange County require about 445,000 acre-feet of water annually to meet Orange County's needs. OCWD makes decisions that are intended not to see the region through the current drought, but to ensure the availability and security of water supply for the next 40-75 years.
Please view the ocean desal term sheet fact sheet for additional information.