Carlsbad SeawaterCarlsbad SeawaterDesalination ProjectDesalination Project

Who is Poseidon Resources?Who is Poseidon Resources?

Privately held company that develops and invests in waterPrivately held company that develops and invests in waterinfrastructure projectsinfrastructure projects

Headquartered in Stamford, CT with local California officesHeadquartered in Stamford, CT with local California officesin Long Beach, Carlsbad and San Diegoin Long Beach, Carlsbad and San Diego

Representative projects:Representative projects:

Largest privately funded municipal wastewater plant in the U.S.Largest privately funded municipal wastewater plant in the U.S. ––Cranston, RICranston, RI

Largest portfolio of water infrastructure assets in MexicoLargest portfolio of water infrastructure assets in Mexico –– PemexPemex

Original developer of the first large scale desalination projectOriginal developer of the first large scale desalination project in thein theUnited States located in Tampa, Florida.United States located in Tampa, Florida.

Currently developing desalination projects in Carlsbad, HuntingtCurrently developing desalination projects in Carlsbad, HuntingtononBeach and Monterey County.Beach and Monterey County.

Why Desalination?Why Desalination?

Mature TechnologyMature Technology 21,000 Projects Operating Worldwide21,000 Projects Operating Worldwide 3 Billion Gallons Per Day of Production3 Billion Gallons Per Day of Production Serving All Conceivable UsesServing All Conceivable Uses

Environmentally Responsible SolutionEnvironmentally Responsible Solution

Recent Reductions in CostRecent Reductions in Cost

Affordable Water Supply OptionAffordable Water Supply Option

Why Now?Why Now?

Significant reductions in the cost:Significant reductions in the cost:

Technology improvementsTechnology improvements

Use of existing infrastructureUse of existing infrastructure

Increased productionIncreased productionefficiencyefficiency

Economies of scaleEconomies of scale

Improved energy efficiencyImproved energy efficiency

% Increase in Productivity

Reverse osmosismembrane andpressure vessel

manufactured inSan Diego County

Market DriversMarket Drivers

IncreasedIncreasedDemandDemand

EconomicEconomicDevelopmentDevelopment

WaterWaterQualityQuality

ReliabilityReliability

Carlsbad SeawaterCarlsbad SeawaterDesalination ProjectDesalination Project

High ( 250High ( 250 –– 350 mg/L350 mg/LTDS )TDS )

Quality:Quality:

DroughtDrought--Proof SupplyProof SupplyRedundant CapacityRedundant Capacity

Reliability:Reliability:

Not to Exceed ImportedNot to Exceed ImportedWater Cost Plus MWDWater Cost Plus MWDIncentiveIncentive

Price:Price:

50 MGD ( 56,000 AFY )50 MGD ( 56,000 AFY )constructed in one orconstructed in one ormore phasesmore phases

Quantity:Quantity:

OnOn--Line 2008Line 2008Schedule:Schedule:

$270 Million$270 MillionEstimatedEstimatedCost:Cost:

6060--Year Lease WithYear Lease WithCabrillo PowerCabrillo Power

Site:Site:

San Diego CountySan Diego County –– CityCityof Carlsbadof Carlsbad

Location:Location:

Encina Power Plantin Carlsbad, California

EXISTING SITE CONDITIONS

PROPOSED DESALINATION FACILITY AT ENCINA POWER STATION

Carlsbad Desalination ProjectCarlsbad Desalination ProjectBefore & After SimulationBefore & After Simulation

Outfall

Intake

Mouth of Lagoon

Carlsbad Desalination 50 MGDCarlsbad Desalination 50 MGDProject SimulationProject Simulation

Desal Plant ConfigurationDesal Plant Configuration

What Happens to the Salt?What Happens to the Salt?

Demonstration PlantDemonstration Plant

La Costa Reservoir

Santa Fe II Reservoir

TAP Reservoir

San Francisco Peak Reservoir

Maerkle Reservoir

Guajome Reservoir

CarlsbadPlant

Morro Hills Reservoir

LEGENDAgency Boundary

Existing Pipeline

Poseidon Pipeline

SDCWA Pipeline

Desalination Facility

Existing Reservoirs

Available SupplyAvailable Supply

Plant Capacity 56,000 AFYPlant Capacity 56,000 AFY

Existing CommitmentsExisting Commitments Carlsbad MWD 21,000 AFY Water Purchase AgreementCarlsbad MWD 21,000 AFY Water Purchase Agreement Valley Center MWD 7,500 AFY Water PurchaseValley Center MWD 7,500 AFY Water Purchase

AgreementAgreement Rincon Del Diablo MWD 7,700 AFY Letter of IntentRincon Del Diablo MWD 7,700 AFY Letter of Intent Olivenhain MWD 5,000Olivenhain MWD 5,000--17,000 AFY Letter of Intent17,000 AFY Letter of Intent

Available SupplyAvailable Supply –– Up to 14,800 AFYUp to 14,800 AFY

Water Purchase AgreementWater Purchase Agreement

Poseidon provides Purchasers with a specified quantity, qualityPoseidon provides Purchasers with a specified quantity, quality andandreliability of supply.reliability of supply.

The water would be treated as independentlyThe water would be treated as independently--owned, local water.owned, local water.

Purchaser eligible to receive a backPurchaser eligible to receive a back--up supply on terms generallyup supply on terms generallyavailable to SDCWA member agencies.available to SDCWA member agencies.

Poseidon would assume the risk of development, permitting,Poseidon would assume the risk of development, permitting,financing, construction and operation of the project.financing, construction and operation of the project.

Purchasers would only pay for water that is delivered in accordaPurchasers would only pay for water that is delivered in accordancencewith predetermined specificationswith predetermined specifications –– Quantity, Quality, Reliability etc.Quantity, Quality, Reliability etc.

Ratepayers protected by longRatepayers protected by long--term, fixed price water purchaseterm, fixed price water purchaseagreement.agreement.

Addresses Key Coastal IssuesAddresses Key Coastal Issues

Economically Feasible and Environmentally ResponsibleEconomically Feasible and Environmentally ResponsibleSolutionSolution Cost of Water Never More Than That of ImportedCost of Water Never More Than That of Imported

WaterWater Complements Conservation and Recycling ProgramsComplements Conservation and Recycling Programs Minimizes Intake EntrainmentMinimizes Intake Entrainment Sustains Biological Productivity in the Discharge AreaSustains Biological Productivity in the Discharge Area Maintains, Enhances & Restores Water QualityMaintains, Enhances & Restores Water Quality

Public Trust Aspects of Ocean Resources PreservedPublic Trust Aspects of Ocean Resources Preserved Advanced Through Local / Regional CoordinationAdvanced Through Local / Regional Coordination Does Not Result in Increased GrowthDoes Not Result in Increased Growth Enhances Public Access to Coastal ResourcesEnhances Public Access to Coastal Resources Preserves Existing GovernmentalPreserves Existing Governmental Regulatory OversightRegulatory Oversight

Project BenefitsProject Benefits

Entirely New DroughtEntirely New Drought--Proof Water SupplyProof Water Supply

Reduced Pressure on SacramentoReduced Pressure on Sacramento--San Joaquin DeltaSan Joaquin Delta

Improved Water QualityImproved Water Quality

Affordable and Predictable PriceAffordable and Predictable Price Increased Revenue to the City and RedevelopmentIncreased Revenue to the City and Redevelopment

AgencyAgency

Dedication of Lagoon and Ocean Front Property forDedication of Lagoon and Ocean Front Property forPublic Access, Recreation and Marine ResearchPublic Access, Recreation and Marine Research

Environmentally Sensitive SolutionEnvironmentally Sensitive Solution

Strong Public SupportStrong Public Support