Officials reach deal on desal plant
Tampa Bay Water agrees to run at set production levels in order to receive $85-million.
By CRAIG PITTMAN
Published January 25, 2006
The battle over who pays for Tampa Bay's $140-million desalination plant appears to be over.
After six months of disagreements, Tampa Bay Water and the state agency helping to pay for the troubled plant have reached an agreement.
It basically says the state agency will pay $85-million in taxpayer money as long as the plant achieves certain production levels.
"We're looking forward to moving on," Tampa Bay Water spokeswoman Michelle Robinson said.
The desal plant, the largest in the United States, is supposed to provide a drought-proof water supply for the Tampa Bay region. It was supposed to begin operating in 2003 but has been delayed until at least this fall.
Built in Apollo Beach, the plant was designed to take seawater from Tampa Bay, filter out the salt and turn it into as much as 25-million gallons of drinking water a day, lessening the environmental impact of pumping groundwater.
The Southwest Florida Water Management District, or Swiftmud, had agreed to pay the $85-million before construction started. Without that money, the plant would not have been built.
In annual reports submitted to Swiftmud, Tampa Bay Water repeatedly had said the plant would provide 25-million gallons of water a day.
But in June, Tampa Bay Water officials said that once the plant was up and running they would not operate it at full capacity. Instead, they might operate it at an average of only 15 million gallons a day.
That didn't sit well with Swiftmud board members.
"We would look like complete idiots if we put up 90 percent of the construction costs and didn't require that they run it" at full strength, said board member Ed Chance of Palmetto.
But Tampa Bay Water officials said water from the plant will cost consumers a lot more than water pumped from beneath the ground or skimmed off the Hillsborough and Alafia rivers. They said they wanted the flexibility to blend sources for the best cost, while still protecting the environment.
The two agencies went to mediation but hit an impasse.
Last month, Tampa Bay Water chairman Ted Schrader, a Pasco County commissioner, worked out a deal with Swiftmud chairwoman Heidi McCree.
Tampa Bay Water's board ratified the agreement quickly but Swiftmud board members balked. They put off a decision until Tuesday, when they passed it by a 7-4 vote, thus avoiding a potentially expensive legal battle.
The agreement says that Swiftmud will pay Tampa Bay Water the $85-million in three installments, based on the desal plant meeting certain production levels.
Tampa Bay Water, a wholesale utility, will get 25 percent of the $85-million when the plant is officially up and running. It will get 50 percent of the money when the plant operates at an annual average rate of at least 12.5-million gallons a day for 12 consecutive months. And it will get 25 percent upon successful operation of the plant at a monthly average rate of 25-million gallons a day for four consecutive months.
The desal plant has been plagued by problems from the start, ranging from contractors going bankrupt to Asian green mussels clogging its water intakes.
It has been shut down since summer so a contractor can repair problems that prevented it from producing more than 7.3-million gallons a day last year.
Tampa Bay Water hired American Water Pridesa for $29-million to fix the plant. Conn said the repairs are on schedule and on budget.