Monday, February 1, 2010
Poseidon Resources' Bond Rating: BBB-
Poseidon Resources proposed desalination project has a BBB- bond rating. Our California Policy Coordinator, Joe Geever uncovered this recently, and penned a piece for San Diego News Network.
The article starts:
"On Wednesday state officials voted to allow Poseidon Resources to sell $530 million in tax-exempt bonds for the proposed Carlsbad desalination plant despite a low bond rating and continuing legal and financial uncertainty surrounding the project. This decision is premature.
Poseidon Resources’ proposal to build the nation’s largest desalination plant in Carlsbad is a risky investment for the state, water agencies, and private investors. Details of the project finances remain unclear and public opposition continues to grow among consumer, labor, and environmental organizations. As the details of the project undergo more scrutiny by state agencies, more problems with the project continue to surface.
Documents disclosed through this tax-exemption process have revealed Standard & Poor’s bond rating for Poseidon’s proposed Carlsbad desalination project is “BBB-,” the greatest risk of any investment-grade bond. This rating, however, is generous given the unresolved legal challenges and state policy changes that could make the desalination plant’s design obsolete in the near future."
There are some great comments at the bottom of the article, including one by someone who asks why San Diego is entertaining desalination when we haven't yet exhausted conservation methods?
Desalination is so expensive. Conservation is cheap!