Earlier this summer a guest op-ed appeared in the Orange County Register, “Learning the right lesson from San Diego’s desal water surplus.” But the “lesson” presented was only partly accurate.
What the authors, both affiliated with the Property and Environment Research Center (PERC), got right was the need to change regulations that restrict the ability for farmers to sell their water allocations to cities. This is consistent with PERC’s mission, which is to promote “free market environmentalism,” property rights, and market based solutions to environmental challenges. But when it comes to the economics of desalination, these critics of the technology were way off. It does not cost too much to make economic sense. The high costs are the result of policy choices.
The “lesson” we should be taking from desalination projects and proposals so far in California is that current policies have grossly inflated the cost of desalinated seawater here for two reasons: the construction cost is inflated thanks to California’s regulatory and legal environment, and the operating cost is inflated because California has the highest electricity rates in the nation…