July 22, 2014

Desalination

Salty Solution?

Five years and $40 million over budget, the largest desalination plant in North America is finally producing fresh water for the Tampa Bay Region.

Cynthia Barnett | 5/1/2007


Filter: The plant pumps seawater through 10,032 membranes so tightly woven that if unraveled they would stretch from Tampa to Tallahassee.

Bidding

As it turned out, the problems that dogged the plant were not environmental. So much went wrong that almost every aspect of the process can be second-guessed, beginning with the fact that neither the water management district nor Tampa Bay Water had any experience with desalination and declined to hire anyone who did.

And while the project had more than its share of bad luck, critics say Tampa Bay Water set itself up for misfortune right from the start by letting price, environmental and legal issues take precedence over bidders' qualifications, financials and ability to deliver.

In 1997, with the water-management district's blessings and funding, Tampa Bay Water's board voted to issue a request for proposals for what would be by far the largest desalination plant in North America, producing 25 million gallons of fresh water a day.

Tampa Bay Water structured the request so that the winning bidder would design, build, own and operate the plant. The project required at least a 10% investment by the developer. Requiring that ownership stake was supposed to provide additional incentive to the developer to succeed, and also to minimize taxpayers' risk. The private contractor would be paid only if the plant worked.

Tampa Bay Water received just four bids -- a sign of how little experience existed a decade ago for building a major desal plant, at least in the U.S. regulatory environment. And the bids came in looking so different that they were impossible to compare: Between 1997 and 1998, Tampa Bay Water had to reissue its request for proposals a second and then a third time.

Tampa Bay Saltwater Desalination Plant

Original costs
Land: $3.1 million
(including 14.5-mile pipeline route)
Plant: $110 million

Additional costs since Tampa Bay Water bought the facility in 2002
Construction oversight: $4 million
Remediation and improvements: $36 million
Attorney fees for lawsuits: $6.8 million

Promised price of water
In 1999: $1.71 per 1,000 gallons
Most recent estimate:
$3.19 per 1,000 gallons

Estimate for when -- and if -- the Southwest Florida Water Management District kicks in its $85-million subsidy for an up-and-running desalination plant: $2.88 per 1,000 gallons

Source: Tampa Bay Water

One early favorite was a team made up of Ionics Inc. and Progress Energy Corp. Ionics had global desal experience, and the team proposed to locate the plant at Progress Energy's Anclote River facility in Pasco County, where the water-management district had done its pilot tests a few years before.

But in each successive round of proposals, a joint venture between engineering giant Stone & Webster and Poseidon Resources Corp., neither of which had built a major desal plant, came in with lower and lower bids. Tampa Bay Water executives were clearly focused on price. In February 1999, they issued a press release, picked up around the globe, boasting that the four competing teams "have shattered price barriers for desalination plants worldwide."

"With one proposal's first-year costs as low as $1.71 per thousand gallons," Maxwell said in the release, "our Tampa Bay desalination facility will have the attention of other coastal communities and states as well as many foreign governments."

Few, however, believed anyone could desalinate 1,000 gallons of seawater for $1.71. "Everyone in the industry was saying, 'there's no way,' " remembers Farrell, who'd left the water management district and worked for one of the competing teams, a consortium of U.S. Water and E.I. duPont de Nemours. "All the teams saw that there was no money to be made on this project -- we were doing it for the marketing position, the cachet of being first and hopefully to get into other plants. But $1.71 was simply not do-able."

Believing that the design-build-own contract would insulate it from risk, Tampa Bay Water's board chose the Poseidon/Stone & Webster proposal in April 1999. The plant would be sited at Tampa Electric Co.'s Big Bend Power Station at Apollo Beach in southern Hillsborough County.

Tags: Southwest, Energy & Utilities

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