Common Contracts
1 similar Water Purchase Agreement contracts
THE SDCWA-POSEIDON WATER PURCHASE AGREEMENT DOES NOT SERVE THE PEOPLE OF SAN DIEGOWater Purchase Agreement • December 3rd, 2012
Abstract. The San Diego County Water Authority (SDCWA) should not sign the water purchase agreement (WPA) with Poseidon Resources, due to its economic, social and logistical flaws. The first flaw is cost: water costing $2,000+ per acre foot will either be sold at a lower price (due to average cost pricing), such that SDCWA “buys high and sells low” or it will be sold at its marginal cost. In this latter case of setting the price of all water to reflect the most-expensive source (marginal cost pricing), we can expect that quantity demanded will fall to a level at which the desalinated water would not be necessary. The second flaw is social: the desalinated water will only improve local reliability if it’s sold at marginal prices (meaning it would not be necessary). If it’s sold at lower prices and/or delivered to new housing in the region, then SDCWA is losing money on the deal and/or subsidizing new development at the expense of existing customers. Third, the WPA is too complicated to under
