The San Diego County Water Authority announced Wednesday that it has saved nearly $18 million in debt payments by refinancing the bonds used to construct part of the Claude “Bud” Lewis Carlsbad Desalination Plant.
The savings topped prior projections of $13.6 million through June 2046, according to the Water Authority. A total of 45 investors, including J.P. Morgan Securities LLC and Goldman Sachs, made nearly $2 billion in orders for the bonds. Investors were attracted to the water authority’s strong credit and history of providing a reliable water supply, according to the agency.
“Not only does the desalination project continue to provide the San Diego region with reliable, high-quality water supplies, but our strong public- private partnership with Poseidon Water is paying off for ratepayers,” said Water Authority Board Chair Jim Madaffer. “High demand for our bonds indicates widespread confidence in the desal project partners and the project’s financial foundation.”
The refinanced bonds were used to build a 10-mile pipeline from the desalination plant to the San Diego region’s aqueduct system. Since opening in December 2015, the plant has produced more than 40 billion gallons of potable water, with the Water Authority committing to purchase at least 15.6 billion gallons each year through 2042.
The Water Authority’s debt service currently amounts to $281 million, 18 percent of its total budget across fiscal years 2018 and 2019. Water Authority officials expect the refinancing to be reflected in lower water bills for San Diego County residents going forward.
“Over the past several years, we have strategically reduced expenses to continue providing safe and reliable water supplies at a reasonable cost,” said Water Authority General Manager Maureen Stapleton. “By maintaining strong credit ratings, veteran leadership and sound financial practices, we have saved ratepayers tens of millions of dollars in recent years through bond refundings that will reduce the impact of future water rate increases.”
–City News Service