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Arizona desalination deal includes plant in Rocky Point, pipeline through Lukeville to Phoenix

IDE Technologies describes it as the largest desalination plant in the world
Posted at 4:54 PM, Dec 21, 2022
and last updated 2022-12-21 18:54:10-05

PHOENIX — Arizona’snewly appointed board tasked with securing the state's water voted to move forward with non-binding exploration and possible discussions with Israeli desalination development company IDE Technologies of Israel on Tuesday.

But there were concerns from various stakeholders about the speed and transparency with which the deal had been presented.

“There has been an utter lack of transparency. And I'm sorry, but this reeks of backroom deals,” Sen. Lisa Otondo (D-Yuma) told members of the Water Infrastructure Finance Authority (WIFA) during public comment.

Otondo had been one of the senators who supported the expanded role of WIFA during the most recent legislative session to take the lead in the exploration and financing of water augmentation projects for Arizona.

"We worked together closely to write the legislation-WIFA legislation-so that it expressly intended deliberation openly in public. And you'll have to excuse me because at the speed that this has moved, I am upset," Otondo said.

This iteration of WIFA is so new it had not come up with rules and processes for applications yet nor had it selected an Executive Director.

A board committee first heard about the desalination project after a hastily called meeting on the previous Friday. At that time WIFA Chair David Beckham explained that he had received an extensive application earlier in the week but had not had a chance to review it thoroughly. Beckham said he was later contacted by IDE Technologies of Israel's attorney and Commerce Authority CEO Sandra Watson and urged to but the proposal on the agenda immediately.

By Tuesday the board was holding public comment and IDE Technologies was asking the state for a non-binding commitment to purchase the water it produces as it begins to apply for permits and financing to build the project.

But representatives from the company said they had been working on the plan for nearly four years with Governor Doug Ducey's Office, and other state and federal agencies including the Bureau of Land Management and Department of Defense.

During the meeting, House Speaker Rusty Bowers (R-Mesa) acknowledged being involved with negotiations but not being allowed to talk about the project because of a non-disclosure agreement.

The desalination plant would be built on the coast of Puerto Penasco also known as Rocky Point, Mexico. IDE described it as the largest desalination plant in the world with the eventual capacity to process 1 million acre-feet of water per year. The water would be drawn from the Sea of Cortez, pumped through Mexico, and end up in the Central Arizona Project Canal by 2027 if expedited according to IDE representatives.

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The company said it would foot the bill for the $5.5 billion plant, pipeline and power infrastructure but was looking for some kind of assurance from WIFA that it would buy the water once it is ready.

"We need a long-term commitment that when we deliver water you will buy it," IDE's Erez Hoter Ishay told board members.

But in Arizona cities are responsible for procuring their own water, not the state.  And Warren Tenney with Arizona Municipal Water Users Association which represents the water interests of the state's largest cities said, his members had only had "one briefing held over a year ago" and said it was being mischaracterized as negotiations.

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"The pressure under which the WIFA board is being asked to rush it is raising negative perceptions that could tank both the project and the long-term success of WIFA. I would like you to pause and not take action today," Tenney told the board.

But there were several speakers who wanted to board to move forward.

Pinal County economic development groups and private water companies Global Water and Arizona Water Company both spoke in favor of the board taking action.

"It was an exploration of what could be a potentially good idea and I want to encourage you to not shut this down too soon. And to at least let the ball roll a little bit further," said Terri Sue Rossi with Arizona Water Company.

In the end, the board drafted a resolution to allow staff to review the application for statutory completeness and potential non-binding discussions.