AZ drops desal plan review, revamps water importation effort

Instead, the Water Infrastructure Finance Authority of Arizona will seek competitive bids for a company or other entity to build a water importation project — which may or may not be a desalination plant.

The authority has decided not to proceed with measures its governing board adopted in December to start the process of seeking a formal agreement with Israeli-based IDE Technologies to build a desalination plant along the Sea of Cortez on the Sonoran coast.

Israel-based IDE Technologies proposed building a 200-mile-long pipeline to bring desalted water from coastal Puerto Peñasco to central Arizona. Then, it would be deposited into the Central Arizona Project canal system for delivery to Tucson, Phoenix, Nogales and possibly other southern Arizona areas.

The authority board had agreed in December to first analyze the desalination proposal and then discuss with company officials a possible agreement to buy and import from 300,000 to 1 million acre-feet of desalinated water annually.

But the state agency decided during the first half of 2023 that before considering a specific project, it will seek bids starting in early 2024 from entities interested in building water-augmentation projects such as a desalination plant, pipelines to Arizona from the Missouri or Mississippi rivers or another water importation proposal.

Before it does that, the authority first needs formal state approval of a new set of rules and guidelines for how it will judge and select projects. A package of proposed rules is now “sitting at the governor’s office,” awaiting approval, said Chuck Podolak, the authority’s executive director.

“The (authority) board wants to see a competitive process, and that doesn’t leave room for dealing with an unsolicited proposal outside of the rules established for such a process,” Chelsea McGuire, an authority spokeswoman, told the Star.

“The board’s direction to me is very very clear: create one or more projects to import water and do a competitive process,” Podolak said.

The authority, commonly known as WIFA, changed its stance in the face of stinging criticism of its board’s December vote from a wide variety of people and interest groups. Legislators of both parties, environmentalists, Sonoran officials and other “public interest” organizations had decried they felt was a rush to judgment on the IDE proposal.

Now, the agency officials’ change of heart will take the focus off the past, hurried process and put it on the tough issues to be addressed with a water-importation project. Those are led by the high cost of such a project, its energy use and its environmental impacts, particularly the disposal of highly saline wastewater into the ocean after the original salty water is purified in desalination.

Two critics from that time welcomed the agency’s changing stance, calling it a positive step to increase public confidence. But one critic, Sandy Bahr of the Sierra Club, said the group intends to keep fighting water importation, calling it an environmentally unsustainable practice.

The other critic, longtime water researcher and attorney Kathleen Ferris, said some form of water importation is inevitable, given what she sees as Arizona’s longtime posture of promoting and supporting growth.

Podolak said of importation, “I think it will happen. I think we will successfully import additional supplies. I believe we can make importation work.”

“They’re all fraught. They’re all expensive. I think it’s too soon to write off any of those,” Podolak said of the various water importation schemes that have previously been floated.

The authority board’s vote in December to pursue IDE’s proposal came at a time when the authority had no policies for reviewing such ideas and had yet to appoint a new executive director. Podolak, was hired by the board a couple hours after it voted to give serious consideration to the IDE project.

Podolak is a former natural resources policy adviser to ex-U.S. Sen. Jeff Flake and former Gov. Doug Ducey. Most recently, he was director of rights and contracts for the quasi-public Phoenix utility the Salt River Project.

The criticism came because the board vote to negotiate with IDE came only a few days after many legislators and the general public had become aware of the proposal.

Board chairman David Beckham said at the time that the board needed to move quickly because the Arizona Commerce Authority Director, Sandra Beckham, told him there was “urgency involved” to get the project moving. It turned out that much of the urgency stemmed from a desire by IDE officials to garner a sign of support from the board the day before company officials were to submit a formal proposal to the Bureau of Land Management for review because the pipeline was to run through some BLM land.

A few days after the board’s vote, the Commerce Authority told the Star, “The project is a game-changer for Arizona’s future, with the potential to deliver over 1 million acre-feet of water a year. The project has undergone numerous years of planning and preparation.”

But the board’s speedy action sparked suspicion among legislators and others that the arrangement smacked of a “backroom deal.” That was something legislative leaders had sought to avoid when they agreed in 2021 to spend up to $1 billion on building big water augmentation projects along with $200 million on water conservation projects.

Explaining the authority’s change of position, Podolak recently told the Star that when he was interviewing for the job with the governing board before IDE’s proposal was publicly known, “I made it clear we had to earn the trust of the public and the Legislature.”

“The existence of WIFA is not guaranteed,” he said. “If we didn’t do this in a straightforward, transparent, trust building way, this whole process could go for naught.”

“If IDE had not come in, I still think I would have run this organization the same way,” Podolak said.

But now, “we’re doing it in the shadow of the IDE proposal,” said Podolak, referring to the authority’s changed stance. “I think it means we’re extra aware of the public perception and the need to be transparent and thorough.”

While it would be inaccurate to say the authority reacted to public criticism last winter, “It made us do it under a microscope and injected a sense of skepticism in people who are watching us.”

Now, IDE’s “past engagement with us provides them no inside track,” Podolak said.

Jordan Rose, a Phoenix attorney who represented IDE as the authority board dealt with its proposal in December, didn’t return an email from the Star seeking comment on the board’s changed position.

Not only was the board affected by the public sentiment toward its speedy consideration of the IDE proposal last December, some board members agreed with the public’s view that the process was moving too fast, said board member Tim Thomure, who is a deputy Tucson city manager and former Tucson Water director.

“I don’t think that anyone from the board would disagree with the public view that this seems rushed and we don’t know the rules of the game,” Thomure told the Star. “How could the board act on this proposal? We’d barely been seated as a board. We didn’t have an executive director. We had no direct policies or procedures. We responded to what was solicited to us. We put it in on a path that would lead to it getting vetted.

“The WIFA board was more consistent with public opinion than what the public felt. The board members were in the same position as the public, with no prior knowledge of this proposal till the week it was submitted.”

Asked why the board would approve a plan to negotiate with IDE if he and other board member felt it was rushed, Thomure replied that the board had crafted what members thought was a path to acknowledge that proposal, “but not commit to anything and also to have the ability to consider it when the time was right.”

“It turns out out now it’s better to put it into a process for establishing all proposals. At the time, we felt it was important to act in some manner with regard to that proposal,” he said.

“Now, I think the state of Arizona has a duty to heavily consider and perhaps invest in a large-scale water augmentation project, maybe this one or any number of different alternatives,” Thomure said. “I do think in Arizona’s future as a state, that there’s a need. I don’t think there is a crisis, but there is a need for augmentation.

He thinks the security of Arizona’s water supply is going to be threatened more and more in the future, due to impacts of climate change, he said.

“They will affect demand patterns in the state more and more over time,” he said. “As the climate gets hotter, the demand for water will go up. It could be true in agricultural sector and also would be true in the M&I (municipal and industrial) sector. The need for cooling will go up, therefore the demand for water will go up.”

But Bahr said about water importation that, “we’ve said for a long time we ought not to rob Peter to pay Paul.”

“That’s what these augmentation proposals are about: where can we swipe water and move it to Arizona and to fuel our unsustainable growth and unsustainable agriculture by it’s very nature,” said Bahr, director of the Sierra Club’s Grand Canyon chapter.

“We think the focus ought to be on how we can create a sustainable water future here in…