The Carlsbad City Council took the lead role in marching the region toward the construction of a desalination facility that could satisfy about 7 percent of the county's water needs.

The council unanimously approved on Tuesday night an agreement to purchase as much as 25 million gallons of water per day from a plant built by Poseidon Resources, a Connecticut-based developer.

Poseidon has plans to build a 50 million gallon per day desalination facility on a site bordering the Encina Power Plant, which is owned by Cabrillo Power.

Carlsbad Mayor Claude "Bud" Lewis said that approving the agreement is an important first step, but noted that cooperation with the San Diego County Water Authority is crucial to the plan's timely success.

The water authority has repeatedly said its own interest in building a plant at the site.

Water authority leaders said that they are responsible for providing water for the region and fear that if the privately built plant does not function, they could fail in their task to supply water to San Diego customers.

Negotiations between the city of Carlsbad and the water authority have recently restarted to determine if a public/private project between the three parties is possible.

Peter MacLaggan, senior vice president for Poseidon, said the contract was written to allow the water authority to purchase water.

Walt Winrow, president and chief operating officer for Poseidon, also promised to continue negotiations with the water authority.

According to the purchase agreement, Poseidon would supply water to Carlsbad at a price equal to or less than what is currently paid for water provided by the authority. The water also will meet a stringent set of regulatory standards, or the city will not be obligated to accept or pay for it.

Lewis said the agreement was favorable because all of the risk for the project is on Poseidon's shoulders. "They are responsible for everything," Lewis said. "And that's the way I like it."

The contract will last for 30 years and also have a buyout option, allowing the city to purchase the plant after the initial agreement is over.

The city of Carlsbad will also make about $2 million annually from tax money if the Poseidon project is built. Lewis said the deal hinges on the water authority's participation, for two reasons.

First, the water rate is based on the receipt of a series of $250 per acre-foot subsidies offered by the Metropolitan Water District, which currently provides the majority of San Diego's water. The subsidy, however, must be sponsored by the local water district, which is the San Diego County Water Authority.

Officials from the water authority have said that the sponsorship decision will ultimately be left to their board of directors.

The second issue, said Lewis, is that the California Coastal Commission may not approve a project that does not have a public sponsor.

"I don't see this moving forward" without water authority participation, Lewis said.

Carlsbad Mayor Pro Tem Romona Finnila took the opportunity to stress that the city will continue to push forward for a desalination plant in Carlsbad.

Finnila also expressed frustration with the earlier negotiations with the water authority, noting a lack of communication between the agency's board of directors and upper management.