City officials are almost giddy about their new role as main partner with a private company to bring a $270 million desalination plant to town.

The San Diego County Water Authority last week suspended its negotiations on the project with the company that would plan and oversee construction, Poseidon Resources, and said it wants to see if Carlsbad can make a deal instead.

"In the long run, it could be the best thing that could have happened," said a smiling Mayor Bud Lewis this week.

"I like to be in control of our destiny," said Councilwoman Ann Kulchin, also happy. "This is our future. The plant will be in our city."

Under the arrangement, the city wouldn't have to pay to buy the site or build or operate the plant, just allow it to be built. Carlsbad probably would purchase water from the plant through a long- term contract if both sides agreed on a price.

In return, the city could end up with $2 million a year in taxes from the project, plus a fishing area on the beach next to the plant and more land for beach parking.

Carlsbad officials also would have more control over what is built where in the beach area around the plant, Kulchin said.

Poseidon, which is based in Connecticut and has offices in San Diego, wants to build the desalination plant just north of the Encina Power Plant to produce 50 million gallons of drinking water per day. That's enough to meet the water needs of 300,000 people.

The location is strategic because the plant would use ocean water the power plant already pulls in to cool its generators.

As Southern California officials grapple with piping in enough water from other areas, they are turning to desalination as a new water source. Cities including Carlsbad, Oceanside, Vista and Poway could purchase desalinated water from the plant, Poseidon officials said.

Talks among the County Water Authority, Poseidon and Carlsbad broke down last week when the county agency said it was bowing out.

The agency's director of water resources, Ken Weinberg, said the water board directors felt it was not wise for two public agencies to be dueling for the best deal with a private company.

He said that if Poseidon and Carlsbad don't reach a deal, the county agency will again try to bring a desalination plant here, because it already started its own environmental impact report.

"The plant will happen. It's just a matter of when," Lewis agreed.

The city is planning to host a meeting of officials from North County cities such as San Marcos, Vista, Poway and Oceanside as soon as Poseidon invites them. The plant will need water customers, the mayor said.

One reason Carlsbad likes Poseidon's project is the $2 million a year in redevelopment taxes it would gain from new business in the city's south coast redevelopment area.

Carlsbad could also get some 25 acres of land scattered around the plant, said Poseidon vice president Peter MacLaggan.

It includes beach access for fishing on the west end of Agua Hedionda Lagoon next to the power plant, land for more beach parking on the south side of the plant and some bluffs across from the power plant.

City officials say they face a potential deal breaker, though.

Right now the city pays the County Water Authority $530 per acre- foot of water; the best price Poseidon has quoted on desalinated water is $800 per acre-foot. Public Works Director Lloyd Hubbs said the CWA must pass on to the city a $250 per acre-foot subsidy from the Metropolitan Water District, which is offered to encourage new desalination water sources, or the deal with Poseidon is just about dead.

"It would be almost impossible to make this happen (without the subsidy)," Hubbs said. "They would be launching us into failure."

Hubbs said the city is expecting an answer within a week from the County Water Authority, but Weinberg said only that the agency will answer as soon as possible.

Carlsbad is asking Poseidon whether the city would get a discount for letting the company use the city's pipes and Maerkle Reservoir to get the desalinated water to a spot where it could be distributed to other cities.

Questions also linger about Poseidon's desalination project in Tampa, Fla., where the plant opened behind schedule, delivered less water than promised and cost more to operate than expected.

Poseidon's MacLaggan said the problems in Florida happened after his company was bought out of the project by Tampa Bay Water.

Tampa's troubles are being considered, Hubbs said, but mostly to make sure Poseidon is quoting a realistic price at $800 per acre- foot.

Any operating problems at the Carlsbad plant would be Poseidon's, because the city never plans to purchase the plant, Hubbs said.

"We're going to be different than Tampa because in Tampa they bought the plant. They bought the problem," he said. "We just want the water."