HUNTINGTON BEACH, Calif. (AP) — A report issued Monday urges a California coastal panel to deny a proposal to build a $1.4 billion desalination plant that would draw on the ocean to expand water sources in Southern California.

Staff for the California Coastal Commission recommended the panel reject Poseidon Water ‘s proposal to build the 50 million gallon-a-day facility Huntington Beach. The project is up for discussion before the panel on May 12.

“This project raises significant and complex coastal protection policy issues,” staff wrote in the report, “including conformity with policies that require protection of marine life, water quality, environmentally sensitive habitat areas, and policies meant to avoid or minimize hazards associated with sea level rise, floods, tsunamis, and geologic hazards.”

The staff also wrote that the proposal raises “significant issues” about potential impacts on environmental justice communities. It also lacks, however, details about who would ultimately buy Poseidon’s water and at what cost, the report states.

Poseidon Water said it believed the commission staff erred in its recommendation.

“No water infrastructure project in the state of California has ever undergone this level of study and scrutiny,” the company said in a statement. “If this recommendation stands, it will effectively be the death knell for desalination in California.”

The proposal has been touted by some in California’s Orange County as an alternative to a long-running drought and a way to expand water sources as the region grows. But environmental groups have long opposed the plan over concerns marine life will be sucked into the plant and argue that critical infrastructure shouldn’t be built in a low-lying coastal areas as the region contends with sea level rise. They also say the water would be too expensive.

The proposal comes as California faces prolonged drought, worsened by climate change, with its nearly 40 million residents heeding repeated calls in recent years to conserve water. It also comes amid rising concern about sea level rise, with a federal report recently forecasting that seas lapping against the U.S. shore could be 10 to 12 inches (0.25 to 0.3 meters) higher by 2050.

Huntington Beach, which is known as “Surf City USA” and relies on its waves and scenic shoreline for tourism dollars, approved a proposal more than a decade ago to build the plant near a coastal power facility. The plant would draw on the sea water and convert it so it could be used to replenish the local groundwater system, a key source of drinking water for many of Orange County’s 3.2 million residents.

But the state coastal panel in 2013 recommended a series of changes to the project to protect marine life. Additional studies were completed and Poseidon updated its proposals for structures used to draw in ocean water.

Poseidon Water has been running a similar desalination plant in nearby Carlsbad, in San Diego County, since 2015.

Susan Jordan, executive director of the California Coastal Protection Network and member of the Stop Poseidon coalition, praised the recommendation Monday to deny the proposal.

In a statement, Jordan said it’s time for Poseidon Water “to recognize the deep and irrevocable flaws with this project, cut its losses and publicly recognize this project and this site are not good for Huntington Beach or California – it’s time to shut it down for good.”

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