Water Forum VI: Vista Ridge, Conservation, Rate Increase

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Andrew Sansom pours a glass of water for Ron Nirenberg at the San Antonio Water Forum. Photo by Scott Ball.

Andrew Sansom (right) pours a glass of water for Councilmember Ron Nirenberg (D8) during the water forum while SAWS CEO Robert Puente (left) looks on. Photo by Scott Ball.

The $3.4 billion Vista Ridge water pipeline, water conservation, the Nov. 19 City Council vote on a new rate increase and structure that will result in reduced bills for low usage and higher bills for big water users dominated the conversation at the San Antonio Clean Technology Forum‘s sixth annual water forum staged before a sold-out luncheon crowd at the Pearl Stable on Monday.

Mayor Ivy Taylor, who delivered opening remarks, asked for audience and community support for the rate increase and rate restructuring. The City is hosting several public meetings in the coming weeks to explain the new eight-tiered rate structure. Click here for details.

The new rate structure, which adds four new usage and pricing tiers to the existing four-tiered system, is designed to reward ratepayers who practice conservation while penalizing users who do not conserve, especially individuals who use excessive amounts of water to irrigate non-native landscapes and turf. Overall, SAWS is seeking a rate increase of 7.5% in 2016 and 7.9% in 2017. The increased revenue will fund three major water and wastewater projects:

  • SAWS has signed a consent decree with the U.S. Environmental Protection Agency to carry out $1.1. billion in repairs and improvements to its sewer lines and pumping stations over the next 10 years.
  • SAWS will open Phase I of its brackish water desalination project in south Bexar County in June 2016, which will generate about 12 million gallons of water per day (mgd) or 13,440 acre-feet per year from the Wilcox Aquifer in Phase I. The plant is located at the existing SAWS Twin Oaks Aquifer Storage & Recovery site. Phase II and III will be completed in 2021 and 2026, respectively. Eventually, the desal facility will generate 36 mgd at a total construction cost of $411 million.
  • Integration of the 50,000 acre-feet of water that will be delivered to SAWS via the 142-mile Vista Ridge pipeline.

Puente told the audience the requested rate increases represent the “worst case scenario” for increases needed for Vista Ridge. The actual rates will likely be much lower if other regional municipalities or water utilities purchase a portion of the Vista Ridge water.

San Antonio Water System's estimated average monthly rates based on the Vista Ridge supply project, and further integration of the former Bexar Met Water District. Courtesy/SAWS

San Antonio Water System’s estimated average monthly rates based on the Vista Ridge supply project, and further integration of the former Bexar Met Water District. Courtesy/SAWS

Puente and others in the water community are strong advocates for the 142-mile Vista Ridge project countless times in the past year and a half, which has enjoyed strong backing from elected officials and business leaders, including Mayor Taylor. The project was unanimously approved by City Council one year ago, but a controversial water policy report first requested by Councilmember Ron Nirenberg (D8) has slowed City Council action on the requested rate increase and fueled renewed opposition from some environmental and water policy groups. That same report, however, recognizes the need for at least 50,000 acre feet more per year to meet the needs of a rapidly growing population and economy, Puente said. “If we’re going to meet the needs of this community, we’re going to need a very large water project.” It is now under review at Texas A&M University’s Institute of Renewable Natural Resources (IRNR) for release by the end of the month.

Nirenberg offered a vigorous defense of his original request for a water report independent of SAWS own 2012 Water Management Plan. While praising SAWS’ record of water management, diversification, and conservation, Nirenberg said elected officials can use the independent report to educate voters and provide the evidence necessary to make difficult political decisions. Puente, who has called the report “a joke” in another public setting, didn’t directly criticize the report at Monday’s forum.

“It’s my job to ask,” Nirenberg said. “And I’m going to continue ask those questions for the life of the project.”

Councilmember, Ron Nirenberg (D8) speaks with SAWS President Robert Puente. Photo by Scott Ball.

Councilmember Ron Nirenberg (D8) speaks with SAWS President Robert Puente (right). Photo by Scott Ball.

Puente did say he does not share the concern expressed in the report about the low credit rating and financial stability of Abengoa, the Spanish engineering and construction company that’s leading the Vista Ridge consortium, “because the concerns were addressed by them and by us a year ago when we were negotiating the terms of this contract. We did our due diligence.”

Wall Street and investors will not fund a pipeline project unless they’re sure Abengoa can build it, Puente said. The terms of the contract, which should be finalized in early 2016, shifts the financial risk of the project away from SAWS and on to the consortium. If water isn’t delivered for any reason, because of any unforeseen reasons, Puente said, SAWS doesn’t have to pay for it.

“Their (Abengoa’s) credit rating is not as important as our ability to pay the bill when it comes due,” Puente said.

And that means rate increases. Water pumped from the Edwards Aquifer, insufficient to meet the growing city’s needs, costs between $331 and $541 an acre-foot. Vista Ridge water will cost between an estimated $1,852 – $1,959, depending on interest rates.

While Puente is confident in the Vista Ridge consortium’s ability to complete the project, he also acknowledged that SAWS could develop a “Plan B.” SAWS could find another company to take over construction and management of the project, take over the project itself, or accelerate construction and expand production of its desalination plant, he said.

Would the Texas Water Development Board (TWDB) loan money for the project if the need arose?

“If SAWS is applying for it, sure,” said panelist Bech Bruun, TWDB chair, who later said SAWS has an excellent credit rating and financial record with the TWDB.

SAWS President and CEO Robert Puente (right) responds to a question during the San Antonio Water Forum. Photo by Scott Ball.

SAWS President and CEO Robert Puente (right) responds to a question during the San Antonio Water Forum as panelist Bech Bruun, Texas Water Development Board chair looks on. Photo by Scott Ball.

SAWS has an Aa2 credit rating compared to Abengoa’s B2 rating currently under review by Moody’s Investor Service.

Brunn, along with Andrew Sansom, director of the Meadows Center for Water and The Environment and Laura Huffman, Texas director of the Nature Conservancy, brought a regional and statewide perspective to the panel. Puente and Nirenberg were the only two local representatives on the panel, which was moderated by Rivard Report Director Robert Rivard.

Vista Ridge promises to deliver 16 billion gallons of water from Burleson County’s Carrizo Aquifer to San Antonio every year for 30-60 years. SAWS believes the aquifers in the source counties can provide that volume of water without significant impact on groundwater supplies, while opponents of the project cite at least one other report that shows a significant impact on groundwater in Burleson, Milam and Lee counties. Sansom said the models used by hydrologists to make such calculations are inexact.

“Today the bulk of the investigation of groundwater across the state – which we do not understand fully – is paid for by philanthropy,” Samson said. “That’s really unacceptable. We need to be spending more public dollars (to understand) the nature of our aquifers and the extent of water (recharge and withdrawal).”

Scientific studies funded by the Texas Legislature would lead to better understanding of groundwater and how to measure it, he said.

Huffman said San Antonio is the first city to negotiate a major water transfer from a point of high supply to a point of high demand, but it won’t be the last. Future interbasin water transfers – moving water from where the supply is plentiful to parts of the state that are the most prone to drought – are inevitable, she said.

Texas State Director of the Nature Conservancy Laura Huffman speaks panelists following the discussion. Photo by Scott Ball.

Nature Conservancy Texas State Director Laura Huffman speaks with panelists following the discussion. Photo by Scott Ball.

“Source water protection, as cities go beyond their basins, (is something we’re) going to have to look at,” Huffman said. “If you’ve got a new basin that is your source water, what are we going to do to protect that? I think as we transfer water around the state, making sure that we don’t leave places worse than we found them is going to be important.”

Amid all the Vista Ridge and water report talk, panelists frequently returned to the topic of conservation.

Huffman praised San Antonio voters for their continued support of the Edwards Aquifer Protection Program, which allows San Antonio to purchase environmentally sensitive properties, especially undeveloped land over the recharge zone, to place a check on further sprawl and more impervious cover that prevents water to recharge back into the underground Edwards Aquifer. Since the initial 2000 vote, renewed three times by voters, including this year, the EAPP has used an estimated $195 million in annual sales tax revenues to purchase conservation easements over the environmentally sensitive Edwards Aquifer Recharge Zone, protecting undeveloped land from future development, especially land with prominent recharge features. More than 130,000 acres of land, which protects an equivalent of 36 billion gallons of water a year for San Antonio residents, has been conserved.

Conservation, Huffman said, “can no longer be just a division in our utility,” it should be integrated into every operation.

Puente said rumors that SAWS, which has an exemplary record of reducing per capita water consumption, will cut back on conservation efforts once Vista Ridge water starts flowing are “just not correct.”

Rivard cited programs in Nevada and California that pay homeowners to convert non-native landscapes and turf into native landscaping that require minimal water and eliminate the need for automatic irrigation systems, which account for a significant percentage of residential water use in San Antonio. Rivard asked if the “political culture in Texas has changed enough in the wake of a new drought of record” to allow officeholders and water management officials to begin instituting such program here.

“We already have,” Puente countered, citing SAWS’ WaterSaver Landscape Coupon, which pays homeowners $100 to remove 200 sq. ft. of turf from their lawns.

Rivard said the small scale made it more of a “pilot project” and that communities in western states had spent hundreds of millions of dollars eliminating traditional water-hungry grass lawns in favor of native landscapes.

Nirenberg said his contact with district residents indicate many want such a conversion program, but officials still seem disinclined to adopt such methods to further the city’s otherwise strong record of water conservation.

Water for Life Award

Mike Beldon was this year’s recipient of the fourth annual Water for Life Award, lauded for a lifetime of volunteerism and, in particular, for serving as the founding chairman of the Edwards Aquifer Authority for eight years starting in 1995. Beldon was the longtime CEO of Beldon Roofing, started by his father Col. Morry Beldon after World War II and now a third-generation family-owned business run by Mike’s son, Brad.

“Water is very important to us and it takes a whole group of people bringing all sorts of different traits and (perspectives) and without them it wouldn’t happen,” Beldon said. “25-50 years from today, nobody is going to remember who we are, nobody is going to remember our names. But I will promise you this, if we have not done what we did today … people would have been saying ‘what were those people thinking?'”

Ed Kelley gives the 2015 Water for Life Award to Mike Beldon, first chair of the Edwards Aquifer Authority. Photo by Scott Ball.

Ed Kelley gives the 2015 Water for Life Award to Mike Beldon, the first chair of the Edwards Aquifer Authority. Photo by Scott Ball.

 

*Top image: Andrew Sansom (right) pours a glass of water for Councilmember Ron Nirenberg (D8) during the water forum while SAWS CEO Robert Puente (left) looks on.  Photo by Scott Ball. 

Related Stories:

Vista Ridge Deal Dominates UTSA Water Symposium

Vista Ridge Project To Dominate Two Water Forums

City Council to Delay Votes on SAWS Rate Increase, Annexation

Controversial Water Report to Get Peer Review

SAWS Board Briefed on Rate Increase, Meter Readers, Water Report 

SAWS Briefs a Receptive City Council on New Rate Structure

4 thoughts on “Water Forum VI: Vista Ridge, Conservation, Rate Increase

  1. Congrats to Councilman Nirenberg for pushing for more transparency regarding the Vista Ridge project. However, I do not think having the A&M entity do the water study was a good choice.

    I also appreciate SAWS’ attempt to solve a water resource problem. My suspicions still surround the selection of Abengoa. Not much has been written about the process that took place to select Abengoa as a partner in the Vista Ridge project. The lack of information/reporting about selecting Abengoa fuels suspicions and thoughts of political favoritism.

  2. I tried to understand and all I can say is “Wow!”

    In the attached slide, what SAWS represents as 2015 isn’t really 2015. It isn’t even real. It’s the “assumed restructured rate proposed for 2016 before the proposed increase.” Read the fine print assumptions at the bottom: “Restructured Rates.”

    SAWS is comparing a potential rate increase to potential re-structured rates. Reality doesn’t intrude. It’s “How a theoretical 2016 rate increase affects a theoretical 2016 restructuring, masquerading as already-in-effect 2015 rates.”

    How can you tell it’s not 2015? Go to SAWS rate calculator, and plug in 7092 and 5668. Find the “Proposed” Water Supply Fee of $10.73 and go left to “Current.” You’ll notice it’s NOT $9.82. Add up the current Water Volume Charge and Water Service Charges. The Proposed column will match SAWS’ slide: $18.15, but the Current value will not, it’s only $15.20, not the briefed-to-the-Council value of $16.51 for 2015.

    How can you verify SAWS presented the adjusted 2016 rates as-an-already done deal in 2015? That’s a bit harder, but you have to track down the RAC proposal and plug in the numbers. I did it, ran the numbers and was within a penny, so yeah, I’m sure. (Trust me, I’m an anonymous guy on the Internet!) My fact checking would be easier if SAWS had a consistent “average” user, though. In September, in the RAC brief, he was 7023/5896 (or less water, more sewer) and the numbers were already calculated.

    Does the result really matter? Not much. It’s a 7.7% increase over actual 2015 numbers.

    Does the concept matter? Yes, yes it does, because they’re comparing two sets of theoretical data and presenting one of them as real-world bills.

    (Disclaimer: I wasn’t in the City Council briefing. I have no idea they caught the mistake and made the Council aware; however, I doubt they have. If they had, they’d be saying “7.7% increase” and not sticking with 7.5%. Read the fine print. Do the math. Trust but verify. The truth is out there.)

    • Joe, thanks for the info. If true, just another example of a public institution thinking nobody is looking and they can manipulate the numbers to their benefit. Surprising-no, disappointing-yes.

  3. Of course there is a “road not taken” strategy available, that SAWS simply will not consider. Presume an average roofprint area of 3,000 sq. ft. and an annual rainfall of 24″ — 31+ is the San Antonio long-term average, so this builds in some drought resistance — and then divide the average annual water supply you’d derive from that rooftop into 50,000 acre-feet and you get 363,000 houses. At an average occupancy of 2.5 persons, that’s 907,500 persons. There’s your 1 million population increase, getting its water supply on a pay as you go basis, with the cost incurred only when the water is imminently needed, and with the costs of supply paid by those who are creating the demand. Sure there are questions to be considered about this building-scale rainwater harvesting strategy, but they will never even be considered, much less resolved, unless/until this option is allowed on the table for an apples-to-apples comparison with the “California-style” massive water importation scheme that is SAWS’ flavor of the month. Then consider that what that strategy may be doing is running society into a box canyon, since it is clear that, at some level, that water importation results in aquifer mining, which will eventually lead to depletion. So if you deplete that source growing a population over the 50-year planning horizon, then what? That population will still be there, won’t it, still needing water for another 50 years, and so on beyond that? Where will that water come from, and what will that cost? Thoughts on this matter are offered in “One More Generation” (http://waterblogue.com/2013/10/29/one-more-generation/).

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