With a flood of new water coming into the San Antonio Water System in 2020, officials are taking the following question public: To sell or not to sell?
SAWS officials brought up the question this week at the utility’s February board meeting, where SAWS Vice President of Water Resources and Governmental Relations Donovan Burton gave an update on Vista Ridge, a pipeline that will begin supplying up to 16.3 billion gallons of water per year to San Antonio.
The question is an important one for SAWS, the municipally owned water and sewer utility serving 1.8 million customers in the San Antonio area. Over the coming years, SAWS could take on a greater role as a regional wholesale water supplier.
“I know there’s people on our staff that don’t want to sell any water,” SAWS Board Chairman Heriberto “Berto” Guerra Jr. said at the board meeting Tuesday. “There’s people on our staff that do. There’s people on our board, people on our City Council that want to and don’t want to. It’s going to take a lot of teamwork for all of us in our community to decide.”
SAWS already has three small wholesale water contracts with East Central Special Utility District, the City of Elmendorf, and The Oaks Water Supply, according to Burton.
On Thursday, SAWS took the question to San Antonio City Council members at a briefing session.
Of the Council’s 11 current members, Mayor Ron Nirenberg, Roberto Treviño (D1), Rebecca Viagran (D3), Rey Saldaña (D4), and Shirley Gonzales (D5) were sitting members in November 2015 when the Council approved water rate hikes that in part to pay for the $2.8 billion project.
Vista Ridge is San Antonio’s largest single new water source set to come online in the next several years. The roughly 140-mile pipeline is set to deliver water from a portion of the Carrizo-Wilcox Aquifer below Burleson County, northeast of Austin.
Under the Vista Ridge deal, a consortium of private companies and banks led by Kansas City-based Garney Construction must build the pipeline and begin shipping water to SAWS. In return, SAWS must purchase all water that reaches San Antonio, up to 16.3 billion gallons per year.
When complete, Vista Ridge will be the largest water transfer project in Texas history.
SAWS President and CEO Robert Puente told council members that construction is well underway in all seven counties the pipeline crosses – Burleson, Lee, Bastrop, Caldwell, Guadalupe, Comal, and Bexar.
SAWS officials said they expect the private companies will invest $927 million in the project. Through their monthly bills, SAWS customers will pay them back $2.8 billion over 30 years. In 2050, SAWS will own the pipeline.
SAWS officials have long acknowledged that San Antonio won’t need all 16.3 billion gallons immediately. In the 2020s, even in a historic drought, they say San Antonio will have enough water to sell up to nearly 4.9 billion gallons per year to other cities, towns, and developments.
For the past two years, SAWS has been approaching nearly every community between San Antonio and Round Rock, a suburb north of Austin, hoping to sell water, Burton said. The corridor is one of the fastest-growing areas in the U.S.
So far, SAWS has gotten interest from potential buyers but no official deals, a signal that demand is constrained as multiple entities vie to build their own projects.
One example is Alliance Regional Water Authority, comprised of the cities of San Marcos, Kyle, and Buda, as well as Canyon Regional Water Authority, which itself represents five smaller water utilities. That entity is developing its own project to tap the Carrizo-Wilcox Aquifer.
“There’s a common mood out there of, ‘I want to control my own destiny,’” Puente said.
Nirenberg, who’s also a SAWS board member in his official capacity, said that council members dating back to 2014 have said they would be interested in selling water, as long as SAWS meets certain conditions. Those conditions include reducing Vista Ridge’s cost burden on SAWS customers and making sure water buyers do their part to conserve.
SAWS officials say it will be up to the SAWS board, City Council, and the community at large to answer some big questions about wholesale sales.
One of them is the price of water. Water from Vista Ridge is projected to cost SAWS around $1,954 per acre-foot, a unit used in the water planning world that adds up to 325,851 gallons.
(At the council meeting, Puente told members the cost would be $1,606 per acre-foot, a figure that only includes fixed costs. He later showed a slide with the $1,954-per-acre-foot number but did not explain the discrepancy.)
SAWS’ other water sources range in cost from $429 to $3,012 per acre-foot, depending on drought conditions, with Vista Ridge projected to be the second highest in price, according to the utility’s 2017 Water Management Plan.
Paying top dollar to ship water from seven counties away, then selling up to one third of that water, has long been an issue for opponents of Vista Ridge. Such opponents include members of the Sierra Club’s local chapter, some of whom held signs at the council meeting opposing the idea.
Sierra Club members, notably Trinity University professor emerita Meredith McGuire and retired mechanical engineer Alan Montemayor, have long said that SAWS should rely on conservation and innovations like rainwater harvesting and greater water reuse to meet its needs.
At the council meeting, Puente raised other questions about how long wholesale water contracts should last, whether SAWS should mandate conservation measures as part of the agreement, and whether drought-related cutbacks should also apply to the entities it sells to.
Council members did not take a vote on the issue, which could come up again in the coming months.