Environmental group sues water pipeline partner for information | www.mystatesman.com

Environmental group sues water pipeline partner for information | www.mystatesman.com
Arguing that partners in a proposed multibillion-dollar water pipeline proposed for Austin’s eastern flank should divulge more information about the workings of the project, an Austin environmental group has filed an open records lawsuit in state District Court.
The Save Our Springs Alliance is suing the nonprofit Central Texas Regional Water Supply Corp. to force it to hand over information about the pipeline route and pump stations, copies of the meeting minutes for the corporation’s board of directors, and correspondence between corporation officials and other partners in the 142-mile pipeline project.
The corporation, with the backing of the state attorney general’s office, has said that it doesn’t currently meet the definition of a governmental body.
The suit, filed Friday, is the latest effort by a loose coalition to stymie the pipeline project, which would send groundwater to San Antonio. Some landowners in rural counties near the pipeline’s proposed start worry they will be robbed of water; the SOS Alliance has raised concerns that the pipeline will fuel development in the Hill Country, over the Edwards Aquifer.
“What we’re worried about is that this could spur development over the aquifer,” SOS staff attorney Lauren Ice said.
The corporation, set up by a private company that is partnering with the San Antonio Water System on the project, is pursuing right-of-way agreements with landowners to the east of Austin for the pipeline, known as the Vista Ridge Water Supply Project, which will deliver water from well fields in Burleson County to the north side of San Antonio.
San Antonio, long dependent on the Edwards Aquifer, committed to the Vista Ridge pipeline project in 2014 to diversify its sources of water. Under the deal, Austin-based BlueWater Systems will pump the water from beneath Burleson County through the pipe, which will be built by Spanish company Abengoa. BlueWater could send enough water for 200,000 households per year to San Antonio, beginning as soon as 2020.
San Antonio will pay for the water whether it needs it or not; as a result, the pipeline — yet to be built — could also provide water for parts of the Hill Country and communities along Interstate 35 as San Antonio seeks to share costs.
Abengoa set up the Central Texas Regional Water Supply Corp. in 2014 “for the purpose of acquiring easements rights-of-way and other interests necessary” for the pipeline project, according to official papers cited in the new suit.
In November, the SOS Alliance filed a public information request with the corporation seeking information about correspondence and the locations of rights of way and pump stations. The corporation then asked the state attorney general for permission to withhold information; the attorney general’s office sided with the corporation, ruling that it is not a governmental body and not subject to the open records request.
The SOS Alliance argues that the corporation should abide by the Texas Public Information Act because, citing language in code, it is providing a water supply service and is not subject to property taxes.
But C. Robert Heath, an attorney for the corporation, said it does not rise to thelevel of such an entity because it does not yet control any property and thus has not even filed for an exemption from property taxes. And in a letter to state Attorney General Ken Paxton in December, Heath argued that the corporation “is not currently providing this water transportation service because the necessary pipeline has not yet been built. … Since (the corporation does not currently provide a water supply or wastewater service … (the corporation) is not a ‘governing body.’ ”In February, the corporation and the San Antonio Water System submitted an $885 million loan request to the Texas Water Development Board.
According to that application, preliminary engineering has been performed, test wells have been drilled, environmental studies have been conducted, and preliminary pipe specifications have been developed.
The partners said the project will “help preserve Edwards spring flows and federally-listed endangered species” by alleviating pressure on the underground aquifer.
The San Antonio Water System, which is not party to the suit, “is always open and transparent” and follows “all laws of open government,” according to utility spokeswoman Anne Hayden.

Pipeline builder, through nonprofit, seeks $885 million state loan - San Antonio Express-News

Pipeline builder, through nonprofit, seeks $885 million state loan - San Antonio Express-News


The company contracted to build a pipeline for the San Antonio Water
System has applied for an $885 million low-interest state loan to
finance the project.


SAWS officials have often said in public meetings and interviews that
financing for the 142-mile pipeline that would deliver up to 16.3
billion gallons per year to San Antonio from Burleson County would come
from bonds sold by Abengoa Vista Ridge.

But on Feb. 5, Abengoa Vista Ridge, through its affiliated nonprofit, submitted the loan application to the Texas Water Development Board for the State Water Implementation Fund for Texas, or SWIFT, over four years: $380 million in 2016, $350 million in 2017, $100 million in 2018 and $55 million in 2019.


TWDB officials who manage the loan program said they were not available for a phone interview Friday.


Asked whether a for-profit corporation can apply for a loan through a
nonprofit entity, Jessica Zuba, TWDB director of regional water
planning and development, said in an email that “nonprofit water supply
corporations are eligible applicants under the SWIFT program.”

Even if the loan is approved, Abengoa Vista Ridge may still choose to
take on another kind of debt, SAWS Chief Financial Officer Doug Evanson
said. SAWS Vice President Donovan Burton called the loan “another tool
in the toolbox.”


“I don’t think they’ve abandoned the idea of selling bonds,” Evanson
said Friday. “They’ve talked about bank financing. They’ve talked about
this.”


The complex financial arrangement to build the pipeline revolves
around SAWS and Abengoa Vista Ridge, the local subsidiary of Spanish
energy and water conglomerate Abengoa S.A.


According to a contract signed in November 2014, Abengoa Vista Ridge
would build the pipeline. The subsidiary was supposed to spend $82
million on construction but could have sought an outside investor for up
to 49 percent. The rest of the estimated $844 million cost would be
financed through debt.


Abengoa Vista Ridge would then build the pipeline, set to be complete
in 2020. SAWS ratepayers would indirectly pay back the lenders and
Abengoa Vista Ridge over 30 years at a cost projected to be $2,042 per
acre-foot. By 2050, SAWS would own the pipeline.


That arrangement has been in flux since Abengoa S.A., struggling under $10.2 billion in debt, filed for pre-insolvency in Spain in late November.


The parent company is trying to make arrangements with creditors by
March 28 to avoid full bankruptcy. On Feb. 9, Abengoa Vista Ridge
announced that it would sell 80 percent of its $82 million stake to an outside investor. It is now considering Garney Construction or the Blackstone Group.


Selling this much of the project would require SAWS to amend the 2014
contract, which also gives the utility the option to take on the
project entirely.

District 8 Councilman Ron Nirenberg, who in February said the City Council should approve any changes to the contract, said he will continue trying to get his proposal on the council’s agenda.


“A city-owned public utility answers to the City Council, who answers
to the San Antonio taxpayer,” he said. “That relationship will not
change, and we have an obligation to protect them.”


If SAWS takes over the project, the TWDB financing would work in the
utility’s favor, CEO Robert Puente said. SAWS even encouraged Abengoa
Vista Ridge to apply for the loan.


“If things don’t go the normal route we originally wanted, this is a
great opportunity because we can easily take over that application if we
take over the project,” Puente said.


While the TWDB has offered other loan programs in the past, the
Legislature created the SWIFT program during the last legislative
session. The agency issued its first round of loans totaling more than


$3.9 billion in 2015.


Average interest rates vary from 2 percent for a 20-year loan to 2.89 percent for a 30-year loan, according to the TWDB.


Eligible entities are nonprofit water supply corporations, local
governments, river authorities, special law districts, water control or
improvement districts, irrigation district or groundwater conservation
districts, according to the TWDB.


The TWBD received 40 “abridged applications” for the latest round of loans, said the agency’s Zuba. One $127 million application came from SAWS to finance the work needed to integrate Vista Ridge water into its system.


The TWBD will later ask for “more financial, engineering and legal
information” to decide whether each project is worthy, Zuba said.


Technically, the $885 million loan application came from Central
Texas Regional Water Supply Corp., a nonprofit entity created by Abengoa
Vista Ridge to acquire pipeline easements from landowners and manage
the real property associated with the pipeline.

However, three out of four directors of the nonprofit are current or
former Abengoa executives -— Joaquin Abaurre Benjumea, Michael Irlbeck
and Richard Morgan. The fourth is Jorge Arroyo, an Austin water
consultant formerly with the TWDB.


Benjumea is also listed as the contact for the loan application. The
listed address is Abengoa Vista Ridge’s San Antonio office at the
Mercantile Building off Northeast Loop 410.


Efforts to reach Benjumea and Abengoa Vista Ridge communications staff Friday were not successful.


Right now, Abengoa Vista Ridge is probably more focused on finding
its new investor than on long-term financing, said SAWS’ Evanson. That
task will pass to the new investor, he said.


“Ultimately, somebody else is going to be in the driver’s seat,” he said.


All this is concerning to Amy Hardberger, a St. Mary’s University law
professor who has closely followed the project and spoken out about
what she sees as a lack of transparency from SAWS and shifting financial
risk away from Abengoa Vista Ridge and onto the San Antonio ratepayer.


“I’m pretty sure TWDB isn’t allowed to (loan) to a private company,”
she said. “We know for a fact that Abengoa couldn’t have applied for
SWIFT funding. Basically, they’re trying to end-around this to get
money.”



bgibbons@express-news.net



Twitter: @bgibbs