Vote set on water pipeline’sfuture - San Antonio Express-News
Faced with a crucial vote later this month, half the City Council
remains steadfast in support of a 142-mile pipeline that would be San
Antonio’s most far-reaching water project yet.
A yes vote Nov. 19 means San Antonio Water System customers will see
substantial rate increases, starting Jan. 1, to fund the $844 million
pipeline to Burleson County, in addition to other water and sewer
projects.
For a typical residential customer, that means a 50 percent higher
total bill for water and sewer service by 2020, which is as far as SAWS
will project for now.
A no vote would sink the pipeline and likely leave ratepayers on the
hook for tens of millions of dollars and no water to show for it.
The money would repay a subsidiary of Abengoa, a Spain-based global
infrastructure construction corporation, for the work already done in
advance of actual construction.
Those preparations started after
a unanimous City Council vote a
year ago cleared the way for the pipeline deal, which is expected to
deliver up to 16.3 billion gallons per year from the Carrizo and
Simsboro aquifer formations in Central Texas. An Austin firm, Blue Water
Systems, is supplying the water, having leased it from landowners in
Burleson County. The Vista Ridge pipeline, as it’s known, will boost
SAWS’ total supply by up to 20 percent.
Opponents’ efforts to organize against the pipeline seem to have done
little to change its momentum with the council. Still, a group of
Burleson County landowners will join with San Antonio environmental and
social justice groups to protest the project at noon Tuesday on the
steps of City Hall.
“Take any county road in this county and knock on 10 doors, and I
would be very surprised if you had more than two out of 10 people that
you talk to that are for this project,” said Burleson County resident
Andy Hovorak, who plans to make the trip.
As of Oct. 31, Abengoa had spent nearly $27 million on engineering
and aquifer studies, test wells, acquiring rights of way for the
pipeline route and other expenses,
a financial update provided by SAWS shows.
If the City Council were to back out or not approve rate increases to
finance Vista Ridge, the contract’s terms dictate SAWS could end up
having to reimburse Abengoa for those costs.
If Abengoa were to reverse course or fail to get the project
financed, then the contract provides for a $2 million payout to SAWS.
The proviso is one of many risk-averting measures SAWS required of
companies that responded to its
2011 request for proposals to get a new water source.
Council views
Despite SAWS’ attempts to diversify its water sources, about
90 percent still comes from 92 wells that tap the Edwards Aquifer
below Bexar County, though that amount can vary. Restrictions on the
aquifer during droughts usually require SAWS to cut pumping, so SAWS
began looking for new supplies decades ago.
One attempt took them two counties away to
Gonzales County in the early 2000s,
where efforts to secure a water supply met with resistance from the
local groundwater district, President and CEO Robert Puente said. In the
end, SAWS ended up with 3.8 billion gallons per year, much less than
expected.
“We didn’t want to have to go through that again,” he said. “So when
we negotiated the (Vista Ridge) contract, we told the respondents that
all those kinds of risks, we wanted them to take. And initially they
didn’t, but we negotiated that back to on their side.”
Efforts spent on negotiations and promoting the contract to the City
Council and the public seem to have paid off. Five council members
expressed support last week; two would not declare a position yet, and
three could not be reached. Mayor Ivy Taylor is an ardent supporter.
“We need to secure our water future and this gives us a time to do
it,” District 4 Councilman Rey Saldaña said. “We’ve debated the
logistics, the financial position of the company, our off-ramps for
risk, and I feel very comfortable going into it.”
District 6 Councilman Ray Lopez said he appreciates having a year to
discuss the project and question SAWS about it. He’s satisfied that the
utility will protect low-income ratepayers from massive increases in
monthly bills by keeping basic rates low and offering financial
assistance to customers as needed.
“The bottom line hasn’t changed,” he said. “I’m am an incredible supporter of it.”
District 9 Councilman Joe Krier said he thinks his constituents
understand rate increases are necessary to pay for the pipeline and are
willing to do so.
“It was and is a thoughtful project, and I’m confident it will be built,” he said.
Krier said his efforts to understand the project included speaking to
Abengoa executives and reading a report rating the risk of 12 potential
water projects.
Until recently, the study was led by former SAWS conservation
director and Texas A&M Water Resources Institute director Calvin
Finch. In a draft version, the Vista Ridge project was rated high risk.
That report had serious problems with its methods, said Roel Lopez,
director of the affiliated Institute for Renewable Natural Resources,
who took over control of the study. He appointed a peer-review panel of
five experts that came up with its own risk-rating system, which lowered
Vista Ridge to medium risk.
“The panel made it mathematically correct,” Lopez said.
After reading the
revised report,
Finch said Friday he would have wanted to speak with the reviewers
directly and be given a chance to discuss their methodology.
“Usually the peer-review process is done for the benefit of the authors,” he said.
District 5 Councilwoman Shirley Gonzales said the final draft of the
report convinced her the project is necessary for long-term growth.
“The greatest concern for my constituents is always the rate
increases,” she said. “I do think SAWS did a really good job of
explaining the rate increases and creating that lifeline rate, and also
making it flexible for low-income people and low-water users.”
The military is watching the project closely as part of an upcoming Base Realignment and Closure process
to make sure bases here have
enough water, District 10 Councilman Mike Gallagher said. He supports
the pipeline so that future San Antonians don’t have severe water
shortages during droughts.
A spokesman for District 2 Councilman Alan Warrick II, who was
elected after the council voted for the project, wouldn’t comment on
whether Warrick supports it. Warrick was in Nashville for a National
League of Cities conference last week, Akeem Brown said.
“A previous council committed to it,” Brown said. Warrick’s “concern
is making sure residents of his district have affordable rates and clean
drinking water.”
District 3 Councilwoman Rebecca Viagran was in Peru last week and
unavailable for comment, staff members said. Efforts to reach District 1
Councilman Roberto Treviño and District 7 Councilman Cris Medina were
unsuccessful.
District 8 Councilman Ron Nirenberg, who voted for the project a year
ago, did not say whether he would vote for the rate increases. He
reiterated his four criteria the project must meet to gain his support:
regional responsibility, commitment to conservation, fiscal
responsibility and transparency.
“We’ve seen stumbling on all four measures,” he said.
Commitments to conservation “have been stalled” and “have lacked support and clarity from the water system,” Nirenberg said.
Vista Ridge’s opponents also have questioned the effectiveness of
SAWS’ water conservation policies while the utility simultaneously adds
another water source.
“I don’t see SAWS working with the city to make sure new projects
have conservation built in,” said Annalisa Peace, director of the
Greater Edwards Aquifer Alliance at an Oct. 21 symposium at the
University of Texas at San Antonio.
“We have and we do,” SAWS CEO Puente responded, offering an example
of SAWS working with the city to pass an ordinance requiring developers
to add topsoil before laying sod in an effort to conserve irrigation
water.
SAWS also gives away water-saving indoor plumbing devices and offers
various rebates to encourage customers to cut water consumption. Its use
of recycled water is the largest such program in the U.S., the utility
says.
“If we hadn’t conserved the way we did, we would have had three
different Vista Ridge projects to be where we are today,” Puente said
when pressed again about conservation at an Oct. 26 water forum.
Higher costs for water
Opponents also have questioned the project based on Abengoa’s financial stability.
Abengoa created a fully owned subsidiary, Abengoa Vista Ridge LLC, to
build the pipeline. Abengoa, the parent company, has come under
scrutiny for poor credit ratings while
its stock has fallen from about $19 a share a year ago to $5.33, though its third-quarter profits, released Friday, met analysts’ forecasts,
the Associated Press reported.
SAWS officials point to the strength of the water transfer and
purchase agreement, which put the risks of acquiring water leases,
securing pumping and transport permits and building the pipeline on Blue
Water Systems and the Abengoa subsidiary, not SAWS.
With long-term financing figured in, the pipeline is projected to
cost $3.4 billion. Once water delivery begins in 2020, SAWS would pay
about $6.75 for every 1,000 gallons. In 2050, it will own the pipeline.
The contract with SAWS allows Abengoa Vista Ridge to sell 49 percent
of its share of the project, said project engineer Gene Dawson of
Pape-Dawson Engineers Inc.
Abengoa’s recent financial update about Vista Ridge states there is
“strong appetite for this project in financial markets.” The company is
exploring other bank financing as back-up, the report states.
The answers on Abengoa and the subsidiary seem to have satisfied Nirenberg.
“I think those have been answered quite well in terms of the design
of the contract and the capitalization of the subsidiary,” he said.
Yet, he raised questions on how much groundwater will be available.
“Ultimately, it’s the reliability of this water that becomes the tipping point,” Nirenberg said.
A May report by the South Central Texas Regional Water Planning Group said the project would exceed modeled available groundwater for the aquifers in the region in every decade through 2070.
Seven groups opposed to the pipeline point to a groundwater modeling
study by independent hydrologist George Rice
stating the project would cause drawdowns of water levels in the Post
Oak Savannah Groundwater Conservation District and a neighboring area
below desired future conditions by 2060.
James Bené, a hydrologist for the firm R.W. Harden hired by Abengoa,
said the amount of water stored in those regional aquifers is so great
that pumping 5.5 million acre-feet over 60 years only will cause a 1.6
percent decline in total storage in the region.
Even if pumping that volume caused unsustainable depletion, Post Oak
Savannah has rules in place that would reduce pumping as necessary for
some or all permit holders, district manager Gary Westbrook said last
week. He and staff member Bobby Bazan regularly measure water levels in
wells throughout the district to keep track of groundwater levels.
“If the water’s there, good. If the water’s not there, you don’t get to pump that much,” Westbrook said.
SAWS’ contract has a provision for pumping cutbacks, too. The utility would have to pay only for water delivered.
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Twitter: @bgibbs
