San Antonio Cuts Off Water Pipeline Proposals

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DALLAS — The San Antonio Water System will reject controversial proposals from three private developers to pipe water to the city from as far away as 150 miles.

Calling the private water supply proposal "too risky," SAWS said Feb. 6 that its staff will recommend to the SAWS board the utility invest instead in a desalination plant in a partnership with the city's gas and electric utility, CPS Energy.

The plan calls for SAWS and CPS to co-locate a natural gas plant on the same site as an expanded brackish desalination plant.

"Brackish groundwater is plentiful and unused in our region, and available for centuries," said SAWS President and CEO Robert R. Puente. "The State of Texas views desalination as a solution to meet future water demands, and so do we."

The decision comes after SAWS rejected three private groundwater projects proposing to pipe up to 50,000 acre-feet of water per year to San Antonio from outlying areas.

The request for new water supplies issued by SAWS was meant to shift all risk to a private developer, calling for the developer to build the project and deliver water to a local SAWS pump station.

"What we were trying to do is buy the commodity at a specified point," Doug Evanson, SAWS chief financial officer, said before the decision was announced.  "We're not into the specifics of how these projects would be financed."

One private company, Abengoa Water LLC, was unable to guarantee that water would be available throughout the life of the project while still requiring payments from SAWS, Puente said.

"The highest ranked proposal was unwilling to assume the risk of water being cut off by the groundwater district that regulates the supply," said Puente of the Abengoa proposal. "We are also unwilling to ask our ratepayers to absorb the cost of a project with potentially no water."

The private proposals would have required annual payments of up to $85 million for 30 years, and a rate increase of approximately 9% to 12% in 2019, not including infrastructure integration costs.

Groundwater conservation districts have the authority to regulate withdrawals of water from aquifers, often with little notice or process for appeal. SAWS has experienced the curtailment decisions of groundwater districts in the past.

"Groundwater law in Texas leaves too much uncertainty and risk for the private and public sectors," added Puente. "I hope that the proposers and cities across the state will join SAWS in calling for the legislature to change the law so Texans can build projects to meet growing future demand."

A second proposal from Dimmit County prompted the local Wintergarden Groundwater Conservation District, from which permits would be needed, to pass a resolution to "specifically oppose the exportation of large quantities of groundwater from Dimmit and Val Verde counties, as is being considered by the San Antonio Water System."

The third proposal from Val Verde Water Company met fierce regional opposition and threats of legal challenges and the formation of a groundwater district to prevent exportation of water from Val Verde County.

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