With lakes Travis and Buchanan at near-historic lows, residents from Travis County and surrounding areas packed Bee Cave's City Hall on April 3 to discuss proposed raw-water rate increases with Lower Colorado River Authority staffers. LCRA staffers said the focus of the meeting was to inform residents and gain public input on the agency's revised water rate adjustment announced March 28, two months after the organization proposed new rates for both interruptible and firm water customers.

Wholesale customers

Karen Bondy, LCRA senior vice president of water resources, said the current rate for firm water customers such as the cities of Cedar Park and Leander is $151 per acre-foot. The January proposal for 2015 increased the rate to $179 per acre-foot, but the March revision changed the rate to $175.46 and projected a 3 percent average annual increase in rates for 2016–19. The rate increase is needed to cover LCRA's cost of providing water to more than 1 million people, including its daily operations, water supply planning and systems that gauge river status, Bondy said. The agency lacks taxing authority, and its income is generated primarily by water and electricity power sales, she said. Interruptible rates, paid by agricultural customers in the Gulf Coast region, are not adequately covering LCRA's costs to provide water downstream, she said. Downstream users will need to fully pay for those costs long-term, she said. Bondy said that under the proposal, the rate for interruptible water customers in the Gulf Coast division will increase by 91 percent in 2015. Nearby Lakeside and Garwood divisions would see rate increases in 2015 of 37 percent and 28 percent, respectively, she said.

Comparing raw water rates

The interruptible rates for the Gulf Coast and Lakeside divisions include the cost of distributing the water to those downstream customers. Firm raw-water rates do not include the cost of distribution, which is paid on an individual basis by cities and municipal entities, LCRA Quantitative Analyst Lead Tim Hammond said. Therefore, the current raw-water cost for downstream customers is $6.50 per acre-foot, he said, compared to $151 for firm customers. Garwood's current $32.81 per acre-foot costs represent only distribution expenses. LCRA is precluded from charging Garwood for raw water because of a contract between Garwood and the LCRA, Hammond said.

Reservoir building cost removed

The January firm water rate proposal of $179 per acre-foot included the cost of constructing a 40,000-acre-foot downstream reservoir in Wharton County. However, the March rate revision of $175.46 per acre-foot does not include the project, Bondy said. "Our goal is to not have to pay for this reservoir out of water rates," she said. On March 19, the LCRA board approved spending $17 million on the first phase of the $215 million reservoir. The structure will capture water downstream from Lake Travis and release it to the downstream users for agricultural and other purposes. LCRA will try to get funding for the remaining reservoir costs from alternative sources, Bondy said. Leander City Manager Kent Cagle said LCRA's new rate proposal counts as an admission that firm water customers have been subsidizing interruptible customers' water use for years. "The question now is, will the LCRA board adopt the proposed rate increases for the interruptible customers?" he said.

Opposition

State Sen. Troy Fraser, R-Horseshoe Bay, said LCRA's request to raise rates stems from poor business management. "[LCRA's] water rates today are the highest in the state of Texas of the major basins, and now they are asking for a 20 percent increase over that to cover their bad decisions," Fraser said. He said the agency should not have released water to downstream customers in 2011 when a drought was imminent. Fraser said the selling the water at $6 an acre-foot and LCRA's executive salary increases caused a shortfall. "[LCRA] is not charging what other river authorities charge," said Jo Karr Tedder, president of Central Texas Water Coalition, an organization that addresses issues facing the Lower Colorado River basin. "We need a water management plan that is equitable."

What this means for local residents

Sam Roberts, Cedar Park Assistant City Manager, said Cedar Park staffers continue to have talks with LCRA, but the city does not yet have a position on the new rates presented in March. "We do think [the new rates] could be a step in the right direction," he said. Leaders in Leander have not estimated how the adjusted raw-water rates would affect city residents, Cagle said. "The raw-water costs are only one aspect of many factors involved in our rates," he said. "We have not updated anything because the LCRA board has not approved the most recent proposal. There will most likely be several more proposals before something is adopted." The LCRA board is expected to vote on the new rates in June. Additional reporting by Stephen Burnett