Proposed hike would not be used for construction of a downstream reservoir in Wharton County
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 in January 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—a customer paying a higher water rate as to not be curtailed, such as a municipality—is $151 per acre-foot. She said January's proposal for 2015 increased the rate to $179 per acre-foot, but the March revision decreased 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 downstream agricultural customers, are not covering LCRA's costs to provide water, and the downstream users will need to fully assume these costs long term, she said.
Bondy said that under the proposal, the rate for interruptible Gulf Coast division water customers will increase by 91 percent in 2015, from $28.52 per acre-foot currently to $54.43 per acre foot. Lakeside and Garwood divisions would see increases in their rates in 2015 of 37 percent and 28 percent, respectively, she said.
Comparing raw water rates
The interruptible rates in Bondy's presentation include the cost to distribute the water to the downstream customers. The firm water rates presented do not list the cost of distribution, paid on an individual basis, LCRA Quantitative Analyst Lead Tim Hammond said.
Therefore, the current raw water cost for interruptible downstream customers is $6.50 per acre-foot, he said. The $28.52 per acre-foot water costs for Gulf Coast and $38.53 for Lakeside, as presented by Bondy, includes the cost to distribute the water to customers, he said. In comparison, firm customers upstream, such as the cities of Austin and Lakeway, currently pay $151 per acre foot to LCRA for raw water, he said.
Garwood's current $32.81 per acre-foot costs represent only distribution costs. LCRA is precluded from charging Garwood for raw water because of a contract between Garwood and the LCRA, Hammond said.
Reservoir building cost removed
Although the January firm water rate proposal of $179 per acre-foot included the cost of constructing a downstream reservoir in Wharton County, the March revision of $175.46 per acre-foot does not include this project in the new rates, Bondy said.
"Our goal is to not have to pay for this reservoir out of water rates," she said.
Bondy said the more than $200 million proposed reservoir will grab water that enters the system downstream from Lake Travis and release it to the downstream users for agricultural and other purposes.
Lakeway City Councilman Joe Bain said that even with the March proposal, upstream water customers are still subsidizing the downstream user's needs.
"Everybody that gets water ought to pay what it costs them," he said. "We are selling water [to downstream users] at a rate of less than what it costs to send [the water] downstream."
Bondy said LCRA will try to get low-cost funding for the reservoir from alternative sources.
Opposition
State Sen. Troy Fraser, R-Horseshoe Bay, said LCRA's rate hike request stems from poor business management practices.
"[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 sale of water three years ago to interruptible customers at $6 an acre-foot and LCRA executive salary increases caused a shortfall to the agency.
"[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
Deborah Gernes, general manager of Travis County Water Control and Improvement District 17, said that although the increase in interruptible rates is a step in the right direction, residents will still see an uptick in their monthly water bill by at least $2 to $3 each month. WCID 17 is an LCRA firm water customer.
"[The adjustment] will mean a [$250,000] increase in costs for WCID 17," Gernes said.
