SAWS moves forward on pipeline By: Josh Baugh

SAN ANTONIO — The San Antonio Water System board of trustees on Tuesday approved a proposal for a water pipeline from Central Texas that would provide enough water annually for more than 150,000 homes, ensuring the city’s long-term water security.

Hours later, a negotiating team formed by the trustees entered into contract talks with the Vista Ridge Consortium — a partnership between Spanish-based Abengoa, a water-treatment and desalination company, and Austin-based Blue Water Systems.

SAWS officials expect to have a contract for board and City Council approval by fall.

Vista Ridge’s proposal is to pipe 50,000 acre-feet annually from Burleson County in Central Texas to San Antonio through a 142-mile-long pipeline that generally would follow the Interstate 35 corridor.

SAWS President and CEO Robert Puente told the trustees that the project would solidify the city’s water security for decades and ultimately save money by purchasing water for the future at today’s costs.

The plan also likely would negate the need for the stage 3 and stage 4 outdoor watering restrictions during droughts.

Board Chairman Heriberto “Berto” Guerra Jr. and Trustee Reed Williams, a former councilman, recused themselves from the discussion of the proposal and subsequent vote because they’d been meeting with the consortium to clarify its proposal.

The proposal was approved unanimously without discussion, save for some closing remarks from Mayor Julián Castro, who thanked Guerra, Williams and the “folks from Abengoa.”

“I know that this will provide the opportunity to move forward on negotiations with the hope that San Antonio can get ahead of the game in terms of water use in the decades to come,” Castro said. “This is one of several approaches that the utility has taken and will be taking in the future to ensure that there’s never a question about our water supply.”

Some balked at the proposal, saying San Antonio would have enough water in the future if appropriate conservation measures are implemented.

Meredith McGuire, a Trinity University professor, pleaded with the board to spike the proposal. San Antonio should do a better job of conserving and collecting rainwater, she said. Piping in water would encourage waste, drive up rates and promote development over the aquifer’s recharge zone, McGuire said.

“The city simply cannot afford any such deal — economically or morally,” she said.

At a news conference after the board’s vote, Greg Flores, SAWS’ vice president of public affairs, challenged those assertions, saying that while San Antonio is a national leader in conservation efforts, that isn’t enough to keep up with expected growth in the coming decades.

Earlier this year, the idea of piping in fresh water from other parts of Texas seemed to have fizzled after SAWS’ staffers raised significant concerns about Abengoa’s original proposal.

They recommended the option of increasing the capacity of a planned desalination plant over a freshwater pipeline.

Robust pushback from some business leaders and others put the concept back in play, and the consortium addressed SAWS’ concerns in the revamped proposal the trustees approved Tuesday.

Under the new proposal, the consortium carries the risk of the project rather than SAWS, which will only pay for water delivered or made available. It also offers a clear price definition and removes the $5 million annual reservation fee that the consortium had sought while the project was being developed.

The group has also agreed to remove automatic 2 percent price escalations, saving $700 million from the cost of the original proposal.

At the end of the 30-year contract, SAWS would get ownership of the wellfield in Burleson County, the pipeline and associated pump stations but will have no interest in the water rights at the end of the term. Owning the infrastructure better positions the utility to continue water production in the future.

One of the elements that makes the proposal attractive for SAWS, Puente said, is that the consortium already has 30-year permits to pump 50,000 acre-feet annually and export the water to Bexar County.

The proposal shows the cost of water per acre-foot in 2020 to be $1,852. Add in the pass-through costs for power, maintenance and operations of the pipeline, the first-year cost would be $2,239 per acre-foot — or, $111,950,000.

SAWS officials said they expect the overall cost of the 30-year contract to be about $3.4 billion. That price is about $725 million less than the consortium originally proposed.