Sunday, February 9, 2014

Kudos to SAWS; Time to Deal with the Day Case

Last week, the San Antonio Water System (SAWS) staff announced their recommendation that SAWS no longer pursue any of the three projects that had been proposed for importing large amounts of ground water from rural Texas to San Antonio.  Instead, they recommended that SAWS pursue expanded brackish ground water desalination, in partnership with the City Public Service, San Antonio’s electric utility.  Kudos are due to SAWS President and CEO Robert Puente for choosing a closer-to-home strategy that, along with continued efficiency improvements, will help the City meet its water needs far into the future.  Here is hoping that the SAWS board and the Mayor give full support to this sensible approach.
But, in the press release announcing the decision, SAWS expressed concern about the role of groundwater districts, saying:

 “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 project proposed by Abengoa Water LLC. “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 thirty 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.”

While  the predictability of ground water regulation by districts can always be improved, the root of the problem is the Texas Supreme Court’s 2012 opinion in Edwards Aquifer Authority v. Day.  As discussed in this TCPS report, the holding in Day pushes groundwater districts into granting pumping permits to all-comers or risk being dragged into expensive “takings” litigation.  At the same time, however, the districts must also implement ground water management plans that protect aquifer levels.  In cases where ground water is connected with surface streams, districts also legitimately strive to maintain spring flows to the rivers and streams, flows that support surface water uses and fish and wildlife.  As an added complication, many districts enter this decision process without sufficient funding to gather the science necessary to understand how much pumping the aquifer can really sustain over the next several decades. 
The only way districts can manage in this rock-and-a-hard place situation is to maintain an option to cut back all pumpers if ground water use begins to cause the aquifer to drop below management goals.  Some districts do that via shorter-term permits that must be periodically renewed.  Others do it through permit conditions that allow the district to cut back pumping to protect aquifer levels and/or spring flows to achieve management goals.  Understandably, that kind of flexibility presents difficulties for a municipality needing long-term secure supplies or for those looking to finance (and profit from) large ground water export projects. 

Mr. Puente is right when he calls for legislative action, but it’s not really about ground water districts. The more central problem is the state’s long-standing failure to come to grips with balancing private property rights and public interest in the management of groundwater.  The central question that will need to be addressed by the Legislature is:   does the Day case leave the state any options for striking a balance that increases regulatory certainty while providing for effective ground water conservation and management? 

Mary E. Kelly, for the Texas Center for Policy Studies   

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