tag:blogger.com,1999:blog-36597601520327831642024-03-14T01:01:37.854-07:00A Sustainable Water Plan for TexasTexas Center for Policy Studieshttp://www.blogger.com/profile/06470944874060481347noreply@blogger.comBlogger15125tag:blogger.com,1999:blog-3659760152032783164.post-53949838866634709192014-05-09T13:47:00.001-07:002014-05-09T13:47:18.962-07:00New Report on Texas Water Planning
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<span style="font-family: Calibri;">(Austin, Texas; <b style="mso-bidi-font-weight: normal;">MAY 9, 2014</b>)<o:p></o:p></span></div>
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<span style="font-family: Calibri;">A report issued today by the non-profit Texas Center for
Policy Studies (TCPS) finds that the current water planning process in Texas
tends to over-estimate future water demand and under-estimate the potential for
making better use of existing supplies.<span style="mso-spacerun: yes;">
</span>Richard Lowerre, TCPS Executive Director, said “This report shows that,
with more reasonable demand projections and better use of conservation and
drought management, the demand/supply gap in 2060 is less than one-half that
predicted by the current 2012 State Water Plan issued by the Texas Water
Development Board. That is, rather than an 8.3 million acre-feet/year gap
between demand and supply in 2060, a more realistic gap is about 3.3 million
acre-feet/year.”<o:p></o:p></span></div>
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<span style="font-family: Calibri;">The report, <a href="http://www.texascenter.org/" target="_blank">Learning from Drought: Next Generation Water Planning for Texas,</a> analyzes the methods used by the state and the 16
regional water planning groups to develop demand and supply projections.<span style="mso-spacerun: yes;"> </span>“The region-based Texas water planning
process was groundbreaking when it first got off the ground 15 years ago.<span style="mso-spacerun: yes;"> </span>But, times and technologies have changed, and
it’s appropriate to look at how the planning process can evolve to give us a
better sense of real priorities,” said Mary Kelly, a consultant with Parula,
LLC and one of the report’s co-authors.<span style="mso-spacerun: yes;">
</span>“This is particularly important as the state begins to look at how to
spend the new $ 2 billion water infrastructure fund authorized by voters in
November 2013,” she added.<o:p></o:p></span></div>
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<span style="font-family: Calibri;">The report makes a number of recommendations for the future
of water planning in Texas.<span style="mso-spacerun: yes;"> </span>For example,
it recommends moving away from current “single scenario” forecasts to an
approach that looks at a range of future scenarios.<span style="mso-spacerun: yes;"> </span>“A multiple scenario approach would allow a
much more comprehensive look at the kind of choices we make about how water is
used and the expense of building new infrastructure versus more efficiently
using existing supplies,” said Joe Trungale, an water resources engineer and
co-author of the report.<o:p></o:p></span></div>
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<span style="font-family: Calibri;">Other recommendations include: <o:p></o:p></span></div>
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<!--[if !supportLists]--><span style="font-family: Symbol; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font-size-adjust: none; font-stretch: normal; font: 7pt/normal "Times New Roman";">
</span></span></span><!--[endif]--><span style="font-family: Calibri;">More reasonable assumptions about the need for
water for future steam electric generation; <o:p></o:p></span></div>
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<div class="MsoListParagraphCxSpMiddle" style="margin: 0in 0in 0pt 0.75in; mso-add-space: auto; mso-list: l0 level1 lfo1; text-indent: -0.25in;">
<!--[if !supportLists]--><span style="font-family: Symbol; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font-size-adjust: none; font-stretch: normal; font: 7pt/normal "Times New Roman";">
</span></span></span><!--[endif]--><span style="font-family: Calibri;">Enhanced consideration of drought contingency
planning as a supply strategy;<o:p></o:p></span></div>
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<!--[if !supportLists]--><span style="font-family: Symbol; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font-size-adjust: none; font-stretch: normal; font: 7pt/normal "Times New Roman";">
</span></span></span><!--[endif]--><span style="font-family: Calibri;">More thorough consideration of brackish
groundwater desalination as a supply strategy; <o:p></o:p></span></div>
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<!--[if !supportLists]--><span style="font-family: Symbol; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font-size-adjust: none; font-stretch: normal; font: 7pt/normal "Times New Roman";">
</span></span></span><!--[endif]--><span style="font-family: Calibri;">Gathering and using more accurate data on
current water use;<o:p></o:p></span></div>
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<!--[if !supportLists]--><span style="font-family: Symbol; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font-size-adjust: none; font-stretch: normal; font: 7pt/normal "Times New Roman";">
</span></span></span><!--[endif]--><span style="font-family: Calibri;">Making healthy rivers and bays and vibrant rural
economies co-equal with other goals of the water planning process.<o:p></o:p></span></div>
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<span style="font-family: Calibri;">“The drought has provided new insights into the
vulnerability of communities whose needs have been ignored and into the
willingness of Texans to adopt innovative and far-reaching water conservation
practices.<span style="mso-spacerun: yes;"> </span>Combined with the
developments in state water financing, a more prominent role for the Texas
Water Development Board and heightened public interest in water, now is the
time to examine whether we have a planning process that is up to the task,”
added Mr. Lowerre.<o:p></o:p></span></div>
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<i style="mso-bidi-font-style: normal;"><span style="font-family: Calibri;">The Texas Center for
Policy Studies is a 501(c)(3) non-profit, founded in 1983.<span style="mso-spacerun: yes;"> </span>The report is available on the TCPS website
at </span></i><a href="http://www.texascenter.org/"><i style="mso-bidi-font-style: normal;"><span style="color: blue; font-family: Calibri;">www.texascenter.org</span></i></a><i style="mso-bidi-font-style: normal;"><span style="font-family: Calibri;">. <o:p></o:p></span></i></div>
Texas Center for Policy Studieshttp://www.blogger.com/profile/06470944874060481347noreply@blogger.com2tag:blogger.com,1999:blog-3659760152032783164.post-69122120778284008072014-02-09T17:49:00.001-08:002014-02-09T17:49:47.925-08:00Kudos to SAWS; Time to Deal with the Day Case
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<span style="font-family: Calibri;">Last week, the </span><a href="http://www.texastribune.org/2014/02/06/after-years-debate-san-antonio-shelves-water-proje/"><span style="color: blue; font-family: Calibri;">San
Antonio Water System (SAWS) staff announced</span></a><span style="font-family: Calibri;"> 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.<span style="mso-spacerun: yes;"> </span>Instead, they recommended that SAWS pursue
expanded brackish ground water desalination, in partnership with the City
Public Service, San Antonio’s electric utility.<span style="mso-spacerun: yes;">
</span>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.<span style="mso-spacerun: yes;"> </span>Here is hoping that the SAWS board and the
Mayor give full support to this sensible approach.<o:p></o:p></span></div>
<span style="font-family: Calibri;">But, in the </span><a href="http://www.saws.org/latest_news/NewsDrill.cfm?news_id=962"><span style="color: blue; font-family: Calibri;">press release</span></a><span style="font-family: Calibri;">
announcing the decision, SAWS expressed concern about the role of groundwater
districts, saying:</span><br />
<span style="font-family: Calibri;"><o:p></o:p></span><br />
<i style="mso-bidi-font-style: normal;"><span style="font-family: "Calibri","sans-serif"; mso-ascii-theme-font: minor-latin; mso-hansi-theme-font: minor-latin;"><span style="mso-spacerun: yes;"> </span></span></i><i style="mso-bidi-font-style: normal;"><span style="font-family: "Calibri","sans-serif"; font-size: 11pt; mso-ascii-theme-font: minor-latin; mso-hansi-theme-font: minor-latin;">“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.”<o:p></o:p></span></i><br />
<i style="mso-bidi-font-style: normal;"><span style="font-family: "Calibri","sans-serif"; font-size: 11pt; mso-ascii-theme-font: minor-latin; mso-hansi-theme-font: minor-latin;"></span></i><br />
<i style="mso-bidi-font-style: normal;"><span style="font-family: "Calibri","sans-serif"; font-size: 11pt; mso-ascii-theme-font: minor-latin; mso-hansi-theme-font: minor-latin;">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. <o:p></o:p></span></i><br />
<i style="mso-bidi-font-style: normal;"><span style="font-family: Calibri;"></span></i><br />
<i style="mso-bidi-font-style: normal;"><span style="font-family: Calibri;">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.”<o:p></o:p></span></i><br />
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<span style="font-family: Calibri;">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 </span><a href="https://www.supreme.courts.state.tx.us/historical/2012/feb/080964.pdf"><i style="mso-bidi-font-style: normal;"><span style="color: blue; font-family: Calibri;">Edwards Aquifer Authority v. Day</span></i></a><span style="font-family: Calibri;">.<span style="mso-spacerun: yes;"> </span>As discussed in this </span><a href="http://www.texascenter.org/water/Ground%20Water%20in%20Texas%202013%20policy%20recommendations.pdf"><span style="color: blue; font-family: Calibri;">TCPS
report</span></a><span style="font-family: Calibri;">, the holding in <i style="mso-bidi-font-style: normal;">Day</i> pushes
groundwater districts into granting pumping permits to all-comers or risk being
dragged into expensive “takings” litigation.<span style="mso-spacerun: yes;">
</span>At the same time, however, the districts must also implement ground
water management plans that protect aquifer levels.<span style="mso-spacerun: yes;"> </span>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.<span style="mso-spacerun: yes;"> </span>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.<span style="mso-spacerun: yes;"> </span><o:p></o:p></span></div>
<span style="font-family: Calibri;">The <u>only</u> 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.<span style="mso-spacerun: yes;"> </span>Some districts do that
via shorter-term permits that must be periodically renewed.<span style="mso-spacerun: yes;"> </span>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.<span style="mso-spacerun: yes;"> </span>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.<span style="mso-spacerun: yes;"> </span><o:p></o:p></span><br />
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<span style="font-family: Calibri;">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.<span style="mso-spacerun: yes;"> </span>The central question that will need to be
addressed by the Legislature is: <span style="mso-spacerun: yes;"> </span><span style="mso-spacerun: yes;"> </span><b style="mso-bidi-font-weight: normal;">does
the <i style="mso-bidi-font-style: normal;">Day</i> case leave the state any
options for striking a balance that increases regulatory certainty while
providing for effective ground water conservation and management?<span style="mso-spacerun: yes;"> </span></b><o:p></o:p></span></div>
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<span style="font-family: Calibri;">Mary E. Kelly, for the Texas Center for Policy Studies<span style="mso-spacerun: yes;"> </span><o:p></o:p></span></div>
Texas Center for Policy Studieshttp://www.blogger.com/profile/06470944874060481347noreply@blogger.com0tag:blogger.com,1999:blog-3659760152032783164.post-41800683580468411932014-01-21T12:04:00.001-08:002014-01-21T12:04:41.557-08:00Groundwater Desalination: An Under-Projected Source of Supply?
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<span style="font-family: Calibri;">The </span><a href="http://www.texastribune.org/in-the-flow/vol-2/no-2/plenty-brackish-water-underground-still-elusive/"><span style="color: blue; font-family: Calibri;">challenges</span></a><span style="font-family: Calibri;">
and </span><a href="http://www.wef.org/about/StoryPage.aspx?story_id=194161513"><span style="color: blue; font-family: Calibri;">opportunities</span></a><span style="font-family: Calibri;">
in </span><a href="http://www.twdb.state.tx.us/innovativewater/desal/index.asp"><span style="color: blue; font-family: Calibri;">brackish
groundwater desalination</span></a><span style="font-family: Calibri;"> as a source of future water supply in Texas have
been receiving considerable attention lately.<span style="mso-spacerun: yes;">
</span>With a </span><a href="http://www.capitol.state.tx.us/tlodocs/83R/billtext/pdf/HC00059F.pdf#navpanes=0"><span style="color: blue; font-family: Calibri;">Joint
Interim Committee on Desalination</span></a><span style="font-family: Calibri;">, Senate Natural Resources Committee </span><a href="http://www.ltgov.state.tx.us/prview.php?id=511"><span style="color: blue; font-family: Calibri;">interim charges</span></a><span style="font-family: Calibri;"> that
include desalination, and a new </span><a href="http://www.texasdesal.com/"><span style="color: blue; font-family: Calibri;">Texas
Desalination Association</span></a><span style="font-family: Calibri;">, this area will continue to be a hot topic.<span style="mso-spacerun: yes;"> </span><o:p></o:p></span></div>
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<span style="font-family: Calibri;">Read </span><a href="http://www.texascenter.org/water/Groundwater%20Desalination.pdf"><span style="color: blue; font-family: Calibri;">our take</span></a><span style="font-family: Calibri;">
on how Texas water planning is (or is not) incorporating brackish groundwater
desalination into the future supply projections and what is needed to ensure the
full potential of this resource is recognized in the current round of planning.<o:p></o:p></span></div>
Texas Center for Policy Studieshttp://www.blogger.com/profile/06470944874060481347noreply@blogger.com0tag:blogger.com,1999:blog-3659760152032783164.post-15629075039873236622013-11-26T14:53:00.000-08:002013-11-26T14:53:19.187-08:00Financing A Sustainable Water Plan for Texas:Part 3This is the final installment in the three-part guest blog series from Sharlene Leuring. We will make all three blogs available as a PDF at <a href="http://www.texascenter.org/">www.texascenter.org</a> soon. <br />
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<b style="mso-bidi-font-weight: normal;"><span style="font-family: Cambria;">Installment 3: Financing Water Conservation and Efficiency <o:p></o:p></span></b></div>
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<span style="font-family: Cambria;">As the debate over Prop 6 played out, many </span><a href="http://www.austinchronicle.com/news/2013-10-25/prop-6-strange-bedfellows-on-both-sides/"><span style="color: blue; font-family: Cambria;">advocates
highlighted</span></a><span style="font-family: Cambria;"> the fact that the underlying legislation, </span><a href="http://www.legis.state.tx.us/tlodocs/80R/billtext/pdf/HB00004F.pdf#navpanes=0"><span style="color: blue; font-family: Cambria;">HB
4</span></a><span style="font-family: Cambria;">, provides that a certain percentage of funding should be dedicated to
water conservation and reuse.<span style="mso-spacerun: yes;"> </span>The specific
terms are important.<span style="mso-spacerun: yes;"> </span>HB 4 creates
section 15. 434(b) of the Texas Water Code, as follows (emphasis added):<o:p></o:p></span></div>
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<span style="color: white; font-family: Courier; font-size: 10pt; mso-bidi-font-family: Courier;"><o:p> </o:p></span><span style="font-family: Cambria;"><i style="mso-bidi-font-style: normal;"><span style="color: black; mso-ascii-font-family: Cambria; mso-ascii-theme-font: major-latin; mso-bidi-font-family: Courier; mso-hansi-font-family: Cambria; mso-hansi-theme-font: major-latin;">(b)</span></i><i style="mso-bidi-font-style: normal;"><span style="color: white; mso-ascii-font-family: Cambria; mso-ascii-theme-font: major-latin; mso-bidi-font-family: Courier; mso-hansi-font-family: Cambria; mso-hansi-theme-font: major-latin;">AA</span></i><i style="mso-bidi-font-style: normal;"><span style="color: black; mso-ascii-font-family: Cambria; mso-ascii-theme-font: major-latin; mso-bidi-font-family: Courier; mso-hansi-font-family: Cambria; mso-hansi-theme-font: major-latin;">Of the money disbursed from the fund during the five-year
period between the adoption of a state water plan and the adoption of a new plan,
the board shall <u>undertake to apply</u> not less than:<o:p></o:p></span></i></span></div>
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<i style="mso-bidi-font-style: normal;"><span style="color: black; mso-ascii-font-family: Cambria; mso-ascii-theme-font: major-latin; mso-bidi-font-family: Courier; mso-hansi-font-family: Cambria; mso-hansi-theme-font: major-latin;"><o:p><span style="font-family: Cambria;"> </span></o:p></span></i><span style="font-family: Cambria;"><i style="mso-bidi-font-style: normal;"><span style="color: black; mso-ascii-font-family: Cambria; mso-ascii-theme-font: major-latin; mso-bidi-font-family: Courier; mso-hansi-font-family: Cambria; mso-hansi-theme-font: major-latin;">(1)</span></i><i style="mso-bidi-font-style: normal;"><span style="color: white; mso-ascii-font-family: Cambria; mso-ascii-theme-font: major-latin; mso-bidi-font-family: Courier; mso-hansi-font-family: Cambria; mso-hansi-theme-font: major-latin;">AA</span></i><i style="mso-bidi-font-style: normal;"><span style="color: black; mso-ascii-font-family: Cambria; mso-ascii-theme-font: major-latin; mso-bidi-font-family: Courier; mso-hansi-font-family: Cambria; mso-hansi-theme-font: major-latin;">10 percent to support projects described by<o:p></o:p></span></i></span></div>
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<i style="mso-bidi-font-style: normal;"><span style="color: black; mso-ascii-font-family: Cambria; mso-ascii-theme-font: major-latin; mso-bidi-font-family: Courier; mso-hansi-font-family: Cambria; mso-hansi-theme-font: major-latin;"><span style="font-family: Cambria;">Section 15.435 that are for:<o:p></o:p></span></span></i></div>
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<span style="font-family: Cambria;"><i style="mso-bidi-font-style: normal;"><span style="color: black; mso-ascii-font-family: Cambria; mso-ascii-theme-font: major-latin; mso-bidi-font-family: Courier; mso-hansi-font-family: Cambria; mso-hansi-theme-font: major-latin;">(A)</span></i><i style="mso-bidi-font-style: normal;"><span style="color: white; mso-ascii-font-family: Cambria; mso-ascii-theme-font: major-latin; mso-bidi-font-family: Courier; mso-hansi-font-family: Cambria; mso-hansi-theme-font: major-latin;">AA</span></i><i style="mso-bidi-font-style: normal;"><span style="color: black; mso-ascii-font-family: Cambria; mso-ascii-theme-font: major-latin; mso-bidi-font-family: Courier; mso-hansi-font-family: Cambria; mso-hansi-theme-font: major-latin;">rural political subdivisions as defined by<o:p></o:p></span></i></span></div>
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<i style="mso-bidi-font-style: normal;"><span style="color: black; mso-ascii-font-family: Cambria; mso-ascii-theme-font: major-latin; mso-bidi-font-family: Courier; mso-hansi-font-family: Cambria; mso-hansi-theme-font: major-latin;"><span style="font-family: Cambria;">Section 15.992; or</span></span></i></div>
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<span style="font-family: Cambria;"><i style="mso-bidi-font-style: normal;"><span style="color: black; mso-ascii-font-family: Cambria; mso-ascii-theme-font: major-latin; mso-bidi-font-family: Courier; mso-hansi-font-family: Cambria; mso-hansi-theme-font: major-latin;">(B)</span></i><i style="mso-bidi-font-style: normal;"><span style="color: white; mso-ascii-font-family: Cambria; mso-ascii-theme-font: major-latin; mso-bidi-font-family: Courier; mso-hansi-font-family: Cambria; mso-hansi-theme-font: major-latin;">AA</span></i><i style="mso-bidi-font-style: normal;"><span style="color: black; mso-ascii-font-family: Cambria; mso-ascii-theme-font: major-latin; mso-bidi-font-family: Courier; mso-hansi-font-family: Cambria; mso-hansi-theme-font: major-latin;">agricultural water conservation; and<o:p></o:p></span></i></span></div>
<br />
<span style="font-family: Cambria;"><i style="mso-bidi-font-style: normal;"><span style="color: black; mso-ascii-font-family: Cambria; mso-ascii-theme-font: major-latin; mso-bidi-font-family: Courier; mso-hansi-font-family: Cambria; mso-hansi-theme-font: major-latin;">(2)</span></i><i style="mso-bidi-font-style: normal;"><span style="color: white; mso-ascii-font-family: Cambria; mso-ascii-theme-font: major-latin; mso-bidi-font-family: Courier; mso-hansi-font-family: Cambria; mso-hansi-theme-font: major-latin;">AA</span></i><i style="mso-bidi-font-style: normal;"><span style="color: black; mso-ascii-font-family: Cambria; mso-ascii-theme-font: major-latin; mso-bidi-font-family: Courier; mso-hansi-font-family: Cambria; mso-hansi-theme-font: major-latin;">20 percent to support projects described by Section
15.435, including agricultural irrigation projects that are designed for water
conservation or reuse.</span></i><i style="mso-bidi-font-style: normal;"><span style="mso-ascii-font-family: Cambria; mso-ascii-theme-font: major-latin; mso-hansi-font-family: Cambria; mso-hansi-theme-font: major-latin;"><o:p></o:p></span></i></span><br />
<br />
<div class="MsoNormal" style="margin: 0in 0in 0pt;">
<o:p><span style="font-family: Cambria;"> </span></o:p><span style="font-family: Cambria;">Even with this “undertake to apply” goal (which is a
minimum, not a maximum, of what can be spent on conservation), there are
serious questions about how TWDB can provide financial support for some types
of non-agricultural conservation strategies, especially those involving
improving assets held by private citizens or businesses outside of the
agricultural sector.<span style="mso-spacerun: yes;"> </span>This is important
because a significant portion of the state’s conservation potential is in
reducing the water footprint of homes, industry and businesses, something that often
requires replacing inefficient appliances, irrigation systems and industrial
equipment with water-efficient technologies.<span style="mso-spacerun: yes;">
</span>The central questions are (1) whether these improvements are amenable to
the type of “debt-financing” available through the Prop 6 funding and (2)
whether there are constitutional or other statutory prohibitions on using state
funds for these strategies since they would create a “private benefit.” <o:p></o:p></span></div>
<br />
<br />
<div class="MsoNormal" style="margin: 0in 0in 0pt;">
<span style="font-family: Cambria;">Because the TWDB already has a program for </span><a href="http://www.twdb.state.tx.us/financial/programs/AWCL/index.asp"><span style="color: blue; font-family: Cambria;">agricultural
conservation loans</span></a><span style="font-family: Cambria;">, the </span><a href="http://texascenterforpolicystudies.blogspot.com/2013/11/financing-sustainable-water-plan-for.html"><span style="color: blue; font-family: Cambria;">use
of Prop 6 funds through SWIFT</span></a><span style="font-family: Cambria;"> for those activities should be more
straightforward.<span style="mso-spacerun: yes;"> </span>The 2012 State Water
Plan projects significant needs for agricultural water conservation.<span style="mso-spacerun: yes;"> </span>For example, Region M projects that $ 132
million would be needed to conserve about 140,000 acre-feet/year in agriculture
by 2060.<span style="mso-spacerun: yes;"> </span>Region O projects a need to
invest $ 346 million <span class="msoDel"><del cite="mailto:Mary" datetime="2013-11-26T15:45"><span style="mso-spacerun: yes;"><span style="color: red;"> </span></span></del></span>in
agricultural efficiency measures to save 480,000 acre-feet per year, helping to
reduce pressure on the dwindling Ogallala aquifer. Given these needs and the
issues with financing customer-side efficiency improvements at the municipal
level, it may be that most of the conservation funding through SWIFT goes to
agricultural efficiency projects. (It is important to note that agricultural
efficiency programs don’t necessarily make more water available for other uses,
as farmers often use the water saved to expand crop production. However, there
are examples of arrangements in which water efficiency improvements on the farm
have yielded water for municipal or environmental uses.) <o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 0pt;">
<span style="font-family: Cambria;">Nevertheless, municipal conservation is a vital strategy for
Texas to balance growth with limited water supply.<span style="mso-spacerun: yes;"> </span>The remainder of this post looks at what
role, if any, Prop 6 might play to advance this strategy.<span style="mso-spacerun: yes;"> </span><o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 0pt;">
<b style="mso-bidi-font-weight: normal;"><span style="font-family: Cambria;">Debt-financing
municipal conservation measures<o:p></o:p></span></b></div>
<br />
<span style="font-family: Cambria;">The first question is <i style="mso-bidi-font-style: normal;">why</i>
municipal water systems would choose to debt-finance water efficiency
improvements for their customers? <o:p></o:p></span><br />
<br />
<div class="MsoNormal" style="margin: 0in 0in 0pt;">
<span style="font-family: Cambria;">Water conservation is actually a source of supply, just like
a reservoir or a desalination plant. The redefinition of water conservation
from a demand tool to a supply source was a major paradigm shift for water
providers, but is now commonly understood. Investments in water conservation
strategies with a clearly defined yield and lifetime can be debt-financed, and
repaid through revenue raised from a water suppliers’ customer payments, just
as they would pay back costs for any other water supply investment.<o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 0pt;">
<span style="font-family: Cambria;">It appears that the only source of municipal water
conservation to which the Board has provided financial assistance in the past
is the repair of leaky distribution systems—the aging pipes that move water
from the source to the customer. The amount of water lost in transport from
source to user can be significant. A 2010 survey by the Texas Water Development
Board found that, on average </span><a href="http://www.savetexaswater.org/doc/131119.WCAC-WL.pdf"><span style="color: blue; font-family: Cambria;">nearly 15%</span></a><span style="font-family: Cambria;"> of
water treated and sent through municipal systems is lost before ever reaching a
customer (based on 1,900 systems reporting data) <span style="mso-spacerun: yes;"> </span>Small systems serving 10,000 customers or
less averaged about 20% total water loss, and large systems with 100,000
customers or more averaged 15%. <o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 0pt;">
<span style="font-family: Cambria;">Because the replacement of a distribution system is an
investment in the water system’s own assets, it is a perfectly acceptable use
of debt funds.<span style="mso-spacerun: yes;"> </span>Thus, reducing system
water loss should be a desirable and authorized use of the SWIFT funds. <o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 0pt;">
<span style="font-family: Cambria;">However, there are other municipal conservation programs
aimed at individual water customers that can provide a reliable source of water
supply.<span style="mso-spacerun: yes;"> </span>The most reliable of these
“customer-side” approaches are those that replace physical systems, such as
programs that provide rebates or other incentives for replacement of
inefficient toilets or water boilers or for replacement of water-intensive
landscaping with water-efficient landscaping. <o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 0pt;">
<span style="font-family: Cambria;">These types of programs generally are more reliable in terms
of supply than those that rely on changes in customer behavior (changes which
may or may not be permanent and which are often influenced by perceptions of
immediate drought). <span style="mso-spacerun: yes;"> </span><o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 0pt;">
<span style="font-family: Cambria;">Through a a combination of appliance retrofits and lawn
buy-back programs, Las Vegas has saved over 59.3 billion gallons of water since
1999.<span style="mso-spacerun: yes;"> </span>The city has spent $200 million to
replace</span><span style="mso-bidi-font-family: "Lucida Bright"; mso-bidi-font-size: 16.0pt; mso-fareast-font-family: PMingLiU; mso-fareast-language: ZH-TW; mso-fareast-theme-font: minor-fareast;"><span style="font-family: Cambria;"> </span><a href="http://www.nytimes.com/2013/08/12/us/to-save-water-parched-southwest-cities-ask-homeowners-to-lose-their-lawns.html?_r=0"><span style="color: blue;"><span style="font-family: Cambria;">more
than 150<span style="mso-bidi-font-family: "Times New Roman"; mso-bidi-font-size: 12.0pt; mso-fareast-font-family: Cambria; mso-fareast-language: EN-US;"> million
square feet</span></span><span style="font-family: "Lucida Bright","serif"; font-size: 16pt;">
</span><span style="mso-bidi-font-family: "Times New Roman"; mso-bidi-font-size: 12.0pt; mso-fareast-font-family: Cambria; mso-fareast-language: EN-US;"><span style="font-family: Cambria;">of turf lawn</span></span></span></a></span><span style="font-family: Cambria;">
over the past decade, with long-term water savings guaranteed by covenants
ensuring that homeowners will not reinstall lawn they were paid to remove
unless they repay their rebate. <span style="mso-spacerun: yes;"> </span>Recently,
Austin Water announced it was launching its own </span><a href="http://austintexas.gov/department/waterwise-landscape-rebate"><span style="color: blue; font-family: Cambria;">lawn
buy-back program</span></a><span style="font-family: Cambria;">. <o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 0pt;">
<span style="font-family: Cambria;">Debt-backed capital investment programs allow water
utilities to mobilize far more capital today than cash-backed capital programs.
(For more explanation of the debt-financing envisioned by SWIFT, including a
glossary of terms, see </span><a href="http://texascenterforpolicystudies.blogspot.com/2013/11/financing-sustainable-water-plan-for.html"><span style="color: blue; font-family: Cambria;">Installment
1</span></a><span style="font-family: Cambria;"> in this blog series).<span style="mso-spacerun: yes;"> </span>The benefit
of debt-financing is that water systems can borrow the money for what is needed
today, with future repayment backed by a pledge of future customer revenues. In
comparison, cash spent today must be available today. Since water systems raise
their cash from customer payments, a cash-financed program typically means
higher rates today than a debt-backed program. As a result, debt-financed
programs allow water systems to smooth the increase in customers’ rates. <o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 0pt;">
<span style="font-family: Cambria;">Debt cannot be used for behavior change programs—the debt
issued for a capital program must be used to finance the construction,
acquisition or improvement of capital assets. It cannot be used for operations
and maintenance (for example, paying the energy bills for a water treatment
plant) or for public outreach programs (for example, media campaigns to educate
water users about conservation). These aren’t rules set in Texas, they are
rules set by the Governmental Accounting Standards Board, the entity that
defines accounting standards for the municipal bond market in which the Texas
Water Development Board participates. <o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 0pt;">
<span style="font-family: Cambria;">But efficiency programs with a defined water yield are an
investment in a capital asset—water supply—and should thus qualify for debt
financing. And, in fact, there are water systems that use bond proceeds to
finance customer efficiency programs. Seattle Public Utilities has used debt
funds to finance the retrofitting of toilets and other water-using devices with
low-flow replacements. <span style="mso-spacerun: yes;"> </span>In Seattle what
made this possible was defining the “asset” being financed not as toilets, but as
the long-term water savings gained by toilet retrofits.<o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 0pt;">
<span style="font-family: Cambria;">The potential for water efficiency investments on customers’
property does not end with toilets or turf grass. Institutional irrigation
systems, industrial machinery, any physical water distribution or water-using
device with a long lifetime can be a source of long-term water savings, and therefore
supply. And Texas is uniquely positioned to unlock the water savings in its
industrial, commercial and institutional sectors with the passage last session
of the Property Assessed Clean Energy Act.<span style="mso-spacerun: yes;">
</span>This new law </span><a href="http://www.keepingpaceintexas.org/about-pace/"><span style="color: blue;"><span style="font-family: Cambria;"><span style="mso-spacerun: yes;"> </span>permits municipalities to use bonds to finance
customer loan programs for energy and water conservation purposes</span></span></a><span style="font-family: Cambria;">,
including water conservation systems, high efficiency irrigation equipment,
on-site improvements to use municipal reclaimed water, and more. <span style="mso-spacerun: yes;"> </span>This type of bond (called a PACE bond) is
repaid through tax assessments that remain attached to the property no matter
who the future owner may be. The PACE bond concept holds significant potential
for funding a transformation in the water intensity of Texas’ economy..<o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 0pt;">
<span style="font-family: Cambria;">So, if it is desirable to pursue a large-scale customer
efficiency program (and if such approaches are included in the state water
plan), and if debt financing would make it easier to do that, SWIFT funds would
be made available for that purpose, right? Not necessarily. <o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 0pt;">
<span style="font-family: Cambria;"><b style="mso-bidi-font-weight: normal;">Public Purpose v.
Private Benefit</b> <o:p></o:p></span></div>
<br />
<span style="font-family: Cambria;">The ability to use SWIFT funds for these customer-side
efficiency improvements largely comes down to whether programs that improve an
asset owned by a private citizen or a business can be financed with public
monies. <o:p></o:p></span><br />
<br />
<div class="MsoNormal" style="margin: 0in 0in 0pt;">
<span style="font-family: Cambria;">Texas, like most states, has a Constitutional prohibition
against the use of public funds for private benefit, something called “the gift
clause.” <span style="mso-spacerun: yes;"> </span>As discussed in </span><a href="http://www.utexas.edu/law/centers/energy/blog/2013/03/proposed-constitutional-amendment-could-help-state-achieve-its-conservation-goals/"><span style="color: blue; font-family: Cambria;">this
post</span></a><span style="font-family: Cambria;"> by the Energy Center at the University of Texas School of Law, Article
III, Sec. 52(a) of the Texas Constitution prohibits the state from lending
credit or granting money to “any individual, association or corporation
whatsoever,” a prohibition that can be relaxed for activities that would enable
a public purpose. <span style="mso-spacerun: yes;"> </span><o:p></o:p></span></div>
<br />
<span style="font-family: Cambria;">Defining a public purpose is where the complications begin,
however.<span style="mso-spacerun: yes;"> </span>In many instances, legislators
have opted to explicitly authorize the use of state financing for specific activities
rather than leave to the courts what might be reasonably construed to serve a
public purpose. Such is the case with toll roads, for which purpose the state’s
credit has been authorized in numerous amendments. <o:p></o:p></span><br />
<br />
<div class="MsoNormal" style="margin: 0in 0in 0pt;">
<span style="font-family: Cambria;">In fact, one piece of legislation from the 2013 session
attempted to do just that for water conservation. </span><a href="http://www.capitol.state.tx.us/BillLookup/History.aspx?LegSess=83R&Bill=HJR142"><span style="color: blue; font-family: Cambria;">House
Joint Resolution 142</span></a><span style="font-family: Cambria;">, filed by Chairman </span><a href="http://www.house.state.tx.us/members/member-page/?district=21"><span style="color: blue; font-family: Cambria;">Alan
Ritter</span></a><span style="font-family: Cambria;"> (the House sponsor of H.B. 4), would have expressly defined water
conservation as a public purpose eligible for state funding.<span style="mso-spacerun: yes;"> </span>As filed, HJR 142 provided that <span style="mso-spacerun: yes;"> </span>“<span style="color: black; mso-bidi-font-size: 8.0pt;">[n]otwithstanding any other provision of this constitution, the
legislature may provide for the creation of programs and the making of loans
and grants of public money, other than money otherwise dedicated by this
constitution to use for a different purpose, for the public purpose of water
conservation.”</span><span style="mso-bidi-font-size: 10.0pt;"> <o:p></o:p></span></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 0pt;">
<span style="font-family: Cambria;">Unfortunately, H.J.R. 142 did not advance through the
legislature, leaving the question of whether the Board or other state agencies
can lend their credit for the public purpose of municipal water conservation
open to the determination of the Texas Water Development Board and for
potential challenge in the courts. <span style="font-family: Times; font-size: 10pt;"><o:p></o:p></span></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 0pt;">
<span style="font-family: Cambria;">Texas does have some history of using state credit for
private benefit that serves a public purpose. One example is the use of TWDB
funds to address the lack of safe drinking water and sewage treatment in
colonias along the Mexican border. (The following is adapted from email
correspondence with former bond counsel to the TWDB.) In the 1990s, the Board
deliberated whether the gift clause prohibited it from making financing
available for connections of homes water and wastewater utilities. Ultimately,
the Board decided that as long as four tests were met, use of public funds
would not constitute an unlawful gift or lending of credit. The four tests
were:<o:p></o:p></span></div>
<br />
<ol>
<li><div class="MsoNormal" style="margin: 0in 0in 0pt;">
<o:p><span style="font-family: Cambria;"> </span></o:p><span style="font-family: Cambria;">Does the expenditure serve
a public purpose?<o:p></o:p></span></div>
</li>
<li class="MsoNormal" style="margin: 0in 0in 0pt; mso-list: l0 level1 lfo1;"><span style="font-family: Cambria;">Are there sufficient
controls on the expenditure to ensure that the public purpose will be
carried out?<o:p></o:p></span></li>
<li class="MsoNormal" style="margin: 0in 0in 0pt; mso-list: l0 level1 lfo1;"><span style="font-family: Cambria;">Is the public protected in
the use of public funds to accomplish the intended result?<o:p></o:p></span></li>
<li class="MsoNormal" style="margin: 0in 0in 0pt; mso-list: l0 level1 lfo1;"><span style="font-family: Cambria;">Has the political
subdivision making the expenditure adequately considered this use of
funds?<o:p></o:p></span></li>
</ol>
<br />
<div class="MsoNormal" style="margin: 0in 0in 0pt;">
<span style="font-family: Cambria;">If TWDB defines water conservation as a public purpose in
its prioritization and rulemaking processes, and if it ensures sufficient
controls over the use of funds to achieve that purpose (such as audits of water
savings, installation of water-saving devices and deed restrictions or other
assurances for their longevity), the TWDB would likely have sufficient grounds
to include customer-side municipal water conservation programs as eligible for
SWIFT funds. <span style="mso-spacerun: yes;"> </span>Using SWIFT funding for
customer-side municipal water efficiency programs could help ramp up this
cost-effective water supply strategy in communities across the state. <o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 0pt;">
<span style="font-family: Cambria;">Effective use of the Prop 6 conservation earmark to include
these programs will require a change in practice and perspective and clear
rules from the TWDB, (and it will require that such programs be explicitly
included as strategies or projects in the state water plan).<o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 0pt;">
<o:p><span style="font-family: Cambria;"> </span></o:p></div>
Texas Center for Policy Studieshttp://www.blogger.com/profile/06470944874060481347noreply@blogger.com2tag:blogger.com,1999:blog-3659760152032783164.post-47567837381579990142013-11-21T10:24:00.001-08:002013-11-21T10:24:09.629-08:00Financing a Sustainable Water Plan for Texas: Part 2<a href="https://www.blogger.com/" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"></a><a href="https://www.blogger.com/" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"></a><a href="https://www.blogger.com/" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"></a><a href="https://www.blogger.com/" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"></a><a href="https://www.blogger.com/" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"></a><a href="https://www.blogger.com/" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"></a><a href="https://www.blogger.com/" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"></a><br />
<div class="MsoNormal" style="margin: 0in 0in 0pt;">
<span style="font-family: Cambria;"><b style="mso-bidi-font-weight: normal;">Installment 2:
Relationship Between Prop 6 and State Water Plan</b><br style="mso-special-character: line-break;" />
<!--[if !supportLineBreakNewLine]--><br style="mso-special-character: line-break;" />
<!--[endif]--></span><span style="font-family: Cambria;">Proposition 6 arose from debate about the need to “fund
implementation” of the State Water Plan.<span style="mso-spacerun: yes;">
</span>But, the current state plan may not be the best roadmap for expenditure
of the new funds. <span style="mso-spacerun: yes;"> </span>A few charts from the
</span><a href="http://www.twdb.state.tx.us/waterplanning/swp/index.asp"><span style="color: blue; font-family: Cambria;">2012 State
Water Plan</span></a><span style="font-family: Cambria;"> illustrate the concerns. .<o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 0pt;">
<o:p><span style="font-family: Cambria;"> </span></o:p><span style="font-family: Cambria;">We’ll start with the plan’s projection of future water
demand.<o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 0pt;">
<b style="mso-bidi-font-weight: normal;"><o:p><span style="font-family: Cambria;"> </span></o:p></b><div class="separator" style="clear: both; text-align: center;">
<b style="mso-bidi-font-weight: normal;"><span style="font-family: Cambria;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhkgjLEkDCj2FaGxkXHN9VHcCuEzHElftujFEytfoGeIiyAex6l-Fs-9DeSgx75Vx28OOctHRR91jAgzIBKSgxsWEHEjoeX2dG6geCjdf_F4iNEltvU7eYSGrpA3WnbtJCIocZZI-P5riAT/s1600/finance+2+figure+one.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhkgjLEkDCj2FaGxkXHN9VHcCuEzHElftujFEytfoGeIiyAex6l-Fs-9DeSgx75Vx28OOctHRR91jAgzIBKSgxsWEHEjoeX2dG6geCjdf_F4iNEltvU7eYSGrpA3WnbtJCIocZZI-P5riAT/s1600/finance+2+figure+one.png" height="215" width="320" /></a></span></b></div>
<br />
</div>
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<span style="font-family: Cambria;">The biggest increase in of projected water demand growth by
far is for municipal households and businesses. <span style="mso-spacerun: yes;"> </span>This municipal demand projection drives the
total projected 2060 capital cost of the water plan, accounting for $ 45.8
billion of the $53 billion total (86%). </span><br />
<span style="font-family: Cambria;"></span><br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiNPF1elt3mOF1xIA_0JdiBGO1saNS_gGFKW7hvcA8ShsEubBljbZnRbEJ_R83-iYXggz26G4ANE2ZvFdUAcB95cMrwmIgsrDQy41TQkQzHhrQGTiBVrSRxT1hm17j2moP-YvqYEC3qoTYr/s1600/finance+2+figure+two.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiNPF1elt3mOF1xIA_0JdiBGO1saNS_gGFKW7hvcA8ShsEubBljbZnRbEJ_R83-iYXggz26G4ANE2ZvFdUAcB95cMrwmIgsrDQy41TQkQzHhrQGTiBVrSRxT1hm17j2moP-YvqYEC3qoTYr/s1600/finance+2+figure+two.png" height="195" width="320" /></a></div>
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<o:p><span style="font-family: Cambria;"></span></o:p><br />
<span style="font-family: Cambria;">The 2012 plan projections are based on the assumption that
municipal demand will rise in direct proportion to population growth.<span style="mso-spacerun: yes;"> </span>These projections do not consider changes in
land use or changes in consumer behavior that have resulted in state household
water use falling 8 % over the past decade.<span style="mso-spacerun: yes;">
</span>As discussed in a separate </span><a href="http://www.ceres.org/resources/reports/assessing-water-system-revenue-risk-considerations-for-market-analysts/view"><span style="color: blue; font-family: Cambria;">analysis</span></a><span style="font-family: Cambria;">,
the linear increase assumption is likely resulting in a substantial over-projection
of future municipal demand.<span style="mso-spacerun: yes;"> </span><o:p></o:p></span><br />
<span style="font-family: Cambria;"></span><br />
<span style="font-family: Cambria;">In any case, to meet this projected demand, the Regional
Groups say they plan to steadily add new supply over the coming fifty years. (This
figure includes new water supply for all types of uses, not just municipal, but
municipal use accounts for the majority of the new projected supply).</span><br />
<span style="font-family: Cambria;"></span><br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi_iboDWInJACY-Hl1bkWJU8xJUsMJTGwCb0a5-JAPwyGIO6xscs_tvonOMQSzsVPlbrYE6enZ6lEX0oqyd8MWdotULQJukIDkvYH2SBHB2stjMb9JNySvpuN9L0kfixTux1iRYIgHv7B8n/s1600/finance+2+figure+three.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi_iboDWInJACY-Hl1bkWJU8xJUsMJTGwCb0a5-JAPwyGIO6xscs_tvonOMQSzsVPlbrYE6enZ6lEX0oqyd8MWdotULQJukIDkvYH2SBHB2stjMb9JNySvpuN9L0kfixTux1iRYIgHv7B8n/s1600/finance+2+figure+three.png" height="144" width="320" /></a></div>
<span style="font-family: Cambria;"><o:p></o:p></span><br />
<br />
<div class="MsoNormal" style="margin: 0in 0in 0pt;">
<span style="font-family: Cambria;">But, here is how the regional water planning groups translate
these water demand and supply projections into in state financing needs. <o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 0pt;">
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiBRNtsVRSJ8ugWiClpyhIwXnmab5hOjg4-D9siURiaQDWxua71IogprRuUqkApeaNb9IEx2IDDRtXiuit_T1j0yaGy-u-te2N62C9Y46JS-e3L-cAYwqRxXyLi9d6DvsYcejlS5rem1Ndf/s1600/finance+2+figure+four.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiBRNtsVRSJ8ugWiClpyhIwXnmab5hOjg4-D9siURiaQDWxua71IogprRuUqkApeaNb9IEx2IDDRtXiuit_T1j0yaGy-u-te2N62C9Y46JS-e3L-cAYwqRxXyLi9d6DvsYcejlS5rem1Ndf/s1600/finance+2+figure+four.png" height="176" width="320" /></a></div>
<b style="mso-bidi-font-weight: normal;"><o:p></o:p></b> </div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 0pt;">
<b style="mso-bidi-font-weight: normal;"><o:p><span style="font-family: Cambria;"> </span></o:p></b></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 0pt;">
<span style="font-family: Cambria;">This graph looks dramatically different from the previous
graphs. <span style="mso-spacerun: yes;"> </span>In fact, a full 58% of the total
amount of state financial support sought by the regional groups is requested
for the first decade to serve a potential future demand that would not emerge
for decades according to their own projection—and may not emerge at all if the
projections are over-stated. <o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 0pt;">
<o:p><span style="font-family: Cambria;"> </span></o:p></div>
<div class="MsoNormal" style="margin: 0in 0in 0pt;">
<span style="font-family: Cambria;">Remember that SWIFT would be a lending program where the
loans are repaid by borrowers—borrowers that receive revenues from their
customers. This means that what we build will be paid for by ratepayers and the
loans must be repaid whether or not what is built is actually needed.<span style="mso-spacerun: yes;"> </span>If actual demand is less than projected
demand, then rates could have to be increased substantially to pay back the
loans (not to mention the disincentive for conservation if demand falls short
of projections).<o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 0pt;">
<o:p><span style="font-family: Cambria;"> </span></o:p><span style="font-family: Cambria;">This is where the link to HB 4 and prioritization of
projects becomes extremely important.<span style="mso-spacerun: yes;">
</span>The prioritization process (which we have described previously </span><a href="http://texascenterforpolicystudies.blogspot.com/2013/06/understanding-house-bill-4_30.html"><span style="color: blue; font-family: Cambria;">here</span></a><span style="font-family: Cambria;">)
was recognized by the legislature as essential to ensuring that state funds are
efficiently managed for the greatest public benefit.<span style="mso-spacerun: yes;"> </span>It is also an implicit recognition that not
all the projects in the 2012 state water plan will need state funding (or will
even be needed at all).<span style="mso-spacerun: yes;"> </span><o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 0pt;">
<span style="font-family: Cambria;"><span style="mso-spacerun: yes;"> </span></span><span style="font-family: Cambria;">Thus, the prioritization process must ensure that state
financial assistance from Prop 6 is both cost-effective and takes into account the
possibility that future municipal demands may be substantially less than
projected. <span style="mso-spacerun: yes;"> </span>A slow but steady approach to
investment in water supply strategies that will meet a clearly demonstrated
need in the near-term would be the most fiscally responsible approach to
management of the new Prop 6 funds.<span style="mso-spacerun: yes;"> </span>And
the prioritization process, carefully implemented, is the tool the Texas Water
Development Board needs to structure that fiscally-responsible approach.<span style="mso-spacerun: yes;"> </span><o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 0pt;">
<o:p><span style="font-family: Cambria;"> </span></o:p></div>
<span style="font-family: Cambria;">One essential component of this slow but steady funding
approach is investment in helping Texans to reduce their water demand (and save
money) by implementing cost-effective efficiency measures. <span style="mso-spacerun: yes;"> </span>These measures, given time to take hold, can </span><a href="http://texascenterforpolicystudies.blogspot.com/2013/07/region-c-reality-check-would-reduce.html"><span style="color: blue; font-family: Cambria;">postpone
or even avoid</span></a><span style="font-family: Cambria;"> the need for massive, expensive new supply projects. <o:p></o:p></span><br />
<br />
<div class="MsoNormal" style="margin: 0in 0in 0pt;">
<o:p><span style="font-family: Cambria;"> </span></o:p><span style="font-family: Cambria;">House Bill 4 requires the Texas Development Board to
allocate some of the Prop 6 funds toward water conservation. Specifically, H.B.
4 directs the Board to make “premium financing” options available for
conservation and water reuse, with at least 20% of the SWIFT funds meant to
flow toward these purposes. Yet, many of the conservation strategies in the
2012 plan do not have an associated capital cost, making them unlikely
candidates for recipients of the Board’s lending program. Whether Prop 6 funds
managed by the Board can effectively be used to achieve this allocation toward
water conservation is the subject of our next post.<o:p></o:p></span></div>
Texas Center for Policy Studieshttp://www.blogger.com/profile/06470944874060481347noreply@blogger.com2tag:blogger.com,1999:blog-3659760152032783164.post-77929822939376722882013-11-20T12:54:00.001-08:002013-11-20T12:54:59.898-08:00Financing a Sustainable Water Plan for Texas
<br />
<div class="MsoNormal" style="margin: 0in 0in 0pt;">
<span style="font-family: Cambria;">In a series of three guest blogs over the next several days,
</span><a href="http://hellsoasis.tumblr.com/"><span style="color: blue; font-family: Cambria;">Sharlene Leurig</span></a><span style="font-family: Cambria;">, Water Program Director
for </span><a href="http://www.ceres.org/"><span style="color: blue; font-family: Cambria;">CERES</span></a><span style="font-family: Cambria;">, examines the details of </span><a href="http://www.twdb.state.tx.us/swift/index.asp"><span style="color: blue; font-family: Cambria;">Proposition 6</span></a><span style="font-family: Cambria;">, the water
project financing measure </span><a href="http://kut.org/post/how-prop-6-passed-and-what-s-next-water-projects-texas"><span style="color: blue; font-family: Cambria;">approved</span></a><span style="font-family: Cambria;">
by Texas voters on November 5<sup><span style="font-size: x-small;">th</span></sup>.<span style="mso-spacerun: yes;">
</span>Proposition 6 amends the Texas constitution to appropriate $2 billion
from the state’s Rainy Day Fund to seed a new water infrastructure loan fund directed
to water supply projects included in the State Water Plan.<span style="mso-spacerun: yes;"> </span><o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 0pt;">
<o:p><span style="font-family: Cambria;"> </span></o:p><span style="font-family: Cambria;">Sharlene’s three posts examine how this new fund will work
(in concert with House Bill 4, passed in the recent session of the Texas
legislature) and what it could achieve—or fail to achieve—in terms of Texas’
water security.<span style="mso-spacerun: yes;"> </span>Today’s post focuses on
the mechanics of the fund and what choices the Texas Water Development Board
(TWDB) is likely to face in ensuring that the $ 2 billion appropriation is used
for maximum public benefit.<span style="mso-spacerun: yes;"> </span>The second
post looks at how administration of the fund will be affected by the new
project prioritization process authorized by </span><a href="http://www.legis.state.tx.us/tlodocs/80R/billtext/pdf/HB00004F.pdf#navpanes=0"><span style="color: blue; font-family: Cambria;">House
Bill 4</span></a><span style="font-family: Cambria;">, the companion legislation passed earlier this year.<span style="mso-spacerun: yes;"> </span>The third post explores whether and how the
fund can be used to support water conservation projects.<span style="mso-spacerun: yes;"> </span><o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 0pt; text-align: center;">
<o:p><span style="font-family: Cambria;"> </span></o:p><b style="mso-bidi-font-weight: normal;"><span style="font-family: Cambria;">Installment 1: Proposition 6 and the Mechanics of <o:p></o:p></span></b></div>
<br />
<div align="center" class="MsoNormal" style="margin: 0in 0in 0pt; text-align: center;">
<b style="mso-bidi-font-weight: normal;"><span style="font-family: Cambria;">Funding State Water Plan Projects<o:p></o:p></span></b></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 0pt;">
<span style="font-family: Cambria;">This post examines how the new infrastructure loan fund will
operate and the choices that will need to be made to ensure that the funds are
allocated for maximum public benefit.<span style="mso-spacerun: yes;"> </span>It
explores the tensions between using the new fund for “state participation” in longer-term,
big-ticket projects, such as reservoirs and pipelines, versus distributing
funds more widely to smaller, near-term projects across the state.<span style="mso-spacerun: yes;"> </span>(<i style="mso-bidi-font-style: normal;">Note:
the following discussion draws on an </i></span><a href="http://www.utexas.edu/law/academics/centers/energy/wp/wp-content/uploads/centers/energy/HB-4-White-Paper-Final.pdf"><i style="mso-bidi-font-style: normal;"><span style="color: blue; font-family: Cambria;">excellent analysis</span></i></a><span style="font-family: Cambria;"><i style="mso-bidi-font-style: normal;"> of the mechanics of Prop 6 and differences
with existing financing mechanisms by the Energy Center at the University of
Texas School of Law</i>.) <o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 0pt;">
<span style="font-family: Cambria;">The </span><a href="http://www.twdb.state.tx.us/waterplanning/swp/index.asp"><span style="color: blue; font-family: Cambria;">2012 State Water
Plan</span></a><span style="font-family: Cambria;"> estimates that the cumulative capital cost of all recommended water
management strategies through 2060 would be $53.1 billion, only $26 billion of
which the Regional Planning Groups reported could be financed through local
capacity.<span style="mso-spacerun: yes;"> </span>As part of the </span><a href="http://www.twdb.state.tx.us/waterplanning/swp/2012/index.asp"><span style="color: blue; font-family: Cambria;">2012 Plan</span></a><span style="font-family: Cambria;">,
TWDB recommended that the Legislature “develop a long-term, affordable, and
sustainable method to provide financing assistance for the implementation of
the state water plan.”<o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 0pt;">
<o:p><span style="font-family: Cambria;"> </span></o:p><span style="font-family: Cambria;">This recommendation was taken up by the Legislature in the
2013 session in three pieces of legislation: <span style="background: white; color: black; mso-bidi-font-size: 8.0pt;">House Bill 4, House Bill 1025 and Senate
Joint Resolution 1. Collectively, these bills: <span style="mso-spacerun: yes;"> </span>restructured the Texas Water Development Board
(see TCPS’s post on the restructuring </span></span><a href="http://www.texascenterforpolicystudies.blogspot.com/2013_06_01_archive.html"><span style="background: white; mso-bidi-font-size: 8.0pt;"><span style="color: blue; font-family: Cambria;">here</span></span></a><span style="background: white; color: black; mso-bidi-font-size: 8.0pt;"><span style="font-family: Cambria;">), established
the </span></span><a href="http://www.twdb.state.tx.us/newsmedia/swift/doc/implementaton_deadlines.pdf"><span style="background: white; mso-bidi-font-size: 8.0pt;"><span style="color: blue; font-family: Cambria;">State Water Implementation
Fund for Texas (SWIFT)</span></span></a><span style="font-family: Cambria;"><span style="background: white; color: black; mso-bidi-font-size: 8.0pt;">; and sent voters a ballot proposition to approve
the transfer of $2 billion from the Economic Stabilization Fund (“Rainy Day
Fund”) to SWIFT. With Proposition 6 approval, the $2 billion will be
permanently transferred from the State Treasury to a trust held by the state on
behalf of the Texas Water Development Board, to be used exclusively for the
financing of </span>recommended water management strategies in the State Water
Plan<span style="background: white; color: black; mso-bidi-font-size: 8.0pt;">.<o:p></o:p></span></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 0pt;">
<span style="font-family: Cambria;">TWDB is the state’s water infrastructure financing agency,
providing $14.3 billion in loans for water and wastewater infrastructure across
the state over the last 56 years. TWDB makes use of its superior credit rating
and low borrowing costs to raise money through bond sales. It then lends that
money to local sponsors of water projects at a lower interest rate than what would
be available to the local if it sold its own bonds in the open market. For very
small systems, the subsidized lending made available by the TWDB is especially
critical as they have fewer options for borrowing money.<span style="mso-spacerun: yes;"> </span><span style="background: white; color: black; mso-bidi-font-size: 8.0pt;"><span style="mso-spacerun: yes;"> </span><o:p></o:p></span></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 0pt;">
<span style="background: white; color: black; mso-bidi-font-size: 8.0pt;"><o:p><span style="font-family: Cambria;"> </span></o:p></span><span style="font-family: Cambria;"><span style="background: white; color: black; mso-bidi-font-size: 8.0pt;">Despite this substantial amount of financing activity at the
state level, Texas water infrastructure needs have been growing, while TWDB’s
lending capacity has been limited by Article III, </span>§ 49 of the state
Constitution, which generally prohibits the state from issuing debt without
voter-approved expansion of constitutional authority.<span style="background: white; color: black; mso-bidi-font-size: 8.0pt;"><o:p></o:p></span></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 0pt;">
<o:p><span style="font-family: Cambria;"> </span></o:p><span style="font-family: Cambria;">In 2011, Texas voters approved a constitutional amendment
granting TWDB authority to issue up to $6 billion worth of debt for the Texas
Water Development Fund II.<span style="mso-spacerun: yes;"> </span>One of the
issues in the Prop 6 election was the difference between the new Prop 6 funding
and the previously authorized $6 billion.<span style="mso-spacerun: yes;">
</span>The answer generally comes down to the state’s constitutional debt
limit. <o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 0pt;">
<o:p><span style="font-family: Cambria;"> </span></o:p><span style="font-family: Cambria;">While bonds sold under this new authority were considered
“self-sustaining” they are counted against the debt limit of the state—which
prohibits new bond issuances when the percentage of debt service payable by
general revenue in any fiscal year exceeds 5% of the average unrestricted
general revenue for the past three years. This can theoretically limit the
ability of the TWDB to issue future bonds. <span style="mso-spacerun: yes;"> </span>So while the TWDB technically could have $6
billion of active market debt, it is constrained in its own debt issuance by
the larger set of debt obligations undertaken by other Texas agencies and by
the state’s constitutional debt limit.<span style="mso-spacerun: yes;"> </span><o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 0pt;">
<o:p><span style="font-family: Cambria;"> </span></o:p><span style="font-family: Cambria;">Thus, H.B. 4 and Prop 6 seek to create a self-sustaining
funding mechanism for water supply projects that can grow beyond the initial $2
billion allocation without bumping up against the state’s debt limit. That is,
the $2 billion can be used to fund much more than $2 billion in capital costs,
but the total amount of financing will depend on how the funds are used.<o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 0pt; text-align: center;">
<o:p><span style="font-family: Cambria;"> </span></o:p><span style="font-family: Cambria;">________________________________<o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 0pt;">
<o:p><span style="font-family: Cambria;"> </span></o:p></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 0pt;">
<span style="font-family: Cambria;">Table 1 provides a definition of some terms that are key to
understanding the specifics of the new financing mechanisms.<o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 0pt;">
<o:p><span style="font-family: Cambria;"> </span></o:p></div>
<div align="center" class="MsoNormal" style="margin: 0in 0in 0pt; text-align: center;">
<b style="mso-bidi-font-weight: normal;"><i style="mso-bidi-font-style: normal;"><span style="font-family: Cambria;">Table 1. Glossary of Key Terms
(adapted from </span></i></b><a href="http://www.investopedia.com/"><b style="mso-bidi-font-weight: normal;"><i style="mso-bidi-font-style: normal;"><span style="color: blue; font-family: Cambria;">Investopedia</span></i></b></a><b style="mso-bidi-font-weight: normal;"><i style="mso-bidi-font-style: normal;"><span style="font-family: Cambria;">)<o:p></o:p></span></i></b></div>
<br />
<div align="center" class="MsoNormal" style="margin: 0in 0in 0pt; text-align: center;">
<b style="mso-bidi-font-weight: normal;"><i style="mso-bidi-font-style: normal;"><span style="font-family: "Calibri","sans-serif"; font-size: 9pt; mso-ascii-theme-font: minor-latin; mso-hansi-theme-font: minor-latin;"><o:p> </o:p></span></i></b></div>
<br />
<table border="1" cellpadding="0" cellspacing="0" class="MsoTableLightShading" style="border-collapse: collapse; border: currentColor; mso-border-bottom-alt: solid black 1.0pt; mso-border-bottom-themecolor: text1; mso-border-top-alt: solid black 1.0pt; mso-border-top-themecolor: text1; mso-padding-alt: 0in 5.4pt 0in 5.4pt; mso-yfti-tbllook: 1184;">
<thead>
<tr style="mso-yfti-firstrow: yes; mso-yfti-irow: -1;">
<td style="background-color: transparent; border-color: black rgb(0, 0, 0); border-style: solid none; border-width: 1pt 0px; mso-border-bottom-themecolor: text1; mso-border-top-themecolor: text1; padding: 0in 5.4pt; width: 135.9pt;" valign="top" width="181">
<div class="MsoNormal" style="margin: 0in 0in 0pt; mso-yfti-cnfc: 5;">
<b><span style="color: black; font-family: "Calibri","sans-serif"; font-size: 9pt; mso-ascii-theme-font: minor-latin; mso-hansi-theme-font: minor-latin; mso-themecolor: text1; mso-themeshade: 191;">Term<o:p></o:p></span></b></div>
</td>
<td style="background-color: transparent; border-color: black rgb(0, 0, 0); border-style: solid none; border-width: 1pt 0px; mso-border-bottom-themecolor: text1; mso-border-top-themecolor: text1; padding: 0in 5.4pt; width: 342.9pt;" valign="top" width="457">
<div class="MsoNormal" style="margin: 0in 0in 0pt; mso-yfti-cnfc: 1;">
<b><span style="color: black; font-family: "Calibri","sans-serif"; font-size: 9pt; mso-ascii-theme-font: minor-latin; mso-hansi-theme-font: minor-latin; mso-themecolor: text1; mso-themeshade: 191;">Brief definition<o:p></o:p></span></b></div>
</td>
</tr>
</thead>
<tbody>
<tr style="mso-yfti-irow: 0;">
<td style="background-color: transparent; border: 0px rgb(0, 0, 0); padding: 0in 5.4pt; width: 135.9pt;" valign="top" width="181">
<div class="MsoNormal" style="margin: 0in 0in 0pt; mso-yfti-cnfc: 68;">
<span style="color: black; font-family: "Calibri","sans-serif"; font-size: 9pt; mso-ascii-theme-font: minor-latin; mso-bidi-font-weight: bold; mso-hansi-theme-font: minor-latin; mso-themecolor: text1; mso-themeshade: 191;">Revolving Loan Fund<o:p></o:p></span></div>
</td>
<td style="background-color: transparent; border: 0px rgb(0, 0, 0); padding: 0in 5.4pt; width: 342.9pt;" valign="top" width="457">
<div class="MsoNormal" style="margin: 0in 0in 0pt; mso-yfti-cnfc: 64;">
<span style="background: white; color: #222222; font-family: "Calibri","sans-serif"; font-size: 9pt; mso-ascii-theme-font: minor-latin; mso-bidi-font-family: "Times New Roman"; mso-bidi-theme-font: minor-bidi; mso-fareast-font-family: PMingLiU; mso-fareast-theme-font: minor-fareast; mso-hansi-theme-font: minor-latin;">A fund that is
structured so that repayments can be used to make more loans.</span><span style="color: #222222; font-family: "Calibri","sans-serif"; font-size: 9pt; mso-ascii-theme-font: minor-latin; mso-bidi-font-family: "Times New Roman"; mso-bidi-theme-font: minor-bidi; mso-fareast-font-family: PMingLiU; mso-fareast-theme-font: minor-fareast; mso-hansi-theme-font: minor-latin;"> As borrowers repay their
loans, this money is made available to new applicants. A fund has fully
revolved when all of the original principal lent has been repaid</span><span style="color: black; font-family: "Calibri","sans-serif"; font-size: 9pt; mso-ascii-theme-font: minor-latin; mso-hansi-theme-font: minor-latin; mso-themecolor: text1; mso-themeshade: 191;"><o:p></o:p></span></div>
</td>
</tr>
<tr style="mso-yfti-irow: 1;">
<td style="background-color: transparent; border: 0px rgb(0, 0, 0); padding: 0in 5.4pt; width: 135.9pt;" valign="top" width="181">
<div class="MsoNormal" style="margin: 0in 0in 0pt; mso-yfti-cnfc: 4;">
<span style="color: black; font-family: "Calibri","sans-serif"; font-size: 9pt; mso-ascii-theme-font: minor-latin; mso-bidi-font-weight: bold; mso-hansi-theme-font: minor-latin; mso-themecolor: text1; mso-themeshade: 191;">Bond<o:p></o:p></span></div>
</td>
<td style="background-color: transparent; border: 0px rgb(0, 0, 0); padding: 0in 5.4pt; width: 342.9pt;" valign="top" width="457">
<div class="MsoNormal" style="margin: 0in 0in 0pt;">
<span style="background: white; color: #111111; font-family: "Calibri","sans-serif"; font-size: 9pt; mso-ascii-theme-font: minor-latin; mso-bidi-font-family: "Times New Roman"; mso-bidi-theme-font: minor-bidi; mso-fareast-font-family: PMingLiU; mso-fareast-theme-font: minor-fareast; mso-hansi-theme-font: minor-latin;">A debt
investment in which an investor loans money to an entity (corporate or
governmental) that borrows the funds for a defined period of time at a fixed
interest rate. Bond buyers are repaid both principal and interest</span><span style="color: black; font-family: "Calibri","sans-serif"; font-size: 9pt; mso-ascii-theme-font: minor-latin; mso-hansi-theme-font: minor-latin; mso-themecolor: text1; mso-themeshade: 191;"><o:p></o:p></span></div>
</td>
</tr>
<tr style="mso-yfti-irow: 2;">
<td style="background-color: transparent; border: 0px rgb(0, 0, 0); padding: 0in 5.4pt; width: 135.9pt;" valign="top" width="181">
<div class="MsoNormal" style="margin: 0in 0in 0pt; mso-yfti-cnfc: 68;">
<span style="color: black; font-family: "Calibri","sans-serif"; font-size: 9pt; mso-ascii-theme-font: minor-latin; mso-bidi-font-weight: bold; mso-hansi-theme-font: minor-latin; mso-themecolor: text1; mso-themeshade: 191;">General Obligation Bond<o:p></o:p></span></div>
</td>
<td style="background-color: transparent; border: 0px rgb(0, 0, 0); padding: 0in 5.4pt; width: 342.9pt;" valign="top" width="457">
<div class="MsoNormal" style="line-height: 115%; margin: 0in 0in 10pt; mso-yfti-cnfc: 64;">
<span style="color: #111111; font-family: "Calibri","sans-serif"; font-size: 9pt; line-height: 115%; mso-ascii-theme-font: minor-latin; mso-bidi-font-family: "Times New Roman"; mso-bidi-theme-font: minor-bidi; mso-fareast-font-family: PMingLiU; mso-fareast-theme-font: minor-fareast; mso-hansi-theme-font: minor-latin;">A <span style="background: white;">municipal
bond backed by the credit and "taxing power" of the issuing
jurisdiction rather than the revenue from a given project. Also called a “GO”
bond. Most bonds issued by the Texas Water Development Board have been GO
bonds.</span></span><span style="color: black; font-family: "Calibri","sans-serif"; font-size: 9pt; line-height: 115%; mso-ascii-theme-font: minor-latin; mso-hansi-theme-font: minor-latin; mso-themecolor: text1; mso-themeshade: 191;"><o:p></o:p></span></div>
</td>
</tr>
<tr style="mso-yfti-irow: 3;">
<td style="background-color: transparent; border: 0px rgb(0, 0, 0); padding: 0in 5.4pt; width: 135.9pt;" valign="top" width="181">
<div class="MsoNormal" style="margin: 0in 0in 0pt; mso-yfti-cnfc: 4;">
<span style="color: black; font-family: "Calibri","sans-serif"; font-size: 9pt; mso-ascii-theme-font: minor-latin; mso-bidi-font-weight: bold; mso-hansi-theme-font: minor-latin; mso-themecolor: text1; mso-themeshade: 191;">Revenue Bond<o:p></o:p></span></div>
</td>
<td style="background-color: transparent; border: 0px rgb(0, 0, 0); padding: 0in 5.4pt; width: 342.9pt;" valign="top" width="457">
<div class="MsoNormal" style="line-height: 115%; margin: 0in 0in 10pt;">
<span style="background: white; color: #111111; font-family: "Calibri","sans-serif"; font-size: 9pt; line-height: 115%; mso-ascii-theme-font: minor-latin; mso-bidi-font-family: "Times New Roman"; mso-bidi-theme-font: minor-bidi; mso-fareast-font-family: PMingLiU; mso-fareast-theme-font: minor-fareast; mso-hansi-theme-font: minor-latin;">A municipal
bond supported by the revenue from a specific project, such as a wastewater
treatment plant or reservoir. Revenue bonds are municipal bonds that finance
income-producing projects and are secured by a specified revenue source.</span><span style="color: #111111; font-family: "Calibri","sans-serif"; font-size: 9pt; line-height: 115%; mso-ascii-theme-font: minor-latin; mso-bidi-font-family: "Times New Roman"; mso-bidi-theme-font: minor-bidi; mso-fareast-font-family: PMingLiU; mso-fareast-theme-font: minor-fareast; mso-hansi-theme-font: minor-latin;"> Most locally-financed
water infrastructure in the United States is financed by revenue bonds repaid
by payments from water or wastewater system customers.</span><span style="color: black; font-family: "Calibri","sans-serif"; font-size: 9pt; line-height: 115%; mso-ascii-theme-font: minor-latin; mso-hansi-theme-font: minor-latin; mso-themecolor: text1; mso-themeshade: 191;"><o:p></o:p></span></div>
</td>
</tr>
<tr style="mso-yfti-irow: 4;">
<td style="background-color: transparent; border: 0px rgb(0, 0, 0); padding: 0in 5.4pt; width: 135.9pt;" valign="top" width="181">
<div class="MsoNormal" style="margin: 0in 0in 0pt; mso-yfti-cnfc: 68;">
<span style="color: black; font-family: "Calibri","sans-serif"; font-size: 9pt; mso-ascii-theme-font: minor-latin; mso-bidi-font-weight: bold; mso-hansi-theme-font: minor-latin; mso-themecolor: text1; mso-themeshade: 191;">Credit Enhancement<o:p></o:p></span></div>
</td>
<td style="background-color: transparent; border: 0px rgb(0, 0, 0); padding: 0in 5.4pt; width: 342.9pt;" valign="top" width="457">
<div class="MsoNormal" style="line-height: 115%; margin: 0in 0in 10pt; mso-yfti-cnfc: 64;">
<span style="background: white; color: #111111; font-family: "Calibri","sans-serif"; font-size: 9pt; line-height: 115%; mso-ascii-theme-font: minor-latin; mso-bidi-font-family: "Times New Roman"; mso-bidi-theme-font: minor-bidi; mso-fareast-font-family: PMingLiU; mso-fareast-theme-font: minor-fareast; mso-hansi-theme-font: minor-latin;">A method
whereby a borrower attempts to improve its debt or credit worthiness. Through
credit enhancement, bond buyers are provided with reassurance that the
borrower will honor the obligation. Credit enhancement can take many
different forms, including additional collateral, insurance, or a third party
guarantee to pay a defined amount of principal and interest. Credit enhancement
reduces credit/default risk of a debt, thereby increasing the overall credit
rating and lowering interest rates for the borrower.</span><span style="color: black; font-family: "Calibri","sans-serif"; font-size: 9pt; line-height: 115%; mso-ascii-theme-font: minor-latin; mso-hansi-theme-font: minor-latin; mso-themecolor: text1; mso-themeshade: 191;"><o:p></o:p></span></div>
</td>
</tr>
<tr style="mso-yfti-irow: 5;">
<td style="background-color: transparent; border: 0px rgb(0, 0, 0); padding: 0in 5.4pt; width: 135.9pt;" valign="top" width="181">
<div class="MsoNormal" style="margin: 0in 0in 0pt; mso-yfti-cnfc: 4;">
<span style="color: black; font-family: "Calibri","sans-serif"; font-size: 9pt; mso-ascii-theme-font: minor-latin; mso-bidi-font-weight: bold; mso-hansi-theme-font: minor-latin; mso-themecolor: text1; mso-themeshade: 191;">Deferred principal/interest loans<o:p></o:p></span></div>
</td>
<td style="background-color: transparent; border: 0px rgb(0, 0, 0); padding: 0in 5.4pt; width: 342.9pt;" valign="top" width="457">
<div class="MsoNormal" style="margin: 0in 0in 0pt;">
<span style="background: white; color: #111111; font-family: "Calibri","sans-serif"; font-size: 9pt; mso-ascii-theme-font: minor-latin; mso-bidi-font-family: "Times New Roman"; mso-bidi-theme-font: minor-bidi; mso-fareast-font-family: PMingLiU; mso-fareast-theme-font: minor-fareast; mso-hansi-theme-font: minor-latin;">Loans can be
structured using terms that allow the borrower to defer payments for a
specified period of time. Lending terms can defer principal payments,
interest payments or both. For example, a loan with a 10-year deferred
principal period would mean that for the first decade, the borrower would pay
only interest on the amount borrowed, and not begin paying down the principle
until after the 10-yr period.<o:p></o:p></span></div>
<div class="MsoNormal" style="margin: 0in 0in 0pt;">
<span style="color: black; font-family: "Calibri","sans-serif"; font-size: 9pt; mso-ascii-theme-font: minor-latin; mso-hansi-theme-font: minor-latin; mso-themecolor: text1; mso-themeshade: 191;"><o:p> </o:p></span></div>
</td>
</tr>
<tr style="mso-yfti-irow: 6; mso-yfti-lastrow: yes;">
<td style="background-color: transparent; border-color: rgb(0, 0, 0) rgb(0, 0, 0) black; border-style: none none solid; border-width: 0px 0px 1pt; mso-border-bottom-themecolor: text1; padding: 0in 5.4pt; width: 135.9pt;" valign="top" width="181">
<div class="MsoNormal" style="margin: 0in 0in 0pt; mso-yfti-cnfc: 68;">
<span style="color: black; font-family: "Calibri","sans-serif"; font-size: 9pt; mso-ascii-theme-font: minor-latin; mso-bidi-font-weight: bold; mso-hansi-theme-font: minor-latin; mso-themecolor: text1; mso-themeshade: 191;">Leverage<o:p></o:p></span></div>
</td>
<td style="background-color: transparent; border-color: rgb(0, 0, 0) rgb(0, 0, 0) black; border-style: none none solid; border-width: 0px 0px 1pt; mso-border-bottom-themecolor: text1; padding: 0in 5.4pt; width: 342.9pt;" valign="top" width="457">
<div class="MsoNormal" style="margin: 0in 0in 0pt; mso-yfti-cnfc: 64;">
<span style="background: white; color: black; font-family: "Calibri","sans-serif"; font-size: 9pt; mso-ascii-theme-font: minor-latin; mso-hansi-theme-font: minor-latin;">Leverage is a
technique for multiplying limited funding by using those funds as collateral
for debt issued. For many years, the Texas Water Development Board has used
leverage to amplify the amount of funding it receives from the Environmental
Protection Agency under the EPA’s State Revolving Funds for water and
wastewater projects. TWDB issues bonds secured by its State Revolving Fund
allocation. The proceeds of those bonds are then used to lend money to local
water project sponsors to comply with drinking water and surface water
standards. The money received from the EPA is invested by the TWDB in
low-risk securities, like Treasury bonds. That investment is pledged as collateral
to bond buyers, thereby securing a strong credit rating and low borrowing
cost for TWDB. In addition, the interest gained by its investments is used to
subsidize the interest rate for TWDB’s borrowers. Through leverage, TWDB is
able to make more money available to its borrowers</span><span style="color: black; font-family: "Calibri","sans-serif"; font-size: 9pt; mso-ascii-theme-font: minor-latin; mso-hansi-theme-font: minor-latin; mso-themecolor: text1; mso-themeshade: 191;"><o:p></o:p></span></div>
</td>
</tr>
</tbody></table>
<br />
<div class="MsoNormal" style="margin: 0in 0in 0pt;">
<o:p><span style="font-family: Cambria;"> </span></o:p></div>
<div class="MsoNormal" style="margin: 0in 0in 0pt;">
<b style="mso-bidi-font-weight: normal;"><span style="font-family: Cambria;">SWIFT AND SWIRFT<o:p></o:p></span></b></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 0pt;">
<span style="font-family: Cambria;">Prop 6 enables the TWDB to expand the amount of loans available
to local sponsors applying for financial support for water supply projects, by
creating two separate but related funds: 1) the State Implementation Fund for
Texas (SWIFT) and 2) the State Water Implementation Revenue Fund for Texas
(SWIRFT). Though the latter has received less media attention, it is actually
the more important of the two when it comes to the matter of growing the $2
billion seed fund.<o:p></o:p></span></div>
<br />
<br />
<div class="MsoNormal" style="margin: 0in 0in 0pt;">
<span style="font-family: Cambria;">SWIFT exists to subsidize loans made by the TWDB to local
sponsors of water supply projects—it is simply a dedicated pool of money to
allow TWDB to lower the effective interest rates paid by its borrowers. SWIFT
can only be used to subsidize lending through five of </span><a href="http://www.twdb.state.tx.us/financial/programs/"><span style="color: blue; font-family: Cambria;">TWDB’s funding programs</span></a><span style="font-family: Cambria;">.<span style="mso-spacerun: yes;"> </span>Four of these programs are briefly described
in the table below; the fifth, SWIRFT, is described in Table 2. <o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 0pt;">
<o:p><span style="font-family: Cambria;"> </span></o:p></div>
<div align="center" class="MsoNormal" style="margin: 0in 0in 0pt; text-align: center;">
<span style="font-family: Cambria;">Table 2.<span style="mso-spacerun: yes;"> </span>TWDB Water Financing Programs<o:p></o:p></span></div>
<br />
<div align="center">
<table border="1" cellpadding="0" cellspacing="0" class="MsoNormalTable" style="border-collapse: collapse; border: currentColor; mso-border-alt: solid #FABF8F .5pt; mso-border-insideh: .5pt solid #FABF8F; mso-border-insidev: .5pt solid #FABF8F; mso-padding-alt: 0in 5.4pt 0in 5.4pt; mso-yfti-tbllook: 1184;">
<tbody>
<tr style="mso-yfti-firstrow: yes; mso-yfti-irow: 0;">
<td style="background-color: transparent; border: 1pt solid rgb(250, 191, 143); mso-border-alt: solid #FABF8F .5pt; padding: 0in 5.4pt; width: 83.45pt;" valign="top" width="111">
<div align="center" class="MsoNormal" style="margin: 0in 0in 0pt; text-align: center;">
<b style="mso-bidi-font-weight: normal;"><span style="font-family: Cambria;">Eligible<o:p></o:p></span></b></div>
<div align="center" class="MsoNormal" style="margin: 0in 0in 0pt; text-align: center;">
<b style="mso-bidi-font-weight: normal;"><span style="font-family: Cambria;">TWDB Program<o:p></o:p></span></b></div>
</td>
<td style="background-color: transparent; border-color: rgb(250, 191, 143) rgb(250, 191, 143) rgb(250, 191, 143) rgb(0, 0, 0); border-style: solid solid solid none; border-width: 1pt 1pt 1pt 0px; mso-border-alt: solid #FABF8F .5pt; mso-border-left-alt: solid #FABF8F .5pt; padding: 0in 5.4pt; width: 2.75in;" valign="top" width="264">
<div align="center" class="MsoNormal" style="margin: 0in 0in 0pt; text-align: center;">
<b style="mso-bidi-font-weight: normal;"><span style="font-family: Cambria;"><span style="mso-spacerun: yes;"> </span>Purpose of Program<o:p></o:p></span></b></div>
</td>
</tr>
<tr style="mso-yfti-irow: 1;">
<td style="background-color: transparent; border-color: rgb(0, 0, 0) rgb(250, 191, 143) rgb(250, 191, 143); border-style: none solid solid; border-width: 0px 1pt 1pt; mso-border-alt: solid #FABF8F .5pt; mso-border-top-alt: solid #FABF8F .5pt; padding: 0in 5.4pt; width: 83.45pt;" valign="top" width="111">
<div class="MsoNormal" style="margin: 0in 0in 0pt;">
<span style="font-family: Cambria;">Water Infrastructure Fund<b style="mso-bidi-font-weight: normal;"><o:p></o:p></b></span></div>
</td>
<td style="background-color: transparent; border-color: rgb(0, 0, 0) rgb(250, 191, 143) rgb(250, 191, 143) rgb(0, 0, 0); border-style: none solid solid none; border-width: 0px 1pt 1pt 0px; mso-border-alt: solid #FABF8F .5pt; mso-border-left-alt: solid #FABF8F .5pt; mso-border-top-alt: solid #FABF8F .5pt; padding: 0in 5.4pt; width: 2.75in;" valign="top" width="264">
<div class="MsoNormal" style="margin: 0in 0in 0pt;">
<span style="font-family: Cambria;">Subsidized and deferred loans for state political
subdivisions and water supply corporations, for projects in SWP or approved
regional water plans<o:p></o:p></span></div>
</td>
</tr>
<tr style="mso-yfti-irow: 2;">
<td style="background-color: transparent; border-color: rgb(0, 0, 0) rgb(250, 191, 143) rgb(250, 191, 143); border-style: none solid solid; border-width: 0px 1pt 1pt; mso-border-alt: solid #FABF8F .5pt; mso-border-top-alt: solid #FABF8F .5pt; padding: 0in 5.4pt; width: 83.45pt;" valign="top" width="111">
<div class="MsoNormal" style="margin: 0in 0in 0pt; tab-stops: center 80.1pt;">
<span style="font-family: Cambria;">Rural Water Assistance
Fund<b style="mso-bidi-font-weight: normal;"><o:p></o:p></b></span></div>
</td>
<td style="background-color: transparent; border-color: rgb(0, 0, 0) rgb(250, 191, 143) rgb(250, 191, 143) rgb(0, 0, 0); border-style: none solid solid none; border-width: 0px 1pt 1pt 0px; mso-border-alt: solid #FABF8F .5pt; mso-border-left-alt: solid #FABF8F .5pt; mso-border-top-alt: solid #FABF8F .5pt; padding: 0in 5.4pt; width: 2.75in;" valign="top" width="264">
<div class="MsoNormal" style="margin: 0in 0in 0pt;">
<span style="font-family: Cambria;">Loans for political subdivisions and nonprofit water
supply corporations, for infrastructure or for consolidation or
regionalization<o:p></o:p></span></div>
</td>
</tr>
<tr style="mso-yfti-irow: 3;">
<td style="background-color: transparent; border-color: rgb(0, 0, 0) rgb(250, 191, 143) rgb(250, 191, 143); border-style: none solid solid; border-width: 0px 1pt 1pt; mso-border-alt: solid #FABF8F .5pt; mso-border-top-alt: solid #FABF8F .5pt; padding: 0in 5.4pt; width: 83.45pt;" valign="top" width="111">
<div class="MsoNormal" style="margin: 0in 0in 0pt;">
<span style="font-family: Cambria;">Agricultural Water Conservation Fund<b style="mso-bidi-font-weight: normal;"><o:p></o:p></b></span></div>
</td>
<td style="background-color: transparent; border-color: rgb(0, 0, 0) rgb(250, 191, 143) rgb(250, 191, 143) rgb(0, 0, 0); border-style: none solid solid none; border-width: 0px 1pt 1pt 0px; mso-border-alt: solid #FABF8F .5pt; mso-border-left-alt: solid #FABF8F .5pt; mso-border-top-alt: solid #FABF8F .5pt; padding: 0in 5.4pt; width: 2.75in;" valign="top" width="264">
<div class="MsoNormal" style="margin: 0in 0in 0pt;">
<span style="font-family: Cambria;">Loans for political subdivisions, colleges, interstate
compact commissions and nonprofit water supply corporations, for conservation
projects<o:p></o:p></span></div>
</td>
</tr>
<tr style="mso-yfti-irow: 4; mso-yfti-lastrow: yes;">
<td style="background-color: transparent; border-color: rgb(0, 0, 0) rgb(250, 191, 143) rgb(250, 191, 143); border-style: none solid solid; border-width: 0px 1pt 1pt; mso-border-alt: solid #FABF8F .5pt; mso-border-top-alt: solid #FABF8F .5pt; padding: 0in 5.4pt; width: 83.45pt;" valign="top" width="111">
<div class="MsoNormal" style="margin: 0in 0in 0pt;">
<span style="font-family: Cambria;">State Participation Program accounts in Texas Water
Development Fund II<b style="mso-bidi-font-weight: normal;"><o:p></o:p></b></span></div>
</td>
<td style="background-color: transparent; border-color: rgb(0, 0, 0) rgb(250, 191, 143) rgb(250, 191, 143) rgb(0, 0, 0); border-style: none solid solid none; border-width: 0px 1pt 1pt 0px; mso-border-alt: solid #FABF8F .5pt; mso-border-left-alt: solid #FABF8F .5pt; mso-border-top-alt: solid #FABF8F .5pt; padding: 0in 5.4pt; width: 2.75in;" valign="top" width="264">
<div class="MsoNormal" style="margin: 0in 0in 0pt;">
<span style="font-family: Cambria;">Deferred interest obligations to repurchase TWDB’s
temporary ownership interest in facilities, for political subdivisions and
water supply corporations <o:p></o:p></span></div>
</td>
</tr>
</tbody></table>
</div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 0pt;">
<o:p><span style="font-family: Cambria;"> </span></o:p></div>
<span style="font-family: Cambria;">These four programs are funded by the TWDB through the sale
of general obligation bonds, which are then used to create revolving loan funds
(meaning that as borrowers repay their debts to the board, the fund is
replenished to be made available to other beneficiaries). <span style="mso-spacerun: yes;"> </span><o:p></o:p></span><br />
<br />
<div class="MsoNormal" style="margin: 0in 0in 0pt; mso-layout-grid-align: none; mso-pagination: none;">
<span style="font-family: Cambria;">At its heart, SWIFT is a means of subsidizing these revolving
loan funds. There are four types of subsidy SWIFT can provide: 1) low-interest
loans (TWDB may lend at as little as 50% the rate of interest at which it
borrows); 2) longer repayment terms for loans; 3) incremental repurchase terms
for projects in which the state owns a share; and 4) deferral of loan payments.
For example, under Option 1, if TWDB can borrow money at 3%, SWIFT funds could
be used to lower the interest rates of the TWDB’s own lending programs to as
little as 1.5%. An example of Option 4 would be TWDB purchasing up to 80% of a
water supply facility, with no principal repayment due from the borrower for as
long as 20 years.<o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 0pt; mso-layout-grid-align: none; mso-pagination: none;">
<span style="font-family: Cambria;">Because SWIFT subsidizes revolving funds (repayments from
existing borrowers are used to make new loans), SWIFT could enable more than $2
billion worth of projects over time as loans are repaid with interest.<span style="mso-spacerun: yes;"> </span>Combined with SWIRFT, however, SWIFT can, in
theory, be leveraged to provide substantially greater amounts of financing.<o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 0pt;">
<span style="font-family: Cambria;">SWIRFT is one of the funds that may receive disbursements
from SWIFT.<span style="mso-spacerun: yes;"> </span>Like SWIFT, SWIRFT can only
be used to finance water projects in the State Water Plan, through same set of
existing TWDB loan programs to which SWIFT is targeted (those in the table
above). Unlike the other funds eligible for SWIFT subsidies, SWIRFT is
capitalized through new revenue bonding authority granted under H.B. 4, meaning
it is totally free of any constraints related to the state debt limit. <span style="mso-spacerun: yes;"> </span>Also, unlike the other four programs eligible
for SWIFT subsidies, SWIRFT revenue bonds can be used for an expanded set of
financial assistance tools, including direct loans to local water project
sponsors, purchasing of debt obligations from these local sponsors, or credit
enhancement for TWDB’s own funding programs. <o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="-ms-text-justify: inter-ideograph; margin: 0in 0in 0pt; text-align: justify;">
<span style="font-family: Cambria;">SWIRFT thereby opens a new chapter in the board’s financing
programs. The credit enhancement component of SWIRFT is especially important to
understand because of its potential for amplifying TWDB’s lending capacity. Under H.B. 4, TWDB may pledge SWIRFT as
collateral for the debts it incurs through the funding programs eligible for
SWIFT support. In this way, SWIRFT could increase substantially the amount of
debt TWDB could sell, as bond buyers would be promised revenues from borrower
repayments and have as added security access to SWIRFT funds in the event that
borrower repayments fell short of TWDB’s own obligations. <o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 0pt;">
<span style="font-family: Cambria;">This credit enhancement authority under SWIRFT, combined
with its revenue-backed bond authorization collectively create the potential
for TWDB to multiply the $2 billion authorized by voters to provide up to $26
billion in total financial support. <span style="mso-spacerun: yes;"> </span>That
is an important figure only in as much as it is the full amount of state
financial support requested by Regional Planning Groups in the 2012 State Water
Plan. (Whether the political subdivisions and water authorities who participate
in the Regional Planning Groups will ever ask the Board to make the full $26
billion available to them is another matter entirely, and will be discussed
more fully in the second blog in this series.) <o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 0pt;">
<o:p><span style="font-family: Cambria;"> </span></o:p><span style="font-family: Cambria;">However, there are a number of factors that will determine
how much the $2 billion appropriation to TWDB will actually grow over time.<span style="mso-spacerun: yes;"> </span>That will in turn determine how well the new
funds can be used to support the wide range of needs in the State Water Plan,
from conservation and reuse, to smaller scale projects in rural areas, to
larger, longer-term projects proposed for growing urban areas. <o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 0pt;">
<o:p><span style="font-family: Cambria;"> </span></o:p><span style="font-family: Cambria;">As one option, TWDB could simply move the $2 billion through
SWIFT, bypassing SWIRFT, and directly support its existing funding programs.
While the money would be repaid to SWIFT over time, it would not necessarily take
advantage of leverage to grow the $2 billion.<span style="mso-spacerun: yes;">
</span>It would then be simply be a $2 billion revolving loan fund,
recapitalized as borrowers repaid their debts to the board, with (subsidized)
interest. In addition, if SWIFT is managed to provide financing subsidies (cash
outflows) that outpace the value gained in the fund through market investments
(cash inflows), the $2 billion could be substantially drained. <o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 0pt;">
<span style="font-family: Cambria;">Another option would be for TWDB to put the lion’s share of
the $2 billion into the State Participation Program fund.<span style="mso-spacerun: yes;"> </span>This fund is generally used for longer-term,
big-ticket projects, such as reservoirs and pipelines, a number of which are
proposed in the 2012 State Water Plan.<span style="mso-spacerun: yes;">
</span>The State Participation Program allows TWDB to purchase a temporary
ownership stake in a water project, with the idea that the loan would be paid
back after the project was built and operating near capacity.<span style="mso-spacerun: yes;"> </span>Nearly 30% of funds the state has <i style="mso-bidi-font-style: normal;">already</i> made available to projects in
the State Water Plan have been through programs with deferred repayment,
including some $93 million through the State Participation Program in which repayment
of the principal typically is deferred for 20 years, and $189 million through
the Water Infrastructure Fund Deferred program, which defers principal and
interest for up to 10 years.<o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 0pt;">
<span style="font-family: Cambria;">This approach, however, would tie up most of the money in
deferred loans, as illustrated by a January 10, 2013 </span><a href="http://www.texascenter.org/water/MemotoMembersonSWPFundingModelswModels-2.pdf"><span style="color: blue; font-family: Cambria;">memo</span></a><span style="font-family: Cambria;">
to the Members of the State House of Representatives from H.B. 4’s sponsor,
House Natural Resources Chairman Allan Ritter:<span style="mso-spacerun: yes;">
</span>loans with 20-year deferred repayment periods would prevent SWIFT from
fully revolving for more than 30 years. <span style="mso-spacerun: yes;"> </span><o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 0pt;">
<span style="font-family: Cambria;">If most of the SWIFT seed funds were sent directly to the state
participation programs with deferred payments, then these few borrowers would
receive the greatest benefit, and the opportunity to use the Prop 6 funds to
shore up water security throughout the state could be compromised.<span style="mso-spacerun: yes;"> </span>In essence, a “big dog eats first” approach
to using the new funds would mean that smaller projects for meeting real
short-term water needs in smaller communities, including throughout rural
Texas, could be undermined. <span style="mso-spacerun: yes;"> </span>On the other
hand, a more balanced approach, more equitably distributed among different
financing options, would allow greater leverage for the $ 2 billion and cover
more water needs throughout the state.<span style="mso-spacerun: yes;"> </span></span></div>
<div class="MsoNormal" style="margin: 0in 0in 0pt;">
<o:p><span style="font-family: Cambria;"> </span></o:p></div>
<span style="font-family: "Cambria","serif"; mso-ansi-language: EN-US; mso-bidi-font-family: "Times New Roman"; mso-bidi-language: AR-SA; mso-fareast-font-family: Cambria; mso-fareast-language: EN-US;">The TWDB now has the task
of balancing these competing interests, all of which will take place in the
context of the project prioritization process set up by HB 4.<span style="mso-spacerun: yes;"> </span>We’ll look at that topic in our next blog.</span>Texas Center for Policy Studieshttp://www.blogger.com/profile/06470944874060481347noreply@blogger.com22tag:blogger.com,1999:blog-3659760152032783164.post-34956051530394155192013-11-07T14:27:00.002-08:002013-11-07T14:27:29.652-08:00Integrating Environmental Water Needs in the Regional Planning Process<br />
<div class="MsoNormal" style="margin: 0in 0in 0pt;">
<b style="mso-bidi-font-weight: normal;"><span style="font-family: "Calibri","sans-serif"; font-size: 14pt; mso-ascii-theme-font: minor-latin; mso-hansi-theme-font: minor-latin;">(Note: the full white paper from
which this post is extracted is available <a href="http://www.texascenter.org/water/Environmental%20Water%20Needs%20and%20the%20Regional%20Planning%20Process%20Final.pdf"><span style="color: blue;">here</span></a>).<o:p></o:p></span></b></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 0pt;">
<span style="font-family: "Calibri","sans-serif"; font-size: 11pt; mso-ascii-theme-font: minor-latin; mso-hansi-theme-font: minor-latin;"><o:p> </o:p></span><span style="font-family: "Calibri","sans-serif"; font-size: 11pt; mso-ascii-theme-font: minor-latin; mso-hansi-theme-font: minor-latin;">Since 1997, the
Senate Bill 1 water planning process has required protection of natural
resources as the state determines how to meet needs for water for the future. <span style="mso-spacerun: yes;"> </span>For example, the basic directive of the
legislature in Senate Bill 1 is:<o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 0pt;">
<span style="font-family: "Calibri","sans-serif"; font-size: 11pt; mso-ascii-theme-font: minor-latin; mso-hansi-theme-font: minor-latin;"><o:p> </o:p></span></div>
<div class="MsoNormal" style="margin: 0in 0in 0pt 0.5in;">
<span style="font-family: "Calibri","sans-serif"; font-size: 11pt; mso-ascii-theme-font: minor-latin; mso-hansi-theme-font: minor-latin;">The state water plan <b style="mso-bidi-font-weight: normal;">shall</b>
provide for the <b style="mso-bidi-font-weight: normal;">orderly development,
management and conservation of water resources</b> and preparation for and
response to drought conditions, in order that sufficient water will be
available at a reasonable cost <b style="mso-bidi-font-weight: normal;">to ensure</b>
public health, safety and welfare, <b style="mso-bidi-font-weight: normal;">further
economic development and protection of agricultural and natural resources</b>
of the entire state." (Texas Water Code, Section. 16.051, emphasis added.)<o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 0pt;">
<span style="font-family: "Calibri","sans-serif"; font-size: 11pt; mso-ascii-theme-font: minor-latin; mso-hansi-theme-font: minor-latin;"><o:p> </o:p></span><span style="color: black; font-family: "Calibri","sans-serif"; font-size: 11pt; mso-ascii-theme-font: minor-latin; mso-hansi-theme-font: minor-latin;">One
of the "Guiding Principles" as adopted by the Texas Water Development
Board (TWBD) for the 2017 State Water Plan is:<o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 0pt 0.5in;">
<span style="color: black; font-family: "Calibri","sans-serif"; font-size: 11pt; mso-ascii-theme-font: minor-latin; mso-hansi-theme-font: minor-latin;">(23) Consideration of <b style="mso-bidi-font-weight: normal;">environmental water needs,</b> <b style="mso-bidi-font-weight: normal;">including
instream flows and bay and estuary inflows,</b> including adjustments by the
[Regional Water Planning Groups] to water management strategies to provide for
environmental water needs including instream flows and bay and estuary needs.…(
TWDB rule at <span style="mso-bidi-font-weight: bold;">31 Texas Admin. Code Section
358.3.)<o:p></o:p></span></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 0pt;">
<span style="color: black; font-family: "Calibri","sans-serif"; font-size: 11pt; mso-ascii-theme-font: minor-latin; mso-bidi-font-weight: bold; mso-hansi-theme-font: minor-latin;">This guiding principle makes sense not only because
of the language in Senate Bill 1, but also because the legislature has enacted
two other laws that focus on protecting environmental water needs: <span style="mso-spacerun: yes;"> </span>Senate Bill 2 in 2001 and Senate Bill 3 in
2007.<span style="mso-spacerun: yes;"> </span>These laws recognized the
important role that water left in rivers and available to flow to bays and
estuaries plays in conserving fish and wildlife habitat, protecting healthy
timber and agricultural lands, providing recreational opportunities and sustaining
economic and cultural values.<span style="mso-spacerun: yes;"> </span>Even the
value of private property along a river and associated riparian rights can vary
significantly with the flow conditions in the river. <o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 0pt;">
<span style="color: black; font-family: "Calibri","sans-serif"; font-size: 11pt; mso-ascii-theme-font: minor-latin; mso-bidi-font-weight: bold; mso-hansi-theme-font: minor-latin;"><o:p> </o:p></span><span style="color: black; font-family: "Calibri","sans-serif"; font-size: 11pt; mso-ascii-theme-font: minor-latin; mso-bidi-font-weight: bold; mso-hansi-theme-font: minor-latin;">Yet, to date, the results of work done under Senate
Bills 2 and 3 have played a very limited role in determining how Texas will use
its water resources over the next 50 years. The work of these bills has not
been fully integrated into the Senate Bill 1 water planning process.<span style="mso-spacerun: yes;"> </span>This next round of regional planning provides
an important opportunity to help provide for environmental water needs.<o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 0pt;">
<span style="color: black; font-family: "Calibri","sans-serif"; font-size: 11pt; mso-ascii-theme-font: minor-latin; mso-bidi-font-weight: bold; mso-hansi-theme-font: minor-latin;">For those regions that want to do more to protect
environmental water needs the question is how to use the water planning process.
<span style="mso-spacerun: yes;"> </span>The most straightforward approach would
be to treat </span><span style="font-family: "Calibri","sans-serif"; font-size: 11pt; mso-ascii-theme-font: minor-latin; mso-hansi-theme-font: minor-latin;">environmental
water needs like other water needs.<span style="mso-spacerun: yes;"> </span>Healthy
river and bay systems need flows that mimic natural conditions, but not necessarily
all the water that has historically flowed in them.<span style="mso-spacerun: yes;"> </span>Once the healthy flow needs are identified,
the regional planning groups could develop suggested strategies to meet those
needs over time.<span style="mso-spacerun: yes;"> </span>In many cases,
strategies to meet environmental flow needs can work in combination with
strategies to provide water for municipal, agricultural or industrial needs<span style="color: black; mso-bidi-font-weight: bold;"><o:p></o:p></span></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 0pt;">
<span style="color: black; font-family: "Calibri","sans-serif"; font-size: 11pt; mso-ascii-theme-font: minor-latin; mso-bidi-font-weight: bold; mso-hansi-theme-font: minor-latin;">Current TWDB rules and guidance do not treat
environmental water needs in the same fashion as other needs, however.<span style="mso-spacerun: yes;"> </span>Instead, the rules and guidance focus on
evaluating the water supply strategies for other needs and then identifying the
effects of the strategies on environmental water needs.<span style="mso-spacerun: yes;"> </span><span style="mso-spacerun: yes;"> </span>The
rules and guidance suggest that regional water plans and the state water plan need
only adjust their strategies for obtaining new water supplies with
considerations of existing environmental flows.<span style="mso-spacerun: yes;">
</span>Thus, if we have already created unhealthy rivers and bays, there is no
process to try to reverse that situation over the next 50 years or more.<span style="mso-spacerun: yes;"> </span><o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 0pt;">
<span style="color: black; font-family: "Calibri","sans-serif"; font-size: 11pt; mso-ascii-theme-font: minor-latin; mso-bidi-font-weight: bold; mso-hansi-theme-font: minor-latin;">Thus, the current state approach gives environmental
water needs a very limited role in the regional planning process.<span style="mso-spacerun: yes;"> </span>TWDB rules and guidance do not promote the
idea that regional planning groups should find strategies to ensure healthy
rivers and bays and, thus, actually develop comprehensive plans that “protect
natural resources.”<span style="mso-spacerun: yes;"> </span><o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 0pt;">
<span style="color: black; font-family: "Calibri","sans-serif"; font-size: 11pt; mso-ascii-theme-font: minor-latin; mso-bidi-font-weight: bold; mso-hansi-theme-font: minor-latin;"><o:p> </o:p></span><span style="color: black; font-family: "Calibri","sans-serif"; font-size: 11pt; mso-ascii-theme-font: minor-latin; mso-bidi-font-weight: bold; mso-hansi-theme-font: minor-latin;">Second, while TWDB encourages the use of TCEQ "environmental
flow standards" under SB 3, TWDB <span style="mso-spacerun: yes;"> </span>fails to acknowledge that such standards are
very limited. They do not reflect the types of flows that scientists and
stakeholders in the SB 2 and SB 3 processes determined are needed to sustain a sound
ecological environment in our rivers and bays.<span style="mso-spacerun: yes;">
</span>TCEQ's standards apply only to surface water rights permit applications
that seek new appropriations of state water.<span style="mso-spacerun: yes;">
</span>That is a very different process from one that is seeking to develop
strategies to fill water needs for the future. <o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 0pt;">
<span style="color: black; font-family: "Calibri","sans-serif"; font-size: 11pt; mso-ascii-theme-font: minor-latin; mso-bidi-font-weight: bold; mso-hansi-theme-font: minor-latin;">TWDB rules do, however, allow regional water
planning groups to use a different process to develop strategies for meeting environmental
water needs in the future.<span style="mso-spacerun: yes;"> </span>Regional
groups wanting to do so simply have to develop their own approach.<span style="mso-spacerun: yes;"> </span><o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 0pt;">
<span style="color: black; font-family: "Calibri","sans-serif"; font-size: 11pt; mso-ascii-theme-font: minor-latin; mso-bidi-font-weight: bold; mso-hansi-theme-font: minor-latin;">There are a number of options for regional planning
groups that want to protect and enhance environmental water needs while not limiting
the growth of cities, industries or agriculture.<span style="mso-spacerun: yes;"> </span><span style="mso-spacerun: yes;"> </span><o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 0pt;">
<span style="color: black; font-family: "Calibri","sans-serif"; font-size: 11pt; mso-ascii-theme-font: minor-latin; mso-bidi-font-weight: bold; mso-hansi-theme-font: minor-latin;">For example, the Brazos River Authority (BRA) sends large
amounts of water from Possum Kingdom Lake downstream to Lake Granbury for transfer
to Squaw Creek Lake and use there by Luminant as cooling water for the Comanche
Peak Nuclear Power Plant. That water could be delivered in different ways from
Possum Kingdom Lake. It could be released in one large pulse once a day or once
a week, leaving the river mostly dry the rest of the time.<span style="mso-spacerun: yes;"> </span>It could be released at a constant low flow. Or
BRA could send the water down in a fashion that meets some, possibly all, of
the SB 3 recommendations for environmental water needs in the segment of the
river between the two lakes.<span style="mso-spacerun: yes;"> </span><o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 0pt;">
<span style="color: black; font-family: "Calibri","sans-serif"; font-size: 11pt; mso-ascii-theme-font: minor-latin; mso-bidi-font-weight: bold; mso-hansi-theme-font: minor-latin;">Thus, the Region G planning group could, with the
assistance of BRA and Luminant, develop strategies for meeting all or some of
the recommendations of scientists and stakeholders who worked to develop an
environmental flow regime for that segment of the river under Senate Bill
3.<span style="mso-spacerun: yes;"> </span>Water needed for existing and new uses
could be released in a fashion that also helps meet the environmental flow needs
identified in the SB 3 process. <o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 0pt;">
<span style="color: black; font-family: "Calibri","sans-serif"; font-size: 11pt; mso-ascii-theme-font: minor-latin; mso-bidi-font-weight: bold; mso-hansi-theme-font: minor-latin;">As discussed in detail in the <a href="http://www.texascenter.org/water/Environmental%20Water%20Needs%20and%20the%20Regional%20Planning%20Process%20Final.pdf" target="_blank">white paper</a>, while
such an approach is not encouraged by the TWDB rules and guidelines, it is not
prohibited.<span style="mso-spacerun: yes;"> </span>It will, unfortunately, be
up to the regional planning groups to take the initiative in the 2016 round of
planning with little assistance from TWDB. <o:p></o:p></span></div>
Texas Center for Policy Studieshttp://www.blogger.com/profile/06470944874060481347noreply@blogger.com1tag:blogger.com,1999:blog-3659760152032783164.post-25394579598685869682013-09-30T08:48:00.001-07:002013-09-30T09:11:39.732-07:00Region O Reverses Course on Irrigation Demand Projections<br />
<div class="MsoNormal" style="margin: 0in 0in 10pt;">
<span style="font-family: Calibri;">(<i style="mso-bidi-font-style: normal;">Note: this post is
also available as a PDF at </i></span><i style="mso-bidi-font-style: normal;"><span style="color: blue; font-family: Calibri;"><a href="http://www.texascenter.org/water/region_o_blog.pdf">www.texascenter.org/water/region_o_blog.pdf</a></span></i><i style="mso-bidi-font-style: normal;"><span style="font-family: Calibri;">). <o:p></o:p></span></i></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 10pt;">
<span style="font-family: Calibri;">The </span><a href="http://www.twdb.state.tx.us/waterplanning/swp/2012/index.asp"><span style="color: blue; font-family: Calibri;">2012 State
Water Plan</span></a><span style="font-family: Calibri;"> projects a statewide demand/supply (needs) gap of 8.325 million
acre-feet/year by 2060.<span style="mso-spacerun: yes;"> </span>That </span><a href="http://www.statesman.com/news/news/opinion/behind-the-scary-water-headlines/nTSRX/"><span style="color: blue; font-family: Calibri;">scary</span></a><span style="font-family: Calibri;">
number is often presented as the reason the state needs to fund implementation
of the state water plan. <o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 10pt;">
<span style="font-family: Calibri;">But, when you break it down (see Table 6.1 in the 2012
plan), you see that </span><a href="http://www.twdb.state.tx.us/waterplanning/rwp/plans/2011/index.asp"><span style="color: blue; font-family: Calibri;">three
regions</span></a><span style="font-family: Calibri;"> together account for two-thirds of the gap:<span style="mso-spacerun: yes;"> </span><o:p></o:p></span></div>
<br />
<div class="MsoListParagraphCxSpFirst" style="margin: 0in 0in 0pt 0.75in; mso-add-space: auto; mso-list: l0 level1 lfo1; text-indent: -0.25in;">
<!--[if !supportLists]--><span style="font-family: Symbol; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font-size-adjust: none; font-stretch: normal; font: 7pt/normal "Times New Roman";">
</span></span></span><!--[endif]--><span style="font-family: Calibri;">Region C (Dallas/Fort Worth area) with 1.588
million acre-feet/yr; <o:p></o:p></span></div>
<br />
<div class="MsoListParagraphCxSpMiddle" style="margin: 0in 0in 0pt 0.75in; mso-add-space: auto; mso-list: l0 level1 lfo1; text-indent: -0.25in;">
<!--[if !supportLists]--><span style="font-family: Symbol; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font-size-adjust: none; font-stretch: normal; font: 7pt/normal "Times New Roman";">
</span></span></span><!--[endif]--><span style="font-family: Calibri;">Region H (Houston area) with 1.236 million
acre-feet/yr and <o:p></o:p></span></div>
<br />
<div class="MsoListParagraphCxSpLast" style="margin: 0in 0in 10pt 0.75in; mso-add-space: auto; mso-list: l0 level1 lfo1; text-indent: -0.25in;">
<!--[if !supportLists]--><span style="font-family: Symbol; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font-size-adjust: none; font-stretch: normal; font: 7pt/normal "Times New Roman";">
</span></span></span><!--[endif]--><span style="font-family: Calibri;">Region O (Llano Estacado) with 2.366 million
acre-feet/yr.<span style="mso-spacerun: yes;"> </span></span></div>
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<span style="font-family: Calibri;"><span style="mso-spacerun: yes;"></span></span> </div>
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<span style="font-family: Calibri;">We have explored the over-inflated Region C demand projections
</span><a href="http://www.texascenterforpolicystudies.blogspot.com/2013/07/region-c-reality-check-would-reduce.html"><span style="color: blue; font-family: Calibri;">elsewhere</span></a><span style="font-family: Calibri;">,
and a similar analysis of Region H is forthcoming.<span style="mso-spacerun: yes;"> </span>But, today we take a closer look at the 2.366
million acre-feet annual gap projected for Region O, which is over 28% of the
total projected statewide gap for 2060.<span style="mso-spacerun: yes;">
</span>Not surprisingly, it’s all about the sustainability of irrigation water from
the </span><a href="http://www.circleofblue.org/waternews/2013/world/texas-ogallala-photos/"><span style="color: blue; font-family: Calibri;">High
Plains Ogallala Aquifer</span></a><span style="font-family: Calibri;">. <o:p></o:p></span></div>
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<span style="font-family: Calibri;">Region O covers much of the Southern High Plains of
Texas.<span style="mso-spacerun: yes;"> </span>Irrigation dominates, accounting
for 95 % of the total regional use in 2010, or 4.186 million acre-feet/yr.<span style="mso-spacerun: yes;"> </span>Virtually all of this irrigation water is supplied
by the Ogallala (<b style="mso-bidi-font-weight: normal;">Figure 1</b>).<span style="mso-spacerun: yes;"> </span></span><br />
<span style="font-family: Calibri;"></span><br />
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<b style="mso-bidi-font-weight: normal;"><span style="font-family: Calibri;">Figure 1.<span style="mso-spacerun: yes;"> </span>Ogallala Aquifer from </span></b><a href="http://www.hpwd.com/public/images/hp_nawqa.gif"><b style="mso-bidi-font-weight: normal;"><span style="color: blue; font-family: Calibri;">High Plains Water District</span></b></a><b style="mso-bidi-font-weight: normal;"><o:p></o:p></b></div>
<o:p><span style="font-family: Calibri;"></span></o:p><br />
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<span style="font-family: Calibri;"><b style="mso-bidi-font-weight: normal;">Figure 2</b> shows
the various irrigation demand projections for Region O for the current (2017) and
past planning cycles.<span style="mso-spacerun: yes;"> </span>While these
projected demands do decline over time, as discussed below, they do not reflect
the constraints on availability of Ogallala water that would be in place with implementation
of management systems designed to preserve some aquifer capacity for the
future.<span style="mso-spacerun: yes;"> </span>The decreasing trend in these
demand projections is “due to declining well yields and increased irrigation
efficiencies.” (State Water Plan, p 118, Region O Summary).</span></div>
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<span style="font-family: Calibri;"><strong></strong></span> </div>
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<span style="font-family: Calibri;"><strong>Figure 2.<span style="mso-spacerun: yes;"> </span>Current and Past Irrigation Demand Projections for Region O<o:p></o:p></strong><o:p></o:p></span></div>
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<span style="font-family: Calibri;"></span><br />
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<span style="font-family: Calibri;"></span><br />
<span style="font-family: Calibri;">Instead, the effect of water management goals on ground
water availability is incorporated into the supply side of the planning
process. <span style="mso-spacerun: yes;"> </span>For example, the </span><a href="http://www.llanoplan.org/view-plan/"><span style="color: blue; font-family: Calibri;">2011 Region O Plan</span></a><span style="font-family: Calibri;"> projected
that water supply will decline 56 % between 2010 and 2060 “due to the managed
depletion of the Ogallala Aquifer,” with ground water availability decreasing
from 3.076 million acre-feet in 2010 to 1.337 million acre-feet in 2060.<span style="mso-spacerun: yes;"> </span></span></div>
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<span style="font-family: Calibri;">This approach results in the large demand/supply gap, which
is theoretically to be addressed with water supply strategies.<span style="mso-spacerun: yes;"> </span>But, the 2011 Region O plan projects that advanced
irrigation conservation will only be able to provide 479,466 acre-feet/year of
water in 2010 at a capital cost of $ 346 million.<span style="mso-spacerun: yes;"> </span><o:p></o:p></span></div>
<span style="font-family: Calibri;">As the 2011 planning process was coming to a conclusion, the
regional groundwater conservation districts in </span><a href="http://www.twdb.texas.gov/mapping/doc/maps/gma/GMA_2.pdf"><span style="color: blue; font-family: Calibri;">Groundwater
Management Area 2</span></a><span style="font-family: Calibri;">, were finalizing their </span><a href="http://www.twdb.texas.gov/groundwater/management_areas/DFC.asp"><span style="color: blue; font-family: Calibri;">desired
future conditions</span></a><span style="font-family: Calibri;"> (DFCs)for the Ogallala aquifer and beginning to adopt
rules to ensure those DFCs could be met.<span style="mso-spacerun: yes;">
</span>For the portion of the Ogallala covered by Region O, the central DFC is
a </span><a href="http://www.hpwd.com/public/pdfs/10-2011%20Cross%20Section.pdf"><span style="color: blue; font-family: Calibri;">50 %
depletion of the aquifer over 50 years</span></a><span style="font-family: Calibri;">.<o:p></o:p></span><br />
<br />
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<span style="font-family: Calibri;">If the Ogallala is, in fact, to be managed to meet the desired
future conditions set by the regional groundwater conservation districts,
shouldn’t the projected “demands” reflect that management, thus potentially
significantly decreasing the statewide projected demand/supply gap that
generates so much attention and paints Texas as a state running out of water?<span style="mso-spacerun: yes;"> </span>Put another way, doesn’t showing a huge
demand that can never realistically be met undermine the integrity of the
planning process? <o:p></o:p></span></div>
<span style="font-family: Calibri;">Region O initially seemed poised to address this important
issue in the current round of planning.<span style="mso-spacerun: yes;"> </span>Earlier
this year, Region O consultants worked with irrigators throughout the region to
review the 2017 irrigation demand projections from the Texas Water Development
Board.<span style="mso-spacerun: yes;"> </span>While the 2017 projections were
on average about 500,000 acre-feet/yr less than the projections from the
2011/2012 planning period (<b style="mso-bidi-font-weight: normal;">Figure 1</b>),
they were still far above the ground water availability under the managed
depletion scenario reflected through DFC implementation.<span style="mso-spacerun: yes;"> </span><o:p></o:p></span><br />
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<span style="font-family: Calibri;">According to the consultant’s July 2013 report (available </span><a href="http://www.llanoplan.org/Downloads/Region%20O%20Meeting%20Packet%20-%20August%201,%202013.pdf"><span style="color: blue; font-family: Calibri;">here</span></a><span style="font-family: Calibri;">
as part of the background materials for the Region O August 1, 2013 meeting
(pp. 9-12 of draft non-municipal demand Technical Memorandum from<span style="mso-spacerun: yes;"> </span>Daniel B. Stephens & Associates, dated
July 26, 2013):<o:p></o:p></span></div>
<i style="mso-bidi-font-style: normal;"><span style="font-family: Calibri;">The
revision to the demand estimates that is proposed here is an attempt to apply
the limitations set forth in the DFC process to the demands previously
estimated…<o:p></o:p></span></i><br />
<i style="mso-bidi-font-style: normal;"><span style="font-family: Calibri;"></span></i><br />
<i style="mso-bidi-font-style: normal;"><span style="font-family: Calibri;">Subcommittee
meetings with irrigation interests discussed current and future needs of
producers and what measures would be required in order to implement the
DFC.<span style="mso-spacerun: yes;"> </span>The general concern was over the
best way to account for real unmet needs, particularly for irrigation, and to
continue to show irrigation water shortages.<span style="mso-spacerun: yes;">
</span>Under the proposed methodology, the irrigation demand would be set equal
to the volume of water that is available in the policy sense for irrigators to
use.<span style="mso-spacerun: yes;"> </span>This would incorrectly show no unmet
needs for the region’s irrigators.</span></i><br />
<i style="mso-bidi-font-style: normal;"><span style="font-family: Calibri;"><o:p></o:p></span></i><br />
<i style="mso-bidi-font-style: normal;"><span style="font-family: Calibri;">Unmet
needs are the impetus for development of a particular water management
strategy.<span style="mso-spacerun: yes;"> </span>Advanced irrigation
conservation, beyond the conservation measures currently being taken, is a
water management strategy that would need to be pursued for the region to meet
their groundwater conservation goals.<span style="mso-spacerun: yes;"> </span>To
account for increased conservation, an estimate of conservation volumes was
added back into the irrigation demand:<o:p></o:p></span></i><br />
<span style="font-family: Calibri;"><i style="mso-bidi-font-style: normal;"></i></span><br />
<span style="font-family: Calibri;"><i style="mso-bidi-font-style: normal;">Total
irrigation demand = Baseline for irrigation demand + advanced conservation</i><o:p></o:p></span><br />
<br />
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<span style="font-family: Calibri;">Thus, the proposed approach was to base the projected
irrigation demand on water available under the DFC <i style="mso-bidi-font-style: normal;">plus</i> an amount that could be achieved via advanced conservation
(and then translate that advanced conservation to the water supply strategy
side of the plan).<o:p></o:p></span></div>
<span style="font-family: Calibri;">Under this approach, 2060 total projected irrigation demand
for Region O would have been <b style="mso-bidi-font-weight: normal;">1.328
million acre-feet/yr for 2060</b> (Figure 5 in the July 2013 consultants’
report) versus the 2011/2012 plan’s projected 2060 demand of <b style="mso-bidi-font-weight: normal;">3.474 million acre-ft/yr</b>.<span style="mso-spacerun: yes;"> </span>And the 2070 projected demand under the
consultant’s approach would have been 1.273 million acre-feet/yr.<span style="mso-spacerun: yes;"> </span><o:p></o:p></span><br />
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<span style="font-family: Calibri;">For perspective, this proposed approach have meant over 2
million acre-feet less than 2011/2012 plan’s <span style="mso-spacerun: yes;"> </span>projected demand, or <i style="mso-bidi-font-style: normal;">nearly <u>one-quarter </u>of the projected 2060 statewide demand/supply
gap from the 2012 plan.<span style="mso-spacerun: yes;"> </span></i><o:p></o:p></span></div>
<span style="font-family: Calibri;">However, between July and the August 1, 2013 meeting of
Region O, the Region O planning group decided instead to request no changes in
the TWDB irrigation demand projections.<span style="mso-spacerun: yes;">
</span>(The revised consultant report and adoption of the TWDB projections can
be found </span><a href="http://www.llanoplan.org/Downloads/Region%20O%20-%20Non-Municipal%20Demand%20Projections.pdf"><span style="color: blue; font-family: Calibri;">here</span></a><span style="font-family: Calibri;">.
<o:p></o:p></span><br />
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<span style="font-family: Calibri;">What changed?<span style="mso-spacerun: yes;"> </span>That
requires a look behind the scenes at development in groundwater management in
Region O, particularly in the </span><a href="http://www.hpwd.com/"><span style="color: blue; font-family: Calibri;">High Plains
Underground Water Conservation District</span></a><span style="font-family: Calibri;"> (HPWD), which covers 16 of the 21
counties in Region O and accounts for the vast majority of irrigation use from
the Ogallala. <o:p></o:p></span></div>
<span style="font-family: Calibri;">Established in 1951, the HPWD has been working for decades
to conserve and protect the basically non-renewable reserves of the
Ogallala.<span style="mso-spacerun: yes;"> </span>In recent years, </span><a href="http://www.hpwd.com/public/pdfs/07-2012%20Cross%25Section.pdf"><span style="color: blue; font-family: Calibri;">as aquifer
levels have begun to drop even more steeply than in the past</span></a><span style="font-family: Calibri;">, HPWD sought
to enact phased-in metering requirements and pumping limits generally 1.5
acre-feet/acre).<span style="mso-spacerun: yes;"> </span>While not free from </span><a href="http://www.texascorn.org/files/31811_ProducersEncouragedatMtgs.pdf"><span style="color: blue; font-family: Calibri;">controversy</span></a><span style="font-family: Calibri;">,
the new rules—</span><a href="http://www.hpwd.com/media/august-7,-2013/july-19-2011"><span style="color: blue; font-family: Calibri;">enacted
in July 2011</span></a><span style="font-family: Calibri;"> were approved 4-0 by the board as necessary to meet the 50/50
goal for the Southern High Plains portion of the Ogallala.<span style="mso-spacerun: yes;"> </span><o:p></o:p></span><br />
<br />
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<span style="font-family: Calibri;">Two factors appear to have combined to generate resistance
to the HPWD’s efforts to sustainably manage the Ogallala for both current and
future generations: <span style="mso-spacerun: yes;"> </span>commodity prices and
the second is the <i style="mso-bidi-font-style: normal;">Edwards Aquifer v. Day </i>case
(discussed </span><a href="http://www.texascenter.org/water/Ground%20Water%20in%20Texas%202013%20policy%20recommendations.pdf"><span style="color: blue; font-family: Calibri;">here</span></a><span style="font-family: Calibri;">).<span style="mso-spacerun: yes;"> </span><o:p></o:p></span></div>
<span style="font-family: Calibri;">Corn, along with cotton and wheat, is one of the major
irrigated crops in the High Plains, from Texas up through Kansas.<span style="mso-spacerun: yes;"> </span>As shown in the recent </span><a href="http://www.twdb.state.tx.us/conservation/agriculture/demonstration/doc/TAWC_Project_Summary.pdf"><span style="color: blue; font-family: Calibri;">report
of results</span></a><span style="font-family: Calibri;"> from the </span><a href="http://www.depts.ttu.edu/tawc/"><span style="color: blue; font-family: Calibri;">Texas Alliance
for Water Conservation</span></a><span style="font-family: Calibri;"> work in the Southern High Plains, crop choices
fluctuate with “anticipated prices, weather conditions, and water
availability.”<span style="mso-spacerun: yes;"> </span>When corn prices are
high, there is an incentive for growers to irrigate as much as possible in
order to take advantage of the market.<span style="mso-spacerun: yes;">
</span>Under that perspective, </span><a href="http://www.nytimes.com/2013/05/20/us/high-plains-aquifer-dwindles-hurting-farmers.html?pagewanted=all&_r=0"><span style="color: blue; font-family: Calibri;">pumping
limitations can be a barrier to short-term profits</span></a><span style="font-family: Calibri;">.<span style="mso-spacerun: yes;"> </span><o:p></o:p></span><br />
<br />
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<span style="font-family: Calibri;">Cropping fluctuations for the 4,700 irrigated acres involved
in the TAWA project are shown in <b style="mso-bidi-font-weight: normal;">Figure
3</b>. These thirty voluntarily-enrolled sites represent only a tiny portion of
the over 2 million irrgated acres in the Southern High Plains, but may be
somewhat indicative of overall trends.</span><br />
<span style="font-family: Calibri;"></span><br />
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<b style="mso-bidi-font-weight: normal;"><span style="font-family: Calibri;">Figure 3.<span style="mso-spacerun: yes;"> </span>Irrigated crop trends
on TAWA sites<o:p></o:p></span></b></div>
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<span style="font-family: Calibri;"><b style="mso-bidi-font-weight: normal;">Figure 4</b> shows
irrigation use in Region O as compared to national average corn prices for the
last five years.<span style="mso-spacerun: yes;"> </span>Both 2009 and 2011 were
years of severe drought in the region, requiring additional irrigation.<span style="mso-spacerun: yes;"> </span></span><br />
<span style="font-family: Calibri;"><o:p></o:p></span><br />
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<div align="center" class="MsoNoSpacing" style="margin: 0in 0in 0pt; text-align: center;">
<b style="mso-bidi-font-weight: normal;"><span style="font-family: Calibri;">Figure 4. Region O Irrigation Use (million
acre-feet/yr) v. National Calendar Yr Average Corn Prices<o:p></o:p></span></b></div>
<div style="text-align: center;">
<span style="font-family: Calibri;">(Sources: Texas
Water Development Board and Farmdoc.illinois.edu)<o:p></o:p></span></div>
<br />
<div class="MsoNoSpacing" style="margin: 0in 0in 0pt;">
<o:p><span style="font-family: Calibri;"> </span></o:p><span style="font-family: Calibri;">Region O water use is not as closely correlated with cotton
prices (<b style="mso-bidi-font-weight: normal;">Figure 5</b>), though 2010 was a
relatively normal precipitation year, which could have reduced cotton
irrigation demands.<span style="mso-spacerun: yes;"> </span><o:p></o:p></span></div>
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" o:ole="" o:spid="_x0000_i1025" style="height: 213pt; visibility: visible; width: 317.25pt;" type="#_x0000_t75">
<v:imagedata o:title="" src="file:///C:\Users\Mary\AppData\Local\Temp\msohtmlclip1\01\clip_image006.png">
<o:lock aspectratio="f" v:ext="edit">
</o:lock></v:imagedata></v:shape></span></span><b style="mso-bidi-font-weight: normal;"><span style="font-family: Calibri;">Figure 5.<span style="mso-spacerun: yes;">
</span>Region O Irrigation Use (1000s AF/yr) v. Calendar Year Avg Cotton Price<o:p></o:p></span></b></div>
<div style="text-align: center;">
<span style="font-family: Calibri;">(Sources: TWDB and
</span><a href="http://www.cotton.org/"><span style="color: blue; font-family: Calibri;">National Cotton Council</span></a><span style="font-family: Calibri;">)<o:p></o:p></span></div>
<b style="mso-bidi-font-weight: normal;"><o:p><span style="font-family: Calibri;"></span></o:p></b><br />
<span style="font-family: Calibri;">Adding to these higher commodity price-related incentives, in
February 2012, the Texas Supreme Court held in the <i style="mso-bidi-font-style: normal;">Day </i>case that groundwater is owned in place by the overlying
landowner.<span style="mso-spacerun: yes;"> </span>The ruling added fuel to a small
group of High Plains farmers </span><a href="http://www.nytimes.com/2012/03/18/us/in-west-texas-push-comes-to-shove-over-water-restrictions.html"><span style="color: blue; font-family: Calibri;">arguing
against</span></a><span style="font-family: Calibri;"> pumping limits on constitutional grounds.<span style="mso-spacerun: yes;"> </span>The </span><a href="http://protectwaterrights.com/"><span style="color: blue; font-family: Calibri;">Protect
Water Rights Coalition</span></a><span style="font-family: Calibri;"> has opposed HPWD’s efforts to enact measurement and
pumping limits at every turn, often finding </span><a href="http://www.texascorn.org/files/HPWDRules_040412-PWRC.pdf"><span style="color: blue; font-family: Calibri;">support</span></a><span style="font-family: Calibri;">
from the Texas Corn Producers. <o:p></o:p></span><br />
<br />
<div class="MsoNormal" style="margin: 0in 0in 10pt;">
<a href="http://lubbockonline.com/business/2013-03-20/turnover-continues-water-district-board-replacement-sought#.UkSBBe4o7cs"><span style="color: blue; font-family: Calibri;">In
November 2012, two HPWD board incumbents were defeated and two more resigned in
early 2013</span></a><span style="font-family: Calibri;">.<span style="mso-spacerun: yes;"> </span>The 12-year director of
HPWD, James Conkwright, </span><a href="http://lubbockonline.com/local-news/2013-06-20/hpwd-administrator-retire#.UkSCHu4o7ct"><span style="color: blue; font-family: Calibri;">resigned
in July 2013</span></a><span style="font-family: Calibri;">.<span style="mso-spacerun: yes;"> </span>Mr. Conkwright also
stepped down from his position representing HPWD on the Region O planning
group.<o:p></o:p></span></div>
<span style="font-family: Calibri;">So, where does Region O go from here?<span style="mso-spacerun: yes;"> </span>As noted above, the TWDB projections adopted
by the Region unfortunately also fail to reflect the aquifer management
goal.<span style="mso-spacerun: yes;"> </span>But, because these demand
projections were initially supplied to the Region by TWDB, there is no clear
step to change them at this point.<span style="mso-spacerun: yes;"> </span><o:p></o:p></span><br />
<br />
<div class="MsoNormal" style="margin: 0in 0in 10pt;">
<span style="font-family: Calibri;">The Region’s next steps will be to look at the demand/supply
gap and water management strategies.<span style="mso-spacerun: yes;">
</span>Presumably, the Region should apply the current DFC to determine
available supply (as required </span><a href="http://info.sos.state.tx.us/pls/pub/readtac$ext.TacPage?sl=R&app=9&p_dir=&p_rloc=&p_tloc=&p_ploc=&pg=1&p_tac=&ti=31&pt=10&ch=357&rl=32"><span style="color: blue; font-family: Calibri;">by
31 T.A.C. Section 357.32(d)</span></a><span style="font-family: Calibri;">).<span style="mso-spacerun: yes;"> </span>With
the application of the DFC/managed available groundwater standard, the
demand/supply gap will be as large as or greater than that shown in the
2011/2012 plan, again distorting the total statewide gap significantly.<span style="mso-spacerun: yes;"> </span>While advanced conservation can be used to
help reduce irrigation demand, the over-stated gap and some completely
unrealistic figure of “unmet needs” will likely remain.<span style="mso-spacerun: yes;"> </span><o:p></o:p></span></div>
<span style="font-family: Calibri;">It’s unfortunate that Region O (and TWDB) missed a golden
opportunity to help improve the overall integrity of the state planning process
and focus instead on what is really needed to achieve sustainable management of
the High Plains portion of the Ogallala Aquifer, which continues to decline at </span><a href="http://www.twdb.texas.gov/publications/reports/technical_notes/doc/TechnicalNote_13-02_GW_Recorder2012.pdf"><span style="color: blue; font-family: Calibri;">alarming
rates</span></a><span style="font-family: Calibri;">.<span style="mso-spacerun: yes;"> </span><o:p></o:p></span><br />
<br />
<div class="MsoNormal" style="margin: 0in 0in 10pt;">
<span style="font-family: Calibri;">The future of the HPWD, one of the oldest and most
successful of Texas groundwater districts would also appear to be in jeopardy
unless those many farmers who do care about the future condition of this unique
resource, and the communities that depend upon it, become more vocal.<span style="mso-spacerun: yes;"> </span><o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 10pt;">
<o:p><span style="font-family: Calibri;"> </span></o:p></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 10pt;">
<span style="font-family: Calibri;"></span><br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi_b5_Ejww7DVXuKuRur-yea8va-_p6bhvETy8mxOigt2xLaA6T6iOaG2qrw8vHZn211n806HA4FbjleEhBrzmcuUCiQBi_vU18SGNB_KZ-yxRxyCFaF-Mv07uEqRvBpYk_YiiszIFvVGXB/s1600/rwpg+map.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"></a> </div>
</div>
Texas Center for Policy Studieshttp://www.blogger.com/profile/06470944874060481347noreply@blogger.com0tag:blogger.com,1999:blog-3659760152032783164.post-24943592898383764742013-09-24T08:40:00.000-07:002013-09-24T08:40:10.627-07:00Data Reliability Undermines Water for Mining Projections
<br />
<div class="MsoNormal" style="margin: 0in 0in 10pt;">
<span style="font-family: Calibri;">While the demands for Texas water by mining are not large
compared to other demands, an </span><a href="http://www.texascenter.org/water_plan.html"><span style="color: blue; font-family: Calibri;">analysis</span></a><span style="font-family: Calibri;"> of projections
for demands and needs in this sector provides an example of how our regional
and state water planning process often fails to collect and use the type of
accurate data needed for a state water plan.<span style="mso-spacerun: yes;">
</span>For planning purposes, water demands for mining include oil and gas
activities, as well as those demands for coal, uranium, rock, sand, gravel and
other traditional mining activities.<span style="mso-spacerun: yes;"> </span><o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 10pt;">
<span style="font-family: Calibri;">This new analysis shows that water use for mining—both
actual and projected—is significant in some regions of the state, but the
projections do not appear to be based on reliable data.<span style="mso-spacerun: yes;"> </span>The analysis also reviews the existing statutory
authority of various agencies to collect water use data and discusses how that
authority might be used to develop better projections.<o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 10pt;">
<b style="mso-bidi-font-weight: normal;"><span style="font-family: Calibri;">Coming soon:<span style="mso-spacerun: yes;"> </span><i style="mso-bidi-font-style: normal;">an
analysis of irrigation water use projections</i>.<o:p></o:p></span></b></div>
Texas Center for Policy Studieshttp://www.blogger.com/profile/06470944874060481347noreply@blogger.com0tag:blogger.com,1999:blog-3659760152032783164.post-7562336964333046342013-09-10T12:57:00.000-07:002013-09-10T12:57:03.563-07:00Edwards Aquifer Authority v. Bragg: Resource Links
<br />
<div class="MsoNormal" style="margin: 0in 0in 10pt;">
<span style="font-family: Calibri;">While this important case has not yet run its full course, the
ultimate outcome of Edwards Aquifer Authority v. Bragg could significantly
affect how regional water planning groups determine how much ground
water will be available in the future.<span style="mso-spacerun: yes;">
</span>Last week, the San Antonio Court of Appeals issued its opinion regarding
whether certain permitting decisions by the </span><a href="http://www.edwardsaquifer.org/"><span style="color: blue; font-family: Calibri;">Edwards Aquifer Authority</span></a><span style="font-family: Calibri;"> constitute
a compensable regulatory taking.<span style="mso-spacerun: yes;"> </span>Here are
some links for further reading:<o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 10pt;">
<a href="http://www.search.txcourts.gov/SearchMedia.aspx?MediaVersionID=88cef3c2-8ca6-41f2-9637-eb471dc21b13&MediaID=d5ce49aa-44b2-4042-98fb-faac1ea3cd53&coa=%22%20+%20this.CurrentWebState.CurrentCourt%20+%20@%22&DT=Opinion"><span style="color: blue; font-family: Calibri;">EAA
v. Bragg opinion</span></a><span style="font-family: Calibri;">, August 28, 2013<o:p></o:p></span></div>
<a href="http://scholar.google.com/scholar_case?case=17654424129403106972&hl=en&as_sdt=2&as_vis=1&oi=scholarr"><span style="color: blue; font-family: Calibri;">Edwards
Aquifer Authority v. Day</span></a><span style="font-family: Calibri;"> (2012 Texas Supreme Court opinion which Bragg
court relies upon)<o:p></o:p></span><br />
<br />
<div class="MsoNormal" style="margin: 0in 0in 10pt;">
<a href="http://lawprofessors.typepad.com/environmental_law/2013/08/bragg-takings-and-the-economics-of-limited-resources.html"><span style="color: blue; font-family: Calibri;">Environmental
Law Prof</span></a><span style="font-family: Calibri;"> Blog (Dave Owen, University of Maine School of Law)<o:p></o:p></span></div>
<a href="http://texaslivingwaters.org/texas-courts-start-fill-blanks-groundwater-law/"><span style="color: blue; font-family: Calibri;">Texas
Living Waters</span></a><span style="font-family: Calibri;"> Blog (Amy Hardberger, St. Mary’s School of Law)<o:p></o:p></span><br />
<br />
<div class="MsoNormal" style="margin: 0in 0in 10pt;">
<a href="http://www.texasobserver.org/texas-court-upholds-takings-claim-landmark-water-case/"><span style="color: blue; font-family: Calibri;">Texas
Observer</span></a><span style="font-family: Calibri;"> article<o:p></o:p></span></div>
<a href="http://agrilife.org/texasaglaw/2013/08/29/decisions-decisions/"><span style="color: blue; font-family: Calibri;">Texas
Agriculture Law</span></a><span style="font-family: Calibri;"> Blog<o:p></o:p></span><br />
<br />
<div class="MsoNormal" style="margin: 0in 0in 10pt;">
<span style="font-family: Calibri;">University of Texas </span><a href="http://www.utexas.edu/law/academics/centers/energy/2013/09/managing-texas-ground-water-more-difficult-than-ever/"><span style="color: blue; font-family: Calibri;">Energy
Center</span></a><span style="font-family: Calibri;"> Blog<o:p></o:p></span></div>
<a href="http://blog.pacificlegal.org/2013/texas-court-finds-agency-cant-deny-pecan-farmers-water-rights-without-compensation/"><span style="color: blue; font-family: Calibri;">Pacific
Legal Foundation</span></a><span style="font-family: Calibri;"> Blog<o:p></o:p></span><br />
Texas Center for Policy Studieshttp://www.blogger.com/profile/06470944874060481347noreply@blogger.com26tag:blogger.com,1999:blog-3659760152032783164.post-32044908507120183122013-09-02T10:32:00.000-07:002013-09-02T10:32:34.422-07:00New Board Can Fill Leadership Vacuum on Texas Water
<br />
<div class="MsoNormal" style="margin: 0in 0in 10pt;">
<span style="font-family: Calibri;">Tomorrow, September 3rd, the three new members of the </span><a href="http://www.twdb.state.tx.us/board/2013/09/Board/BoardAgenda.pdf"><span style="color: blue; font-family: Calibri;">Texas
Water Development Board</span></a><span style="font-family: Calibri;"><span style="mso-spacerun: yes;"> </span>will convene
for the first time since being </span><a href="http://www.twdb.state.tx.us/newsmedia/press_releases/2013/08/boardmembers.asp"><span style="color: blue; font-family: Calibri;">appointed
by Governor Rick Perry</span></a><span style="font-family: Calibri;">.<span style="mso-spacerun: yes;"> </span>At their
September 3<sup><span style="font-size: x-small;">rd</span></sup> meeting, Chairman Carlos Rubenstein and fellow board
members Mary Ann Williamson and Bech Bruun will make opening remarks, appoint
an Executive Administrator and hear comments from the public.<span style="mso-spacerun: yes;"> </span>But this short first meeting is only a
prelude to the real work that lies ahead for this now full-time board:<span style="mso-spacerun: yes;"> </span>providing the statewide agency leadership
needed to achieve a sustainable water future in Texas.<o:p></o:p></span></div>
<span style="font-family: Calibri;">Jack Welch, business guru and former CEO of General
Electric, once said that “<em><span style="color: black; font-family: "Calibri","sans-serif"; font-style: normal; mso-ascii-theme-font: minor-latin; mso-bidi-font-family: Helvetica; mso-bidi-font-style: italic; mso-hansi-theme-font: minor-latin;">a leader’s
job is to look into the future and see the organization, not as it is, but as it
should be.”</span></em></span><em><span style="color: black; font-family: "Helvetica","sans-serif";"> </span></em><em><span style="color: black; font-family: "Calibri","sans-serif"; font-style: normal; mso-ascii-theme-font: minor-latin; mso-bidi-font-family: Helvetica; mso-bidi-font-style: italic; mso-hansi-theme-font: minor-latin;">The new
TWDB members have an unprecedented opportunity to do just that.<span style="mso-spacerun: yes;"> </span><o:p></o:p></span></em><br />
<br />
<div class="MsoNormal" style="margin: 0in 0in 10pt;">
<span style="font-family: Calibri;">The new board has the opportunity, first and foremost, to
ensure that the state’s water planning process is grounded in reality, not
wishful thinking, with respect to both projected demands and available
supply.<span style="mso-spacerun: yes;"> </span>It can move the planning process
away from the current exercise of producing a long-term oriented wish list of
expensive infrastructure projects to a focus on what, exactly, needs to be done
to accelerate cost-effective efficiency strategies to stretch our existing
supplies and meet real needs over the next two decades.<span style="mso-spacerun: yes;"> </span>House Bill 4, passed in May 2013, provides
the board with </span><a href="http://www.texascenterforpolicystudies.blogspot.com/2013/06/understanding-house-bill-4_30.html"><span style="color: blue; font-family: Calibri;">a
prioritization process</span></a><span style="font-family: Calibri;"> to accomplish these goals.<span style="mso-spacerun: yes;"> </span><o:p></o:p></span></div>
<span style="font-family: Calibri;">The board can protect the value of healthy rivers and
streams to the Texas economy and to the state’s future generations by: <span style="mso-spacerun: yes;"> </span>working with rural landowners to protect
watersheds and aquifer recharge zones; developing the science and policy tools
the state needs to ensure that drought and increased climate variability don’t
result in dried up rivers and lifeless bays; and recognizing that healthy flows
will ensure that Texas water management decisions are not driven by federal
laws like the Endangered Species Act.<span style="mso-spacerun: yes;"> </span><o:p></o:p></span><br />
<br />
<div class="MsoNormal" style="margin: 0in 0in 10pt;">
<span style="font-family: Calibri;">While groundwater management authority remains dispersed
among over 100 local and regional districts, the board can play a role in
raising awareness about the value of careful aquifer stewardship and it can help
the public and water managers understand how groundwater and surface water are
inter-connected.<span style="mso-spacerun: yes;"> </span><o:p></o:p></span></div>
<span style="font-family: Calibri;">And, finally, the board can and should ensure that the
legislature is aware of the need to invest in modern management and protection
of Texas water resources.<span style="mso-spacerun: yes;"> </span>Texas needs
much better information on actual water use, near-term demands and
environmental water needs.<o:p></o:p></span><br />
<br />
<div class="MsoNormal" style="margin: 0in 0in 10pt;">
<span style="font-family: Calibri;">Texas has come a long way in water management and planning
since the TWDB was first established in 1957, during a devastating drought that
may be exceeded only by the current one.<span style="mso-spacerun: yes;">
</span>But, there is much more to do to respond to new challenges.<span style="mso-spacerun: yes;"> </span>Here is hoping the new board will reimagine a
TWDB that provides the statewide leadership essential to meeting those challenges
and developing a sustainable water future. <o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 10pt;">
<span style="font-family: Calibri;">By: <b style="mso-bidi-font-weight: normal;">Mary E. Kelly, <i style="mso-bidi-font-style: normal;"><a href="http://www.parulallc.com/"><span style="color: blue;">Parula,
LLC</span></a> for <a href="http://www.texascenter.org/"><span style="color: blue;">Texas Center for Policy
Studies</span></a></i></b><i style="mso-bidi-font-style: normal;"><o:p></o:p></i></span></div>
Texas Center for Policy Studieshttp://www.blogger.com/profile/06470944874060481347noreply@blogger.com1tag:blogger.com,1999:blog-3659760152032783164.post-30575303239397693392013-08-20T13:13:00.001-07:002013-08-20T13:13:14.328-07:00Water for Steam Electric Power Generation: Planning or Pie in the Sky?
<br />
<div class="MsoNormal" style="margin: 0in 0in 10pt;">
<span style="font-family: Calibri;">The Texas Water Plan projections for steam electric power
generation (SEPG) provide a stark example of how the planning process often
fails to live up to its potential to guide the state to a sustainable water
future.<span style="mso-spacerun: yes;"> </span><o:p></o:p></span></div>
<span style="font-family: Calibri;">Our new analysis, available at </span><a href="http://www.texascenter.org/"><span style="color: blue; font-family: Calibri;">www.texascenter.org</span></a><span style="font-family: Calibri;">, shows that the
regions often ignored reasonable guidance from the TWDB that would have
resulted in substantially lower projected SEPG water demand.<span style="mso-spacerun: yes;"> </span>Instead, many of the regional planning groups
have included unsubstantiated projections for future demand by steam
electric plants.<span style="mso-spacerun: yes;"> </span></span><br />
<div class="MsoNormal" style="margin: 0in 0in 10pt;">
<span style="font-family: Calibri;"><span style="mso-spacerun: yes;"></span>More troubling, TWDB
has failed to push back against these inappropriate projections and failed to
adopt rules that would direct the regions to substantiate the SEPG water
demand.<span style="mso-spacerun: yes;"> </span></span></div>
<div class="MsoNormal" style="margin: 0in 0in 10pt;">
<span style="font-family: Calibri;"><span style="mso-spacerun: yes;"></span>Finally, the process for
developing SEPG water demand projections is essentially disconnected from the
reality of how many new power plants Texas might actually need or expect over
the next 50 years <i style="mso-bidi-font-style: normal;">and</i> where those
plants <i style="mso-bidi-font-style: normal;">should</i> be located from an
available water supply perspective.<span style="mso-spacerun: yes;"> </span><o:p></o:p></span></div>
Texas Center for Policy Studieshttp://www.blogger.com/profile/06470944874060481347noreply@blogger.com1tag:blogger.com,1999:blog-3659760152032783164.post-41345145362196042702013-07-21T14:44:00.001-07:002013-07-21T14:44:56.514-07:00REGION C REALITY CHECK WOULD REDUCE THE PRICE TAG OF THE STATE WATER PLAN<br />
<div class="MsoNormal" style="margin: 0in 0in 10pt;">
<span style="font-family: Calibri;">As we noted in our last </span><a href="http://kut.org/wp-content/media_player/playerkutx.htm"><span style="color: blue; font-family: Calibri;">post</span></a><span style="font-family: Calibri;">, a recent
Texas Court of Appeals ruling has highlighted the issue of Region C’s desire to
proceed with the proposed Marvin Nichols Reservoir in East Texas. This project,
which is proposed to supply approximately </span><a href="http://www.twdb.state.tx.us/publications/state_water_plan/2012/13.pdf"><span style="color: blue; font-family: Calibri;">450,000
acre feet/year at a capital cost of $ 3.3 billion</span></a><span style="font-family: Calibri;">.<span style="mso-spacerun: yes;"> </span>Marvin Nichols is one of eight Region C
projects that are in the top 20 most costly projects in the 2012 State Water
Plan.<span style="mso-spacerun: yes;"> </span>In fact, the 2012 Plan recommended
a total of $ 21 billion in water supply projects for Region C, or about 40% of
the total projected state plan cost of $ 53 billion by 2060.<span style="mso-spacerun: yes;"> </span>Many of these projects, especially the
proposed large new reservoirs and pipelines, are not projected to be needed
until near the end of the 50-year planning horizon.<span style="mso-spacerun: yes;"> </span><o:p></o:p></span></div>
<div class="MsoNormal" style="margin: 0in 0in 10pt;">
<span style="font-family: Calibri;">These proposed Region C projects are driven by municipal
demand projections for the fast-growing Dallas-Fort Worth Metroplex.<span style="mso-spacerun: yes;"> </span>These demand projections have two components:
projected population and projected water use per capita, often expressed in
gallons of water per capita per day (or GPCD).<span style="mso-spacerun: yes;">
</span>Both population and projected water use figures are developed in the
first instance by the Texas Water Development Board (TWDB).<span style="mso-spacerun: yes;"> </span>The regions are then given leeway to request
“adjustments” of both population and projected GPCD.<o:p></o:p></span></div>
<div class="MsoNormal" style="margin: 0in 0in 10pt;">
<span style="font-family: Calibri;">The </span><a href="http://www.twdb.state.tx.us/waterplanning/data/projections/2017/demandproj.asp"><span style="color: blue; font-family: Calibri;">demand
projections</span></a><span style="font-family: Calibri;"> supplied to Region C by TWDB for the current new round of
planning are considerably lower than the projections used to develop the 2012
plan.<span style="mso-spacerun: yes;"> </span>In fact, as discussed below, using
the TWDB projections with the application of conservation strategies comparable
to that used in the 2012 Region C plan, would result in almost 600,000
acre-feet <b style="mso-bidi-font-weight: normal;"><i style="mso-bidi-font-style: normal;">less</i></b> municipal demand in 2060 (2.2 million acre-feet (MAF) vs.
the 2012 plan projection of 2.8 MAF), potentially completely <b style="mso-bidi-font-weight: normal;"><i style="mso-bidi-font-style: normal;">eliminating</i></b>
the need for Marvin Nichols or other projects, or at least pushing them out to
the very far end of the 50-year planning horizon.<o:p></o:p></span></div>
<div class="MsoNormal" style="margin: 0in 0in 10pt;">
<span style="font-family: Calibri;">These new, more realistic, demand projections are a vital
step by TWDB in the direction of a more sustainable water plan for Texas.<span style="mso-spacerun: yes;"> </span>Strong oversight and public engagement will
be necessary to ensure these realistic projections are not undermined during
the regional review process.<span style="mso-spacerun: yes;"> </span>And, in
fact, there is reason to believe, as explained below, that if all (not just
some) water user groups in Region C were to engage in aggressive efficiency and
drought management measures, could eliminate the need for an additional 400,000
acre-feet of new supply.<span style="mso-spacerun: yes;"> </span>This, in turn,
should result in a substantial reduction in the projected costs of the Region C
plan, and thus in the cost of the state plan as a whole.<span style="mso-spacerun: yes;"> </span><o:p></o:p></span></div>
<div class="MsoNormal" style="margin: 0in 0in 10pt;">
<span style="font-family: Calibri;">___________________________<span style="mso-spacerun: yes;">
</span><o:p></o:p></span></div>
<div class="MsoNormal" style="margin: 0in 0in 10pt;">
<b style="mso-bidi-font-weight: normal;"><i style="mso-bidi-font-style: normal;"><span style="font-family: Calibri;">Discussion<o:p></o:p></span></i></b></div>
<div class="MsoNormal" style="margin: 0in 0in 10pt;">
<span style="font-family: Calibri;">Updated municipal demands are calculated based on </span><a href="http://www.twdb.state.tx.us/waterplanning/data/projections/2017/demandproj.asp"><span style="color: blue; font-family: Calibri;">population
forecasts</span></a><span style="font-family: Calibri;"> supplied by the state demographer and on GPCD estimates.<span style="mso-spacerun: yes;"> </span>The population forecast tends to become less
accurate toward the end of the planning horizon, but a review of previous water
plans indicates that population projections compare well with actual growth.<span style="mso-spacerun: yes;"> </span>For example, census results showed that the
forecasts from 2006 overestimated 2010 population by only about 1 percent.<span style="mso-spacerun: yes;"> </span>The population forecast for the new 2017 plan
corrects for that difference and other region-specific factors.<span style="mso-spacerun: yes;"> </span><o:p></o:p></span></div>
<div class="MsoNormal" style="margin: 0in 0in 10pt;">
<span style="font-family: Calibri;">Developing accurate and agreed upon GPCD projections is
substantially more complex and error-prone.<span style="mso-spacerun: yes;">
</span>The first complication is the data.<span style="mso-spacerun: yes;">
</span>Water use data in much of Texas is self-reported by retail or wholesale
water suppliers, and reports differ among different entities. The amount that
users report (buyers) may not always match the amount that wholesalers
(sellers) report.<span style="mso-spacerun: yes;"> </span>So, consultants who do
the leg work of developing regional plans spend a good part of their effort
resolving these discrepancies.<o:p></o:p></span></div>
<div class="MsoNormal" style="margin: 0in 0in 10pt;">
<span style="font-family: Calibri;">What is turning out to be a more controversial issue,
however, has been the decision on what annual water use to select for the base
year GPCD.<span style="mso-spacerun: yes;"> </span>The base year GPCD is
important because, after making some adjustments for the build-out of more
efficient plumbing fixtures, the base year demand defines the demand that will
be used for planning for future water needs through 2070. Because water use
varies significantly from year to year, selecting the appropriate base year is
critical. In some cities, particularly where no drought management measures are
applied, municipal use per capita may be higher in dry years than in wet
years.<span style="mso-spacerun: yes;"> </span>By contrast, where drought
management measures are employed in dry years, municipal use per capita will be
lower, though potentially still higher than in normal years.<span style="mso-spacerun: yes;"> </span><o:p></o:p></span></div>
<div class="MsoNormal" style="margin: 0in 0in 10pt;">
<span style="font-family: Calibri;">Since the regional planning process is intended to meet
water needs during drought – water supply estimates are based on availability
during a repeat of the historical drought or record, which for most of the
state occurred in the 50’s – water planners at the Texas Water Development
Board selected a dry year, 2011, to represent base year demands.<o:p></o:p></span></div>
<div class="MsoNormal" style="margin: 0in 0in 10pt;">
<span style="font-family: Calibri;">The estimates of municipal demand used to develop the <u>2012
State Water Plan</u> show that the baseline for Region C starts at 207 GPCD in
2010 and declines to 198 GPCD in 2060, as a result of reduction from federally
mandated plumbing fixture efficiencies. The 2011 Region C planning group also
recommended basic and advanced water conservation strategies for individual
water user groups.<span style="mso-spacerun: yes;"> </span>These water supply
strategies further reduced the projected per capita use to 201 GPCD in 2010 and
178 in GPCD in 2060. With a Region C population estimated at about 6.6 million
people and growing to 13.0 million in 2060, this resulted in total municipal
demands of approximately 1.5 MAF in 2010 growing to 2.8 MAF in 2060.<o:p></o:p></span></div>
<div class="MsoNormal" style="margin: 0in 0in 10pt;">
<span style="font-family: Calibri;">However, the initial demand estimates provided to Region C
by TWDB for development of the <u>2017 plan</u> are substantially lower than
those used for developing the 2012 plan.<span style="mso-spacerun: yes;">
</span>The base GPCD for 2010 is 176 which, again, as the result of plumbing
code upgrades, declines to 161 in 2060.<span style="mso-spacerun: yes;"> </span><o:p></o:p></span></div>
<div class="MsoNormal" style="margin: 0in 0in 10pt;">
<span style="font-family: Calibri;">Although it is too soon in the planning process to know what
Region C or other regions will do with respect to water conservation
strategies, if we assume that a comparable level of savings will be proposed in
this round, the GPCD can be expected to be revised down to about 169 in 2010
and 141 in 2060.<span style="mso-spacerun: yes;"> </span>Moreover, population
projections for the 2017 Region C plan are about 3% lower at the beginning and
end of the planning horizon (2020 and 2060) and about 6% lower in the middle
decades as compared with the estimates developed in the last round.<span style="mso-spacerun: yes;"> </span>These estimates, combined with the 169/141
GPCD values, would result in total municipal demands of approximately 1.2<span style="mso-spacerun: yes;"> </span>to 2.2 MAF in 2060, or more than a 20
reduction in municipal water demand estimates for Region C.<o:p></o:p></span></div>
<div class="MsoNormal" style="margin: 0in 0in 10pt;">
<span style="font-family: Calibri;">The per capita water use reductions in Region C represent an
important step in the right direction towards meeting long term water needs and
one for which water suppliers and policy makers should be commended.<span style="mso-spacerun: yes;"> </span>It is also reflective of well documented
broader trends in </span><a href="http://www.allianceforwaterefficiency.org/Declining-Sales-and-Revenues.aspx"><span style="color: blue; font-family: Calibri;">decreased
per capita water use</span></a><span style="font-family: Calibri;"> across the county, suggesting that this decreasing per
capita use trend, rather than the flat line forecasts (excluding adjustments
plumbing fixture improvements), should be incorporated in long term
projections. That said, it is worth asking whether even the use rates meet
sufficiently ambitious goals for municipal water use.<o:p></o:p></span></div>
<div class="MsoNormal" style="margin: 0in 0in 10pt;">
<span style="font-family: Calibri;">Texas Water Conservation Implementation Task Force (</span><a href="http://www.savetexaswater.org/"><span style="color: blue; font-family: Calibri;">WCITF</span></a><span style="font-family: Calibri;">) recommended a goal </span><a href="http://www.savetexaswater.org/about/doc/WCITF_Report_2004.pdf"><span style="color: blue; font-family: Calibri;">of 140
GPCD</span></a><span style="font-family: Calibri;"> for potable water supplied to municipal retail customers. The
discussion above suggests that Region C is on course towards that goal.<span style="mso-spacerun: yes;"> </span>There are several nuances to the WCITF target
that are worth considering. In support of Region C’s current forecasts, for
example, it should be noted that the 140 GPCD goal explicitly includes reuse as
part of the calculation. That is, before calculating the GPCD, demand should be
reduced by the amount of supply that is projected to be met through reuse of
existing supply. There is a significant amount of existing and planned reuse in
Region C, and so, by this calculation, the projected GPCD would be even
lower.<span style="mso-spacerun: yes;"> </span><o:p></o:p></span></div>
<div class="MsoNormal" style="margin: 0in 0in 10pt;">
<span style="font-family: Calibri;">On the other hand, given that conservation is the most cost
effective, least environmentally destructive and overall most sustainable
strategy for meeting long term water needs, it is important to consider that
the WCITF 140 GPCD recommendation was the result of a long and difficult
negotiation to reach a broad consensus amount water suppliers, state agency
representatives and public and environmental advocacy groups. <span style="mso-spacerun: yes;"> </span>It does not necessarily represent a
particularly aggressive approach to conservation, nor is it reflective of the
best we can do with technological innovation, funding and education.<span style="mso-spacerun: yes;"> </span><o:p></o:p></span></div>
<div class="MsoNormal" style="margin: 0in 0in 10pt;">
<span style="font-family: Calibri;">In fact, a minority report to the WCITF recommended a target
of 125 GPDC.<span style="mso-spacerun: yes;"> </span>Furthermore, even if the
140 estimate does represent a reasonable goal, it should be noted that this
target was intended for individual water user groups. <span style="mso-spacerun: yes;"> </span>As shown in Table 1, many of the Region C water
user groups whose needs were projected to be met by some of the very costly and
environmentally damaging projects proposed in the last state water plan still project
a GPDC well above 200. <o:p></o:p></span></div>
<div class="MsoNormal" style="margin: 0in 0in 10pt;">
<span style="font-family: Calibri;"><b style="mso-bidi-font-weight: normal;">Table </b><!--[if supportFields]><b
style='mso-bidi-font-weight:normal'><span style='mso-element:field-begin'></span><span
style='mso-spacerun:yes'> </span>SEQ Table \* ARABIC <span style='mso-element:
field-separator'></span></b><![endif]--><b style="mso-bidi-font-weight: normal;"><span style="mso-no-proof: yes;">1</span></b><!--[if supportFields]><b
style='mso-bidi-font-weight:normal'><span style='mso-element:field-end'></span></b><![endif]--><b style="mso-bidi-font-weight: normal;">: <span style="mso-spacerun: yes;"> </span>Large Water User Groups (Population > 30K) Supplied
by Wholesalers Proposing Large Reservoir Projects With High GPCDs </b></span></div>
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEinpgINcUH9Mvok_wDLi6gZ2gWoE8F1-Bey9mpksqVRU7Kia3AJPfCjBLMVBaGq5mLzmzkXKnqLVgrebBFOHHWrPYyULY0blDJC-rIZaDfVFumwyCU5zusZCNjv8VftES4E1WK6dOXDEK4W/s1600/dfw+high+gpcd+table.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEinpgINcUH9Mvok_wDLi6gZ2gWoE8F1-Bey9mpksqVRU7Kia3AJPfCjBLMVBaGq5mLzmzkXKnqLVgrebBFOHHWrPYyULY0blDJC-rIZaDfVFumwyCU5zusZCNjv8VftES4E1WK6dOXDEK4W/s1600/dfw+high+gpcd+table.png" height="285" width="320" /></a></div>
<div class="MsoNormal" style="margin: 0in 0in 10pt;">
<span style="font-family: Calibri;"><b style="mso-bidi-font-weight: normal;"><span style="mso-no-proof: yes;"><o:p></o:p></span></b></span> </div>
<div align="center" class="MsoNormal" style="margin: 0in 0in 10pt; text-align: center;">
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<div class="MsoNormal" style="margin: 0in 0in 10pt;">
<span style="font-family: Calibri;">If these water user groups <span style="mso-spacerun: yes;"> </span>with high GPCDs were able to get their
individual use down to the compromise 140 GPCD value, this could result in
additional reduction of over 400,000 acre-feet/year in 2060 and a regional average
GPCD of about 130.<span style="mso-spacerun: yes;"> </span>This kind of
aggressive goal could make Region C a leader in the state (and the nation) in
showing how to meet future water demand in a cost-effective and sustainable
fashion.<span style="mso-spacerun: yes;"> </span><o:p></o:p></span></div>
<div class="MsoNormal" style="margin: 0in 0in 10pt;">
<span style="font-family: Calibri;">Unfortunately, rather than an increased push towards more
conservation, some Regional Planning groups, apparently including Region C, may
try to push the pendulum back the other way.<span style="mso-spacerun: yes;">
</span>The argument is that the new base GPCD projections supplied by TWDB are too
low because base demands in 2011 may reflect implementation of drought
contingency plans (reducing outdoor watering etc.)<span style="mso-spacerun: yes;"> </span><o:p></o:p></span></div>
<div class="MsoNormal" style="margin: 0in 0in 10pt;">
<span style="font-family: Calibri;">Some have put forward the view that drought contingency
measures should be included in the water plan as “supply strategies” rather
than being reflected in baseline demands. They contend that drought contingency
plans will not be implemented unless they are budgeted and planned for, and
thus they should be included as water supply strategies.<span style="mso-spacerun: yes;"> </span><o:p></o:p></span></div>
<div class="MsoNormal" style="margin: 0in 0in 10pt;">
<span style="font-family: Calibri;">Yet, Texas Law does require the development and
implementation of drought contingency plans.<span style="mso-spacerun: yes;">
</span>Thus, it can be argued that these reductions are similar to those that
result from the mandatory plumbing code changes built into demand forecasts. <o:p></o:p></span></div>
<div class="MsoNormal" style="margin: 0in 0in 10pt;">
<span style="font-family: Calibri;">Moreover, if drought contingency plans are at least required
to be in the demand forecast, the projected gap between supply and demand will
be less, thus reducing the potential costs of meeting the gap.<span style="mso-spacerun: yes;"> </span>Unfortunately, the last Region C plan states that
drought contingency planning should not even be incorporated as a water supply
strategy: : <o:p></o:p></span></div>
<div class="MsoNormal" style="margin: 0in 0in 10pt 0.5in;">
<i style="mso-bidi-font-style: normal;"><span style="font-family: Calibri;">Drought
management and emergency response measures are important planning tools for all
water suppliers. They provide protection in the event of water supply
shortages, but they are not a reliable source of additional supplies to meet
growing demands. They provide a backup plan in case a supplier experiences a
drought worse than the drought of record or if a water management strategy is
not fully implemented when it is needed. Therefore, drought management measures
are not recommended as a water management strategy to provide additional
supplies for Region C.<o:p></o:p></span></i></div>
<div class="MsoNormal" style="margin: 0in 0in 10pt;">
<span style="font-family: Calibri;">If that position were adopted by TWDB and drought
contingency reductions were not included in the demands, the projected gap
between supply and demand would be inflated statewide, leading to a much more
expensive state plan. <o:p></o:p></span></div>
<div class="MsoNormal" style="margin: 0in 0in 10pt;">
<b style="mso-bidi-font-weight: normal;"><i style="mso-bidi-font-style: normal;"><span style="font-family: Calibri;">Conclusion<o:p></o:p></span></i></b></div>
<div class="MsoNormal" style="margin: 0in 0in 10pt;">
<span style="font-family: Calibri;">The debate in Region C between TWDB and some who prefer to
use higher demand projections poses an important statewide issue.<span style="mso-spacerun: yes;"> </span>If the high demand approach is adopted b
other planning groups, it could result in more proposals for unnecessary and
controversial projects, bogging down the state plan in the type of conflicts
that have arisen between Regions C and D.<span style="mso-spacerun: yes;">
</span><o:p></o:p></span></div>
<div class="MsoNormal" style="margin: 0in 0in 10pt;">
<span style="font-family: Calibri;">The benefits of drought contingency planning on lowering
demands for the planning process are clear. . <span style="mso-spacerun: yes;"> </span>The baseline demands used should reflect these
measures. <span style="mso-spacerun: yes;"> </span>Failure to include them would
mean that some water users will take on responsible demand reduction efforts,
and the political and economic costs associated with them, while others look to
state funding to help them build costly projects that may ultimately not be
needed.<span style="mso-spacerun: yes;"> </span>That is not a sustainable, or
equitable, approach to state water planning. <o:p></o:p></span></div>
<div class="MsoNormal" style="margin: 0in 0in 10pt;">
<o:p><span style="font-family: Calibri;"> </span></o:p></div>
<div class="MsoNormal" style="margin: 0in 0in 10pt;">
<o:p><span style="font-family: Calibri;"> </span></o:p></div>
Texas Center for Policy Studieshttp://www.blogger.com/profile/06470944874060481347noreply@blogger.com2tag:blogger.com,1999:blog-3659760152032783164.post-44973907641782787732013-07-10T12:37:00.000-07:002013-07-10T12:37:23.596-07:00Court to Texas Water Planners: The Law Matters
<br />
<div class="MsoNormal" style="margin: 0in 0in 10pt;">
<span style="font-family: Calibri;">A recent </span><a href="http://caselaw.findlaw.com/tx-court-of-appeals/1632444.html"><span style="color: blue; font-family: Calibri;">Texas Court
of Appeals ruling</span></a><span style="font-family: Calibri;"> could result in some major changes in how Texas develops
its State Water Plan.<span style="mso-spacerun: yes;"> </span>The suit was <span style="mso-spacerun: yes;"> </span>brought by </span><a href="http://www.wardtimber.com/"><span style="color: blue; font-family: Calibri;">Ward
Timber</span></a><span style="font-family: Calibri;"> and a number of East Texas landowners who challenged the 2012
decision by the Texas Water Development Board (TWDB) to approve the Region C
regional water plan. The Court reversed this approval after ruling that TWDB
can be sued if it does not follow and enforce the law and rules applicable to
Texas water planning. <span style="mso-spacerun: yes;"> </span><span style="mso-spacerun: yes;"> </span><o:p></o:p></span></div>
<span style="font-family: Calibri;">This result should lead to a more sustainable and realistic
water planning process. <o:p></o:p></span><br />
<br />
<div class="MsoNormal" style="margin: 0in 0in 10pt;">
<span style="font-family: Calibri;">The dispute focused initially on the challenge to TWDB’s
approval of the regional plan for the Dallas-Fort Worth area.<span style="mso-spacerun: yes;"> </span><span style="mso-spacerun: yes;"> </span>The </span><a href="http://www.twdb.state.tx.us/waterplanning/rwp/regions/d/index.asp"><span style="color: blue; font-family: Calibri;">Region
D</span></a><span style="font-family: Calibri;"> plan for Northeast Texas identified a </span><a href="http://www.twdb.state.tx.us/waterplanning/rwp/regions/c/index.asp"><span style="color: blue; font-family: Calibri;">Region
C</span></a><span style="font-family: Calibri;"> water strategy that conflicted with the Region D plan.<span style="mso-spacerun: yes;"> </span><o:p></o:p></span></div>
<span style="font-family: Calibri;">The conflict centered on the proposed </span><a href="http://trinityrivertexas.org/explore/thirsty/s4_nichols.php"><span style="color: blue; font-family: Calibri;">Marvin
Nichols Reservoir</span></a><span style="font-family: Calibri;">, on the Sulphur River in Region D.<span style="mso-spacerun: yes;"> </span>The Region C plan included the proposed
reservoir as a long-term water supply strategy for the Metroplex area.<span style="mso-spacerun: yes;"> </span>Region D’s plan, however, expressly stated
that the proposed reservoir conflicted with its plan,<span style="mso-spacerun: yes;"> </span>which included the finding that a reservoir
at the proposed location would destroy<span style="mso-spacerun: yes;">
</span>important agricultural and natural resources that Region D intended to
protect.<span style="mso-spacerun: yes;"> </span><o:p></o:p></span><br />
<br />
<div class="MsoNormal" style="margin: 0in 0in 10pt;">
<span style="font-family: Calibri;">The identification by one region of a potential
interregional conflict is authorized, if not required, by Texas law at </span><a href="http://codes.lp.findlaw.com/txstatutes/WA/2/C/16/C/16.053"><span style="color: blue; font-family: Calibri;">Section
16.053(h) of the Texas Water Code</span></a><span style="font-family: Calibri;">.<span style="mso-spacerun: yes;">
</span>If such a conflict exists between two regional plans, TWDB is required by
that same portion of the Code to bring the regions together in an effort to
find a resolution.<span style="mso-spacerun: yes;"> </span>If that is not
successful, the law then requires that TWDB itself resolve the conflict.<span style="mso-spacerun: yes;"> </span><o:p></o:p></span></div>
<span style="font-family: Calibri;">At the outset, TWDB argued that it could not be sued for its
decision to approve a regional plan because these were just “plans” with no
immediate effect. TWDB<span style="mso-spacerun: yes;"> </span>also argued that
there was no interregional conflict.<o:p></o:p></span><br />
<br />
<div class="MsoNormal" style="margin: 0in 0in 10pt;">
<span style="font-family: Calibri;">The Court’s May 2013 opinion upheld a lower court ruling,
reversing the TWDB’s approval of the Region C plan.<span style="mso-spacerun: yes;"> </span>The Court held that:</span></div>
<div class="MsoNormal" style="margin: 0in 0in 10pt;">
<span style="font-family: Symbol; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font-size-adjust: none; font-stretch: normal; font: 7pt/normal "Times New Roman";">
</span></span></span><!--[endif]--><span style="font-family: Calibri;">TWDB can be sued for failure to comply with
Texas law or its rules on water planning;<o:p></o:p></span></div>
<span style="font-family: Symbol; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font-size-adjust: none; font-stretch: normal; font: 7pt/normal "Times New Roman";">
</span></span></span><!--[endif]--><span style="font-family: Calibri;">The TWDB decision to approve the 2011 Region C
plan violated Texas law; and</span><br />
<span style="font-family: Calibri;"><o:p></o:p></span><br />
<span style="font-family: Symbol; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font-size-adjust: none; font-stretch: normal; font: 7pt/normal "Times New Roman";">
</span></span></span><!--[endif]--><span style="font-family: Calibri;">TWDB’s definition of <span style="mso-spacerun: yes;"> </span>interregional conflicts as limited to
instances where two regions relied on the same water to meet proposed demands was
inconsistent with Texas law. </span><br />
<span style="font-family: Calibri;"><o:p></o:p></span><br />
<span style="font-family: Calibri;">TWDB’s deadline to appeal to the Texas Supreme Court has now
passed, so the Court’s holding stands. <span style="mso-spacerun: yes;"> </span>It will be an important precedent for future
water planning efforts, as well as for the current dispute between Regions C
and D over the proposed Marvin Nichols Reservoir.<o:p></o:p></span><br />
<br />
<div class="MsoNormal" style="margin: 0in 0in 10pt;">
<span style="font-family: Calibri;">The Ward Timber decision provides valuable guidance and
benchmarks for on-going water planning efforts.<span style="mso-spacerun: yes;">
</span>While the Texas water plan is reasonably viewed as a “bottom-up” effort,
it has to also reflect the broader state interests.<span style="mso-spacerun: yes;"> </span>It has become increasingly clear over the
last few planning rounds that more state level engagement is needed.<span style="mso-spacerun: yes;"> </span>As reflected in </span><a href="http://www.capitol.state.tx.us/tlodocs/83R/billtext/pdf/HB00004F.pdf#navpanes=0"><span style="color: blue; font-family: Calibri;">HB
4</span></a><span style="font-family: Calibri;">, passed this year by the legislature, state funds need to be spent on
strategies that are priorities for both the regions and the state.<span style="mso-spacerun: yes;"> </span>The state needs a water plan that reflects a realistic
future and that can be implemented in a cost-effective and
environmentally-sound manner.<span style="mso-spacerun: yes;"> </span><o:p></o:p></span></div>
<span style="font-family: Calibri;">State level engagement can come in many forms, but one
important avenue <span style="mso-spacerun: yes;"> </span>is TWDB rules and
guidance implementing the statutory requirements for planning. The Ward Timber
case holds that the regions and TWDB need to take those rules seriously. <span style="mso-spacerun: yes;"> </span>The Court upheld Region D's position that state
water planning law allows it to protect its important agricultural and natural
resources, even as the state seeks to meet municipal and other needs for water now
and in the future. <o:p></o:p></span><br />
<br />
<div class="MsoNormal" style="margin: 0in 0in 10pt;">
<span style="font-family: Calibri;">TWDB rules can be used to set rational boundaries on the
regional planning process, as envisioned by the statutory language in </span><a href="http://codes.lp.findlaw.com/txstatutes/WA/2/C/16/C/16.053"><span style="color: blue; font-family: Calibri;">Section 16.053</span></a><span style="font-family: Calibri;">
of the Texas Water Code.<span style="mso-spacerun: yes;"> </span>For example, </span><a href="http://info.sos.state.tx.us/pls/pub/readtac$ext.ViewTAC?tac_view=4&ti=31&pt=10&ch=357&rl=Y"><span style="color: blue; font-family: Calibri;">TWDB’s
current planning rules</span></a><span style="font-family: Calibri;"> seek to establish consistent methods by which all regions
project certain future water needs.<span style="mso-spacerun: yes;"> </span>If a
regional group does not comply with these or other elements of the rules, TWDB
needs to enforce them by disapproving all or a part of the regional plan.<span style="mso-spacerun: yes;"> </span>The Ward Timber case holds, in essence, that if
TWDB does not do so, a court could invalidate the TWDB's decision to approve
the regional plan.<span style="mso-spacerun: yes;"> </span><span style="mso-spacerun: yes;"> </span><o:p></o:p></span></div>
<span style="font-family: Calibri;">Thus, Ward Timber case has implications beyond the Region C
and D conflict.<span style="mso-spacerun: yes;"> </span>While resolution of that
conflict will likely happen one way or another in the next six months to one
year, the other aspects of the Court decision can affect all 16 regional
planning processes for this next round and into the future.<span style="mso-spacerun: yes;"> </span>Given the lack of attention in past rounds of
planning to certain aspects of the legal requirements, such as protection of
natural resources and environmental water needs, the Ward Timber case may also
send a clear message that all aspects of the planning process established in
the law and TWDB rules need to be addressed in the 2016 round of regional
plans.<o:p></o:p></span><br />
<ul>
<li>
</li>
</ul>
Texas Center for Policy Studieshttp://www.blogger.com/profile/06470944874060481347noreply@blogger.com0tag:blogger.com,1999:blog-3659760152032783164.post-38694185021837026432013-06-30T17:35:00.000-07:002013-06-30T17:35:02.561-07:00Understanding House Bill 4
<br />
<div class="MsoNormal" style="margin: 0in 0in 10pt;">
<span style="font-family: "Verdana","sans-serif"; font-size: 12pt; line-height: 115%;">After several months of debate, the legislature
approved and Governor Perry signed <a href="http://www.capitol.state.tx.us/tlodocs/83R/billtext/pdf/HB00004F.pdf#navpanes=0"><span style="color: blue;">House
Bill 4,</span></a> setting up a revolving loan fund to implement the Texas Water
Plan.<span style="mso-spacerun: yes;"> </span>However, the proposed transfer of
$ 2.0 billion from the Economic Stabilization Fund (known as the Rainy Day
Fund) to capitalize the new implementation fund will not become effective unless
authorized by a constitutional amendment that will be before voters in the November
2013 statewide election.<o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 10pt;">
<span style="font-family: "Verdana","sans-serif"; font-size: 12pt; line-height: 115%;">But, HB 4 is much more than just a new loan fund.<span style="mso-spacerun: yes;"> </span>In fact, it restructures the Texas Water
Development Board and, contingent on the passage of the constitution amendment,
sets up a complex new prioritization process for deciding how to allocate the
new loan funds.<span style="mso-spacerun: yes;"> </span><o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 10pt;">
<span style="font-family: "Verdana","sans-serif"; font-size: 12pt; line-height: 115%;">And, as with any major public policy initiative, the
devil is in the details. So, what does HB 4 do and what can we expect to happen
over the next few years?<o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 10pt;">
<span style="font-family: "Verdana","sans-serif"; font-size: 12pt; line-height: 115%;">First, let’s look at what happens even if the
constitutional amendment authorizing the transfer from the Rainy Day Fund, <a href="http://www.capitol.state.tx.us/tlodocs/83R/billtext/pdf/SJ00001F.pdf#navpanes=0"><span style="color: blue;">SJR
1</span></a>, <i style="mso-bidi-font-style: normal;"><a href="http://www.star-telegram.com/2013/06/03/4906347/opposition-forming-to-massive.html"><span style="color: blue;">does
not<span style="font-style: normal;"> </span>pass</span></a></i> in November.<span style="mso-spacerun: yes;"> </span><o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 10pt;">
<span style="font-family: "Verdana","sans-serif"; font-size: 12pt; line-height: 115%;">The <a href="http://www.twdb.state.tx.us/"><span style="color: blue;">Texas Water
Development Board</span></a> will change from the current six-member unpaid, part-time
board to a three-member, paid, full-time board whether or not the voters
approve the constitutional amendment.<span style="mso-spacerun: yes;"> </span>As
with the current TWDB, the Governor will make all board appointments, in this
case by September 1, 2013.<span style="mso-spacerun: yes;"> </span>Under the new
legislation, one member must have experience in engineering, one in public or
private finance, and one in law or business.<span style="mso-spacerun: yes;">
</span><span style="mso-spacerun: yes;"> </span>The new board is then required to
hire a new Executive Administrator by October 1, 2013.<span style="mso-spacerun: yes;"> </span>It’s likely that this new administrative team
will also begin to set their own goals and policies.<o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 10pt;">
<span style="font-family: "Verdana","sans-serif"; font-size: 12pt; line-height: 115%;">Once the board members are appointed, they will face
some looming deadlines under HB 4 to get the new infrastructure fund up and
running and establish a process to set priorities for using the fund.<span style="mso-spacerun: yes;"> </span>But, these actions will only be required if
the constitutional amendment transferring rainy funds to the infrastructure
fund is approved by the voters.<o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 10pt;">
<span style="font-family: "Verdana","sans-serif"; font-size: 12pt; line-height: 115%;">If SJR 1 does pass, then the board will begin a fairly
complex process to prioritize spending from the new infrastructure fund, which
will be known as the State Water Implementation Fund for Texas (SWIFT). The
legislation itself sets some priorities for spending, requiring that not less
than 10% of the funds disbursed go to projects for “rural political subdivisions
or agricultural water conservation and that not less than 20% go to support
projects for water conservation or reuse, including agricultural irrigation
projects.<o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 10pt;">
<span style="font-family: "Verdana","sans-serif"; font-size: 12pt; line-height: 115%;">Beyond these directives, however, the Board has the
primary role in prioritizing projects for funding.<span style="mso-spacerun: yes;"> </span><o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 10pt;">
<span style="font-family: "Verdana","sans-serif"; font-size: 12pt; line-height: 115%;">Here, in brief are the steps set out in HB 4:<o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 10pt;">
<span style="font-family: "Verdana","sans-serif"; font-size: 12pt; line-height: 115%;">First, the Board is to convene the chairs of the
regional water planning groups (RWPGs).<span style="mso-spacerun: yes;">
</span>This group is tasked with developing “uniform standards to be used by
the regional water planning groups” in prioritizing projects. These standards must
be developed by December 2013 and “approved by the Board.”<span style="mso-spacerun: yes;"> </span><o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 10pt;">
<span style="font-family: "Verdana","sans-serif"; font-size: 12pt; line-height: 115%;">Then, using these “standards”, each regional group is to
prioritize projects in its respective regional water plan.<span style="mso-spacerun: yes;"> </span>This prioritization will be conducted for
both the existing <a href="http://www.twdb.state.tx.us/waterplanning/swp/index.asp"><span style="color: blue;">2012 plan</span></a> and,
at the appropriate time, for the new plans now under development.<span style="mso-spacerun: yes;"> </span>The draft regional prioritization for the
2012 plans must be submitted to the Board by June 2014.<span style="mso-spacerun: yes;"> </span>The Board can then comment on the RWPG draft
prioritization.<span style="mso-spacerun: yes;"> </span>The final RWP prioritization
is due by September 2014.<o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt; mso-layout-grid-align: none;">
<span style="color: black; font-family: "Verdana","sans-serif"; font-size: 12pt; mso-bidi-font-family: Courier;"><o:p> </o:p></span></div>
<br />
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<span style="font-family: "Verdana","sans-serif"; font-size: 12pt; line-height: 115%;">At a minimum, a regional water planning group must
consider the following criteria in prioritizing each project:<o:p></o:p></span></div>
<br />
<div class="MsoNoSpacing" style="margin: 0in 0in 0pt 1in; mso-list: l0 level1 lfo3; text-indent: -0.5in;">
<!--[if !supportLists]--><i style="mso-bidi-font-style: normal;"><span style="font-family: "Verdana","sans-serif"; font-size: 12pt; mso-bidi-font-family: Verdana; mso-fareast-font-family: Verdana;"><span style="mso-list: Ignore;">(1)<span style="font-size-adjust: none; font-stretch: normal; font: 7pt/normal "Times New Roman";">
</span></span></span></i><!--[endif]--><i style="mso-bidi-font-style: normal;"><span style="font-family: "Verdana","sans-serif"; font-size: 12pt;">the <b style="mso-bidi-font-weight: normal;">decade</b> in which the project will be
needed;<o:p></o:p></span></i></div>
<br />
<div class="MsoNoSpacing" style="margin: 0in 0in 0pt 1in;">
<i style="mso-bidi-font-style: normal;"><span style="font-family: "Verdana","sans-serif"; font-size: 12pt;"><o:p> </o:p></span></i></div>
<br />
<div class="MsoNoSpacing" style="margin: 0in 0in 0pt 0.5in;">
<i style="mso-bidi-font-style: normal;"><span style="font-family: "Verdana","sans-serif"; font-size: 12pt;">(2 )<span style="mso-tab-count: 1;"> </span>the <b style="mso-bidi-font-weight: normal;">feasibility</b>
of the project, including the<o:p></o:p></span></i></div>
<br />
<div class="MsoNoSpacing" style="margin: 0in 0in 0pt 0.5in;">
<i style="mso-bidi-font-style: normal;"><span style="font-family: "Verdana","sans-serif"; font-size: 12pt;">availability
of water rights for purposes of the project and the<o:p></o:p></span></i></div>
<br />
<div class="MsoNoSpacing" style="margin: 0in 0in 0pt 0.5in;">
<i style="mso-bidi-font-style: normal;"><span style="font-family: "Verdana","sans-serif"; font-size: 12pt;">hydrological
and scientific practicability of the project;<o:p></o:p></span></i></div>
<br />
<div class="MsoNoSpacing" style="margin: 0in 0in 0pt 0.5in;">
<i style="mso-bidi-font-style: normal;"><span style="font-family: "Verdana","sans-serif"; font-size: 12pt;"><o:p> </o:p></span></i></div>
<br />
<div class="MsoNoSpacing" style="margin: 0in 0in 0pt 0.5in;">
<i style="mso-bidi-font-style: normal;"><span style="font-family: "Verdana","sans-serif"; font-size: 12pt;">(3) <span style="mso-tab-count: 1;"> </span>the <b style="mso-bidi-font-weight: normal;">viability</b>
of the project, including whether<o:p></o:p></span></i></div>
<br />
<div class="MsoNoSpacing" style="margin: 0in 0in 0pt 0.5in;">
<i style="mso-bidi-font-style: normal;"><span style="font-family: "Verdana","sans-serif"; font-size: 12pt;">the
project is a comprehensive solution with a measurable outcome;<o:p></o:p></span></i></div>
<br />
<div class="MsoNoSpacing" style="margin: 0in 0in 0pt 0.5in;">
<i style="mso-bidi-font-style: normal;"><span style="font-family: "Verdana","sans-serif"; font-size: 12pt;"><o:p> </o:p></span></i></div>
<br />
<div class="MsoNoSpacing" style="margin: 0in 0in 0pt 0.5in;">
<i style="mso-bidi-font-style: normal;"><span style="font-family: "Verdana","sans-serif"; font-size: 12pt;">(4) <span style="mso-tab-count: 1;"> </span>the <b style="mso-bidi-font-weight: normal;">sustainability</b>
of the project, taking into<o:p></o:p></span></i></div>
<br />
<div class="MsoNoSpacing" style="margin: 0in 0in 0pt 0.5in;">
<i style="mso-bidi-font-style: normal;"><span style="font-family: "Verdana","sans-serif"; font-size: 12pt;">consideration
the life of the project; and<o:p></o:p></span></i></div>
<br />
<div class="MsoNoSpacing" style="margin: 0in 0in 0pt 0.5in;">
<i style="mso-bidi-font-style: normal;"><span style="font-family: "Verdana","sans-serif"; font-size: 12pt;"><o:p> </o:p></span></i></div>
<br />
<div class="MsoNoSpacing" style="margin: 0in 0in 0pt 0.5in;">
<i style="mso-bidi-font-style: normal;"><span style="font-family: "Verdana","sans-serif"; font-size: 12pt;">(5) <span style="mso-tab-count: 1;"> </span>the <b style="mso-bidi-font-weight: normal;">cost-effectiveness</b>
of the project, taking into<o:p></o:p></span></i></div>
<br />
<div class="MsoNoSpacing" style="margin: 0in 0in 0pt 0.5in;">
<i style="mso-bidi-font-style: normal;"><span style="font-family: "Verdana","sans-serif"; font-size: 12pt;">consideration
the expected unit cost of the water to be supplied by<o:p></o:p></span></i></div>
<br />
<div class="MsoNoSpacing" style="margin: 0in 0in 0pt 0.5in;">
<i style="mso-bidi-font-style: normal;"><span style="font-family: "Verdana","sans-serif"; font-size: 12pt;">the
project.</span></i><o:p></o:p></div>
<br />
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt; mso-layout-grid-align: none;">
<span style="color: black; font-family: "Verdana","sans-serif"; font-size: 12pt; mso-bidi-font-family: Courier;"><o:p> </o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 10pt;">
<span style="font-family: "Verdana","sans-serif"; font-size: 12pt; line-height: 115%;">In prioritizing projects, each regional water planning group
is to “include projects that meet long-term needs as well as projects that meet
short-term needs.”<o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 10pt;">
<span style="color: black; font-family: "Verdana","sans-serif"; font-size: 12pt; line-height: 115%; mso-bidi-font-family: Courier;">But, the
regional prioritization is not the final step.<span style="mso-spacerun: yes;">
</span>In fact, it is only one factor to be considered by the Board.<span style="mso-spacerun: yes;"> </span>HB 4 provides that the Board has the final
say on prioritization as it relates to providing financial assistance from the SWIFT.
<o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt; mso-layout-grid-align: none;">
<span style="color: black; font-family: "Verdana","sans-serif"; font-size: 12pt; mso-bidi-font-family: Courier;">The Board is charged with setting up a “point system” for prioritization.<span style="mso-spacerun: yes;"> </span>This system must include a “standard for the
board to apply in determining whether a project qualifies for financial assistance
at the time the application for financial assistance is filed with the board.”<o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt; mso-layout-grid-align: none;">
<span style="color: black; font-family: Courier; font-size: 10pt; mso-bidi-font-family: Courier;"><o:p> </o:p></span></div>
<br />
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt; mso-layout-grid-align: none;">
<span style="color: black; font-family: "Verdana","sans-serif"; font-size: 12pt; mso-bidi-font-family: Courier;">The legislation then provides fairly substantial direction to the
Board in what should be considered in setting up this point system. <span style="mso-spacerun: yes;"> </span>Specifically it provides: <o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt; mso-layout-grid-align: none;">
<span style="color: black; font-family: Courier; font-size: 10pt; mso-bidi-font-family: Courier;"><o:p> </o:p></span></div>
<br />
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt 0.5in; mso-layout-grid-align: none;">
<i style="mso-bidi-font-style: normal;"><span style="color: black; font-family: "Verdana","sans-serif"; font-size: 12pt; mso-bidi-font-family: Courier;">(c)The board shall give the highest consideration in<o:p></o:p></span></i></div>
<br />
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt 0.5in; mso-layout-grid-align: none;">
<i style="mso-bidi-font-style: normal;"><span style="color: black; font-family: "Verdana","sans-serif"; font-size: 12pt; mso-bidi-font-family: Courier;">awarding points to projects that will have a substantial
effect,<o:p></o:p></span></i></div>
<br />
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt 0.5in; mso-layout-grid-align: none;">
<i style="mso-bidi-font-style: normal;"><span style="color: black; font-family: "Verdana","sans-serif"; font-size: 12pt; mso-bidi-font-family: Courier;">including projects that will:<o:p></o:p></span></i></div>
<br />
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt 0.5in; mso-layout-grid-align: none;">
<i style="mso-bidi-font-style: normal;"><span style="color: black; font-family: "Verdana","sans-serif"; font-size: 12pt; mso-bidi-font-family: Courier;"><o:p> </o:p></span></i></div>
<br />
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt 0.5in; mso-layout-grid-align: none; text-indent: 0.5in;">
<i style="mso-bidi-font-style: normal;"><span style="color: black; font-family: "Verdana","sans-serif"; font-size: 12pt; mso-bidi-font-family: Courier;">(1) serve a large population;<o:p></o:p></span></i></div>
<br />
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt 0.5in; mso-layout-grid-align: none; text-indent: 0.5in;">
<i style="mso-bidi-font-style: normal;"><span style="color: black; font-family: "Verdana","sans-serif"; font-size: 12pt; mso-bidi-font-family: Courier;">(2) provide assistance to a diverse
urban and rural<o:p></o:p></span></i></div>
<br />
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt 0.5in; mso-layout-grid-align: none;">
<i style="mso-bidi-font-style: normal;"><span style="color: black; font-family: "Verdana","sans-serif"; font-size: 12pt; mso-bidi-font-family: Courier;">population;<o:p></o:p></span></i></div>
<br />
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt 0.5in; mso-layout-grid-align: none; text-indent: 0.5in;">
<i style="mso-bidi-font-style: normal;"><span style="color: black; font-family: "Verdana","sans-serif"; font-size: 12pt; mso-bidi-font-family: Courier;">(3) provide regionalization; or<o:p></o:p></span></i></div>
<br />
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt 0.5in; mso-layout-grid-align: none; text-indent: 0.5in;">
<i style="mso-bidi-font-style: normal;"><span style="color: black; font-family: "Verdana","sans-serif"; font-size: 12pt; mso-bidi-font-family: Courier;">(4) meet a high percentage of the
water supply needs of<o:p></o:p></span></i></div>
<br />
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt 0.5in; mso-layout-grid-align: none;">
<i style="mso-bidi-font-style: normal;"><span style="color: black; font-family: "Verdana","sans-serif"; font-size: 12pt; mso-bidi-font-family: Courier;">the water users to be served by the project.<o:p></o:p></span></i></div>
<br />
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt 0.5in; mso-layout-grid-align: none;">
<i style="mso-bidi-font-style: normal;"><span style="color: black; font-family: "Verdana","sans-serif"; font-size: 12pt; mso-bidi-font-family: Courier;"><o:p> </o:p></span></i></div>
<br />
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt 0.5in; mso-layout-grid-align: none;">
<i style="mso-bidi-font-style: normal;"><span style="color: black; font-family: "Verdana","sans-serif"; font-size: 12pt; mso-bidi-font-family: Courier;">In addition to these criteria the Board must <o:p></o:p></span></i></div>
<br />
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt 0.5in; mso-layout-grid-align: none;">
<i style="mso-bidi-font-style: normal;"><span style="color: black; font-family: "Verdana","sans-serif"; font-size: 12pt; mso-bidi-font-family: Courier;">must also consider at least the following criteria in<o:p></o:p></span></i></div>
<br />
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt 0.5in; mso-layout-grid-align: none;">
<i style="mso-bidi-font-style: normal;"><span style="color: black; font-family: "Verdana","sans-serif"; font-size: 12pt; mso-bidi-font-family: Courier;">prioritizing projects:<o:p></o:p></span></i></div>
<br />
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt 0.5in; mso-layout-grid-align: none;">
<i style="mso-bidi-font-style: normal;"><span style="color: black; font-family: "Verdana","sans-serif"; font-size: 12pt; mso-bidi-font-family: Courier;"><o:p> </o:p></span></i></div>
<br />
<div class="MsoListParagraph" style="line-height: normal; margin: 0in 0in 0pt 1.25in; mso-add-space: auto; mso-layout-grid-align: none; mso-list: l2 level1 lfo1; text-indent: -0.5in;">
<!--[if !supportLists]--><i style="mso-bidi-font-style: normal;"><span style="color: black; font-family: "Verdana","sans-serif"; font-size: 12pt; mso-bidi-font-family: Verdana; mso-fareast-font-family: Verdana;"><span style="mso-list: Ignore;">(1)<span style="font-size-adjust: none; font-stretch: normal; font: 7pt/normal "Times New Roman";">
</span></span></span></i><!--[endif]--><i style="mso-bidi-font-style: normal;"><span style="color: black; font-family: "Verdana","sans-serif"; font-size: 12pt; mso-bidi-font-family: Courier;">the local contribution to be made to finance the<o:p></o:p></span></i></div>
<br />
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt 0.5in; mso-layout-grid-align: none;">
<i style="mso-bidi-font-style: normal;"><span style="color: black; font-family: "Verdana","sans-serif"; font-size: 12pt; mso-bidi-font-family: Courier;">project, including the up-front capital to be provided by
the<o:p></o:p></span></i></div>
<br />
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt 0.5in; mso-layout-grid-align: none;">
<i style="mso-bidi-font-style: normal;"><span style="color: black; font-family: "Verdana","sans-serif"; font-size: 12pt; mso-bidi-font-family: Courier;">applicant;<o:p></o:p></span></i></div>
<br />
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt 0.5in; mso-layout-grid-align: none;">
<i style="mso-bidi-font-style: normal;"><span style="color: black; font-family: "Verdana","sans-serif"; font-size: 12pt; mso-bidi-font-family: Courier;"><o:p> </o:p></span></i></div>
<br />
<div class="MsoListParagraph" style="line-height: normal; margin: 0in 0in 0pt 1.25in; mso-add-space: auto; mso-layout-grid-align: none; mso-list: l2 level1 lfo1; text-indent: -0.5in;">
<!--[if !supportLists]--><i style="mso-bidi-font-style: normal;"><span style="color: black; font-family: "Verdana","sans-serif"; font-size: 12pt; mso-bidi-font-family: Verdana; mso-fareast-font-family: Verdana;"><span style="mso-list: Ignore;">(2)<span style="font-size-adjust: none; font-stretch: normal; font: 7pt/normal "Times New Roman";">
</span></span></span></i><!--[endif]--><i style="mso-bidi-font-style: normal;"><span style="color: black; font-family: "Verdana","sans-serif"; font-size: 12pt; mso-bidi-font-family: Courier;">the financial capacity of the applicant to repay<o:p></o:p></span></i></div>
<br />
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt 0.5in; mso-layout-grid-align: none;">
<i style="mso-bidi-font-style: normal;"><span style="color: black; font-family: "Verdana","sans-serif"; font-size: 12pt; mso-bidi-font-family: Courier;">the financial assistance provided;<o:p></o:p></span></i></div>
<br />
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt 0.5in; mso-layout-grid-align: none;">
<i style="mso-bidi-font-style: normal;"><span style="color: black; font-family: "Verdana","sans-serif"; font-size: 12pt; mso-bidi-font-family: Courier;"><o:p> </o:p></span></i></div>
<br />
<div class="MsoListParagraph" style="line-height: normal; margin: 0in 0in 0pt 1.25in; mso-add-space: auto; mso-layout-grid-align: none; mso-list: l2 level1 lfo1; text-indent: -0.5in;">
<!--[if !supportLists]--><i style="mso-bidi-font-style: normal;"><span style="color: black; font-family: "Verdana","sans-serif"; font-size: 12pt; mso-bidi-font-family: Verdana; mso-fareast-font-family: Verdana;"><span style="mso-list: Ignore;">(3)<span style="font-size-adjust: none; font-stretch: normal; font: 7pt/normal "Times New Roman";">
</span></span></span></i><!--[endif]--><i style="mso-bidi-font-style: normal;"><span style="color: black; font-family: "Verdana","sans-serif"; font-size: 12pt; mso-bidi-font-family: Courier;">the ability of the board and the applicant to<o:p></o:p></span></i></div>
<br />
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt 0.5in; mso-layout-grid-align: none;">
<i style="mso-bidi-font-style: normal;"><span style="color: black; font-family: "Verdana","sans-serif"; font-size: 12pt; mso-bidi-font-family: Courier;">timely leverage state financing with local and federal
funding;<o:p></o:p></span></i></div>
<br />
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt 0.5in; mso-layout-grid-align: none;">
<i style="mso-bidi-font-style: normal;"><span style="color: black; font-family: "Verdana","sans-serif"; font-size: 12pt; mso-bidi-font-family: Courier;"><o:p> </o:p></span></i></div>
<br />
<div class="MsoListParagraph" style="line-height: normal; margin: 0in 0in 0pt 1.25in; mso-add-space: auto; mso-layout-grid-align: none; mso-list: l2 level1 lfo1; text-indent: -0.5in;">
<!--[if !supportLists]--><i style="mso-bidi-font-style: normal;"><span style="color: black; font-family: "Verdana","sans-serif"; font-size: 12pt; mso-bidi-font-family: Verdana; mso-fareast-font-family: Verdana;"><span style="mso-list: Ignore;">(4)<span style="font-size-adjust: none; font-stretch: normal; font: 7pt/normal "Times New Roman";">
</span></span></span></i><!--[endif]--><i style="mso-bidi-font-style: normal;"><span style="color: black; font-family: "Verdana","sans-serif"; font-size: 12pt; mso-bidi-font-family: Courier;">whether there is an emergency need for the<o:p></o:p></span></i></div>
<br />
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt 0.5in; mso-layout-grid-align: none;">
<i style="mso-bidi-font-style: normal;"><span style="color: black; font-family: "Verdana","sans-serif"; font-size: 12pt; mso-bidi-font-family: Courier;">project, taking into consideration whether:<o:p></o:p></span></i></div>
<br />
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt 0.5in; mso-layout-grid-align: none;">
<i style="mso-bidi-font-style: normal;"><span style="color: black; font-family: "Verdana","sans-serif"; font-size: 12pt; mso-bidi-font-family: Courier;"><o:p> </o:p></span></i></div>
<br />
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt 0.5in; mso-layout-grid-align: none; text-indent: 0.5in;">
<i style="mso-bidi-font-style: normal;"><span style="color: black; font-family: "Verdana","sans-serif"; font-size: 12pt; mso-bidi-font-family: Courier;">(A)the applicant is included at the
time of the<o:p></o:p></span></i></div>
<br />
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt 0.5in; mso-layout-grid-align: none;">
<i style="mso-bidi-font-style: normal;"><span style="color: black; font-family: "Verdana","sans-serif"; font-size: 12pt; mso-bidi-font-family: Courier;">application on the list maintained by the commission of
local<o:p></o:p></span></i></div>
<br />
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt 0.5in; mso-layout-grid-align: none;">
<i style="mso-bidi-font-style: normal;"><span style="color: black; font-family: "Verdana","sans-serif"; font-size: 12pt; mso-bidi-font-family: Courier;">public water systems that have a water supply that will
last less<o:p></o:p></span></i></div>
<br />
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt 0.5in; mso-layout-grid-align: none;">
<i style="mso-bidi-font-style: normal;"><span style="color: black; font-family: "Verdana","sans-serif"; font-size: 12pt; mso-bidi-font-family: Courier;">than 180 days without additional rainfall; and<o:p></o:p></span></i></div>
<br />
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<i style="mso-bidi-font-style: normal;"><span style="color: black; font-family: "Verdana","sans-serif"; font-size: 12pt; mso-bidi-font-family: Courier;"><o:p> </o:p></span></i></div>
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<i style="mso-bidi-font-style: normal;"><span style="color: black; font-family: "Verdana","sans-serif"; font-size: 12pt; mso-bidi-font-family: Courier;">(B)federal funding for which the
project is<o:p></o:p></span></i></div>
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<i style="mso-bidi-font-style: normal;"><span style="color: black; font-family: "Verdana","sans-serif"; font-size: 12pt; mso-bidi-font-family: Courier;">eligible has been used or sought;<o:p></o:p></span></i></div>
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<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt 0.5in; mso-layout-grid-align: none;">
<i style="mso-bidi-font-style: normal;"><span style="color: black; font-family: "Verdana","sans-serif"; font-size: 12pt; mso-bidi-font-family: Courier;"><o:p> </o:p></span></i></div>
<br />
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt 0.5in; mso-layout-grid-align: none;">
<i style="mso-bidi-font-style: normal;"><span style="color: black; font-family: "Verdana","sans-serif"; font-size: 12pt; mso-bidi-font-family: Courier;">… whether the applicant is ready to proceed with the
project at the time of the application, including whether:<o:p></o:p></span></i></div>
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<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt 0.5in; mso-layout-grid-align: none;">
<i style="mso-bidi-font-style: normal;"><span style="color: black; font-family: "Verdana","sans-serif"; font-size: 12pt; mso-bidi-font-family: Courier;"><o:p> </o:p></span></i></div>
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<div class="MsoListParagraph" style="line-height: normal; margin: 0in 0in 0pt 1.5in; mso-add-space: auto; mso-layout-grid-align: none; mso-list: l1 level1 lfo2; text-indent: -0.5in;">
<!--[if !supportLists]--><i style="mso-bidi-font-style: normal;"><span style="color: black; font-family: "Verdana","sans-serif"; font-size: 12pt; mso-bidi-font-family: Verdana; mso-fareast-font-family: Verdana;"><span style="mso-list: Ignore;">(A)<span style="font-size-adjust: none; font-stretch: normal; font: 7pt/normal "Times New Roman";">
</span></span></span></i><!--[endif]--><i style="mso-bidi-font-style: normal;"><span style="color: black; font-family: "Verdana","sans-serif"; font-size: 12pt; mso-bidi-font-family: Courier;">all preliminary planning and design work<o:p></o:p></span></i></div>
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<i style="mso-bidi-font-style: normal;"><span style="color: black; font-family: "Verdana","sans-serif"; font-size: 12pt; mso-bidi-font-family: Courier;">associated with the project has been completed;<o:p></o:p></span></i></div>
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<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt 0.5in; mso-layout-grid-align: none;">
<i style="mso-bidi-font-style: normal;"><span style="color: black; font-family: "Verdana","sans-serif"; font-size: 12pt; mso-bidi-font-family: Courier;"><o:p> </o:p></span></i></div>
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<div class="MsoListParagraph" style="line-height: normal; margin: 0in 0in 0pt 1.5in; mso-add-space: auto; mso-layout-grid-align: none; mso-list: l1 level1 lfo2; text-indent: -0.5in;">
<!--[if !supportLists]--><i style="mso-bidi-font-style: normal;"><span style="color: black; font-family: "Verdana","sans-serif"; font-size: 12pt; mso-bidi-font-family: Verdana; mso-fareast-font-family: Verdana;"><span style="mso-list: Ignore;">(B)<span style="font-size-adjust: none; font-stretch: normal; font: 7pt/normal "Times New Roman";">
</span></span></span></i><!--[endif]--><i style="mso-bidi-font-style: normal;"><span style="color: black; font-family: "Verdana","sans-serif"; font-size: 12pt; mso-bidi-font-family: Courier;">the applicant has acquired the water rights<o:p></o:p></span></i></div>
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<i style="mso-bidi-font-style: normal;"><span style="color: black; font-family: "Verdana","sans-serif"; font-size: 12pt; mso-bidi-font-family: Courier;">associated with the project;<o:p></o:p></span></i></div>
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<i style="mso-bidi-font-style: normal;"><span style="color: black; font-family: "Verdana","sans-serif"; font-size: 12pt; mso-bidi-font-family: Courier;"><o:p> </o:p></span></i></div>
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<div class="MsoListParagraph" style="line-height: normal; margin: 0in 0in 0pt 1.5in; mso-add-space: auto; mso-layout-grid-align: none; mso-list: l1 level1 lfo2; text-indent: -0.5in;">
<!--[if !supportLists]--><i style="mso-bidi-font-style: normal;"><span style="color: black; font-family: "Verdana","sans-serif"; font-size: 12pt; mso-bidi-font-family: Verdana; mso-fareast-font-family: Verdana;"><span style="mso-list: Ignore;">(C)<span style="font-size-adjust: none; font-stretch: normal; font: 7pt/normal "Times New Roman";">
</span></span></span></i><!--[endif]--><i style="mso-bidi-font-style: normal;"><span style="color: black; font-family: "Verdana","sans-serif"; font-size: 12pt; mso-bidi-font-family: Courier;">the applicant has secured funding for the<o:p></o:p></span></i></div>
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<i style="mso-bidi-font-style: normal;"><span style="color: black; font-family: "Verdana","sans-serif"; font-size: 12pt; mso-bidi-font-family: Courier;">project from other sources; and<o:p></o:p></span></i></div>
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<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt 0.5in; mso-layout-grid-align: none;">
<i style="mso-bidi-font-style: normal;"><span style="color: black; font-family: "Verdana","sans-serif"; font-size: 12pt; mso-bidi-font-family: Courier;"><o:p> </o:p></span></i></div>
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<div class="MsoListParagraph" style="line-height: normal; margin: 0in 0in 0pt 1.5in; mso-add-space: auto; mso-layout-grid-align: none; mso-list: l1 level1 lfo2; text-indent: -0.5in;">
<!--[if !supportLists]--><i style="mso-bidi-font-style: normal;"><span style="color: black; font-family: "Verdana","sans-serif"; font-size: 12pt; mso-bidi-font-family: Verdana; mso-fareast-font-family: Verdana;"><span style="mso-list: Ignore;">(D)<span style="font-size-adjust: none; font-stretch: normal; font: 7pt/normal "Times New Roman";">
</span></span></span></i><!--[endif]--><i style="mso-bidi-font-style: normal;"><span style="color: black; font-family: "Verdana","sans-serif"; font-size: 12pt; mso-bidi-font-family: Courier;">the applicant is able to begin implementing<o:p></o:p></span></i></div>
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<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt 0.5in; mso-layout-grid-align: none;">
<i style="mso-bidi-font-style: normal;"><span style="color: black; font-family: "Verdana","sans-serif"; font-size: 12pt; mso-bidi-font-family: Courier;">or constructing the project;<o:p></o:p></span></i></div>
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<i style="mso-bidi-font-style: normal;"><span style="color: black; font-family: "Verdana","sans-serif"; font-size: 12pt; mso-bidi-font-family: Courier;"><o:p> </o:p></span></i></div>
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<div class="MsoListParagraph" style="line-height: normal; margin: 0in 0in 0pt 1.25in; mso-add-space: auto; mso-layout-grid-align: none; mso-list: l2 level1 lfo1; text-indent: -0.5in;">
<!--[if !supportLists]--><i style="mso-bidi-font-style: normal;"><span style="color: black; font-family: "Verdana","sans-serif"; font-size: 12pt; mso-bidi-font-family: Verdana; mso-fareast-font-family: Verdana;"><span style="mso-list: Ignore;">(5)<span style="font-size-adjust: none; font-stretch: normal; font: 7pt/normal "Times New Roman";">
</span></span></span></i><!--[endif]--><i style="mso-bidi-font-style: normal;"><span style="color: black; font-family: "Verdana","sans-serif"; font-size: 12pt; mso-bidi-font-family: Courier;">the demonstrated or projected effect of the<o:p></o:p></span></i></div>
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<i style="mso-bidi-font-style: normal;"><span style="color: black; font-family: "Verdana","sans-serif"; font-size: 12pt; mso-bidi-font-family: Courier;">project on water conservation, including preventing the
loss of<o:p></o:p></span></i></div>
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<i style="mso-bidi-font-style: normal;"><span style="color: black; font-family: "Verdana","sans-serif"; font-size: 12pt; mso-bidi-font-family: Courier;">water, taking into consideration, if applicable, whether
the<o:p></o:p></span></i></div>
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<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt 0.5in; mso-layout-grid-align: none;">
<i style="mso-bidi-font-style: normal;"><span style="color: black; font-family: "Verdana","sans-serif"; font-size: 12pt; mso-bidi-font-family: Courier;">applicant has filed a water audit with the board … that
demonstrates that the applicant is accountable with regard to reducing water
loss and increasing efficiency in the distribution of water; and<o:p></o:p></span></i></div>
<br />
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt 0.5in; mso-layout-grid-align: none;">
<i style="mso-bidi-font-style: normal;"><span style="color: black; font-family: "Verdana","sans-serif"; font-size: 12pt; mso-bidi-font-family: Courier;"><o:p> </o:p></span></i></div>
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<div class="MsoListParagraph" style="line-height: normal; margin: 0in 0in 0pt 1.25in; mso-add-space: auto; mso-layout-grid-align: none; mso-list: l2 level1 lfo1; text-indent: -0.5in;">
<!--[if !supportLists]--><i style="mso-bidi-font-style: normal;"><span style="color: black; font-family: "Verdana","sans-serif"; font-size: 12pt; mso-bidi-font-family: Verdana; mso-fareast-font-family: Verdana;"><span style="mso-list: Ignore;">(6)<span style="font-size-adjust: none; font-stretch: normal; font: 7pt/normal "Times New Roman";">
</span></span></span></i><!--[endif]--><i style="mso-bidi-font-style: normal;"><span style="color: black; font-family: "Verdana","sans-serif"; font-size: 12pt; mso-bidi-font-family: Courier;">the priority given the project by the applicable<o:p></o:p></span></i></div>
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<i style="mso-bidi-font-style: normal;"><span style="color: black; font-family: "Verdana","sans-serif"; font-size: 12pt; line-height: 115%; mso-bidi-font-family: Courier;">regional water planning group….<o:p></o:p></span></i></div>
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<span style="font-family: "Verdana","sans-serif"; font-size: 12pt; line-height: 115%;">The Board will also have to consider comments from the
SWIFT Advisory Committee created by HB 4.<span style="mso-spacerun: yes;">
</span>This committee will be made up of the Comptroller, three senators
appointed by the Lt. Governor and three representatives appointed by the
Speaker of the House.<span style="mso-spacerun: yes;"> </span><o:p></o:p></span></div>
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<span style="font-family: "Verdana","sans-serif"; font-size: 12pt; line-height: 115%;">House Bill 4 does not set a date by which the Board
must complete the point system for administering the SWIFT, but it is unlikely
to happen before September 2014, when the regional prioritizations of the 2012
plans are to be finalized.<span style="mso-spacerun: yes;"> </span>By that time,
of course, the current round of planning will be well underway and a new
session of the legislature will be just around the corner. <o:p></o:p></span></div>
Texas Center for Policy Studieshttp://www.blogger.com/profile/06470944874060481347noreply@blogger.com2