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Travis wrangles with LCRA over sale of utilities

Wednesday, February 16, 2011 by Michael Kanin

The Travis County Commissioners Court has called for changes in the way the Lower Colorado River Authority conducts the sale of its water and wastewater utilities. The county joins a host of other jurisdictions concerned that the authority’s methods could significantly increase some area water rates.


Officials from the authority were on hand to absorb sometimes scathing criticism from members of the court. They offered their assurances that the organization’s board would hear the commissioners’ concerns.


As part of a separate item, the court also instructed its Intergovernmental Relations Coordinator, Deece Eckstein, to look into state legislative action that could address their concerns about utility pricing. “It’s getting out of control, as far as some of the utility rates here in Travis County,” said Precinct 1 Commissioner Ron Davis. “Some of these homeowners really can’t afford to live in their homes because of the significant increase in their utility bills.”


Precinct 3 Commissioner Karen Huber and County Judge Sam Biscoe joined Davis in his concern.


Huber also wondered about affordability. “Given the fact that we know of some large private supply companies that have come in and bought some small systems in Travis County and significantly increased the rates beyond what is tolerable for some people, and also the fact that at (the Texas Commission on Environmental Equality) the rate appeal process is very expensive to the rate payers … we run the risk of a large sale to a single private company, (their) having a monopoly (and) being able to go in and raise those rates exponentially,” she said.


Biscoe worried about the authority’s motivations. “What the (jurisdictions) are saying is that the contracts are one-sided and that (the authority) has figured out a way to creatively gouge them for every penny that (it) can get out of it,” he said.


LCRA Manager of Customer and Business Strategy Dennis Daniel told the court that profit is not a factor in the sale of its utilities. Biscoe wasn’t so sure. “They’ve convinced me that, if (the authority) is not trying to profit, it is trying to … get monetary gain in some other way,” he said.


The LCRA board decided to sell off all of its 32 water and wastewater utilities in November. The move came after discussions that began in 2005. Five of the utilities serve communities in Travis County.


Daniel told the court that his organization has already completed successful negotiations for the sale of six water and wastewater utilities. He said that six more are pending.


The court’s action came in the form of a resolution that, in part, called for the authority to extend its negotiating period until the end of 2011. That move would allow governmental bodies more time to process complicated questions of feasibility posed by utility acquisition. It passed the court unanimously with all members present.


The current deadline for negotiations with jurisdictions is March 11.


Biscoe was realistic about the impact of the court’s resolution. “The (authority) is a big kid on the block,” he said. “Maybe they will listen, maybe not. But we deal with that every Tuesday. All you can do is what you think you ought to do, and hopefully it will have some sort of positive effect.”

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