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Conservation measures could hike rates for Austin Water users

Tuesday, November 12, 2013 by Elizabeth Pagano

As the current drought deepens – despite recent rains – city officials may be forced to take steps to install tougher conservation measures as water levels in the Highland Lakes continue to fall. But, as Austin Water Utility Assistant Director Daryl Slusher told the Environmental Board last week, using less water could mean higher water rates for customers.


Slusher said that with 2013 still on track to be one of the driest years on record, the Austin Water Utility would not only be forced to further limit water use, but could also invoke so-called drought rates to protect the utility’s financial position.


Slusher updated the board on the drought, saying that recent heavy rains in the Austin area have, unfortunately, not substantially alleviated drought conditions. He said that while heavy rain fell in parts of the region, there was very little precipitation to the west over the Highland Lakes.


“That’s a dynamic that we’ve seen throughout this drought… When (rains) have fallen they have often been to the east, and not to the west over the water supply lakes,” said Slusher, adding that while the drought could force widespread water conservation throughout Austin, that conservation may have an unwelcome side effect for rate payers.


“I’m going to be real frank with you. We also might have to pursue drought rates at some point,” said Slusher. “When you use less water, even though there are a lot of societal benefits to that… it does lower your revenues.”


Slusher explained that conservation does lower costs for utility somewhat, but other costs remained static.


“It doesn’t lower near as much as the revenue that you lose. You have the same amount of customers. You have, basically, the same fixed costs,” said Slusher.


Slusher said the utility may bring forward drought rates as early as this spring.


The Lower Colorado River Authority says that there are currently about 730,000 acre feet of water in Lakes Buchanan and Travis. That is only 36 percent full. If the lake levels fall below the drought of record, about 30 percent, additional water restrictions will go into effect.


The LCRA says that without significant inflows, the Highland Lakes could reach that trigger point next spring.  


Conservation hasn’t been a total economic loss for the utility. Water saving measures have pushed back the date at which the city‘s 1999 prepaid $100 million contract is set to expire. The terms of that contract state that the city doesn’t have to pay until they use 200,000 acre-feet for two years in a row.


At one time, there was hope that the contract would last until 2017, but Slusher explained that the city hasn’t gotten anywhere near that figure yet. Current projections are that the contract won’t expire until around 2028 to 2031.


Other firm water customers in the area currently pay $151 per acrefoot.


After the presentation, Board Member Jennifer Walker addressed the situation at Matagorda Bay. The Texas Commission on Environmental Quality will consider whether the LCRA will be allowed to cut off fresh water to the bay in early December.


“It would be wonderful if the City of Austin was there on the side of protecting environmental flows in our river and our bay,” said Walker. “It takes a little bit of water to do that, but the long-term benefits of that are huge.”


Slusher said that taking a position on the issue was currently under discussion. He took the opportunity to hammer home the point about LCRA releases of water to downstream agricultural users once again.


“If there was a more rational, or cautious approach to the agricultural releases, then we wouldn’t be in that kind of situation – or perhaps not,” said Slusher. “That’s part of having a water management plan that wouldn’t make that same mistake again.”

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