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LCRA lowers water rate for cities, municipalities

Thursday, November 19, 2015 by Tyler Whitson

The Lower Colorado River Authority is “making it rain” – savings, that is.

The river authority’s board of directors approved a proposal on Wednesday to lower water rates for “firm” customers, typically cities and municipalities in Central Texas, starting in January.

The measure will undo this year’s drought-related increase, dropping rates from $175 to $145 per acre-foot, a unit that equals roughly 326,000 gallons.

John Hoffman, executive vice president of water at the river authority, explained why staff proposed the decrease. “We’re selling water, and we have revenues coming in to allow us to be able to basically discount the rate,” he said. “Right now we’re looking at being able to hold the reduced rate for another two years after this year.”

Hoffman noted that the decrease goes beyond simply removing the year-long drought-related increase, as it is $6 less than 2014 rates.

Although the move likely comes as welcome news to the river authority’s firm customers, which include Austin, Cedar Park and Leander, its financial impact to the city of Austin itself is not great. The city, which is by far the river authority’s largest customer, prepaid in 1999 to consume as much water as it wants until it reaches a 201,000 acre-foot average.

“That is not anticipated now until probably 2030 and beyond,” Austin Water Assistant Director David Anders told the Austin Monitor. “We’re not, as Austin Water, in a position to be anywhere near where we would have to actually pay those rates for our raw water.”

The city of Austin consumed 47,584 acre-feet of firm water in 2014.

Austin Energy, on the other hand, has contracts with the river authority to cool some of its power plants. However, Elaina Ball, the utility’s vice president of power production, told the Monitor that the financial impact would be contingent on how often Austin Energy resorts to using firm water, which happens only when it has exhausted its rights to water from other parts of the river.

In 2014, Austin Energy consumed 3,049 acre-feet of firm water.

The million-dollar question, of course, is whether the new rates indicate that the record-breaking drought that has parched reservoir lakes Travis and Buchanan since 2008 is, indeed, over.

“When you take a look at combined storage approaching 1.6 million acre-feet, you start to feel a little bit better about the way that question looks, but we’ve been getting this water in these kind of fits and starts,” said Hoffman.

The river authority reported on Wednesday afternoon that lakes Travis and Buchanan, which supply the firm water, were at 79 percent of their total capacity. Those lakes were at 36 percent in February, when the river authority declared the current drought the worst on record.

“We still have this dry pattern that’s been in place, interrupted by these kind of extreme events, and what we really want to see is a more normative pattern of rainfall and inflows occurring where we see this kind of regular thing. We’re hopeful that this El Niño is going to come in and do that,” Hoffman said.

“If we can kind of keep this up and we can actually get it up in the Hill Country as opposed to Austin and downstream, we’ll be in a much more comfortable place in terms of the drought question,” Hoffman concluded, referring to recent rain patterns.

Despite the cautious optimism, the Texas Commission on Environmental Quality – responding to a river authority request – approved an update to the 2010 Water Management Plan for the reservoir lakes on Nov. 5.

The update, which is scheduled to go into effect no later than Jan. 1, 2016, tightens restrictions on the amount of water that can be released to “interruptible” customers, including rice farmers in the Lower Colorado River Basin.

The change may actually mean that interruptible customers will receive more water than they have as of late given that for the past four years, the commission has granted the river authority’s requests to suspend the existing plan and shut off water for most of those customers. The board will consider interruptible rates in December.

In an update to the board on the Water Management Plan, Hoffman said that, at current storage levels, the river authority projects it would propose releasing between 155,000 and 202,000 acre-feet of interruptible water on March 1 for the first of two possible releases next year.

That, of course, depends on what the weather looks like between now and then.

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