By CASSIE MCKEE, Four Points News
The board of the Lower Colorado River Authority, which provides water for more than a million people in Central Texas, will vote next week on a proposed rate increase for firm water customers, including the City of Austin and Water Control & Improvement District 17, which includes Steiner Ranch.
LCRA staff is recommending that the rate for firm-water customers be increased from $151 an acre-foot to $175.46 an acre-foot, beginning in January 2015, and increase an average of 3 percent a year from 2016-2019, according to information on the LCRA website. The board will consider the item at its June 18 board meeting.
John Hofmann is the executive vice president for water for the LCRA.
John Hofmann, executive vice president for water for the LCRA, said the new rate would be considered a “drought rate” and is necessary to make up for the loss in revenue from no longer selling water to downstream agricultural users.
“In the absence of any of that water being sold downstream, that leaves us at a deficit,” Hofmann said.
As a raw water provider, LCRA does not set rates for individual residents or businesses that receive treated water from their local supplier and so can’t speak to how each provider would deal with new rates. The cities of Cedar Park and Leander are both firm water customers of LCRA.
“We want to reserve comment until the public process is complete,” said Jennie Huerta, communications manager for the city of Cedar Park.
David Steed is president of Water Control & Improvement District 17.
David Steed, president of WCID 17 in Travis County, said his water district would hold off on increasing rates for as long as possible for customers. WCID currently has more than 13,000 accounts covering a population that is approaching 40,000 people.
“We’re going to try to hang on without doing any radical changes for as long as we can, maybe as much as a year,” Steed said. “If we have to go to court with (the LCRA) over the water management plan or price increases, we’re going to have to raise prices to cover our legal fees. That can get expensive quickly.”
LCRA, as a raw water provider, has two classes of water customers: firm and interruptible. The agency curtailed water for most irrigated agriculture customers – known as interruptible customers – in 2012, 2013 and 2014 due to the persistent drought. Interruptible customers are mainly agricultural customers and buy water at a lower cost than firm water customers, with the understanding that interruptible water can be cut back or cut off during severe drought.
The board would not set a new rate for interruptible customers because there is no water to give them, Hofmann said
“Because water for those interruptible customers has been curtailed, we wouldn’t set a rate for them,” Hofmann said. “But if water becomes available, we would set a rate. There’s no water for them and there won’t be any water for them for a while.”
Steed said he’d like to see interruptible customers put on a cost-of-service basis like the firm customers.
“In my view, it’s just a corrupt system that’s been permitted to continue because we haven’t had a drought situation since the 50s and no one was growing rice back then,” Steed said. “They have no income stream coming from the interruptibles so it’s up to us the firm customers or they’re going to do an internal switch-a-roo to cover their downstream river operations.”
Hofmann said the LCRA spends about $10 million on delivering water for the downstream customers and that if the agency were able to outsource that operation, it would be able to save about $6 million per year. He said if that were to happen, they could reinstate the old rates for firm water customers.
“I believe the rate would go back to $151 per acre,” he said.
He said the board would make that determination by the end of this year.
In 2013, the LCRA Board Ad Hoc Rates Committee directed staff to analyze the cost of water service to develop rates that fully cover costs and pay for new supplies. LCRA staff performed this analysis and presented its initial recommendations for a rate increase on Jan. 14, 2014. Since that time, staff has talked with customers and the public and gotten their feedback. Based largely on that feedback, staff revised its proposal in late March.
“I feel like we got a lot of input,” Hoffman said. “We continue to hear input from customers around the lakes.”
LCRA board meetings are open to the public and take place at LCRA headquarters, 3700 Lake Austin Blvd., in Austin.