Texas water planners stand ready to approve a $53 billion road map for satisfying the state’s thirst over the next half-century but have not resolved how to pay for it.
The perils of not paying for the state’s plan, intended to prevent grave water shortages by 2060, already are evident in the price tag. The cost has risen from $31 billion in 2007, the last time the Texas Water Development Board updated the plan. The 2002 version was estimated at $18 billion.
Officials attribute the soaring costs to more water-supply projects in booming areas and higher costs for construction and purchasing water rights, among other factors.
“The bottom line is, the cost is going to up and up and up,” said Laura Huffman, Texas director of the Nature Conservancy. “There is nothing about this plan that will get less expensive. That alone should motivate people to do something now.”
With the adoption of the 2012 State Water Plan expected Thursday, the water board will urge state lawmakers to establish a “sustainable, long-term” funding source for reservoirs, pipelines and other projects.
The water board says it is “imperative” to address the financing needs, given the size and scope of the plan, which includes 26 new major reservoirs.
The $53 billion price tag still is cast as a bargain compared to the toll of inaction. If Texas does not construct new supply projects, a repeat of the devastating 1950s drought, the marker for the worst-case dry spell in the its history, could cost the state $116 billion a year by 2060, according to the water plan.
The Texas Legislature, however, proved to be spending-averse during its 2011 session. Even the most severe one-year drought in state history did not make conditions dry enough for lawmakers to find a way to fund water development beyond asking voters for authority to issue debt through bonds.
Tap fee plan withered
To finance the projects, state Rep. Allan Ritter, a Nederland Republican, proposed a tap fee that water users would pay each month for the next 15 years. He also sought the transfer of $500 million from the System Benefit Fund, which was created to help low-income people pay utility bills.
The two bills, which supporters said would have generated $27 billion for the plan, died in a House committee.
Securing a dedicated funding source will be a challenge because of the economy, said Heather Harward, executive director of the H2O4Texas Coalition, which includes oil companies, manufacturers, water suppliers and cities among its members.
“We intend to show that the water plan helps protect us during times of drought,” she said. “And it will create economic certainty for every Texas business that relies on the availability of clean, affordable water to continue creating jobs and growing the economy.”
Historically in Texas, federal agencies, cities and counties, river authorities and local water districts have provided most of the financing to develop reliable water supplies.
Some rural and low-income communities have struggled to meet their water needs because their residents cannot afford higher rates to repay the municipal debt on the projects, according to the water board.
Texas voters last month approved a revolving $6 billion bond program that the water board will use to help local communities grow and maintain water supplies.
Huffman, however, said the money will not be enough because it is not limited to supply projects identified in the state plan. The bonds also can be used for wastewater treatment plants and flood control.
“All of the money should be aligned with the state plan,” Huffman said. “A good first step is looking at this existing money, and then we can create a long-term funding stream.”
The plan recommends 562 supply projects to slake the state’s growing water needs by 2060 but does not actually authorize the construction of any of them.
Instead, the water board uses the 295-page document to coordinate the plans of 16 regional groups.
Over the next 50 years, the state’s population is projected to grow from 25 million to 46 million, while annual water demand is expected to increase from 18 million acre-feet to 22 million acre-feet. One-acre foot, equal to about 326,000 gallons, is enough to serve two typical Texas families for a year.
Some critics say the state plan is flawed because it is predicated on the idea that Texans will continue normal water use even in dry times.
“Our projections are overstated,” said Ken Kramer, director of the Sierra Club‘s Lone Star Chapter and a water policy expert. “It is geared toward peak demand, so we are not managing demand.”