With no end in sight to the current drought, it appears that the Highland Lakes will cross over the 45% full level by about August 24th (after falling below the 50% mark on about August 1st).

The 45% level is important since this is an LCRA trigger to enter stage2 watering restrictions for downstream customers.  For Austin Water customers, this means changing to once per week lawn watering.  It will be interesting to see how this impacts Austin's water usage over the next month or so, since year-round restrictions were a less-expensive (free) alternative to the $500M+ WTP4 plant that would actually save ratepayers money on their water bills.

Another interesting observation is that the last peak in lake capacity occurred in spring 2010, when the lakes reached about 86% of capacity.  It should be concerning that in the span of 16 months, the lakes have dropped an additional 40% with the prospect of continued drought into 2012.

Drought Impact on AWU Finances

In past years, AWU has stated that in wet years they expect to miss revenues but make up for this in dry years when they have a "windfall".  With this in mind, AWU should be having a massive windfall year since this is the driest 9-month period recorded in Texas.  Instead, AWU is barely breaking even as of June 30, 2011.  Expect AWU to post slightly improved numbers through mid-August and then fall below expectations for the year once stage-2 restrictions are enforced.

The problem is that AWU's finances are geared toward selling water.  That will be an increasingly difficult position to be in as our Water Supply dwindles and in future years as the drought continues, or in the case the drought subsides, residents minimize future watering as prices rise and it is easier to replace dead grass with native plants and xeriscaping.

Many people appear to be uninformed about the purpose of WTP4 and how building it will affect Austin.  Most people simply trust Austin Water Utility's management when they say we need to build WTP4 without questioning the motives or implications of this decision.  Unfortunately, as ratepayers, we all need to be aware of the implications of AWU's investments since we are the ones who will be stuck footing the bill.  The purpose of this article is to dispel some of the misinformation around WTP4 and inform Austin residents about how it fits into our public water system.

Our public water supply consists of four basic components:

1. Water Supply (Lake Buchanan and Lake Travis)
2. Water Treatment
3. Water Storage
4. Water Distribution

Austin Water Utility's role is to manage these four components in order to provide an affordable and reliable water system for the city.   By choosing to invest heavily in WTP4, Austin Water has put itself in a position where it must simultaneously sell more water to pay for infrastructure while promoting conservation to ensure our future water supply.  These are mutually exclusive actions, so the only outcome will be substantially higher water rates.

AWU should instead be focusing investment in conservation programs, which would not only protect our water supply but also address peak water use, which is the metric used to justify building WTP4.  Investment should also be made in our storage and distribution systems, to minimize treated water lost by the system while improving their ability to deliver water across the city.  By following this course, AWU could effectively drive conservation while keeping Austin's water affordable.

Water Supply

Austin's water supply is the Highland Lakes (primarily Lake Buchanan and Lake Travis) that provide water to the City of Austin.  The Lower Colorado River Authority (LCRA) manages the water within the entire system of lakes and rivers associated with the Lower Colorado River, from Lake Buchanan to Majagorda Bay, and ensures that water is available to users throughout this area.  For this reason, only a portion of the water in these lakes are available for use by Austin while the rest is reserved for downstream users.  Currently Austin uses about one-third of the water flowing out of Lake Travis.

Austin currently has the rights to 325,000 acre-feet per year (105B gallons) from the Highland Lakes, and in recent years we have consumed up to 165,000 acre-feet per year (53B gallons).  Because of an agreement with LCRA, we do not currently have to pay to remove water from the lakes until we hit the 200,000 acre-feet (65B gallons), at which point we must pay for all water use above 150,000 acre-feet (48B gallons) -- confusing, isn't it.  Furthermore, Austin has negotiated a contract for an additional 250,000 acre/feet in the year 2050 to accommodate higher usage as Austin grows.

The question then becomes, where does this future water come from?  Currently, the lakes are only 65% full because of the current drought which started in October 2010.  If we can consume 35% of available water in 8 months, what happens when Austin doubles it's consumption?  The problem is that water is a limited resource, and changing climate patterns are likely to make this resource become more scarce.  The LCRA will have to look to building additional reservoirs to supply downstream use as more of Lake Travis and Buchanan are devoted to Austin.  Building these reservoirs will not be cheap, but you can bet that Austin residents will be helping to pay for them through our purchases of water from the LCRA.

Long term, only conservation can address the issue of our water supply. As we are seeing with the droughts of 2008/2009 and again in 2011, the weather can play a huge role in the availability of water.  When full, the lakes contain 2.0M acre-feet and we are currently at 1.3M acre-feet.   We have already consumed nearly 35% of the water from the Highland Lakes as the current drought has cut inflow to the lakes to a trickle.  What happens if the current drought continues into 2012?  More importantly, what happens in he future when Austin doubles in size and we have a drought?  These are the issues that must be addressed to assure the long-term availability of water to the Austin area.  If there is no water, it doesn't matter how much we can treat.

In May 2011, the Austin City Council passed a resolution for Austin to meet the stringent 140 gallon per capita daily (GPCD), which is based on a state mandate to conserve water.  AWU then spent the next 6 months studying how to achieve this goal.  They reported their findings to the city council in January 2011 and found that by the year 2020, AWU will be losing $100M/year on an annual basis because of conservation (and predict they need a 25%-35% rate increase to make this up).  If by their own admission, they won't be selling as much water in 2020, WHY ARE WE BUILDING WTP4???

Water Treatment

Raw water from the lakes must be treated before it can be consumed by Austin residents.  Austin currently treats water at two plants, Davis and Ulrich, which provide up to 285 million gallons per day of treated water;  building WTP4 adds an additional 50 million gallons/day of capacity.  So what is driving the presumed need to build WTP4?  The answer: irrigation.

During the winter months, Austin consumes about 100 million gallons/day for things everyday uses such as drinking, bathing, flushing toilets, commercial use, etc.  This is about one third of our treatment capacity (285 million gallons/day).  During the summer, our peak water use roughly doubles to about 190-200 million gallons per day.  This isn't because we flush toilets twice as often or shower more, it is simply from irrigating our lawns during the hot summer months.  The amount of water treated on heaviest usage day each summer is referred to as our "peak usage" for that year.

It is this "peak" usage which has caused Austin Water to be concerned that we will run out of water capacity by 2014, and thus must build WTP4. Therefore, AWU has decided that the best investment is to spend over $500M building new treatment capacity so we can water our lawns on the peak day of the year, regardless of how much water may or may not be in the lakes.

This begs the question of whether there are other ways of addressing our peak usage. For instance, this usage is tied heavily to watering our lawns, so why not restrict watering to once per week, and spread the demand across more days?  The current twice per week schedule has had this effect, and moving to a once per week schedule would also further cut water use.  The graph to the right the daily amount of water treated from April 9, 2011 to May 9, 2011 (a hot, dry period).  Mondays are highlighted in green and correspond to the days of lowest water usage.  This also happens to be the one day a week when no residences or businesses are supposed to water.

Furthermore, why couldn't AWU simply monitor water use and issue the equivalent of "Ozone Action Days", when residents are asked to cut water use as we approach the limits of the system.  There are many creative solutions to address peak usage that AWU hasn't considered, and all of these are far cheaper than investing $500M in additional capacity.

By investing in WTP4, AWU has only ensured that we can remove water from the lakes faster than before during the a few peak days in some future year.  Unfortunately, this goes against the long-term need to conserve water so that we actually have enough water in the lakes to treat.  In the process, AWU has created a lot of capacity (at a high cost) that when utilized threatens our long-term water supply.

Water Storage

Water is stored in large tanks (usually elevated) around the city.  The purpose of these storage tanks is to provide a buffer for the treatment plants (that produce water continuously) to even out the uneven consumption of water throughout Austin (since water use varies throughout the day).  Water storage tanks also provide the pressure that allows the water to flow out of our taps when we turn them on.  It is important to mention the storage portion of the system since one of the original reasons cited by AWU to build WTP4 is to ensure adequate pressure around the city.  This is clearly a false statement, since pressure is provided by the storage tanks, thus if there are pressure problems, they should be investing in additional storage capacity.

Ironically, doing this would also mitigate the peak usage case, since additional storage provides a buffer to get over our peak use periods.  Currently Austin has water storage that equals approximately one day of peak usage.  Investing in storage is much less expensive than production and provides a better solution for peak use cases such as a large fire (another example cited for building WTP4).

Water Distribution

Water distribution is AWU's ability to distribute water from the storage tanks to end users.  The distribution consists of thousands of miles of underground pipes around Austin;  the problem is that this is one area where AWU has been neglecting.  Each year, there are hundreds of water main breaks around the city, many of which occur in cast-iron pipes that have been in use for the past 100 years.  AWU has consistently pushed off investment in fixing their leaking infrastructure in order to pursue expansion projects such as WTP4 and the I-35 South project.

Thus, AWU's water distribution is contributing to higher rates through water leaks that remove water from the system.  Some studies indicate that as much as 7-10M gallons per day are leaking from the system -- this is equivalent to 15-20% of the new capacity of WTP4.  Just fixing the leaks makes this water available (additional treated water) and conserves our water supply by simply conserving the water we have already treated.

Conclusion

AWU must manage investments in these four areas in order to provide a cost-effective water system.  Their current priorities in investing in treatment capacity do not make sense when looking at the system as a whole.  AWU's priorities should first be with conservation. Conservation protects our long-term water supply by ensuring that the lakes we depend on actually have water in them.  Furthermore, conservation (especially in irrigation) directly addresses the peak-use days, thus removing the need for additional treatment capacity.  Investments in infrastructure should be targeting the aging distribution system and building additional storage capacity to reduce lost water and address pressure and water availability concerns around the city.