LCRA press release: water rate proposal

Press release from LCRA:
March 28, 2014

LCRA staff has revised an earlier proposal to change the rates LCRA charges firm and interruptible customers for raw water.

In January, LCRA staff presented its initial rate proposal to the LCRA Board of Directors. Since then, members of the LCRA staff have spent many hours talking with customers and the public throughout the basin to collect feedback. LCRA staff has revised its preliminary rate proposal for the Board's consideration as a direct result of that information-gathering process. Revisions to the proposal will enable LCRA to recover costs while mitigating future rate impacts to its customers.

LCRA has long been committed to being a responsible steward of the river and the basin's natural resources. LCRA is determined to responsibly manage the water of the lower Colorado River from the uppermost tributaries that feed the Highland Lakes down to Matagorda Bay.

Managing the basin's water system comes with financial costs, known as river management costs. LCRA is committed to allocating these costs among firm and interruptible customers in a fair and equitable way. After evaluating feedback from customers and the public across the basin, LCRA is proposing to allocate river management costs among firm and interruptible customers based on the amount of water they use.

LCRA also recognizes that proposed rates need to consider key factors, including:

LCRA has no taxing ability and must rely on rates to cover its costs.
Interruptible water can be, and has been, curtailed in times of severe drought. River management costs continue during these times, and LCRA must recover those costs.
LCRA needs to work toward rates that fully recover the costs of providing interruptible water. These costs are currently under-recovered.
After considering these factors and input from customers and the public, LCRA staff is proposing a change in water rates that differs from the January proposal. The revised proposal:

Allocates river management costs based on the amount of water used instead of a share of committed firm supply.
No longer includes costs of developing new water supply.
Includes updated cost information that has been developed since January.
Interruptible Water Rate Proposal
The revised rate proposal for interruptible water takes a significant step toward achieving full cost recovery.

The proposal calls for the new rates for Lakeside and Gulf Coast interruptible supply to be effective January 2015, with a goal to raise rates to reach full cost recovery over time. New rates for the Garwood Irrigation Division could be approved for 2014 as part of a separate rate process.

 All rates are per acre-foot of water. An acre-foot is the amount of water needed to cover an acre with one foot of water, or 325,851 gallons.

*As part of a separate rate process, LCRA is working on rates for 2014 that may be retroactively applied to Garwood and other irrigation customers that use LCRA groundwater and run-of-river water, or make use of LCRA canals to transport their own groundwater.