Page 16


Who owns Texas’ water? Austin Why should a state agency allow a utility combine to buy water from a river authority for $30 million when the state agency could grant the utility a permit for the water for a mere $5,000? Well, according to Joe R. Carroll and Joe Carter, who constitute a majority of the Texas Water Rights make sure that the utility, the South Texas Nuclear Project, won’t get fouled up in a legal hassle that might put the power consortium behind schedule. You see, if the nuclear plant didn’t start supplying electricity on timein 1982the cost of getting alternative power might be as much as $750,000 a day, the commissioners explained. The Lower Colorado River Authority, which itself generates electricity, has a deal with the nuclear plant to supply the water for 55 years at $10 an acre-foot. The total price is estimated at between $30 million and $56 million. The LCRA maintains that it controls the Colorado River water in question. The plan was for the South Texas Project to get a state permit for 102,000 acre-feet of water from the Colorado River. The permit would then be handed over to the LCRA, which would sell the water back to the nuclear plant for $10 an acrefoot. The LCRA would also agree to shrink by 102,000 acre-feet its existing state permit for water in Lake Travis. Also as part of the deal, LCRA would have the option of becoming a 5 percent member of the nuclear project. Everything was going along swimmingly until the third member of the TWRC, former State Sen. Dorsey Hardeman, started insisting very loudly that the water actually belongs to the state, not the LCRA. The nuclear plant people and TWRC Chairman Carter and Commissioner Carroll then explained that by paying the LCRA $30 million for the water in question, they were protecting the consumers against the possibility of those $750,000 a day delay costs. Some critics, however, charged’that the LCRA water sale was in actuality a cozy deal to boost the power plant’s rate base by $30 million or so and thus raise the profit margin for the plant’s investors. \(The nuclear facility is being financed by Houston Lighting & Power, the City of Austin, City Public Service of San Antonio, and Central Power & Light of Three San Antonio legislators who were outraged by the water scheme asked Hou s e Speaker Bill Clayton to investigate the proposed sale. Clayton did a little research and then announced, “It appears that delays would mean that Texas users who will benefit from the project will pay a steep price for the delays. Therefore, I will not attempt to influence the Water Rights Commission decision.” Atty. Gen. John Hill, however, came to a different conclusion. After assigning two assistants to investigate the situation, Hill went before the Water Rights board and said in no uncertain terms that the state owned the water and that the LCRA should not be allowed to sell it. He told the commissioners that if they sided with the LCRA, he would take the board to court. Participants in the TWRC meeting got pretty huffy. After Hill said he would try to enjoin the commissioners’ action, Carter once more made the point that LCRA’s threats of court action might prove too costly for the consumer. “Well, let it come. Let it come,” the a.g. cried from his seat in the audience. “We’re ready,” LCRA General Manager Charles Herring shouted back, as he glared at Hill. Carter and Carroll then proceeded to vote in favor of the LCRA deal. Their argument about avoiding court delays seemed peculiar since Hill’s assurances that he would take the question to court guaranteed that the water sale would be adjudicated, no matter which way the commissioners voted. Hardeman was the sole commissioner to go against the plan. The day before the TWRC vote, City cided to unilaterally withdraw its approval of the deal with the LCRA. “I’m very strongly against what’s taking place,” said CPS Chairman Tom Berg. At the same time, Berg said that due to rapidly escalating cost estimates, San Antonio might also consider pulling out of the South Texas Project altogether. “There is a point where we ought to draw the line,” he said. The nuclear plant was originally supposed to cost about $900 million. Now the estimate is up to $1.2 billion. The story is the same all over the United States. Part of the problem is Westinghouse’s attempts to default on contracts to supply uranium to nuclear plants. Uranium prices are rising and so are other plant costs. The plants already in operation are not turning out to be nearly as efficient or economical as they were supposed to be. Then, of course, there are increasingly serious questions about the safety of the plants. The setbacks to the industry have been so great that Ralph Nader says there’s “de facto moratorium” on new nuclear power projects. When LCRA General Manager Charles Herring was asked about CPS’ possible withdrawal from the South Texas Project, he told S.A. Rep. Ron Bird that the LCRA might be willing to buy San Antonio’s share of the project at a reduced price. Bird and S.A. Reps. Frank Malda and G.J. Sutton said in a press release, “Maybe this is what . Herring has had in mind all alongto make things so untenable for the City of San Antonio that it withdraws and he can buy in for less than it would have cost in the beginning.” Herring answered that he had no such scheme in mind. As for the $30 million water fee, Herring said that the cost of the water per customer would compute out to only about six cents a year over the life of the contract. Attorney General Hill said his suit will claim the commissioners acted beyond the scope of their authority. K.N. March 12, 1976 5 THE TEXAS OBSERVER “A tradition of honesty, accuracy, fairness, and tireless investigation has enabled the Texas Observer to occupy a unique place in Texas journalism.” The Adversaries: Politics and The Press, Bill Rivers, ed. “The always impious Texas Observer … We recommend it.” I. .F. Stone’s Bi-Weekly, May 31, 1971 “. . the Progressive and the Texas Observer, both of them knowledgeable, superbly written, and leavened by a wit of which conservatives seem incapable.” George Frazier, The Boston Globe, Dec. 15, 1973. “Oddly, the impact of some of its biggest stories comes on the rebound: They are picked up and commented on nationally before the state’s daily press recognizes them.” Lew Powell, Chicago Journalism Review, April, 1974 [ ] One Year $10.00 [ Two Years $18.00 ] Three Years $25.00 \(Non-Texas addresses exempt from 5% sales tax Name Street City & State Zip [ Check end.; [ I Bill me 600 WEST 7 AUSTIN, TEXAS 78701