Can Aqua Texas supply enough water without overpumping?

In Part Two of this series about the dispute between Aqua Texas and the Hays Trinity Groundwater Conservation District, attorney Jim Blackburn, who is President of the Trinity Edwards Spring Protection Association and a Professor in the Practice of Environmental Law at Rice University, outlined the essential issues from the viewpoint of the Groundwater District and TESPA.

“Aqua is a utility regulated by the Public Utility Commission. They have a permit to pump groundwater from the Groundwater District, with terms and conditions which Aqua agreed to abide by,” said Blackburn. “They pumped more water than they were permitted and they have major leaks within the system that add to the violation.”

In 2023, the Groundwater District fined Aqua for overpumping 89 million gallons. District officials said they wouldn’t renew Aqua’s permits for 2024 if they didn’t pay the $449,000 fine. Instead of paying, Aqua sued the Groundwater District in federal district court, claiming they are receiving “unequal treatment.”

“Essentially, Aqua is asserting that they cannot be regulated, that they have an absolute right to the water,” said Blackburn. “They are challenging the basic concepts of groundwater regulation here in Texas. We have a utility that’s acting like a bully rather than working to solve the problem.”

The Conservation District has 90 days, until April 4, to figure out how to answer Aqua’s lawsuit.

Where does TESPA come in?

According to Blackburn, TESPA will try to intervene in the federal district court litigation to help the District. If TESPA’s legal support in federal court is not allowed, there may be a lawsuit at the state district court or a separate federal court filing.

TESPA has said that they will also file a petition with the Public Utility Commision to withdraw Aqua’s permit, their Certificate of Convenience and Necessity, to operate.

“But TESPA is coming after Aqua,” Blackburn told the community on February 9, “because what they have done to this community is something that simply we cannot allow to continue.”

Can Aqua Service its customers without overpumping?

Adam Friedman: Attorney and partner with McElroy, Sullivan, Miller & Weber LL told the community that the PUC regulates electric, telecommunication, water and wastewater utilities and that its mission is to “protect customers, foster competition and promote high quality infrastructure.”

Before a retail water utility can operate, he said, “they have to apply for a CCN and that CCNs are geographic territories. A CCN gives a retail public utility the exclusive right to provide water service within that area. With that exclusive right comes the requirement to provide continuous and adequate service to the customer in that area.”

In 2018 when Aqua Texas applied with the PUC to get CCN 11157 transferred to their name from their affiliate company, Aqua Utilities, which was the prior owner, they specified, Friedman’s data showed, that the CCN would serve 1,363 customers in Woodcreek I, Woodcreek II and Mountain Crest.

“However,” he told the assembled community members, “the number of customers was well over 2,000.” Further, he said, “according to TCEQ [Texas Commission on Environmental Quality], the system is now servicing a total population of 6,045 people,” explaining that there is a 50% increase from the original 1300 customers to the current 2015 customers that the PUC now serves. Wells 21 and 22, that provide water to the customers, are in the Jacob’s Well Groundwater Management Zone.

That’s why, he says, that TESPA is filing a complaint and a petition to open an investigation and possible revocation of Aqua Texas’s CCN permit because there isn’t enough water to service all of those customers.

Aqua Texas has stated that the amount overpumped was to fulfill demand; however, Friedman said, “Aqua asserts that groundwater law can be voided because they are obligated to serve their customers, even when breaking the groundwater law has a direct impact on Jacob’s Well and other nearby wells.”

Friedman concluded with, “And until Aqua demonstrates that they have access to a water supply that is not violating the law and not damaging Jacob’s Well, then the remedy ought to be decertifying their CCN and finding another operator to do it.”

In addition to answering the federal lawsuit and filing a petition to withdraw Aqua’s permit to operate, TESPA will contest an application made by Aqua to the PUC to increase water rates.

Contesting the rate increase

To address the rate increase issues, Lauren Ice, attorney with the firm Perales, Allmon, & Ice, spoke at the meeting.

“Environmental concerns go hand-in-hand with transparency, public accountability and good governance, and this rate case touches upon many of those overlapping concerns,” she said. “Aqua has applied to the Public Utility Commission for a System Improvement Charge.”

According to Ice, a utility can recover some of the costs from improvements they’ve already made to infrastructure with a SIC. “They’re not allowed to recover everything they spent, just certain things.” Aqua is required to provide proof to the PUC of their expenditures and follow a strict formula to calculate the charge they pass on to customers.

The Watershed Association, TESPA, and the Woodcreek Property Owners Association are working together to contest the application for the rate increase.

“Aqua tried to have all of us thrown out of the case but were not successful,” said Ice. “The judge denied their attempt.” TESPA had until yesterday to request a formal hearing.