Planning for future water use a conundrum for Houston

Sep. 8, 2014Houston Chronicle

Beneath Houston, miles of the city’s aging water mains are leaking billions of gallons each year. The repairs will require years of work and millions of dollars.

Officials, meanwhile, would like residents to take shorter showers and use their sprinklers less often – a conservation ethic that could mean less revenue for the utility tasked with fixing the old pipes.

So what’s a city to do? It’s a conundrum facing Houston and other cities across drought-prone Texas as they manage an invaluable but limited resource and the demands of a growing population.

WaterFor Austin, Midland and Wichita Falls, it’s led to higher water bills even as residents cut their use. Fort Worth has seen some of its water and sewer debt downgraded after losing millions of dollars because of conservation.

Houston, meanwhile, is raising the possibility of a new rate structure as the city finalizes the first update to its conservation plan since enduring the worst one-year drought in its history in 2011.

Sharlene Leurig, an expert on water-project financing for the Boston-based nonprofit Ceres, said the one-two punch of persistent droughts and aging infrastructure is making it more important for utilities to have more reliable revenue. But the need to pay for expensive repairs or new supplies, such as reservoirs, can turn conservation into the “unwanted stepchild” of utilities, she said.

“Conservation over the long term saves money because new supplies are extremely expensive,” Leurig said. “The problem is, when you have a city like Houston trying to get its water system in order, there can be losses in the near term.”

Houston’s updated plan – set to come before City Council on Tuesday, calls for residents to reduce water usage by little more than 1 gallon per day by 2019 – or a 1.6 percent reduction over five years. Experts say it’s a modest target, well below the goals recently set by Austin and San Antonio, and the state’s recommended cut of at least 1 percent a year.

But it also reflects the tricky calculus facing a city that already carries a $6.4 billion debt load for water and sewage infrastructure. Roughly 45 percent of the city’s revenue from water sales goes to paying off the debt, said Alvin Wright, a Public Works Department spokesman.

The conservation plan hangs Houston’s long-term savings on reducing water loss from aging pipes and implementing new, more stringent plumbing codes starting in January. Wright said the rule changes should reduce water usage in new construction “without impacting the quality of life of our citizens.”

Rebate for low flow toilets

Critics say the city is missing an opportunity to encourage changes in the way residents use water because the proposal lacks ambitious targets.

Ken Kramer, a water policy expert for the Sierra Club’s Lone Star chapter, said the plan sets weak goals and has few water-saving programs beyond providing residents with real-time information on their usage. Houston should employ rebates for low-flow toilets and audits of water use for irrigation, among programs that have worked elsewhere in the state, he said.

“These things are happening in cities across Texas,” Kramer said, “but Houston doesn’t seem that interested.”

Water conservation hasn’t been an urgent theme for Houston, which is located in one of the state’s wettest places. The climate allows residents to use considerably less water, especially on their lawns, than people living in the Dallas-Fort Worth area, who have a reputation as water hogs.

But Houstonians still use more water on a daily basis than the residents of Austin, El Paso and San Antonio, according to the Texas Water Development Board’s most recent data.

The new plan comes two years after Mayor Annise Parker formed a task force to explore ways for the growing city to use water more wisely and to ensure a robust supply for decades to come. She said the group of lawyers, engineers and environmentalists, among others, would be “forward-thinking” and consider all “innovative ideas.”

City not ready to act

But Houston has yet to act on the committee’s recommended strategies. The city “wants to be good stewards of our citizens’ resources, both environmental and financial, and make sure we only introduce programs that take all these resources into account,” Wright said.

The TWDB, the state’s water-planning agency, requires cities to submit conservation plans every five years to be eligible for financial assistance. Houston is seeking the state’s aid for a canal-and-pipeline system to move Trinity River water to Lake Houston and the planned expansion of a wastewater treatment plant.

The push for additional water supplies is occasioned by demand forecasts based on historic use and tied to population growth. The city projects demand at 150 gallons per person per day through 2024, even though demand has plateaued or declined here and in other cities, such as Dallas and San Antonio.

“I am sure they are not looking to reduce customer usage, which would require them to increase rates,” Leurig, the water-project financing expert, said of Houston. “Of course, this becomes a vicious cycle when the city looks at how it must satisfy that demand over the long-term, including massive infrastructure projects that would only further increase rates.”

Price can be a powerful strategy for encouraging conservation, she said. But rate hikes are politically difficult, as evident in 2010 when Houston previously adjusted its rates to reflect the cost of service. The proposed 30 percent hike was unsuccessfully challenged in court.

Houston charges less for water – at least for households that used 7,500 gallons per month – than many other major cities, including Cleveland, San Francisco and Seattle, the American Water Works Association’s most recent rate survey found.

Too early to know

Houston’s rate design does increase significantly for the heaviest residential users – those consuming more than 12,000 gallons per month. However, the pricing structure still allows a household using 10,000 gallons per month to spend less per unit than one that consumes 5,000 gallons.

“Right now the price of water is so low they don’t see a price signal and change their behavior,” said Michael F. Bloom, an engineer who is chairman of the Greater Houston Partnership’s committee on water issues.

If Houston decides to encourage conservation through its price, it doesn’t have to lead to significant revenue risk, Leurig said. It’s possible to construct a rate structure that provides stability by setting higher base charges.

Houston recently hired a consultant to review its pricing structure. Wright said it’s too early to know how it might change.

Proposal to conservewater

  • 1 gallon a day:City’s proposal for residents to reduce water usage by 2019
  • 1.6 percent: City’s proposal for residential water cuts over five years
  • 1 percent: State’s recommended goal for cutting residential water use each year