Some Final Thoughts on WTP4

Big City Council vote on WTP4 this Thursday.  Here is my previous post from the WTP4 forum.  The post highlights outstanding issues on both sides of the argument.

InFact Daily says that Shade is the going to be the swing vote and she is voting in the affirmative for the plant.  Morrison, Spelman, and Riley are voting against and submitting a conservation plan amendment.  Everybody is for conservation, so the substance should pass.   I’ve been most impressed by Council member Spelman, especially because he went and created a detailed alternative demand projection and analysis.  I’ve reproduced a key chart above where he tries to ascertain future demand under different conservation trends, but you should read the whole presentation to get a sense of his risk analysis approach.

In retrospect, I’ve come to understand the utility’s and proponent’s point of view a lot better.  They are interested in managing risk cheaply.  Council member Spelman takes on the risk part, but also gets a bit oddly anti-Keynesian at times.  The debt part of his argument is clearly wrong since this bonding capacity is already included in Austin’s excellent bond ratings.  The higher water rate issue makes more sense, though that can be fixed with a progressive rate structure and hardship programs.  I believe the “no” votes will be proposing something on the latter.  Ultimately, the utility thinks it’s a cheap time to bid and build, and though opponents point to the fact that these types of projects always have over-runs, that actually is an argument in favor of being very sensitive to price opportunities available in the current economic environment.

Of course there are more opportunities for conservation.  After all, Austin Water could just price water at $10 a gallon and restrict all kinds of non-essential uses.  Personally, I favor more tweaking with those levers, but I understand how the utility’s staff are not sure that the political consensus and support will be there for those tough measures, so they are going ahead and buying capacity that everybody agrees will eventually be needed when they think its cheap.  The consequences of missing an optimal development date were described as mildly problematic lower pressure at peak times.  Not a disaster, but as the utility staff made clear, there is an element of professional pride on the line with ensuring proper pressure at all times.

Personally, I am not sure how I would vote.  As readers now, I suspect the population growth projection is too low (even in the Spelman alternatives), so an accurate accounting would boost demand estimation as long as per capita demand remains at its current low or decreases at a lower rate than population growth.  I also would have liked to see a comparison of how effective the plant is versus conservation alternatives on a cost per MGD basis taking into consideration the construction savings presently available.  And personally, I would have liked to see modeling on the effects of additional restrictions and steeply progressive rate changes.  Alas, I requested data to develop these from some of our officials, but didn’t hear back.

I am hopeful that all the pro-conservation organizing will indeed lead to something like a Pecan Street Project for water.  I respect both sides of this argument.  But given how profusely everyone has said they support additional conservation efforts, I will be extremely disappointed if we drop the ball on setting a bolder conservation course.  Let’s see what happens.

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