SAWS: Vista Ridge Pipeline - SAWS Selects Proposal for Largest Non-Edwards Water Deal
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Aquifer Level 681.5 | Year-Round Watering Hours

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Vista Ridge Pipeline Project

July 1, 2014

SAWS Selects Proposal for Largest Non-Edwards Water Deal

Contract negotiations to proceed in open meetings for unprecedented transparency

San Antonio Water System today formally selected a water supply proposal submitted by the Vista Ridge Consortium that guarantees a long-term water supply for the residents and businesses of San Antonio. The proposal promises delivery of 50,000 acre-feet of water to San Antonio from the Carrizo and Simsboro aquifers in Burleson County by 2020.

In the midst of prolonged drought and exploding population growth, SAWS has selected a diverse long-term water supply proposal that can meet 20 percent of current annual demand.

"This project will be a game-changer for San Antonio’s future, helping us meet a diverse and growing demand for water for decades to come," said Robert R. Puente, president and CEO of SAWS. "The next step is to negotiate a contract that is beneficial to our community."

In a move of unprecedented transparency, the SAWS Board also approved the formation of a committee that will negotiate the contract in weekly posted meetings that will be open to the public. The first negotiation session was scheduled to take place on July 1, the very afternoon the project was selected.

“We are committed to an open and transparent public negotiation and education process,” said SAWS Chairman Berto Guerra. “Our community deserves to have all the information needed to make an informed decision on purchasing the largest non-Edwards Aquifer supply in our city’s history.”

Under the highest ranking proposal of nine that were received, the Vista Ridge Consortium has already secured 30-year permitted water rights of 50,000 acre feet per year in Burleson County northeast of Austin, and they would develop the well field and construct the pipeline to San Antonio.

Two weeks ago, SAWS deemed that the Vista Ridge proposal was responsive to a Request for Competitive Sealed Proposals. Their proposal had been clarified to address specific SAWS concerns that included a requirement for payment even in cases when water was not delivered, automatic price escalation, and payment of a $5 million annual reservation fee that would have started upon the signing of the contract.

As a result, the total project cost over 30 years was reduced by over $700 million, and Vista Ridge Consortium agreed to assume complete delivery risk, including regulatory, technical and financial risk at a fixed price for the 30-year duration of the project.

SAWS projects its service area will grow at a rate of 20,000 new people every year, requiring it to provide services for the daily activities of work and play in a fast-growing community. “Purchasing this quantity of water is one of the most significant decisions our community will ever make,” said Puente. “It will require a 30-year commitment of annual payments, but it will provide the security of knowing our economic future and our quality of life will not suffer because of a lack of water.”

The project will require rate support for payments that would be scheduled to begin upon delivery of water as early as 2019. In order to support the Vista Ridge Consortium project and its integration to the SAWS system, current projections anticipate a rate increase of approximately 16 percent to the average monthly residential bill by 2020. The exact cost and rate impact will not be known, however, until the contract is negotiated. SAWS expects to have a contract negotiated and considered by City Council by the fall of 2014.

The Vista Ridge Consortium is led by Abengoa (NASDAQ:ABGB), an international company with more than 70 years of experience in sustainable and innovative technology solutions and project financing in the water, energy and environmental sectors. Abengoa has successfully completed more than 100 infrastructure projects worldwide using private financing, with a total investment in excess of $21 billion.