With the anticipated world population growth, one of the major challenges will be supplying clean potable water for this growth, as well as for existing populations. Much of these needs for potable water will occur in arid and semi-arid lands. Sometimes, the challenges of supplying potable water for these areas appears to be insurmountable. However, based on the experience of the Colorado River Municipal Water District ("CRMWD") which serves West Texas, supplying water in these areas in most cases is not only doable, but can be financed solely with revenues received for the water supplied.
First, to tell you a little about CRMWD, or the "District," it was formed in 1949 by an act of the Texas Legislature for the member cities of Odessa, Midland, Big Spring, Colorado City, and Snyder. Originally, it was to furnish water only to these cities, but as time passed, the District has assumed a much broader role to furnish water to most of the cities in West Texas. The cities of Midland and Colorado City dropped out of the District before any construction started, leaving the three current member cities of Odessa, Big Spring, and Snyder. In recent years, the District has contracted to furnish a large part of the water requirements of Midland, San Angelo, and Abilene, Texas, as well as numerous other smaller cities and rural water districts. The District now furnishes all, or part of the water to approximately 500,000 people in West Texas. Attached Figure 1 is a map of CRMWD's system, lakes, and pipelines.
The District furnishes most of this water from three reservoirs on the Texas Colorado River. These reservoirs have a combined capacity of over 1,200,000 acre feet of water when full. The District also produces water from five water well fields. Water deliveries run about 75,000 acre feet per year (average of approximately 65,000,000 gallons per day) to its member and customer cities. (Unfortunately, in an arid climate, evaporation from these reservoirs runs approximately 80,000 – 85,000 acre feet per year, or more than is actually consumed.)
The District has invested approximately $380,000,000 in lakes, water wells, and pipelines, but current replacement costs are estimated to be $750,000,000. All of these costs have been financed solely with revenue bonds. The District has neither sought nor used any Federal or State funds to construct its facilities. The District has limited taxing authority (which it has never used), and all of its bonds have been secured solely by its water contracts, and there have been no guarantees by member cities. Even though the District saw water demand tripling in the decade of the ‘60's and continuing to grow rapidly in the ‘70's, ‘80's, and ‘90's, new water supplies have been developed well before they were needed, and the District has never rationed water to either its member or customer cities in the 55 years since the District was formed. It is almost unbelievable that about the only major area of Texas that has not seen water rationing is in the West Texas desert area!
The District's water supplies have neither been cheap, nor close to where they were needed. The District's largest source of supply, Lake Ivie, is 140 miles from, and 1400 feet lower in elevation than the District's largest customers, Odessa and Midland. Obviously, pumping costs are a large part of the cost of the District's water. Electric power (for pumping) accounts for about 40% of the total budget (including debt service), and 67% of the operational budget for the District each year. Figure 2 shows how all of CRMWD's water supplies are pumped over long distances and up substantially higher elevations. Delivered cost for raw, untreated water to Odessa and Midland now average about $1.45 per thousand gallons. This perhaps is the highest cost for large quantities of raw water in Texas, and maybe in the whole country. (Although the District has never rationed water to its customers over the past 55 years of its existence, in some ways, the cost does "ration" water usage and encourages conservation.)
The District is managed by a 12 member Board of Directors. The City Councils of the three member cities each appoint 4 directors who serve 2 year staggered terms. Although the term for each director is only for 2 years, the cities traditionally reappoint directors so that the average term is a long period of time. (I have served as a Director for 26 years, and the four Directors from Odessa have served a combined total of 66 years. The seat I hold on the Board has been held by only one other person since the District was formed.) The longevity of the Board Members and their freedom from political influence are some of the main reasons for the success of the District in meeting its water needs.
I believe this shows that the District has been quite successful in achieving its mission of supplying adequate water to its member and customer cities in an arid area where rainfall averages only approximately 15 inches per year. So how was it done? There is no one single answer to this question; it took a combination of planning, good management, and perhaps some luck, to have accomplished this. At this time, I would like to discuss some of the more important requirements in meeting water needs in an arid area.
1. Providing adequate water is a very long range project. Supplies that will be needed 20 to 30 years in the future must be planned today, and construction of the necessary infrastructure must be started 20 or more years before it is needed. (If one waits until the water is needed, then the supply of this water will be too late.) Longevity of Board Members must be sufficient to plan long range, and to carry through on actions that long range planning identified as being needed.
As mentioned above, the entity responsible for water supply must be free of political influence. Political bodies are inherently "reactive," whereas supplying water requires long range "proactive" decisions. Politicians must run periodically for re-election, and thus they find it hard to think and plan much beyond the next election.
The CRMWD Board is blessed with the structure of its organization. While the founders may well have had the foresight to have planned the organization to be free from political influence, regardless of the reason, it has worked very well. The Board has on more than one occasion committed to spend millions of dollars on water supplies when there was no apparent present need for additional water. This structure has allowed the Board the freedom to look far into the future, and if a need is seen for additional water, then make the necessary decisions to obtain the anticipated additional water supplies.
2. In arid areas, accept the fact that water will be expensive, but there are some positives when expensive water is the accepted norm. First, higher priced water makes it much more feasible to obtain water, such as water from more remote sources, and treatment of brackish water (such as by reverse osmosis). Higher cost water also encourages conservation of water, and assures that it will be used only for the more essential needs.
3. If at all possible, water supplies in an arid area should be base loaded with surface water sources and supplemented with underground water. Underground water reservoirs under arid lands recharge at a very low rate – usually at less than 0.5% per year. If water is pumped rapidly from these underground aquifers, then in effect, the water will be "mined" and will deplete rapidly. However, based on CRMWD's experience, if water is produced sparingly from underground aquifers in arid areas, then recharge occurs slowly, and the underground water supplies will last a long time. Underground water should be used solely for "peak shaving" and as an emergency standby supply whenever surface water can be used as the base source of supply.
In considering surface water sources in arid areas, one must be open minded and consider water sources that are some distance from where they are needed, maybe 200 to 300 miles away, and at a much lower elevation. (One would never consider such a source if the requirements were for "cheap" water.) By accepting the concept of expensive water, and then looking further away from the place where the water is needed, many times one can find several sources of surface water.
In planning surface reservoirs in arid areas, they must be huge. (If all of CRMWD's reservoirs were full, the District would have about an 18.5 year supply of water, not counting evaporation.) In desert areas, long periods of droughts are usually followed by short periods of floods. One must be ready to catch and store the runoff when the periods of heavy rainfall occur. Then one must understand that when these reservoirs are only 20% to 30% full, this is still a lot of water, and this is normal water storage in surface reservoirs in arid areas.
4. In arid lands, conservation represents a major part of adequate water supplies. Programs to educate the public to voluntarily conserve water are essential. Much of the conservation can be driven by economics and showing the public that they can save money by conserving. Some of our municipal customers use water rates that escalate for higher water consumption by their customers to further encourage conservation.
Another part of conservation are programs to retain and/or reclaim water that has already been captured and transported. CRMWD currently has a program underway to study the recovery and reuse of water from the municipal waste water plants of our member and customer cities. With the technology that is available today, this reclaimed waste water will be cleaner than water currently delivered from the lakes. Furthermore, since it will not have to be transported over long distances, it will be cheaper. CRMWD believes that recovered waste water can supply about 20% of our municipal water needs – which is a significant amount of water.
5. In providing municipal water supplies, it is essential that the users be willing to pay an amount equal to the cost for their water – there is no free lunch. But if users will pay for the cost of the water, and are willing to sign contracts to purchase their water from a water supply entity, then the infrastructure probably can be financed using revenue bonds. With the experience we have had, Wall Street understands this collateral and has been willing to finance our facilities for water supply. Part of the reason is that Wall Street understands that water supply is essential for a population to exist. Thus their willingness to finance will be based on the usually criteria: i.e., the capabilities of the management, the security of the water supply, and the terms of the water sales contracts. In some cases, water sales contracts will have to be take-or-pay contracts, particularly for an entity that is new in the water supply business. Also, the lenders will require a sinking fund equal to approximately 10% (or more) of the annual debt service cost, to be added to the cost of water sold to the customers.
6. In constructing water supply infrastructure, it is essential that designs and construction be managed prudently. In the case of CRMWD, we have found that we can build a reservoir at approximately 1/3 of the cost that the Corp of Engineers will spend for a comparable size reservoir. While it is necessary to use consulting engineering firms to do the actual design, the water supply entity must exercise strong control over the design, and take bids on the actual construction. There is no substitute for good management to control the costs of major construction projects.
In the United States, costs related to environmental and regulatory issues are substantial. Many of these cost can be avoided in developing countries. However, additional costs for logistics to construct facilities in remote areas may offset these savings.
7. While using surface water to base load water requirements (with underground water to supplement surface water) is the ideal source of water, in certain areas the surface water and/or underground water may not be available. Should this be true, then the costs go up. One has to consider more expensive ways to furnish water, such as desalinization of sea water or underground brackish water. It may also be necessary to consider sources much further away from where it is needed (maybe several hundred miles). Again, economics dictates how much water will be used, and if water becomes extremely expensive, water usage may be limited to only what is needed for the health and welfare of the population.
However, when the water supplies become more expensive, the need to keep politics out of decisions on water supply, and for good prudent management become even more critical. Situations like this require difficult decisions. And if water is to be available, decision makers will have to make these decisions and then act.
I am reminded of an instance when CRMWD was being formed, and the District was going to have to borrow $10,000,000, when none of its member cities had ever borrowed as much as $1,000,000 before. There was quite a debate as to whether the member cities could afford such a huge expenditure. The debate was ended when one of the member city mayors asked, "Gentlemen, what is a drink of water worth in Hell?"
In summary, the key ingredients generally for water supplies in arid and semi-arid lands include the following:
• Plan far ahead and build infrastructure long before it is needed.
• Keep politics out of the water supply business.
• Accept the fact that water will be expensive in arid and semi-arid lands.
• If at all possible, base load water needs with surface water, and supplement the surface water with underground water, primarily for peak shaving and emergency supply requirements.
• Carefully control costs of infrastructure and operations.
• Be flexible and innovative. When it appears conventional water sources are not available, then consider unconventional sources.
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