In 1999, the City of Houston joined the Lower Brazos Basin Water Alliance (Alliance) to take the lead in their joint efforts to preserve the Allens Creek Reservoir. The members of the Alliance included Brazos River Authority (BRA), Gulf Coast Water Authority, City of Houston, City of Missouri City, City of Richmond, City of Rosenberg, City of Stafford, City of Sugar Land and WCID #2.
This reservoir was originally permitted by Houston Lighting and Power (HL&P — a predecessor of Reliant Energy) in 1974 to provide cooling water for a proposed nuclear power plant. The power plant was not built, and HL&P never moved to construct the Allens Creek Reservoir project. The water rights permit expired by its terms because of failure to commence and complete the project in accordance with the water use permit conditions.
After much effort, expense and debate, the Texas Legislature passed SB 1593 in 1999 instructing the Texas Natural Resource Conservation Commission, predecessor to Texas Commission on Environmental Quality, to resurrect the water right and grant it to the Texas Water Development Board (TWDB).
The City of Houston and Brazos River Authority acquired the 9,500-acre Allens Creek Reservoir site from Reliant Energy. The resulting joint project between the City of Houston, the BRA and the TWDB allows the sharing of cost and water. The City of Houston would own 70 percent of the water and BRA would own 30 percent.
Importantly, the City of Houston is the water supplier to the Houston region, including industry on the Houston Ship Channel. The City of Houston is also the provider to the North Harris County Regional Water Authority, West HCRA, Central HCRA and will be to the North Fort Bend Regional Water Authority. In fact, the reservoir was envisioned to be used as a water supply for Fort Bend and West Houston.
House Bill 2846 by Rep Lyle Larson mandates that the City of Houston "enter into a contractual agreement with the Brazos River Authority to transfer to the Brazos River Authority all of the City's ownership interests in the Allens Creek Reservoir project, including all required water right permits, along with the responsibility to construct the project in accordance with all associated statutory requirements and deadlines."
Although HB 2846 sets an upper limit of $23 million to be paid to the City of Houston, there is no provision for the City of Houston to be provided anything of value for its water rights, especially comparable water rights approved for use in the Houston area.
The City of Houston has spent $23 million through the Texas Water Development Board so far on the Allens Creek Project. House Bill 2846 was amended to reimburse the City of Houston up to $23 million but this amount does not compensate the City of Houston for the loss of 15% of the City's water assets (approximately 100,000 acre-feet of water per year, or just over 91 million gallons per day) that the City would have obtained from the Allens Creek Reservoir project.
Contracts involving water rights should be made by the water-rights holders themselves, through arms-length agreements which ensure that fair value is received in the exchange of a scarce resource. Additionally, the Texas Water Code mandates that water planning to supply projected water needs is done through a process centered on Regional Water Planning Groups, not by fiat from Austin.
The City of Houston opposed passage of House Bill 2846.