Many of you may not realize it but SRA – Louisiana is in the process of putting together a Water Sales Agreement with a private company by the name of Toledo Bend Partners that would allow the company to transfer and sell water from Toledo Bend Lake to Texas. The following is a letter I sent to Mr. Jim Pratt – Executive Director Sabine River Authority, State of Louisiana asking for clarification on a number of issues related to this contract.
I would like to respond to your comments request regarding the proposed Water Sales Agreement with Toledo Bend Partners. Last week I had also submitted a letter to SRA-Texas referencing certain information that was posted in the Shreveport Times newspaper (Dec 1st) – but at this time I have had no response from SRA-Texas.
I will try not to “ramble” but allow me to just present a few comments:
(1) The first thing that comes to mind is the timing of the agreement. The lake is lower than we have seen it since it was created, businesses are doing their best to not go bankrupt and the rainfall projections for 2012 are bleak at best. I understand “long-range planning”, but I cannot believe that public opinion will be in favor of any plan that suggests pulling water from a reservoir that is 11-plus feet low – and one that may not even get back to the 165’ msl mark in 2012. The upcoming year will probably see a number of our businesses shut their doors, the value of peoples homes continue to slide downward and the overall economy of the nation continues to see more and more folks out of work.
(2) For years property owners around the lake, and our many visitors, suffered through what seemed to be a total lack of concern by SRA in generating as much as they could during the least inflow of water months of the year. And in time this is what caused the almost “tea party” type meetings and people stating that they had had enough. The perception (whether it is real or not) was that SRA was a part of the problem – not part of a solution. I assure you that SRA’s reputation has not improved significantly since the 168’ meetings were completed and the talk of a plan to sell water (without a good story behind it of why we should) would push most folks over the edge.
(3) I understand the logistics of Water Sales vs. Hydropower and support a plan that would use the 600,000 acre-feet per year of water sold (one acre-foot is lots of water – 325,848 gallons) rather than continuing a generating process that uses huge amounts of this precious resource for minimal monetary gain and produces even larger disruption to our areas economics. A recent document showed that 6-months of power generation uses one million acre feet of water annually versus a water sales agreement that would use 600,000 acre feet over the same period of time. The problem I have is supporting a water selling plan if the generating of power also continues. What assurance do we have that this will not take place?
(4) It would seem that SRA-Texas would eventually be a partner in this plan since transfer of water outside of its base or origin is prohibited by Texas law (this could probably be quickly amended if the $$$ were there), It is also my understanding that Texas can only charge a rate that equals their expenses. But a joint venture might have a good side – Perhaps both SRA’s could operate in a more cooperative manner – which would be a refreshing change from the past.
(5) I looked through the 82 pages of the Water Sales Agreement (I used up a full print cartridge on my printer) and appreciate the fact that much of the information contained is legal protection and rules for both sides to follow. I do however think that we have had enough contracts that have very long-term conditions. . such as this one that has a termination date of fifty years with the right to extend the contract for another 49 years. That is a long time to have a contract in effect under the changing economic conditions we are seeing in both our domestic and international business.
(6) I think the Drought Contingency Plan needs to be much more aggressive in protecting the volume of water that can be taken under these conditions. Why would you be selling large amounts of water if people are being told to prohibit outdoor use, minimize indoor usage and “lake front” property is a block or more from the water?
(7) The contract states that we will be maintaining a minimum flow downstream of 144 cfs. If that is sufficient to maintain the needs then why do we continue running 501 cfs?
(8) What happens down the road if we have the water contract in place and have effectively agreed to not generate electricity… and then the request comes to SRA for “emergency generating” to “assist” needs on the power grid?
(9) In the “Recitals” section of the contract it states in item E that “The economic and social and environmental benefits to SRA resulting from this agreement are projected to exceed the value of the obligations of SRA undertaken herein, this agreement has a public purpose and is in the public interest of SRA”. I would like to see some wording that states that it is also in the best interest of the public.
I am sure that many questions will come up on exactly where the diversion point/s will be located and where the pipeline will be going. Lots of wording about a diversion point downstream, but then I see a statement that SRA does not contemplate any approved location downstream. If there was a diversion point downstream would SRA be using the generators to release sufficient amounts of water to satisfy the contract?
• Not sure if I understand the mention of more than one Purchaser Project under this agreement?
• It also states that the Purchaser may purchase water from Toledo Bend Reservoir from another Person with the written approval of SRA. What circumstance would allow this to take place?
• The agreement makes it clear (right now) that water may only be sold to persons for use outside Louisiana… except if given written approval by SRA. What legal issues would develop if the need was there to allocate or sell additional water within Louisiana? Would this be another water sales agreement that would increase the amount of water pulled from TB on an annual basis?
• Not sure how to address this, but there will always be speculation and concerns about the measuring equipment and whether it is accurately monitoring the volume of water being pulled from Toledo Bend. We landowners gauge it pretty well by how much our floating docks drop.
• If Texas joins as a partner will the audit of all transactions be done by both Louisiana and Texas auditors? • I assume that David Charlton of Baton Rouge is the attorney representing Toledo Bend Partners.
• Exhibit 4 lists three individuals that are original principals with a 10% or greater equity interest in Purchaser – Aubrey Temple Jr., Donald Bollinger and B.J. McCombs. Are these Louisiana folks?
• What effect will the expiring of the Power Sales Agreement in 2018 have on overall operation of SRA?
• If the water sales contract goes into effect, where do you expect the additional revenue to be used?
• How does the financing of the $2 billion overall project take place – private enterprise, state and/or government assistance, etc.?
I would assume that by now the agreement is in front of the Louisiana Governor and could possibly even be signed. I am in no way opposed to private enterprise investing in a project that can make money but I am also a landowner on Toledo Bend Lake.
My wife and I are retirees and we moved to Toledo Bend to enjoy life, fish, work with the church and stay busy with other community functions. For the past year-plus I have had my “floating” dock sitting on dry ground and our pontoon boat hangs suspended in the air.
With our current drought conditions many of the folks that use to come down for the week or weekend have gone elsewhere. Grandkids that use to enjoy catching perch off the dock now just walk down to the dock and shake their heads in disappointment. Some businesses that use to flourish are probably going to not make it and trying to find a buyer for your home or property is impossible unless you just want to give it away. Needless to say there are many frustrations in the Toledo Bend area.
Making money by selling
water and not using volumes of water generating would seem to be a viable plan for the future – if we have enough water to go around. I hope that both SRA-Louisiana and SRA-Texas will look after the people’s best interest as they go forward with a water sales plan. — JB