SAWS Approval of Developer for Controversial Pipeline Raises Serious Questions - Texas Scorecard

Late last month, the San Antonio Water Systems Board of Trustees unanimously approved a controversial $3.4 billion pipeline project to bring more water to San Antonio, which is now pending approval before city council on October 30th.  The Vista Ridge Pipeline is a 142 mile pipeline that will pump water leased from rights holders in Lee and Burleson County out of the Carizo-Wilcox Aquifer.  Proponents of the project claim that San Antonio’s water needs are dire and dependence on the Edwards Aquifer must be addressed immediately, but at nearly seven times the cost per acre-foot of water out of the Edwards Aquifer, the deal would constitute some of the most expensive water sold in Texas.  With rate increases for SAWS customers irrespectively planned for the future, many ratepayers are skeptical, raising questions about the necessity of the project and the viability of alternatives.  While the immense cost alone is certainly enough to warrant closer scrutiny, the choice of developer (Abengoa) deserves greater attention.

The eponymous Vista Ridge pipeline is to be built by the Vista Ridge Consortium, a partnership between Austin based BlueWater Systems Inc. and Spanish multinational conglomerate Abengoa – a massive, engineering company steeped in controversy and surrounded by powerful connections.

Abengoa Solar, a subsidiary, received $2.8 billion in stimulus loans (five times more than the infamous Solyndra) for two large solar projects – one in Arizona, and one in California.  The curious thing is that not only were the loans finalized despite a speculative credit rating by Fitch, the company also received preferential treatment from the Department of the Interior to lease federal land in a no-bid process.  How?  Friends in high places, including infamous Democrats Senator Dianne Feinstein, Al Gore, and former New Mexico Governor Bill Richardson, and even President Obama himself, who touted Abengoa’s “Solana” project (at 2:15 in the video) as part of his “solar recovery,” an initiative notorious for crony political favoritism.

More alarming, however, is the fact that Abengoa is currently under investigation by two federal agencies for some very serious ethical lapses.  Former employees allege that the company routinely violates U.S. Immigration law, using taxpayer funds to hire foreign and illegal immigrant workers, and also regularly violates environmental and workplace safety laws.  Despite all of the above, earlier this month the company received a $132.4 million loan guarantee and a $97 million grant to build a biofuel plant in Kansas.  With a cursory glance revealing quite a robust government relations model at work throughout the company’s nearly 600 subsidiaries, one can’t help but wonder who’s on the other side in this particular instance.

The project goes before San Antonio City Council on October 30th.  City council officials need to keep in mind that since eminent domain abuse is prevalent in these kinds of projects as we’ve reported, this 100 foot-wide, 142 mile swath of a project will affect much more than their constituents alone.  As such, speculation is not only irresponsible, but at $3.4 billion, it’s expensive, too.