SAWS President and CEO Robert Puente attends a board meeting. Photo by Scott Ball.
SAWS President and CEO Robert Puente listens to presentations during the SAWS board meeting. Photo by Scott Ball.

If Abengoa Vista Ridge can’t find an investor to take on 80% of its Vista Ridge project, San Antonio Water System may have to abandon the 142-mile water pipeline plan, change the contract, or take on the $3.4 billion project itself.

At least five investment firms have expressed interest in becoming a partner, said SAWS President and CEO Robert Puente on Thursday after briefing City Council on the project. Three of those firms – Brookfield Global Infrastructure Advisor Ltd., John Laing Group PLC and the Blackstone Group – have submitted proposals.

Abengoa Vista Ridge is a subsidiary of Abengoa Sociedad Anónima, the Spanish renewable energy and engineering conglomerate that filed for protection from its creditors in November 2015. It has until March 28 to reach a deal.

SAWS has the authority to approve or deny the new Vista Ridge partner and could be selecting an applicant as early as April, Puente said, just a few months after Abengoa Vista Ridge announced its plan to sell a majority of its equity in the project.

Despite these setbacks, the project could still start delivering 50,000 acre feet for at least 30 years from Burleson County by 2020, he said. “The project remains viable and desirable” as the best shot at securing the city’s water future by providing 20% of San Antonio’s water supply.

“One of the big arguments (against the Vista Ridge project) was that Abengoa doesn’t have the finances to do this and that turned out to be true,” Puente said after the meeting. “So now they’re going to get somebody that does.”

The partner would have to agree to the same terms of the contract that Abengoa did, which means taking on all of the risk if the project falls through.

“We have to do our diligence, find out who those equity partners are going to be, to make sure they’re the kind to entity that can see the project through,” Puente said. Part of the contract requires Abengoa to pay for this due diligence process and it has until May 2017 to secure the new partner by the financial close.

Councilman Ron Nirenberg (D8) and his colleagues expressed a firm desire to keep the financial risk of the project off of SAWS and ratepayers and on external developers.

“The risk tolerance has to remain the same,” Nirenberg said.

SAWS rates increased by 7.5% in 2016 and are projected to go up 7.9% in 2017, in part to begin to pay for Vista Ridge. Nirenberg stressed that he doesn’t want to see the project effect ratepayers any more than it has to.

The investment firms know not to try to renegotiate the contract, Puente said. He assured the Council that if at any time it looks like a change in contract or risk profile arrises in the future, he will call a special meeting.

SAWS taking over the project is also a possibility, should City Council approve such a move, but that would mean shifting the risk back onto SAWS.

“The more risk, the cheaper the project,” Puente said.

Abandoning the project altogether would mean relying on the expansion of other under-way and existing water sources like the Brackish Groundwater Desalination Plant and Carrizo Aquifer.

“All of the options are going to be very expensive,” said Councilwoman Shirley Gonzales (D5), as cities and residents across Texas and the U.S. try to come up with a balanced response to increasing demand.

What makes the Vista Ridge deal as it stands so appealing, Puente said, is that the price is locked in for 30 years.

Mayor Ivy Taylor agreed.

“I believe that the Vista Ridge water project is an integral and viable part of our water future,” Taylor said.

*Top image: SAWS President and CEO Robert Puente listens to presentations during the SAWS board meeting. Photo by Scott Ball. 

Related Stories:

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Council Approves New Water Rates, Structure

City Council Poised for Key Vote on Water Rates

Cisneros: City Council Should Approve SAWS Rate Changes

Commentary: Is the Vista Ridge Groundwater Reliable?

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Iris Dimmick

Senior Reporter Iris Dimmick covers public policy pertaining to social issues, ranging from affordable housing and economic disparity to policing reform and mental health. Contact her at