A shifting of priorities along the Guadalupe River in the early 2000s set the Guadalupe-Blanco River Authority on a path that led to the controversial plan to drain four lakes in Guadalupe and Gonzales counties, according to a former river authority official. 

In Guadalupe County courtroom on Wednesday, a former Guadalupe-Blanco River Authority executive manager testified that a shifting of senior water rights into Canyon Lake left six lakes lower down in the river basin without enough reliable water to produce enough revenue from power generation to pay for the replacement of the dams. 

The GBRA’s announcement last month that it plans to draw down the four remaining lakes caused an uproar in the communities that have sprouted up alongside the lakes and the 90-year-old dams that hold back the water. The GBRA purchased the entire lake and dam system in the 1960s to reap the revenue from the hydroelectric power generated by the dams, which were built in the 1920s and 1930s. 

GBRA officials now say the lake “dewatering” is a matter of safety. A spillgate at the dam that forms Lake Dunlap failed in May, following a previous spillgate failure at Lake Wood in 2016.

James Murphy, a water lawyer and former administrative law judge who served as the GBRA’s deputy manager from 2008 to 2016, said Wednesday the situation could have been avoided. If the river authority hadn’t moved the water rights roughly 15 years ago, it could have ensured enough reliable flow would be in the river to generate enough power – and revenue – to replace the dams, he said. 

“We have a duty to those lakes,” Murphy said, testifying on behalf of a group of nearly 300 lakeside residents suing the GBRA to stop the drain. “What we did was sell their only valuable asset.” 

The move effectively doubled the amount of drinking water available from Canyon Lake, now a significant water source for fast-growing communities from New Braunfels to Boerne. Though the GBRA is headquartered in Seguin and has close historical ties to the hydropower lakes, Murphy said the authority was irresistibly drawn into becoming a water supplier to the high-growth areas on the edge of the Texas Hill Country.

But Jonathan Stinson, the GBRA’s deputy manager since 2016 and a former assistant executive administrator at the Texas Water Development Board, said there’s no way the hydropower dams in the Guadalupe River valley can make enough money to pay for replacements. The GBRA estimates replacing them would cost between $15 million and $35 million per dam. Hydropower earned the GBRA only an average of approximately $2.6 million per year over the last 10 years, according to the river authority.  

Restrictions on how the water in the lakes could have been used also meant the GBRA could not have made money selling the water for municipal use or to farmers, according to Stinson and former GBRA officials. And unlike other river authorities, such as the San Antonio River Authority, state law does not allow the GBRA to assess taxes. 

Keeping the water rights in the hydropower lakes “would not have changed where we are now,” Stinson said. 

How To Move Water Rights

To understand the GBRA’s water shuffle, you first have to understand how water rights work in Texas. 

In Texas, all water in rivers and lakes belongs to the public, but the right to withdraw a certain amount per year can be assigned to those who want to put it to good use. Since there’s a limited amount of water in a river during drought times, water gets allocated on a first-come, first-served basis. The rights to the amount of water originally stored in the GBRA’s six hydropower lakes date back to 1914 and 1926, according to the GBRA. 

Because the right to use water is considered a property right, all kinds of mechanisms exist that allow water rights to be bought, sold, and bartered. In the GBRA’s case, the plan was to take the water rights associated with the hydropower lakes and essentially move them roughly 20 miles northward into Canyon Lake, a major reservoir on the Guadalupe River in Comal County.

This allowed more water out of Canyon Lake to be sold to growing cities and suburbs in the San Antonio-New Braunfels area, where demand for water grew fast in the early 2000s, Murphy said. 

Canyon Lake, completed in 1964, is a joint project of the GBRA and the U.S. Army Corps of Engineers. The federal government owns the dam that forms the lake and the reservoir, but the GBRA has the rights to sell most of the water and pays 35 percent of the debt on the dam. 

Moving the senior water rights doubled the amount of water that could be sold from Canyon Lake from 45,000 acre-feet per year to 90,000 acre-feet per year, Murphy said. One acre-foot is 325,851 gallons – enough to supply approximately 700 San Antonio households for a day. 

The San Antonio Water System is one buyer of water from Canyon Lake. In 2006, a few years after the water rights had been moved to Canyon Lake, SAWS began purchasing 9,000 acre-feet per year.

As Murphy tells it, this was all part of a shift in the GBRA’s focus towards the suburbs and metro areas and away from the smaller downstream communities and agricultural users along its basin. 

“There are in reality three GBRAs,” Murphy said in a prepared testimony before the Texas Legislature in April. “One represents urban growth between Austin and San Antonio, another represents the Texas Hill Country, while a third represents both rural areas and the rapidly industrializing Gulf Coast.”

Under former GBRA General Manager Bill West Jr., whose 23 years at the river authority ended in 2016, the GBRA “struggled mightily to balance those interests,” Murphy said.

“The Interstate 35 corridor between Austin and San Antonio is one of the fastest growth areas in the nation,” Murphy told the Texas House Natural Resource Committee. “Money talks loudly when it comes to real estate. Speculative demand and associated political pressure forced GBRA to direct inordinate attention to this region.”

Jim Murphy

Reached by phone Friday, West contradicted Murphy’s assessment of whether the dams could have made more money. Those who use water out of Canyon Lake aren’t using the full amount they’ve been allocated, so moving the water rights has had no effect so far on how much power the downstream dams can generate, West said. 

“There’s no question that the money derived from the power produced from the [hydroelectric dams] is a real challenge,” West said. “And only in a real wet year do you get into the black and make some money.”

No Easy Fix in Sight 

Despite the different conclusions about what led the river authority to the lake draining decision, no one seems to have an easy fix for generating enough money to rebuild the dams and keep the lakes full.

Even with the lawsuits pending, the river authority seems focused on plans by some members of the Friends of Lake McQueeney group and the Preserve Lake Dunlap Association to create a new taxing district to pay for dam repairs. 

That would involve levying a property tax on lakeside residents, who currently enjoy the benefits of living on the lakes but have not financially contributed to the dams’ upkeep.

Bob Worth, a member of the Friends of Lake McQueeney who also testified in court Wednesday, said that after the failure of the Dunlap spillgate, members of the group have set to work creating such a district and hope to have residents in affected counties vote in May on bonds necessary to fix the dams.

Stinson described these new property taxes, GBRA funding, and grant money from the state or federal government as a “three-legged stool” that could help fund dam replacement. 

In his testimony, Worth decried the way that GBRA has handled the decision to drain the lakes. More than 1,400 property owners learned about the move in August after they received letters from the GBRA saying draining was to start Monday. A judge has temporarily barred the GBRA from opening the spillgates pending the initial salvos in two separate lawsuits. 

“All I can tell you is we were shocked,” Worth said. “We honestly thought we were moving significantly down the path of coming up with funding for the lakes.” 

Proceedings are expected to resume Monday in district court in Guadalupe County.

Brendan Gibbons is a former senior reporter at the San Antonio Report. He is an environmental journalist for Oil & Gas Watch.