SJRA holds rates flat in FY27 despite $7.2m Houston supply fee and expedited pipeline replacement

SJRA holds rates flat in FY27 despite $7.2m Houston supply fee and expedited pipeline replacementThe San Jacinto River Authority’s GRP Review Committee has advanced a budget that maintains current surface and groundwater rates, balancing rising contractual obligations and emergency infrastructure repairs with $1.3 million in chemical procurement savings.

The FY27 operating budget maintains surface water fees at $3.10 and groundwater fees at $2.51.

A $2.85 million transmission line replacement was expedited to FY26 after installation-related breaks halted surface water deliveries to a Conroe water plant.

Supply use fees paid to the City of Houston will reach $7.2 million as SJRA hits maximum contractual take-or-pay volumes.

Cost increases were partially mitigated by a $1.3 million reduction in granulated activated carbon and aluminum chlorohydrate costs secured through a new vendor.

The San Jacinto River Authority (SJRA) GRP Review Committee has recommended approval of its Fiscal Year 2027 operating budget, successfully holding rates flat despite mounting expenses from emergency pipeline repairs and escalating third-party water supply contracts. Under the proposed budget, surface water fees will remain at $3.10 and groundwater fees at $2.51. SJRA Controller Jamie Lewis confirmed that the rate stability was achieved without impacting demand or production forecasts. A major driver of capital expenditure discussed at the July 20 meeting is the White Oak Creek transmission line, which suffered breaks in August 2025 and April 2026. The failures, which staff attributed to an incorrect installation method and an improper bend radius, forced the line out of service and halted surface water deliveries to Conroe Water Plant Number 6. To restore surface water service, the committee approved a budget amendment expediting the line's replacement from FY27 to FY26. The amendment pulls forward a total project budget of $2.84 million, utilizing repair and replacement funds that are already on hand. An initial $339,000 will be contracted in FY26 to begin design work on the 800- to 1,000-foot replacement segment, which will include a casing installed beneath the creek. Operationally, the SJRA is absorbing a significant increase in supply use fees paid to the City of Houston. Contractual obligations will push the fee to $7.2 million in FY27, up from $5.4 million in FY26 and $3 million in FY25. Staff noted that the steep increase reflects the authority scaling up to utilize the full maximum amount of the City of Houston contract, compounded by Houston's annual rate hikes. The authority's pipeline maintenance budget will also jump from $224,000 to $805,000 to cover the White Oak Creek issues and other regional network repairs. These rising costs were heavily offset by successful procurement strategies. The SJRA secured a roughly $1.3 million reduction in costs for granulated activated carbon and aluminum chlorohydrate simply by switching vendors while maintaining the exact same material specifications.