SJRA advances global contract amendment to halt rate-funded surface water expansions

SJRA advances global contract amendment to halt rate-funded surface water expansionsFollowing the legal collapse of local groundwater reduction mandates, the San Jacinto River Authority is restructuring its regional water contracts to freeze general infrastructure expansions, requiring utilities to front the capital for any new surface water capacity.

The proposed global amendment to the GRP contracts requires approval from 85% of participating water demand by January 1, 2027.

Under the new framework, future expansions of the surface water system will no longer be funded through general surface water and pumpage fees.

New connections or capacity requests must be entirely funded by the requesting entities and demonstrate no negative impact on existing rates.

SJRA projects its surface water plant could reach its 30 MGD capacity limit by FY2029–2030 due to a surge in new allocation requests.

The committee approved surface water allocations for WCID No. 1 and MUD 94, contingent on the utilities funding their own pipeline extensions.

The San Jacinto River Authority (SJRA) is moving to fundamentally restructure its regional water supply contracts, advancing a 'global amendment' that will halt general rate-funded expansions of its surface water infrastructure. Outlined during a June 22 meeting of the SJRA Groundwater Reduction Plan (GRP) Review Committee, the amendment responds to the legal collapse of local groundwater reduction mandates. Following a 2019 final judgment that voided the Lone Star Groundwater Conservation District’s conversion regulations, the SJRA was left operating a massive surface water system without the regulatory framework that initially justified its construction. Mitchell Page, outside counsel for the SJRA, explained that the proposed contract amendment formally recognizes the absence of a regulatory mandate. Crucially, it eliminates the concept of 'future phases' of GRP infrastructure as a shared expense. Moving forward, the existing surface water treatment and distribution system will be maintained, but any future expansions will not be funded through general surface water and pumpage fees. Instead, individual water utilities, municipal utility districts (MUDs), or cities seeking new connections or additional capacity must front the capital costs themselves. These requests will only be approved if the requesting entity can demonstrate the expansion will either lower or have zero negative impact on existing rates. This policy shift comes as the SJRA’s surface water treatment plant approaches its operational limits. SJRA staff informed the committee that a recent surge in surface water requests could push the plant to its 30 million gallon per day (MGD) capacity limit in the coming years. Based on current and anticipated allocations, daily maximum demands are projected to reach 29.28 MGD by fiscal year 2029–2030. Staff confirmed that any expansion of the plant beyond 30 MGD would be borne entirely by the entities driving the new demand. Applying this rate-neutral, self-funded standard, the committee approved surface water allocation requests for Montgomery County Water Control and Improvement District (WCID) No. 1 and MUD 94 during the meeting. WCID No. 1’s adjusted request secures 60 million gallons of surface water per year. Both utilities will be entirely responsible for funding the pipeline extensions required to receive the water, while the SJRA will manage operations and maintenance. Staff noted that the delivery volumes will be carefully balanced against groundwater pumping to ensure the allocations do not negatively impact the broader GRP rate base. To take effect, the global amendment requires approval from 85% of the participating water demand, calculated from the prior calendar year, by January 1, 2027. The SJRA is currently awaiting final comments from the City of Conroe—a major participant whose ongoing rate litigation influenced the amendment’s drafting—by June 30. Once finalized, the authority plans to distribute the amendment for a minimum three-month voting period this fall.