Exelon Still Holding Onto Guadalupe Water

Jul 12, 2009 | San Antonio Express-News by Anton Caputo | Related Press

Exelon Energy’s plans to build two nuclear reactors near Victoria may be on hold, but it hasn’t stopped the power company from reserving the rights to 75,000 acre-feet of precious Guadalupe River water for another year — and maybe longer.

The deal, which the Chicago-based energy behemoth inked with the Guadalupe-Blanco River Authority, has worried some Victoria-area residents.

They argue the river doesn’t hold enough water to quench the region’s current thirst, let alone feed the massive reservoir needed to cool nuclear reactors.

“The river is just flat dry,” said Houston environmental attorney Jim Blackburn, who has been hired by a community organization to oppose Exelon. “It’s just a mess right now, and there is no way you can put a firm demand for 75,000 more acre-feet.”

But the energy company and the river authority swear there is, even as the Guadalupe is running from time to time at less than 10 percent of its average flow at periods during the record drought gripping much of the state.

“I understand how people can get this wrapped around their head by looking at the river and saying no way, but it doesn’t work that way,” Exelon spokesman Craig Nesbit said. “We’ve done studies and studies of the studies, and follow-up studies of the studies. Those water rights exist whether we build a plant or not. The only question is how you choose to use them.”

The situation highlights the tension between those looking to serve the power needs of a growing state and those worried about a water supply that seems increasingly stressed under the pressure of growth — and now, severe drought.

Exelon has backed off its deal to build two nuclear reactors near Victoria for the time being because of economic uncertainties.

Among the issues clouding the deal is Exelon’s failure to make the short list of projects to receive federal loan guarantees, and its attempted hostile takeover of NRG Energy — which is proposing to build two more nuclear reactors outside Bay City in a multibillion-dollar partnership with San Antonio’s CPS Energy.

But even with its projects on the ropes, Exelon still is seeking a site permit from the Nuclear Regulatory Commission that would allow it to restart the Victoria project anytime over the next 20 years. Key among the needs is a water supply capable of filing its cooling reservoirs.

Exelon had an agreement with the river authority to reserve 75,000 acre-feet — more than a third of the water all of San Antonio uses during a dry year. The agreement, which is simply to hold the rights and doesn’t involve any actual water, would have ended June 30 without the extension. But Exelon paid the river authority $1.1 million to extend the water rights reservation for a year with the understanding it would begin negotiating a longer extension next month.

Eventually, if Exelon builds, it could buy the water rights. Currently, they go for $100 an acre-foot, which at 75,000 acre-feet would cost $7.5 million a year.

Farmers and cities that hold junior rights, like Victoria and Kerrville, have been cut off from river water at times during the drought and forced to rely more on well water.

The river authority earlier this month released water from Canyon Lake down the river to help the cities downstream

The Exelon deal makes no sense to Victoria area rancher David Huber, 61, who has watched the Guadalupe and the nearby San Antonio River dwindle over the past two years. The river’s authority’s most recent drought report showed the Guadalupe’s flow near Victoria is 187 cubic feet per second, about 18 percent of its average flow.

“As far as water down here, we just don’t have it,” he said. “It’s as bad as I’ve seen it in my lifetime. The whole point is the ’50s drought was not as bad. If we didn’t have mesquite and huisache, the cattle would be starving.”

But river authority General Manager Bill West said the connection between the diminished river flow and the amount of water available isn’t as direct as it might seem because the authority has water in Canyon Lake.

“It seems to make some sense, but they overlook the fact that the water rights that are being committed to that project are some of the most senior water rights on the river,” West said. “There is growth potential for our folks down there. We’re not selling the last drop, as some people would have it seem.”

Read the entire article »