May 1, 2013

State takes industrial water sales from Western Area Water

By Kate Ruggles
Farmer Staff Writer

The Western Area Water Supply Authority (WAWSA) went into this legislative session unsure about where it would stand when the session was all said and done. They found themselves not only in a fight for funding, but to maintain control of their infrastructure.
According to Denton Zubke, WAWSA president, the state of North Dakota, including the Governor’s Office, and the Independent Water Providers, wanted people to be able to take water out of the Missouri River and Lake Sakakawea and use it for industrial purposes, which could have threatened WAWSA infrastructure.
Now, with the end of the session in sight, it looks like all parties are satisfied with the proposed legislation, including Zubke.
“I didn’t see a need to change things,” states Zubke. “But I feel the state came up with a rational solution for everyone.”
In fact, Zubke states that the changes made to WAWSA really weren’t that much.
“The structure and mission of WAWSA has been altered slightly in that the state is in charge,” states Zubke. “There will still be industrial water sales. But now they will be sold to benefit the state.”
Because of the differing opinions concerning WAWSA, Zubke states that his biggest concern was WAWSA’s ability to keep the infrastructure it acquired when WAWSA was started, and to be able to maintain control of the new infrastructure WAWSA has built in the last two years.
That new infrastructure includes pipelines put in place from the Williston Water Treatment facility to the 10 surrounding communities that make up WAWSA, one of which is McKenzie County.
But according to Robert Harms, who represented the Independent Water Providers, the legislation that is working its way through the session minimizes the conflict between the two entities and is a good compromise and structure moving forward. And not only will WAWSA be able to keep its infrastructure, but the state will assume responsibility for all WAWSA’s debt.
WAWSA was first started in the last legislative session when the state loaned $110 million for a pipeline project in western North Dakota that would bring Missouri River water to the rural areas surrounding Williston.
Initially, there was concern about whether WAWSA would be able to repay the state loans through industrial water sales, even with the fact that right after the legislation was enacted, the oil industry boomed.
After this legislative session, however, WAWSA is no longer worried about repaying the loans or losing its infrastructure.
“Senate Bill 2233 guarantees our revenue requirements, so that if we are not able to generate enough revenue to meet our requirements, they will not take our infrastructure away,” states Zubke. “It takes some of the risk away for WAWSA and the WAWSA member entities. And it removes any default provisions from the original bill two years ago that would have caused our infrastructure to go to the state. Now the state assumes responsibility for WAWSA’s debt, while still allowing us to keep our infrastructure.”
The only drawback in Zubke’s opinion, is that originally, once the loans were repaid, the WAWSA member entities would have been able to keep the profits from the industrial water sales, which would benefit the WAWSA communities on a more local level.
But according to the proposed legislation, once the loans are repaid, the state’s industrial water sales profits will go into the Resources Trust Fund. That means that those profits will not necessarily benefit the local WAWSA member entities, as all oil producing counties will have the ability to request access.
According to Harms, if the state is unable to generate enough industrial water sales to repay the $110 million in debt it has essentially taken back from WAWSA, it will either have to consider forgiving some of the debt or explore other options. According to Harms, one option would be putting the debt back on the local entities that promoted WAWSA in the first place.
There is also the issue of the $119 million in funds WAWSA requested from the Legislature in House Bill 1020 at the start of this legislative session.
According to Zubke, WAWSA accomplished a tremendous feat in that it built $110 million worth of infrastructure in the areas surrounding Williston during a time when western North Dakota’s infrastructure was tried beyond its limits. And it is not quite done yet.
Zubke feels it would be a shame if Senate Bill 2233 passed without all of House Bill 1020 passing as well.
“One stipulation of Senate Bill 2233 is that, if passed, House Bill 1020 be kept intact,” states Zubke.
“Those funds contain the money for projects like the Williston Water Treatment Facility upgrade, and the remaining phases of the WAWSA infrastructure development plans. It would be unfortunate if the funding for those projects was not allowed to pass intact.”
At this point in time, however, Zubke states he is not concerned that will be an issue.