SAN ANTONIO – As the Vista Ridge pipeline moves forward, two companies that hold water leases in the project's source area, Burleson and Milam counties, are involved in a lawsuit. The suit was filed in Travis County in December by Metropolitan Water Company L.C., also known as Met Water.
"What Met Water and other companies have been doing is buying up leases from the groundwater owners,” St. Mary’s law professor Amy Hardberger said.
After acquiring groundwater leases over time, Met Water shopped the leases and entered into an agreement with a company called Blue Water Regional Supply Project LP. Blue Water’s role was to help market the water, according to San Antonio Water System.
"Blue Water was sort of functioning as a partner or a middle person,” Hardberger said.
Blue Water eventually formed a deal with Abengoa Vista Ridge LLC to provide water for the Vista Ridge project, a pipeline that is expected to deliver water to the city of San Antonio. Met Water alleges in the lawsuit that it and Blue Water agreed to split profits from the deal 50/50.
"Up to (this) date, according to the lawsuit, Blue Water has received $2.5 million in payments and Met Water has seen none of that,” Hardberger said.
A stipulation in the contract between SAWS and Abengoa Vista Ridge, which is listed as a defendant in the lawsuit, calls for all financial issues and all litigation surrounding the Vista Ridge project to be resolved by May 2017.
It was a concern brought up by San Antonio City Councilman Ron Nirenberg at Thursday’s City Council meeting.
What's going to happen if Blue Water and Met Water are locked up in a courtroom for the better part of a decade?” Nirenberg said.
That question was answered by SAWS CEO Robert Puente.
“If there is any pending litigation it has to have a conclusion has to end has to be resolved prior to financial close,” Puente said.
If Abengoa does not meeting those requirements, SAWS would have several options moving forward.
"It is grounds for a material breach, which means San Antonio could exit the contract without any penalty," Hardberger said.
Met Water released a statement on the issue, which was obtained through SAWS. It reads:
"Metropolitan Water Company, LP. (Met Water) supports the Vista Ridge Water Supply Project.
"The Lawsuit Met Water filed is based upon ongoing disagreements with Blue Water Systems and Blue Water Vista Ridge (Blue Water), exclusively. Neither San Antonio Water Systems (SAWS) or Abengoa Vista Ridge (Abengoa) are the Parties of concern to Met Water. Abengoa's status in the Lawsuit exists due to the necessity to include all parties in the litigation. Met Water does not believe Blue Water's behavior and actions represent those of Abengoa.
"Met Water does not intend for its Lawsuit to place the Project at risk. Met Water assures the beneficiaries of the Project, including SAWS and the ratepayers of the City of San Antonio, that it has no desire for the Project to fail. Met Water has spent the past sixteen (16) years developing this Project and is committed to seeing it completed. We will continue to work with Blue Water, as we have for the past fourteen (14) months, in an effort to reach a full and fair settlement of all the issues associated with this Lawsuit."