GRP Proposes Sale of 5 Billion Gallons of Groundwater Reduction Credits

The Missouri City Council convened on August 18, 2025, to discuss the potential sale of groundwater over conversion credits, a significant financial and regulatory matter for the city. The meeting focused on authorizing staff to seek buyers and negotiate the sale of up to 5 billion gallons of these credits, which are currently held by the Groundwater Reduction Plan (GRP).

Nicholas Cook, the assistant utilities director, explained that over conversion credits are generated when entities use more alternative water than required by the Fort Bend Subsidence District regulations. The GRP currently owns 19 billion gallons of these credits, purchased at a rate of 2 cents per thousand gallons, as a safeguard against potential disincentive fees of $6.50 per thousand gallons for exceeding groundwater pumping limits.

The council learned that there is a limited market for these credits, primarily consisting of public and private entities in Zone A, which includes major population centers like Missouri City, Sugar Land, and Fulshear. A recent inquiry for 20 million gallons of credits indicates some market interest, prompting the GRP to recommend the sale.

Council members expressed caution regarding the sale, emphasizing the importance of maintaining sufficient credits as an insurance policy against future regulatory changes. The GRP's recommendation to limit the sale to 5 billion gallons aims to ensure that the city retains enough credits to meet its water needs, even as it seeks to generate additional revenue.

The council's discussions highlighted the balance between financial gain and long-term water security, with projections estimating potential revenue of $70,000 to $90,000 from the sale, depending on the negotiated price. The next steps involve council approval to proceed with negotiations for the sale of the credits, ensuring that Missouri City remains prepared for future water demands while exploring new revenue opportunities.