Kelly, LCRA water operations staff, presented proposed interruptible agricultural water rates for calendar year 2025 to the Water Operations Committee on Jan. 21 and summarized public comments and funds available to mitigate revenue losses if curtailment continues.

For curtailed divisions Gulf Coast and Lakeside the staff recommendation follows earlier incremental rate moves: a 2.3% increase is proposed and the recommended 2025 interruptible stored water rate for Gulf Coast and Lakeside would be $77.79 per acre‑foot (an increase of $1.75). Kelly said the rate design assumed full availability for modeling but acknowledged curtailment for those divisions in 2025 is likely.

"In the event that curtailment is seen in Gulf Coast and Lakeside in 2025, we will use the rate stabilization fund to offset the lost revenue as we've done during calendar year 2023–24 curtailment periods," Kelly said. The presentation listed a current rate stabilization fund balance of $14,600,000 and projected use of $9,800,000 in 2025 under continued curtailment, leaving a projected balance of $4,800,000 by the end of calendar year 2025.

For Garwood the recommended weighted average 2025 rate is $44.98 per acre‑foot (an increase of $1.19). Kelly said Garwood's contract language and the 1999 water management plan guidelines determine interruptible stored water availability there; for 2025 Garwood would be limited to 18,100 acre‑feet of interruptible stored water while still having access to about 100,000 acre‑feet from other sources.

Staff also proposed eliminating the $100 application fee for rice and turf contracts on the basis that those contracts carry a minimum charge that already covers application processing costs; the fee would remain for supplemental contracts that typically do not carry a minimum charge. The slides showed excessive use charges that increase charges by 40%, 80% or 150% of the interruptible stored water rate for customers who exceed allotted volumes on a field.

Kelly summarized public comment received online and at farmer meetings held in the lower basin; one commenter argued the proposed rates do not cover dam maintenance and capital costs and accused the authority of improper conduct. Attorney Sebastian responded to the comment during the meeting: "I do not agree with that assertion," and said under Board Policy 106 a board member recusal was not required for the vote on the proposed rates because the rates apply broadly to agricultural water users rather than to a particular board member.

Kelly reviewed the Ag Reserve Fund (original balance $13,000,000) and said its current balance is $6,700,000 with a projected use of $2,500,000 in 2025 assuming full operations; on that trajectory the Ag Reserve Fund would be depleted by calendar year 2028 if measures remain unchanged. Kelly noted there are no proposed changes to rules or the drought contingency plan in the 2025 recommendations.

The committee did not vote on the rates on Jan. 21; staff said the recommended rates would be presented for adoption at the LCRA board meeting the following day.

No board votes were recorded on the rate proposals during the committee meeting; the minutes show the committee approved the prior meeting minutes and then recessed to the subsequent agenda item.