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LCRA proposes 3% interruptible irrigation-rate increase for Gulf Coast and Lakeside as staff readies farmers’ meetings
Summary
LCRA staff told the Operations Committee it plans a 3% interruptible-rate increase for Gulf Coast and Lakeside for calendar year 2026, intends to rely on agricultural reserve funds to limit customer bills, and will post draft rates for public review after December farmer meetings.
John Hoffman presented LCRA’s proposal for interruptible irrigation rates for calendar year 2026 and explained the methodology staff used to convert FY2025 actual costs and billing-unit estimates into a proposed schedule.
Hoffman said LCRA sets water rates on a calendar-year basis for TCEQ reporting and is proposing a 3% increase for Gulf Coast and Lakeside relative to the last time rates were charged (calendar year 2022). "We're going back to the last year that we charged rates and we put in place a 3% rate increase," Hoffman said. He also told the committee the proposal is structured to achieve full cost recovery when combined with other revenue sources, including the ag-reserve fund.
Staff described four major cost buckets used in rate-setting: river-management O&M, water-supply debt, irrigation canal delivery costs, and other adjustments (including firm-funded capital). Hoffman said firm customers cover about 78.7% of river-management operating costs and interruptible customers cover about 21.3%. He noted Arbuckle operations add a projected interruptible share of roughly $219,000 next year.
Hoffman explained an escalating surcharge structure that applies when customers exceed an assumed planting "duty" per acre, with adders of 40%, 80% and 120% (effectively billing at 140%, 180% and 220% of the contracted rate for excess use). He said staff will use multi-season lookbacks to calculate billing units, but because curtailments in recent years shortened the dataset, some divisions require lookbacks to 2020 for accurate averages.
Board members pressed staff on key variables. When asked how accurate acreage projections will be, Hoffman said final accuracy comes with signed contracts in March. Directors raised concerns about low rice prices, high input costs and crop pests affecting growers' planting decisions, which would change billing-unit counts and could cause under- or over-recovery of costs.
Hoffman outlined next steps: staff will hold farmer meetings in December for each division, post draft documents for public review mid-December, assemble public input and return a recommendation to the board at the January meeting. Availability determinations for interruptible water remain scheduled for March 1.
No formal rate change was adopted at the Nov. 12 meeting; staff presented the proposal for feedback and public engagement.
