2019-024 Water Supply Indirect Reuse Permit UpdateDate: February 8, 2019 Report No. 2019-024
INFORMAL STAFF REPORT
TO MAYOR AND CITY COUNCIL
SUBJECT:
Status update on the Indirect Reuse Permit application with the TCEQ for an expanded water
supply.
BACKGROUND:
The City of Denton submitted an application to the Texas Commission on Environmental
Quality (TCEQ) for an indirect reuse permit in order to claim a portion of the City’s effluent
water as a water right. This application was submitted on February 4, 2010 and was deemed
administratively complete on May 11, 2011. Once deemed complete, the application was placed
in the que for permit drafting. Permit drafting tends to be a slow and iterative process, and has
taken approximately seven and a half years to complete. On December 13, 2018, staff received
notice that the TCEQ had completed the City’s draft indirect reuse permit. Staff reviewed this
draft and directed the TCEQ to proceed with the required 30 day public notice process on
January 30, 2019. Staff estimates that it will be approximately one month before this public
notice is released. The purpose of this informal staff report is to inform the council of the status
of the permit and to provide the background of the direct and indirect reuse programs at the City
of Denton.
Direct and Indirect Reuse Summary
Expanding the City’s current water supply through Direct and Indirect Reuse of the City’s
treated wastewater effluent has been a long term water supply strategy for nearly fifty years.
Direct Reuse programs use treated wastewater plant flows prior to discharge into the receiving
stream and are mostly used for non-potable water uses, such as irrigation or industrial uses.
Indirect Reuse programs apply to a water right holder wanting to claim the use of wastewater
effluent discharges (also known as return flows) into “waters of the state” for diversion and
subsequent use downstream of the point of discharge. Indirect Reuse programs require
conveyance of these return flows through natural water bodies through the use of a “bed and
banks” permit from the TCEQ. Direct Reuse permits tend to be much simpler to obtain than
Indirect Reuse permits. However, indirect reuse programs are frequently used in Texas as a
means to extend existing surface water supplies that are used for municipal purposes.
Direct Reuse Program
Direct Reuse of the wastewater effluent was first used back in 1971 for the Denton Municipal
Electric Generating Facility as an alternative non-potable water supply for the generating
facility’s cooling tower. The use of this treated effluent reduced water demands that would
otherwise have come from the City’s surface water supply from Lake Lewisville. Approximately
30 years later, the City applied for a Direct Non-Potable Reuse permit from the TCEQ to allow
diversion of up to 6 million gallons of treated wastewater effluent for non-potable water use to
potential water irrigation customers on the southeast side of town. After obtaining the Direct
Reuse permit from the TCEQ in 2001, a 16 inch treated effluent transmission line was
constructed from the Pecan Creek Water Reclamation Plant south along Mayhill Road to serve
Date: February 8, 2019 Report No. 2019-024
irrigation customers that include the Denton Regional Medical Center, the Denton State School,
and the Oakmont Country Club golf course.
At the time this second Direct Reuse project was permitted, the City of Denton had limited
access to their wastewater treatment discharges into Lake Lewisville. Although these return
flows helped to support the existing water rights held by the Cities of Dallas and Denton, the
1985 Untreated Water Supply Contract between Denton and Dallas limited Denton’s
withdrawals from Lake Lewisville to firm yield. Firm yield is defined as the water supply
available in a reservoir system that could be diverted and used over a seven year drought of
record condition. Denton’s firm yield share in Lake Lewisville was only 4.34 MGD and
wastewater discharges from treatment plants going into the lake were considered effluent return
credits. These credits were shared between Denton and Dallas on the basis of the original water
right shares in Lake Lewisville with 5% going to Denton and 95% going to Dallas. Hence, the
City of Denton had very limited water supply value for its wastewater return flows into Lake
Lewisville under the 1985 Untreated Water Sales Agreement with the City of Dallas.
Long Range Water Supply Planning
The statewide water supply planning process under Senate Bill 1 is a regional planning process
administered by the Texas Water Development Board. This process requires Regional and
Statewide Water Supply Plans to be developed every five years with a 50 year planning horizon
Region C is comprised of a 16 county area that includes most of the North Central Texas Council
of Governments (NCTCOG) planning area and the four primary counties of the Dallas-Ft. Worth
(DFW) Metroplex The City of Denton has had a representative on the Region C Water Supply
Planning Group since it was originally formed after Senate Bill 1 in 1996.
In accordance with Senate Bill 1, Regional and Statewide plans have been developed four times
in the past beginning in 2001 with the last plan adopted in 2016 and incorporated into the 2017
Texas Water Plan. The Region C Water Supply Planning Group is currently working on the fifth
round of water supply planning cycle that will be completed in 2021 and this plan examines
water demands and supply options out to the year 2070.
The statewide plans have a large emphasis on reducing water demands through water
conservation programs and extending existing water supplies through reuse programs. In the
DFW region, the vast majority of water demands are from municipal water users and the
wastewater return flows from users are a substantial new source of water supply through Direct
and Indirect Reuse programs. Compared to all other Regions in the state, Region C has the most
reliance on water conservation and reuse as a means of meeting future water supply demands
over the next 50 years. All of the major water suppliers in the DFW region, including Tarrant
Regional Water District, North Texas Municipal Water District, the Cities of Dallas and Fort
Worth as well as the Upper Trinity Regional Water District have all developed significant
enhancements to their water supply portfolio through implementation of Direct and Indirect
Reuse.
Denton’s current water supply plan under the Region C Water Supply Planning Process is based
upon water conservation, expansion of reuse programs and ultimately additional purchases of
Date: February 8, 2019 Report No. 2019-024
untreated water from the City of Dallas. Denton in is the Dallas Water Utility water supply
planning area and has been an untreated water wholesale customer city of Dallas since 1962.
Denton’s joint development of Lake Lewisville and Lake Ray Roberts with the City of Dallas
provides water rights for Denton of 5% of Lake Lewisville and 26% of Lake Ray Roberts. The
City of Dallas has the remaining water rights for each reservoir. Due to these shared reservoir
projects, Denton has not purchased water from Dallas Water Utilities since the Ray Roberts
Reservoir was filled.
Development of the City’s Indirect Reuse Program
The City of Denton’s Indirect Reuse program has been developed over nearly twenty years. As
mentioned, Denton was restricted under the 1985 Untreated Water Purchase Agreement with the
City of Dallas to only claiming 5% of its wastewater return flows into Lake Lewisville. Staff
made some attempts to renegotiate these terms with the City of Dallas dating back to
approximately 1999, but were unsuccessful. However, when the City of Dallas made an
application for a major Indirect Reuse permit to import up to 60 million gallons per day (MGD)
of their Southside Wastewater Treatment Plant effluent into Lake Lewisville, the City of Denton
protested this permit and was able to resolve the protest by a settlement agreement. This
agreement stipulated that the City of Denton would withdraw their protest in exchange for the
City of Denton having rights to claim up to 50% of its wastewater return flows into Lake
Lewisville to an amount that could not exceed 50% percent of Denton’s total firm yield of the
combined Lake Lewisville and Lake Ray Roberts reservoir systems (24.1 MGD; 4.34 MGD
from Lake Lewisville and 19.76 MGD from Lake Ray Roberts). The Settlement Agreement
further stated that the City of Dallas would support a water right permit amendment application
to the TCEQ for the City of Denton to claim this additional 12.05 MGD Indirect Reuse permitted
water right. Since the City of Denton currently discharges treated wastewater effluent into Pecan
Creek and this stream flows into Lake Lewisville, Denton does not need any new facilities to
claim this additional water right.
The resulting water rights from the settlement agreement were incorporated into the Region C
Water Supply Plan and the Denton and Dallas Long Range Water Supply Plans. These were
important actions, since the TCEQ will not issue a water permit in Texas unless it is consistent
with the current statewide water plan. The results of these efforts are reflected in both the 2012
and the 2017 plans. Knowing that the application and permit amendment would take several
years to complete, Denton Water Utility staff submitted a permit amendment application to the
TCEQ on February 4, 2010 to claim the return flows discharged into Lake Lewisville. After a
series of information requests and responses, this permit application was officially declared
administratively complete on May 11, 2011. This date is significant since it establishes the
priority date for the water right in the Trinity River Basin.
After working extensively with the TCEQ Water Rights Permitting Team on various issues
centered on the required reuse accounting plan, Denton received written notice from the TCEQ
on December 13, 2018 that the draft permit had been developed and was ready for Denton’s
review and subsequent release for the 30 day public notification process. After requesting a time
extension until February 1, 2019 for our review, we notified the TCEQ on January 30, 2019 to
proceed forward with the release of the draft permit amendment as soon as possible.
Date: February 8, 2019 Report No. 2019-024
The permit request received very favorable responses from TCEQ staff. TCEQ staff
acknowledged the City’s Water Conservation Plan and our achieved performance in reducing per
capita water use. The TCEQ’s Surface Water Availability Team reviewed the examined the
hydrology and potential impacts to senior water right holders, and the Resource Protection Team
reviewed the potential for environmental impacts to aquatic and riparian habitats, recreational
uses, water quality, and bay and estuary freshwater inflows. The last item is of particular note
since reuse projects in the upper portion of the Trinity River Basin have raised some concerns to
regarding environmental impacts. Based upon the TCEQ’s staff analyses, Denton’s reuse permit
amendment represents less than 0.1% of the total inflow volumes into the Galveston Bay estuary
system.
DISCUSSION:
The next steps in the water rights permit amendment process will be a required 30 day public
notice process. If any entity that has standing in the process, (typically other water right holders
in the basin) requests a contested case hearing on the permit, the City may elect to negotiate a
settlement agreement similar to the Denton/Dallas settlement agreement to withdraw the protest,
or the case will be referred to mediation at the TCEQ. If this effort fails, a contested case
hearing will be referred to the State Office of Administrative Hearings (SOAH) to be heard prior
to the TCEQ making a final decision. Contested case hearings at SOAH are conducted in a
manner that is similar to a standard court proceeding. An appointed official will hear the case
and make a final decision and recommendation to the Executive Director of the TCEQ. The
TCEQ then makes a decision if the permit is to be issued or denied.
The costs and time to obtain the final permit depends on the number and merit of requests for a
contested case hearing and Denton’s ability to resolve these requests and obtain withdrawals
from contesters. To assist in these efforts, the City of Denton secured the services of the law
firm of Booth, Ahrens and Werkenthin (BAW). BAW represented the City of Denton in our
protests and settlements of the Upper Trinity and Dallas Water Utilities Indirect Reuse permit
applications, provided assistance for Denton’s Direct Reuse permit application, and provided a
review of the indirect reuse draft permit from the TCEQ. If the draft permit results in opposition
leading up to a contested case hearing process, staff will continue to keep the Public Utilities
Board and City Council informed and obtain the necessary approval to expand the existing
contract with BAW that is currently limited to $40,000.
It is possible that a contested case hearing could require considerable expenditures by the City of
Denton for legal representation and expert testimony. However, it is also possible that a
contested case hearing may not be required at all. We have a settlement agreement with the City
of Dallas that commits to supporting this permit application by the City of Denton. As the
majority water right holder in the Elm Fork Upper Trinity River Basin, the City of Dallas
represents the most important water right stakeholder in this permit application and would
clearly have the most standing in this water right permit application.
The 12.05 MGD additional water supply that this Indirect Reuse permit brings to the City of
Denton’s water supply portfolio has the potential to extend the City’s water supply independence
for the next 15 to 27 years depending upon growth, weather and return flows back into Lake
Date: February 8, 2019 Report No. 2019-024
Lewisville from the Water Reclamation Plants. In economic terms this represents a new water
supply worth approximately up to 3.5 million dollars a year of untreated water purchases that can
be avoided in future years.
CONCLUSION:
The proposed indirect reuse water right permit application process has taken many years to reach
this point and remains a critical component to the City’s long range water supply plan.
Obtaining the permit will help City of Denton extend its significant financial investments in its
water supply projects and lessens the City’s dependence on untreated water purchases from the
City of Dallas. Staff will be glad to provide additional information upon request.
STAFF CONTACT:
Tim Fisher, P.E., Director of Water
(940) 349-7190
Tim.Fisher@cityofdenton.com