SAN ANTONIO – In the midst of financial concerns regarding Vista Ridge partner, Abengoa, San Antonio Water System CEO Robert Puente assured City Council members on Thursday that there was no need to worry.
Despite what many have described as a complicated contract, Puente said risk to ratepayers remained unchanged from what was originally voted on by the council.
"Is it going to cost more? Is the risk shifting to where it is going to cost our ratepayers more? The answer is no, it will not,” Puente said.
In fact, Puente went a step further.
"(The) risk has decreased for SAWS,” Puente said.
KSAT asked Puente if SAWS was aware of Abengoa’s shaky financial situation at the time the contract was signed.
"We were aware that they had a very different and risky business model,” Puente said. “That's why we put all those provisions into the contract to protect us."
During Thursday’s presentation at City Hall, council members indicated they felt comfortable with Puente’s assurance that the risk of the project had not changed.
"Our biggest risk, as councilman (Mike) Gallagher stated, is failing to secure our water future,” Mayor Ivy Taylor said.
Still, going forward, because of parent company Abengoa’s financial situation, Abengoa Vista Ridge will need additional investors. According to Puente, there are five potential equity partners, three of which have turned in proposals. He also added that the contract gives SAWS the power to approve or disapprove which partner or partners are chosen.
"So we are going to do our due diligence, make sure it’s good for the contract and therefore good for the ratepayers,” said Puente of vetting the potential new partner(s).
Per the contract, Abengoa has until May 2017 to reach financial close. Should financial close not occur by then, SAWS could take over the project.
"If we take it over, there will be more risk, but there would be a much cheaper project,” Puente said. “So you have to balance the two."