Texas water provider files lawsuit against Hays groundwater district

A Central Texas water provider has filed a federal lawsuit against a groundwater district in Hays County amid ongoing permitting issues and alleged overproduction of groundwater.

HAYS COUNTY, Texas (KXAN) — A Central Texas water provider has filed a federal lawsuit against a groundwater district in Hays County amid ongoing permitting issues and alleged overproduction of groundwater.

Aqua Texas, Inc. filed the suit against the Hays Trinity Groundwater Conservation District, alleging the district has provided "unlawful and unequal treatment of Aqua Texas" as well as a "complete disregard for Aqua's state law duty to provide 'continuous and adequate' water service to its customers," per court filings.

Currently, Aqua Texas services three systems within the district: Woodcreek Phase 1, Woodcreek Phase 2 and the Mountain Crest area. It also operates wells within the Jacob's Well zone.

What led up to the lawsuit?

The filing marks a continuation of ongoing tension between the two entities. The Hays Trinity Groundwater Conservation District claimed over the summer that Aqua Texas over-pumped almost 90 million gallons of water in 2022, resulting in a nearly $449,000 fine issued against the water provider.

In August, district officials said they wouldn't be able to renew Aqua Texas' current permits for 2024 if the groundwater provider didn't settle the existing fine.

“Ultimately, if Aqua Texas does not settle the NOAV, cannot adhere to its permit production requirements, and will not demonstrate that it is acting on its drought management plan as required by the terms and conditions of its permit, the District will not be able to renew Aqua’s current permits for 2024 and the utility will be subject to substantial penalties and injunctive relief in court,” the district's general manager Charlie Flatten said in an email to KXAN.

But Aqua Texas claimed an ongoing moratorium against permitting new wells means the company won't be able to minimize its reliance on the Jacob's Well zone, an ecologically sensitive area substantially impacted by near-dry conditions and dismal water flow.

In Aqua Texas' suit, the provider said the amount of groundwater produced from its wells is dependent on customers' voluntary demands for water services and isn't the result of a mandatory usage requirement set by Aqua Texas. The entity also pointed to its millions in investment into water conservation efforts to reduce water loss, which Aqua Texas said exceeds the penalty the provider had incurred.

“Despite Aqua Texas’ vested ownership rights in wells and water rights, and its statutory obligation to provide water service to its customers, the Hays Trinity GCD has publicly threatened to not renew Aqua Texas’ permit to produce groundwater for its customers because Aqua disputes—and therefore has not paid—an almost half-million-dollar illegal penalty that the District assessed against Aqua Texas," the suit read.

What is Aqua Texas requesting in its suit?

At issue: Aqua Texas began work in July 2022 to construct two new wells to help minimize the provider's reliance on the Jacob's Well zone. It said it's spent more than $2.25 million on the two new wells to minimize that dependency.

The provider alleged a permitting moratorium enacted by the district prohibited Aqua Texas from constructing those two new wells, furthering its reliance on the sensitive, no-flow Jacob's Well zone.

“Ironically, the District’s permitting moratorium on Aqua’s new wells harms what the District purports to be concerned about—Jacob’s Well—because Aqua must continue to fully utilize its existing wells inside the JWGMZ instead of reducing reliance on those wells in favor of the new wells outside of the JWGMZ," the suit said.

The suit is seeking a "preliminary and permanent injunctive relief" to allow Aqua Texas to receive permitting for its two new wells, forgive the penalty as the district did for other fined groundwater providers and "award compensatory damages" to Aqua Texas.

Read the full lawsuit below.

KXAN reached out to the Hays Trinity Groundwater Conservation District for comment on the federal lawsuit. We will update this story once we've received a response.