Today, ND Watchdog Dustin Gawrylow reported the House Appropriations Committee decided to make it official that the Western Area Water Supply (WAWS) is “too big to fail.” But what exactly does this mean?
The committee created a provision through a set of amendments to HB 1020 (the Water Commission bill) that will require the State Water Commission to pay loans on behalf of WAWS, specifically stating that if WAWS cannot make payment to the Bank of North Dakota, the Water Commission will make the payments instead. The amendment to section 12 of the bill reads:
If the western area water supply authority defaults in its payment of the principal or interest on the consolidation loan provided for in section 11 of this Act, the Bank of North Dakota shall notify the legislative council, and the state water commission shall provide a payment, subject to budget section approval, to the Bank of North Dakota in an amount of the default as certified to the budget section by the Bank of North Dakota.
With a very tight budget, this sort of provision, Gawrylow says, could end up preventing other water projects around the state form being funded, and that the bailout provision is proof the state needs to find a way out of the industrial water business.
What is WAWS?
The WAWS project combines water from the Missouri River and groundwater to supply the municipal, rural and industrial needs for Burke, Divide, McKenzie, Mountrail and Williams Counties. These counties include the cities of Williston, Watford City, Ray, Stanley, Wildrose, Crosby, Noonan, Columbus and Fortuna.
The Western Area Water Supply Authority was designed to supply water for residents, but has exceeded its original scope, and focuses mostly on providing water to fracking operations in the western North Dakota. Funding for the project has already included millions of dollars, with plans to spend millions more. Gawrylow says:
With so much state taxpayer money on the line, legislators who have supported this project may feel the need to constantly throw more money at the project to make sure it succeeds – or provide a bailout and forgive the loans.
Continued concerns about WAWS
In 2014, the majority of the water being sold for use as fracking water, with concerns about the long-term sustainability of private industrial water sales amidst the expansion and support of a state-owned and managed industry. The state-run WAWS runs in direct competition to private industrial water providers.
When oil was booming, WAWS was able to get ahead of the two loans it has, but now that oil markets have cratered and leveled off, the WAWS business plan has proven faulty, and the worst part–WAWS is playing with public money.
Watch Gawrylow’s video here that shows exactly why a WAWS bailout should be rejected. You can also read the whole story here at the ND Watchdog Network.
You can also sign up for the North Dakota Watchdog Network’s legislative updates by clicking here.