The Public Utility Commission of Texas on Friday ruled that Kempner Water Supply Corporation is not entitled to compensation from the city of Lampasas in the wake of a water battle between the two entities, Lampasas City Manager Finley deGraffenried announced in a news release late Friday.

The state commission also decided that Lampasas is entitled to provide water to its business park, which is within its city limits.

Kempner has never provided water to the business park area, which was originally in Kempner’s service area. The dispute over the business park began in 2015 when the Lampasas Economic Development Corporation requested water service from Kempner, and Kempner responded that it would cost approximately $2.4 million and take 36 months to provide service.

The EDC asked the city if it could provide the service that it needed, and the city was able to provide the same service to the business park within 90 days at a cost of approximately $128,000, according to deGraffenried’s release.

The EDC initiated a proceeding at the Public Utility Commission of Texas to have the business park removed from Kempner’s service area. Kempner opposed the request.

“Kempner intervened in the city’s PUC proceeding for approval to serve the business park, claiming it was entitled to approximately $1.6 million in compensation from the city before the city could serve the business park,” according to the Lampasas news release. The PUC held Kempner’s claims were meritless.

“The city did suggest, in writing, that we would negotiate with Kempner on compensation for the service area; they elected to continue to litigate and unfortunately they are now faced with substantial legal bills and no compensation,” deGraffenried said.

The case is one of a number of ongoing disputes between the Kempner water provider and the city.

Kempner Water Supply Corporation has raised challenges to various provisions of its 2006 contract to deliver water to Lampasas.

In January 2015, the 27th District Court in Lampasas ruled in favor of Lampasas over the meaning of the 2006 contract and stated Kempner WSC breached the contract and ordered the water company to compensate the city $117,432.27 for unauthorized charges and $333,563.00 in attorney’s fees.

“Kempner’s interpretation of the contract was rejected by the Lampasas District Court,” stated Helen Foster, attorney for the city. “The city continues to be concerned that Kempner’s communications to its members fail to accurately reflect the financial contributions the city continues to make under the contract, including significant debt service for facilities that serve Kempner’s members,” Foster added.

“The contract was thoroughly negotiated by the Kempner Board and its attorneys and also its engineers in 2006, and the Court correctly ruled they cannot change the rules just because they made a deal they don’t like today,” said deGraffenried.

Kempner has appealed the decision to the Texas Court of Appeals.

(4) comments


Well if you're on Kempner Water you can watch your bill for another rate increase. They just lost their law suit with Lampasas so now, in addition to subsidizing Lampasas residents water, we'll get to pay for their business park too.
That water board ought to be in jail for their complete failure to fulfill their fiduciary responsibility to their membership.
My electric bill through Pedernales Electrical Coop is cheaper than my water bill thanks to the incompetence of the KWSC Board of Directors.
If you live in town you get water, sewer, and garbage collection when you pay your water bill. With Kempner WSC we pay a minimum of $65 per month to have water available whether you use any or not. Factor the cost of maintaining your own septic system plus hiring another firm to collect your garbage every week and it's cheaper to just dig a well.


In the mean time, Kempner WSC members will continue to subsidize water for Lampasas residents and will suffer constantly rising water rates in order to offset the flow of water, through Kempner pipes, to the Lampasas Business Park.
All because the Kempner Water Board "didn't know what they were signing".
My electric bill is lower than my water bill and there are only two people living in my home!!!


I don't live in either Kempner nor Lampasas, but apparently Kempner Water Supply is run by fools. I know many people who do live in or near Kempner and receive their water from Kempner Water Supply - they all state they are fed up.


Apparently, Kempner Water is best used to flush its members' money down the toilet. How could they possibly lose the opportunity to service Business Park? They were only going to do it for 19X the cost & 12X the time as Lampasas! No big whoop.

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