The Economics of Reclaimed Water in Austin

Reclaimed water line photo by Jeffrey Parkinson

In This Story…

• The best strategy to make reclaimed water use more economic and widespread is to build lines to the largest customers.  About 10% of Austin’s total water in 2023 was consumed by 3 microchip factories and 30 large commercial/multifamily customers near existing and proposed lines to these factories.

• Microchip factories, which require ultrapure water, have successfully used reclaimed water in both the U.S. and Singapore.

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Turning Purple to Green

In 2023, about 7% of Austin’s wastewater was purified and resold as reclaimed water.  If all of the remaining wastewater in Austin could be treated to a high-quality standard and reused, it would supply the needs of an additional 764,000 people at 2023 per capita level of consumption.  The impediment to expanding Austin’s reclaimed water system is not potential.  It is cost.  

It is expensive to lay a completely new purple-pipe network to a section of the utility service territory.

Austin’s reclaimed system is in fact subsidized by the ratepayers, and is not considered a profit maker.  The question of economics for the system to operate at less cost, or even make a profit, revolves around finding enough customers in a designated area to justify expansion.

Austin’s Mysterious Reclaimed Water Footprint

The current and future footprint for Austin’s reclaimed water system is somewhat mysterious to people who do not work for the utility.  The publicly-available map of the system showing the areas where current service exists and future service is intended has not been updated since 2015.  This author’s attempts to obtain more current maps were met with frustration.  

This gap in public information makes it difficult for conservationists, journalists, and members of the general public to responsibly analyze potential expansion of the reclaimed system.  

In order to come up with a scenario that makes economic sense required overlaying the dated 2015 map of reclaimed water lines with the reclaimed system’s current customers and overlaying it again with Austin’s largest customers.  This allows some estimates of system expansion to be made.

In the scenario below, Austin’s largest Industrial customers become magnet destination points, with some of the City’s largest Commercial and Multifamily customers located near the pipelines between the wastewater plants and the destination points.

Industrial Magnets

Nattapol_Sritongcom/Shutterstock.com

Microchip wafer fabrication plants are ravenously thirsty.  Austin has four of them: Samsung in Northeast Austin; two operated by NXP (one in East Austin, and one in Southwest Austin); and one operated by Cypress Semiconductor (now owned by Infineon) in Southeast Austin near Bergstrom Airport.  In 2023, the 3 fabs near existing or planned reclaimed water lines collectively used 3.2 billion gallons, 7.2% of total Austin consumption, enough for 70,000 people at Austin’s 2023 level of consumption.

Two of the fabs, NXP-East and Cypress, are within one-third of a mile of existing reclaimed water lines.  Samsung, Austin’s single largest water user, has a proposed reclaimed water line running directly behind its location.

How much reclaimed water these companies can use is uncertain.  Chip factories require ultrapure water, so pure that they must upgrade potable water supplied by the utility to a much higher standard.  How much more money would be required to upgrade reclaimed water to this same ultrapure standard is unknown.  The three corporations contacted for this article would not comment, and Austin Water has done no investigations of the potential.

However, in Singapore, reclaimed water is provided to wafer fabs as a premium product.  It is also supplied to Intel’s manufacturing facilities in Chandler, AZ.   So there is obviously precedent for its use.  

In 2023, Austin’s reclaimed water was sold to Austin customers at a 35% discount compared to industrial rates for potable water.  This provides financial incentive for investigation of its potential to provide some or most consumption at these plants.

Serving Customers Along the Way

In 2023, 16 of Austin’s largest Commercial customers were close to existing or planned reclaimed water lines.  The biggest consumer was the Tesla manufacturing plant off of Highway 130 in East Austin.  Other larger commercial customers include: the City of Austin district chilling stations; Data Foundry (a data storage center); Applied Materials (a microchip and electronics display engineering company); and downtown office buildings and hotels.

The large commercial customers located within a mile of existing or planned reclaimed water lines consumed about 900 million gallons in 2023, about 1.9% of Austin’s total consumption, enough for 19,500 people at Austin’s 2023 level of consumption.

Apartment complexes also often use huge volumes of water for landscapes.  In 2023, there were 14 multifamily consumers located within a mile of these water lines that consumed 406 million gallons, about 1% of Austin’s total consumption, enough for 9,000 people at Austin’s 2023 level of consumption.

The proposed 12-mile reclaimed water line expansion (red) to the Samsung wafer fab (orange) has several large Commercial (green) or Multifamily (black) customers on the route. Existing reclaimed water lines are shown in black.

Map of two of Austin’s wafer fabs (orange) near existing reclaimed water lines and other large Commercial (green) and Multifamily (black) customers. Proposed line expansion is shown in red and existing reclaimed water lines are shown in black.

It takes years to build out a system like the one described here.  By the time a megadrought hits our region, it will be too late to implement this as an emergency strategy.  A very public discussion needs to take place now to determine its feasibility.

Among the things discussed is why the utility, with all of its personnel talent and brain power, has waited for environmental advocates to make this proposal.

Tell Austin to Reclaim Water!

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This article is the second of a two-part series on Reclaimed Water. CLICK HERE for Part One of the series. 

Paul Robbins is an environmental activist and consumer advocate living in Austin.  He has been Editor of the Austin Environmental Directory, a sourcebook of green issues, products, services, and organizations, since 1995.