News Release
February 11, 2009
Contact: Alicia Pierce
(512) 463-0103
Nichols files four bills to protect water customers

Austin — State Senator Robert Nichols (R-Jacksonville) recently filed four water utility bills that would provide increased protection for consumers and landowners, particularly those using investor-owned utilities.

"Because Texans only have one choice when it comes to a water provider, we must be careful to protect the rights of consumers," said Nichols. "These bills offer some common sense and fair solutions in what is otherwise a state-issued monopoly.

SB 717 clearly prohibits utilities from charging the same rates among individual systems unless those systems are similar. Currently, a utility may be granted the ability to charge a universal rate even when some systems are of significantly less quality.

"This change will help guarantee a user pays for the level of service they actually receive, not the service received by someone in a different system," said Nichols.

SB 718 redefines how a utility may become the exclusive provider for an area. Currently, a landowner of 25 or more acres must actively decline to join a utility's monopoly within 30 days or become part of the area by default. All of those who own less than 25 acres would automatically be included in the proposed area. Nichols' bill would instead require the utility to get permission from those who own 10 or more acres to join the service area.

"The burden should be on the utility, not the landowner, to include land in an exclusive service area," said Nichols. "This is a property rights issue, and I support a landowner's right to choose to be in a service area or not."

SB 719 allows the Texas Commission on Environmental Quality (TCEQ) to set an interim water rate while a proposed rate is challenged. Under current law, a utility can charge its proposed rate before receiving a final ruling from TCEQ. Unfortunately, rate challenges can take several years and consumers are left paying the proposed rate until a final resolution is reached.

"Water users shouldn't get stuck paying a higher proposed rate for years while TCEQ works to resolve the matter," said Nichols. "This bill gives the agency the power to set a reasonable rate that is fair to both the utility and the consumer."

SB 720 prohibits a water utility from charging users for legal fees incurred when a utility loses a rate challenge.

"Under current law, customers who challenge a rate increase must pay the legal fees on both sides, even if they win a rate challenge," said Nichols. "Water utilities should not be able to pass along those cost to ratepayers when they lose the case."