News Release
November 29, 2012
Contact: Mandy Morton
(512) 463-0103
Nichols chairs meeting on water rate regulation changes

Austin — Yesterday State Senator Robert Nichols (R-Jacksonville) chaired a Senate Natural Resources subcommittee meeting to address rising water and sewer rates from investor-owned utilities.

Nichols was appointed to lead the subcommittee charged with making policy recommendations regarding the rapidly escalating water and sewer rates for Texans living in rural and unincorporated areas of the state.

"The many stakeholders working with the subcommittee have helped us to determine that the current regulatory system is broken," said Nichols. "The one-size-fits-all treatment of large-, mid- and small-sized utilities does not work."

It is the subcommittee's proposal that rate jurisdiction of water and waste water be moved from the Texas Commission on Environmental Quality (TCEQ) to the Public Utilities Commission (PUC). The workgroup has reached this conclusion for two primary reasons:

  • PUC's structure and expertise are focused on fair and efficient rate-related regulation.
  • Transfer offers potential benefits by aligning most State utility regulation within one agency.

PUC's mission is to protect customers, foster competition and promote high quality infrastructure, whereas TCEQ's mission is to protect our state's public health and natural resources. Considering that PUC currently regulates the state's electric and telecommunication utilities, it would be a relatively seamless transition to transfer water rate regulation to their purview as well. This would take advantage of PUC's regulatory focus while also allowing TCEQ to better focus on its core mission of ensuring environmental equality.

Henderson County resident and Texans Against Monopolies' Excessive Rates (TAMER) chairman, Orville R. Bevel, Jr., noted in his testimony at yesterday's meeting, "TAMER heartily supports the transfer of the regulation of water and sewer utilities to the PUC. We also support giving the Office of Public Utility Counsel (OPUC) a role in the water and sewer regulation. We do not believe that water and sewer ratemaking is a function of environmental regulation."

OPUC helps electric and telecommunication customers by providing them with representation and interceding on their behalf. It is the subcommittee's proposal that OPUC also come to represent water ratepayers who currently only have access to the Office of Public Interest Counsel (OPIC) to answer basic procedural questions regarding TCEQ.

As Nichols noted, "It is vital that ratepayers have legitimate customer representation to stand on their behalf. A transfer to OPUC will ensure this occurs."

Participants in the review process have included representatives from key stakeholder groups such as ratepayers, investor-owned utilities, TCEQ, PUC and OPUC.