Texas Senators Robert Nichols and Kirk Watson filed Senate Bill 567 today to overhaul the state's oversight of investor-owned water and sewer utilities (IOUs), and to ensure that customers have an advocate in cases over excessive rates.

The legislation reflects the work of Senate subcommittees led by Senators Nichols and Watson in 2012. These subcommittees held hearings on steep increases in water and sewer rates that were imposed by investor-owned utilities. The policy recommendations regarding these rapidly escalating water and sewer rates, reflected in S.B. 567, will bring relief to Texans living in rural and unincorporated areas of the state. Companion legislation was filed by Rep. Charlie Geren in the House.

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

"Over the past decade, more and more small, privately owned public water and wastewater utility systems have been acquired by national corporations and investment funds," Senator Watson said. "Texans need to be able to afford basics like water and sewer service. We've found that they also need protection from national or multinational entities that view water as a profitable commodity, not a basic necessity for rural Texans."

The legislation:

1. Transfers economic regulation of water and sewer utilities from the Texas Commission on Environmental Quality (TCEQ) to the Public Utility Commission of Texas (PUC);
2. Establishes IOU classifications based on number of connections; and
3. Gives the Office of Public Utility Counsel (OPUC) authority to intervene in water rate cases on behalf of residential and small commercial customers.

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