Relating to allowing a water and sewer utility to assess a utility facilities construction and improvement charge to recover certain costs associated with certain construction and improvement projects.
The new law will specifically amend Subchapter F, Chapter 13 of the Water Code, introducing criteria for assessing the surcharge. It mandates that the utility must submit a proposed capital budget for approval, detailing the associated costs of the projects, and establish a system for customers to be notified of any surcharge increases. Annual audits will ensure transparency, comparing how much was authorized against what the utility actually recovers. Importantly, the amount recovered through this charge cannot exceed 10% of the utility's annual revenue, providing a safeguard against excessively high charges.
House Bill 2741 aims to allow water and sewer utilities in Texas to impose a system construction and improvement surcharge. This surcharge is designed to help these utilities recover costs associated with certain construction and improvement projects that are completed and put into service between two consecutive rate cases. This provision intends to provide relief to utilities by enabling them to manage costs more effectively without waiting for the traditional rate-setting processes, which can be time-consuming and cumbersome.
While the bill’s proponents argue that the surcharge will facilitate the timely funding of important infrastructure projects, critics may raise concerns about the potential for increased costs for consumers and the utility's accountability. There are apprehensions that without stringent regulation, utilities could impose excessive surcharges, thus shifting the financial burden onto the customers. Still, the bill preserves a framework that allows for consumer engagement and oversight by the Texas Commission on Environmental Quality, which will be responsible for implementing rules consistent with the new provisions.