Texas House Bill HB1587

Texas 2019 - 86th Regular

Caption

Relating to the regulation of certain classes of retail public water utilities.

Impact

The bill proposes amendments to the Water Code, focusing on the procedures that utilities must follow to change their rates. Utilities will be required to send a statement of intent to ratepayers at least 35 days prior to any rate changes. This provision is intended to enhance transparency and consumer awareness regarding rate adjustments. Additionally, the bill introduces alternative ratemaking methodologies that allow regulatory authorities to consider factors beyond just the rate of return, with the aim of encouraging regionalization and maintaining reliable service. This could significantly alter how utilities manage their pricing structures and relate to their customers.

Summary

House Bill 1587 is aimed at updating the regulatory framework for retail public water utilities in Texas. The bill defines and classifies utilities into different classes based on their number of connections, specifically introducing classifications for Class B, Class C, and Class D utilities. These classifications are crucial for establishing the procedures and standards for rate adjustments, ensuring that smaller utilities (Class C and D) have simplified processes compared to their larger counterparts (Class A). This differentiation is intended to promote better service delivery and financial stability within smaller water utility providers.

Contention

There may be concerns regarding how the bill balances the regulatory oversight of large utility companies with the need to support smaller ones. While proponents argue that the simplified process for smaller utilities will foster competition and improve service, opponents might argue that the relaxed regulatory environment could lead to a decrease in service quality or accountability. Furthermore, the adequacy of consumer protections in the face of potential rate increases may become a point of contention among stakeholders in the water utility sector.