Texas House Bill HB2506

Texas 2025 - 89th Regular

• Filed: 2/5/25

Caption

Relating to rates for water or sewer utility service provided by certain municipally owned utilities.

Impact

The implementation of HB2506 may significantly impact how large municipally owned utilities manage their services and rate structures. By classifying utilities that initiate rate increases during the activation of a drought contingency plan as Class A utilities, this legislation may provide municipalities with more flexibility in managing water supplies and charges. The bill may also set precedents for future legislation concerning utility management and the financial operational policies of large municipalities.

Summary

House Bill 2506 addresses the regulation of rates for water and sewer utility services provided by certain municipally owned utilities. Specifically, it amends Section 13.181 of the Water Code to apply only to utilities owned by municipalities with populations exceeding one million. This bill defines circumstances under which these utilities can initiate rate increases, particularly when implementing provisions of their drought contingency plans. This change aims to streamline the process for rate adjustments to ensure adequate resource management during times of drought.

Contention

Notable points of contention around this bill may arise from concerns regarding the potential for increased utility rates, especially for consumers living outside municipal limits. Critics might argue that this could disproportionately affect low-income communities reliant on these essential services, particularly during drought conditions where water is scarce. Moreover, while proponents advocate for the efficient management of resources, there may be apprehensions regarding the oversight and accountability of municipal utilities in implementing rate increases without sufficient public input.

Texas Constitutional Statutes Affected

Water Code

• Chapter 13. Water Rates And Services
  • Section: 181