By: Perry S.B. No. 2662
(In the Senate - Filed March 13, 2025; April 3, 2025, read
first time and referred to Committee on Water, Agriculture and
Rural Affairs; April 15, 2025, reported adversely, with favorable
Committee Substitute by the following vote: Yeas 7, Nays 0;
April 15, 2025, sent to printer.)
Click here to see the committee vote
COMMITTEE SUBSTITUTE FOR S.B. No. 2662 By: Perry
A BILL TO BE ENTITLED
AN ACT
relating to the enforcement of drought contingency plans by water
and sewer utilities and the Public Utility Commission of Texas.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 13.041(a), Water Code, is amended to
read as follows:
(a) The utility commission may regulate and supervise the
tariffs and business of each water and sewer utility within its
jurisdiction, including ratemaking and other economic regulation.
The commission may regulate water and sewer utilities within its
jurisdiction to ensure safe drinking water and environmental
protection. The utility commission and the commission may do all
things, whether specifically designated in this chapter or implied
in this chapter, necessary and convenient to the exercise of these
powers and jurisdiction. The utility commission may consult with
the commission as necessary in carrying out its duties related to
the regulation of water and sewer utilities.
SECTION 2. Section 13.042(a), Water Code, is amended to
read as follows:
(a) Subject to the limitations imposed in this chapter and
for the purpose of regulating rates and services so that those rates
may be fair, just, and reasonable and the services adequate and
efficient, the governing body of each municipality has exclusive
original jurisdiction over all water and sewer utility rates,
tariffs, operations, and services provided by a water and sewer
utility within its corporate limits.
SECTION 3. Section 13.136, Water Code, is amended by
amending Subsection (a) and adding Subsection (a-1) to read as
follows:
(a) Every utility shall file with each regulatory authority
tariffs showing all rates that are subject to the original or
appellate jurisdiction of the regulatory authority and that are in
force at the time for any utility service, product, or commodity
offered. Every utility shall file with and as a part of those
tariffs all rules and regulations relating to or affecting the
rates, utility service, product, or commodity furnished, including
the utility's drought contingency plan required by the commission.
(a-1) Notwithstanding Subsection (a), a provision of a
drought contingency plan does not constitute a rate as defined by
Section 13.002.
SECTION 4. Sections 13.250(b) and (d), Water Code, are
amended to read as follows:
(b) Unless the utility commission issues a certificate that
neither the present nor future convenience and necessity will be
adversely affected, the holder of a certificate or a person who
possesses facilities used to provide utility service shall not
discontinue, reduce, or impair service to a certified service area
or part of a certified service area except for:
(1) nonpayment of charges for services provided by the
certificate holder or a person who possesses facilities used to
provide utility service;
(2) nonpayment of charges for sewer service provided
by another retail public utility under an agreement between the
retail public utility and the certificate holder or a person who
possesses facilities used to provide utility service or under a
utility commission-ordered arrangement between the two service
providers;
(3) noncompliance with a drought contingency plan;
(4) nonuse; or
(5) [(4)] other similar reasons in the usual course of
business.
(d) Except as provided by this subsection, a retail public
utility that has not been granted a certificate of public
convenience and necessity may not discontinue, reduce, or impair
retail water or sewer service to any ratepayer without approval of
the regulatory authority. Except as provided by this subsection, a
utility or water supply corporation that is allowed to operate
without a certificate of public convenience and necessity under
Section 13.242(c) may not discontinue, reduce, or impair retail
water or sewer service to any ratepayer without the approval of the
regulatory authority. Subject to rules of the regulatory
authority, a retail public utility, utility, or water supply
corporation described in this subsection may discontinue, reduce,
or impair retail water or sewer service for:
(1) nonpayment of charges;
(2) noncompliance with a drought contingency plan;
(3) nonuse; or
(4) [(3)] other similar reasons in the usual course of
business.
SECTION 5. Section 11.1272, Water Code, is amended by
amending Subsections (c), (d), and (e) and adding Subsection (c-1)
to read as follows:
(c) A [By May 1, 2005, a] drought contingency plan required
by commission rule adopted under this section must include:
(1) specific, quantified targets for water use
reductions to be achieved during periods of water shortages and
drought; and
(2) reasonable procedures for the enforcement of
mandatory water use restrictions, including fines, water rate
surcharges, restriction of service, discontinuation of service, or
any other penalty.
(c-1) The entity preparing the drought contingency plan
shall establish the targets and enforcement procedures required
under Subsection (c).
(d) The commission, the utility commission, and the board by
joint rule shall identify quantified target goals for drought
contingency plans that wholesale and retail public water suppliers,
irrigation districts, and other entities may use as guidelines in
preparing drought contingency plans. Goals established under this
subsection are not enforceable requirements.
(e) The commission, the utility commission, and the board
jointly shall develop and update at least once every five years
model drought contingency programs for different types of water
suppliers that suggest best management practices for accomplishing
the highest practicable levels of water use reductions achievable
during periods of water shortages and drought for each specific
type of water supplier.
SECTION 6. This Act takes effect immediately if it receives
a vote of two-thirds of all the members elected to each house, as
provided by Section 39, Article III, Texas Constitution. If this
Act does not receive the vote necessary for immediate effect, this
Act takes effect September 1, 2025.
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