Understanding New Rates

To understand Texas Water Utilities’ recent rate review, we want you to have all the related information in one place. This article will explain the rate review, what goes into setting rates, and the resources available to you. It is important to us that you have what you need to make informed decisions for your household. We want you Water Empowered!

Rate Review Explained

Why are you changing rates and why now?

From 2016-2019, Texas Water Utilities invested over $35.1 million in system upgrades across the state to ensure safe and clean drinking water as well as proper treatment and disposal of wastewater. Periodically, we must recoup these costs of capital improvements already made with rate adjustments.

On February 23, 2022, Texas Water Utilities received approval from the PUC to set new rates for Texas Water Utilities – Monarch customers. The approval came after a rate review initiated in 2020 that included an initial filing, a lengthy discovery process, written and oral testimony, settlement negotiations, and ultimately, approval of final rates. Below is a timeline of the rate review

Rate Review Timeline

On July 15, 2020, Texas Water Utilities filed a rate application with the Public Utility Commission of Texas (PUC) and sent a notice to customers shortly thereafter. By law, the proposed rates would go into effect on September 18, 2020; however, a settlement was reached that allowed the PUC more time to review the application through the use of interim rates.
On October 14, 2020, the PUC approved two phases of interim rates. The first phase of interim rates was applied retroactively beginning September 18, 2020, and did not change the then-current rates.
On February 2, 2021, the second phase of interim rates went into effect and changed the current rates to those initially proposed in Texas Water Utilities’ application.
On February 23, 2022, the PUC completed the rate review and approved final rates for customers.
On April 18, 2022, meter reads that happen on or after this date will be calculated with the new rates.

What kind of rates is going into effect on April 18, 2022?

These are the final rates approved by the PUC. If you are in an area with rates being implemented in “phases,” you can expect changes over time with your rates that follow the set timeline.

Final rates include a monthly base rate (fixed rate) that covers the cost of infrastructure, a usage rate (variable rate) that covers the cost of treating water, and a pass-through rate that covers the cost of purchased water or purchased wastewater treatment. Final rates will be applied retroactively to billing periods between September 18, 2020 and April 17, 2022, and once approved by the PUC, customers will begin being reimbursed or charged the difference between final rates and interim rates during the adjustment period.

An adjustment period happens because the PUC needs adequate time to review and determine, if the utility either has more money to be collected or needs to give money back to customers. Therefore, you will either see a bill credit with money back or a temporary, additional fee make up the difference between final rates and interim rates.

Other fees that you will see are passthrough rates and a temporary surcharge fee. A passthrough rate is a rate we are charged by water source regulation boards (they oversee the use and care for aquifers and surface water sources. Some of you may also receive a wastewater passthrough rate which is related to the wastewater treatment and returning the water back to its source. The temporary surcharge fee is to recover the cost to file the rate review with the regulatory board.

How much will my rates change?

Customers will see their bills change by different percentages, and some changes will be phased in over a period of years. To see the rates and rate change comparisons for your service district, click here.

We know this is a lot to understand and we want to provide you with the facts so you may be well-informed about the bill you receive each month.

Other Costs Rates Go Toward

Your rates also go into many things that keep the water flowing. Watch this video to learn more.

Need Assistance?

We understand times our tough right now. Customer Care has resources available to aid in moments where you need to pay your bill later than usual or if you need a payment arrangement.

If you need assistance with making monthly payments, visit our Water Assist webpage and read through our payment assistance program to see if you qualify for monthly aid.