BILL ANALYSIS H.B. 1824 By: Pickett 3-27-95 Committee Report (Amended) BACKGROUND The greater Canutillo service area is an area in northwest El Paso encompassing approximately 14,207 acres in the upper valley area of El Paso. The area includes the unincorporated community of Canutillo, the La Tuna Correctional Facility, the Village of Vinton and the Town of Anthony, Texas. The greater Canutillo service area excludes the area of the El Paso County Water Control and Improvement District-Westway (Westway.) This area includes approximately 9,034 people, many of whom are without water and wastewater service. The City of El Paso (El Paso), through its El Paso Water Utilities Public Service Board (PSB) has identified alternatives available for providing water and wastewater service to this area to meet demands up to the year 2015. It is anticipated that the provision of water and sewer service to people without such service living in colonia areas would be provided in at least two phases with preliminary cost estimates of $10,996,313 for water facilities and $12,000,000 for wastewater facilities with 25% of the financing from the Texas Water Development Board (TWDB) and 75% financing from the Corps of Engineers. The first phase would provide water and sewer service to the community of Canutillo. In order to be able to serve in this area, El Paso, through its PSB, must be allowed to charge rates for water and sewer service in the greater Canutillo service area which exceed similar rates to is municipal customers so that El Paso could fully recover the cost of serving these customers. These costs would include the debt incurred by El Paso on behalf of the Canutillo customers for the necessary improvements to provide water and sewer services to the greater Canutillo service area. PURPOSE As proposed, H.B. 1824 would permit El Paso, through its PSB, to charge rates for water and sewer service in the greater Canutillo service area which exceed similar rates charged to its municipal customers, which would allow water and sewer service to be provided at cost to residents of the greater Canutillo service area without water and sewer service. RULEMAKING AUTHORITY It is the committee's opinion that this bill does not expressly grant any additional rulemaking authority to a state officer, department, agency, or institution. SECTION BY SECTION ANALYSIS SECTION 1. (a) Allows El Paso to charge residents of the greater Canutillo service area a higher rate for service than rates charged to residents of the municipality. The difference in rates will be necessary to fully recover the cost of service to the area. (b) This indicates what the PSB may include in the rates charged to residents of the greater Canutillo service area. SECTION 2. Defines the greater Canutillo service area. SECTION 3. Emergency clause. EXPLANATION OF AMENDMENTS Committee Amendment #1: At page 1, line 17, after the word "area;", deletes the word "or" and adds the word "and"; at page 1, between lines 19 and 20, adds a new subsection (c) to read as follows: (c) Notwithstanding subsections (a) and (b) of this Section, for a period of five years after the City of El Paso begins water supply or sewer service to the greater Canutillo service area, the City of El Paso may not charge residents of the service area a rate that exceeds 115 percent of the rate charged to the residents of the City of El Paso. SUMMARY OF COMMITTEE ACTION H.B.1824 was considered by the committee in a public hearing on March 13, 1995. The following persons testified in favor of the bill: Mr. Ed Archuleta, representing El Paso Public Service Board; Mr. Herbert L. Prouty, General Counsel, El Paso Water Utilities, Public Service Board, representing himself; Ms. Jessica Wales, representing herself and El Paso Interreligous Sponsoring Organization. The following persons testified against the bill: None (0). The following persons testified on the bill: Mr. Samuel W. Jones, representing Texas Natural Resource Conservation Commission; Mr. Tom Brown, representing the Texas Water Development Board. The bill was left pending. H.B.1824 was considered by the committee in a public hearing on March 27, 1995. No testimony was received. The committee considered one (1) amendment to the bill. The amendment was adopted without objection. The bill was reported favorably as amended, with the recommendation that it do pass and be printed, by a record vote of 8 ayes, 0 nays, 0 pnv, and 1 absent.