By: Puente H.B. No. 3367
A BILL TO BE ENTITLED
AN ACT
relating to requiring water utilities to adopt water rates that
encourage conservation and dedicating revenue for conservation
programs.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS
SECTION 1. Chapter 430 Local Government Code, is amended by
adding Section 430.003 to read as follows:
430.003 Water Rates for Municipal and County Utilities a)
When setting rates for all classes of customers, no volume credit
shall be included in the minimum charge for water or sewer. All
connections shall be metered and water rates shall include a
gallonage charge.
b) For municipally and county owned water utilities with
3300 or more connections, water rates for residential customers
shall include at least three rate blocks based on the amount of
water used. The rate blocks shall increase in cost per gallon or
cubic feet of water consumed as the total volume of consumption
increases. Blocks shall be set so that average indoor water use is
included in the first block, or the first and second blocks if there
is a lifeline rate. The rate structure shall be applied either year
round or seasonally but shall include water usage from June 1
through September 30 of each year.
c) For municipally and county owned water utilities with
less than 3300 connections, the rate structure shall be a tiered
rate structure for residential customers. The rate blocks shall
increase in cost per gallon or cubic feet of water consumed as the
total volume of consumption increases. The rate structure shall be
applied either year round or seasonally but shall include water
usage from June 1 through September 30 of each year.
d) The rate structures for nonresidential customers shall
be a tiered rate structure or be a seasonal structure with higher
rates charged each year from at least June 1 through September 30
than during the rest of the year.
e) In no event shall any rate structure be a declining block
rate structure.
f) At least two (2) percent of gross annual water system
revenue should be dedicated to implementing water efficiency
programs.
g) Rates and charges for water and sewer service shall be
adequate to recover the full cost of operation, maintenance, debt
retirement including coverages necessary to comply with bond
covenants, the replacement of annual depreciation of all
infrastructure assets necessary to provide timely and adequate
service delivery, a leak detection and water audit program, and a
water efficiency program.
h) Any rate change after the effective date of this bill
shall comply with this section.
i) If the provisions of this section are not implemented,
the Commission on Environmental Quality or its successor agency
shall take this into account in any enforcement action.
SECTION 2. Subchapter E, Chapter 13, Water Code, is amended
by adding Section 13.1365 to read as follows:
Sec. 13.1365. CONSERVATION ORIENTED RATE STRUCTURES a)
When setting rates for all classes of customers, no volume credit
shall be included in the minimum charge for water or sewer. All
connections shall be metered and water rates must include a
gallonage charge.
b) For water utilities with 3300 or more connection, water
rates for the residential class of customers will include at least
three rate blocks based on the volume of water used. The rate
blocks shall increase in cost per gallon or cubic feet of water
consumed as the total volume of consumption increases. Blocks shall
be set so that average indoor water use is included in the first
block, or the first and second blocks if there is a lifeline rate.
The rate structure shall be applied either year round or seasonally
but must include water usage from June 1 through September 30 of
each year.
c) For water utilities with less than 3300 customers, the
rate structure shall be a tiered rate structure for residential
customers. The rate blocks shall increase in cost per gallon or
cubic feet of water consumed as the total volume of consumption
increases. The rate structure shall be applied either year round or
seasonally but shall include water usage from June 1 through
September 30 of each year.
d) The rate structures for nonresidential customers shall
be a tiered rate structure or be a seasonal structure with higher
rates charged each year from at least June 1 through September 30
than during the rest of the year.
e) In no event shall any rate structure be a declining block
rate structure.
f) At least two (2) percent of gross annual water system
revenue should be dedicated to implementing water efficiency
programs.
g) All revenues in excess of test year costs due to an
inclining block rate shall be placed in a special account and used
for water efficiency programs, leak detection and repair, meter
testing, and system improvements.
h) Any rate change after the effective date of this bill
shall comply with this section
i) If the provisions of this section are not implemented,
the Commission shall take this into account in any enforcement
action.
SECTION 3. Chapter 15.106(b), Water Code, is amended to
read as follows:
Sec 15.106(b) Before the board grants the application or
provides any financial assistance under an application, it shall
require an applicant to adopt or to have already implemented a
program of water conservation for the more efficient use of water
that incorporates the practices, techniques, or technology
prescribed by Subdivision (9)(B), Section 15.001, of this code and
that the board determines will meet reasonably anticipated local
needs and conditions. The program [may] shall include but is not
limited to [any or all of] the following:
(1) restrictions on discretionary water uses, such as
lawn watering;
(2) plumbing code standards for water conservation in
new building construction;
(3) retrofit programs to improve water-use efficiency
in existing buildings;
(4) educational programs;
(5) universal metering;
(6) conservation-oriented water rate structures.
The Board shall ensure that a program that includes
conservation-oriented water rate structures is designed so that:
a) When setting rates for all classes of customers, no
volume credit shall be included in the minimum charge for water or
sewer. All connections shall be metered and water rates must
include a gallonage charge.
b) For water utilities with 3300 or more connections, water
rates for the residential class of customers shall include at least
three rate blocks based on the amount of water used. The rate blocks
shall increase in cost per gallon or cubic feet of water consumed as
the total volume of consumption increases. Blocks shall be set so
that average indoor water use is included in the first block, or the
first and second blocks if there is a lifeline rate. The rate
structure shall be applied either year round or seasonally but
shall include water usage from June 1 through September 30 of each
year.
c) For water utilities with less than 3300 connections, the
rate structure shall be a tiered rate structure for residential
customers. The rate blocks shall increase in cost per gallon or
cubic feet of water consumed as the total volume of consumption
increases. The rate structure can be applied either year round or
seasonally but shall include water usage from June 1 through
September 30 of each year.
d) The rate structures for nonresidential customers shall
be a tiered rate structure or be a seasonal structure with higher
rates charged each year from at least June 1 through September 30
than during the rest of the year. In no event shall any rate
structure be a declining block rate structure.
e) At least two (2) percent of cross annual water system
revenue should be dedicated to implementing water efficiency
programs.
f) Any rate change after the effective date of this bill
shall comply with this section.
g) If the provisions of this section are not implemented,
the Commission shall take this into account in any enforcement
action.
(7) drought contingency plans; and
(8) distribution system leak detection and repair.
SECTION 4. Chapter 49, Water Code, is amended by adding
Section 49.236 as to read as follows:
49.236 Water Rates a) When setting rates for all classes of
customers, no volume credit shall be included in the minimum charge
for water or sewer.
b) For water districts with 3300 or more connections, water
rates for the residential class of customers shall include at least
three rate blocks based on the amount of water used. The rate blocks
shall increase in cost per gallon or cubic feet of water consumed as
the total volume of consumption increases. Blocks shall be set so
that average indoor water use is included in the first block, or the
first and second blocks if there is a lifeline rate. The rate
structure can be applied either year round or seasonally but shall
include water usage from June 1 through September 30 of each year.
c) For water districts with less than 3300 connections, the
rate structure shall be a tiered rate structure for residential
customers. The rate blocks shall increase in cost per gallon or
cubic feet of water consumed as the total volume of consumption
increases. The rate structure can be applied either year round or
seasonally but shall include water usage from June 1 through
September 30 of each year.
d) The rate structures for nonresidential customers shall
be a tiered rate structure or be a seasonal structure with higher
rates charged each year from at least June 1 through September 30
than during the rest of the year.
e) In no event shall any rate structure be a declining block
rate structure.
f) At least two (2) percent of gross annual water system
revenue should be dedicated to implementing water efficiency
programs.
g) Any rate change after the effective date of this bill
shall comply with this section
h) If the provisions of this section are not implemented,
the Commission shall take this into account in any enforcement
action.
SECTION 5. Chapter 67, Water Code, is amended by adding
Section 67.018 to read as follows:
67.018 Water Rates
i) When setting rates for all classes of customers, no
volume credit shall be included in the minimum charge for water or
sewer.
j) For corporations with 3300 or more connections, water
rates for the residential class of customers shall include at least
three rate blocks based on the amount of water used. The rate
blocks shall increase in cost per gallon or cubic feet of water
consumed as the total volume of consumption increases. Blocks shall
be set so that average indoor water use is included in the first
block, or the first and second blocks if there is a lifeline rate.
The rate structure can be applied either year round or seasonally
but shall include water usage from June 1 through September 30 of
each year.
k) For corporations with less than 3300 customers, the rate
structure shall be a tiered rate structure for residential
customers. The rate blocks shall increase in cost per gallon or
cubic feet of water consumed as the total volume of consumption
increases. The rate structure can be applied either year round or
seasonally but shall include water usage from June 1 through
September 30 of each year.
l) The rate structures for nonresidential customers shall
be a tiered rate structure or be a seasonal structure with higher
rates charged each year from at least June 1 through September 30
than during the rest of the year.
m) In no event shall any rate structure be a declining block
rate structure.
n) At least two (2) percent of gross annual water system
revenue should be dedicated to implementing water efficiency
programs.
o) Any rate change after the effective date of this bill
shall comply with this section
p) If the provisions of this section are not implemented,
the Commission shall take this into account in any enforcement
action.
SECTION 6 This Act take effect September 1, 2003.