Utility commission lowers water rates for four utility districts west, north of Austin

Waters rates will go down for more than 46,000 residents in Travis County's extraterritorial jurisdiction thanks to a petition filed by several municipal utility districts.

The Public Utility Commission of Texas issued an order adopting lower rates for water and wastewater service for some districts beginning with the next billing cycle. Commissioner Kenneth Anderson made a motion to approve the order, which passed the three-member board unanimously Oct. 8.

The order also mandates the city of Austin refund money it charged in excess of the new rates since the rates were appealed. Kalinda Howe of 3 Points Partners, which provides communication services for the MUDs, said Austin estimated it will owe $3 million in refunds; the MUDs estimate the city will owe about $6 million. The refund must include interest and be paid out within 30 days of the ruling.

Commission Chairwoman Donna Nelson said the order was based on a petition from North Austin MUD No. 1, Northtown MUD, Travis County Water Control and Improvement District No. 10 and Wells Branch MUD, each of which purchases treated water and wastewater services from the city and resells it to retail customers.

The case stems from an Austin City Council ruling three years ago. Council usually sets one water rate for the entire year before the fiscal year begins Oct. 1. But in fiscal year 2012-13, council set two rates: one that took effect Oct. 1, 2012, and another rate that took effect Feb. 1, 2013.

In April 2013, the MUDs filed a petition with the Texas Commission on Environmental Quality appealing the rates. The case was transferred to the PUC in September 2014.

During the course of the case, the city provided an overview of its rate-setting process, but it did not disclose the data and formulas used to support the rates it charged, according to the Oct. 7 PUC order. According to the order, the city failed to meet its burden of proof showing its rate were just and reasonable.

“The city may not increase water or wastewater rates applicable to petitioners without prior commission approval,” the order concluded.

After the PUC adopted the order, the MUDs' attorney, Randy Wilburn, a partner at Gilbert Wilburn PLLC, issued a statement.

"The Public Utility Commission was clear today that the city of Austin's practice of taxing utility customers through excessive water and wastewater rates is not allowed," he said in the statement. "We hope our fellow large employer customers, like the state of Texas take notice and use this ruling to help end these improper charges to all water and wastewater customers."

Affected utility districts:

North Austin MUD No. 1 serves the Milwood and Rattan Creek neighborhoods, including The Bluffs and Rattan Creek subdivisions. The district is located west of Parmer Lane, with McNeil Road to the south and RM 620 to the north. The majority of the district located in Williamson County.

Northtown MUD lies east of I-35 between Austin and Pflugerville, bounded by Howard Lane to the south and Dessau Road to the east. It includes Northtown Park, Meadow Pointe, Wildflower, Settler’s Meadow, The Lakes at Northtown and Brookfield neighborhoods.

Travis County Water Control and Improvement District No. 10 is located west of Austin near the Westlake area.

Wells Branch MUD is sandwiched between MoPac to the west and I-35 on the east. It is bordered on the south by Howard Lane and on the north by Grand Avenue Parkway.