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Huber: Counties need authority to protect water customers

Tuesday, October 30, 2012 by Kimberly Reeves

In an appearance before the House County Affairs Committee last week, Travis County Commissioner Karen Huber asked state lawmakers to rein in the abuses of investor-owned water utility companies that are jacking up rates.

 

Huber said the time had come to enable counties to represent aggrieved water users in rate case appeals before the Texas Commission on Environmental Quality.

 

“We’ve probably had at least a dozen small utilities in Travis County that have been bought by these investor-owned utilities,” Huber told the committee. “The way the process works is that some of these utilities have jacked up rates as much as 95 percent, sometimes overnight.”

 

Travis County is well aware of problems with both water quality and rate hikes from the for-profit privately owned firms, such as Monarch Utilities, a subsidiary of Covina, Calif.-based SouthWest Water Co., and Bastrop-based Aqua Water Supply Corp.

 

In many cases, private water companies serve older subdivisions and homeowners, Huber said. Most of these residents can’t afford to pay the tens of thousands of dollars to appeal a rate increase, especially since increased rates stay in place through an appeal. Those appeals can take months and even years, Huber said.

 

Huber, in fact, was preaching to the choir. Members of the County Affairs Committee, especially Reps. Wayne Smith (R-Baytown) and Lance Gooden (R-Terrell), had heard plenty from constituents.

 

Gooden, who represents portions of Henderson County, said rate hikes have gotten to the point where some people literally cannot afford to pay for water. So they simply don’t have water service, relying on the kindness of neighbors to provide them with what limited water they get.

 

“Sometimes they’re lucky,” Gooden said. “They have a wealthy neighbor up the road, so they can go and fill up a bottle so they can drink water at night and flush their toilets. It’s a very serious problem, whether they’re seniors on a fixed income or living at the poverty level or even just wealthy people out of Dallas who come to a home on the lake for the weekends.”

 

Residents are being fleeced. Gooden said it was unconscionable for companies to charge residents fees of $120 to $150 a month before a single gallon is used. Gooden said he suspected companies suggested rate hikes far higher than necessary, knowing they would go through the appeals process and possibly even sell the company before the TCEQ sets a lower rate.

 

“Where can I get in on that deal?” Chair Garnet Coleman joked. “That sounds like good money.”

 

Jim Boyle of Texas Ratepayers United, who also spoke to the panel, said rates are high for the users of investor-owned utilities across the state. He agreed that county representation could be helpful in rate cases.

 

“These are private corporations, not public in any sense of the word,” Boyle said. “They are owned by shareholders. They are no longer mom and pop businesses. We have companies from out of state – from California and Pennsylvania – that have come to Texas and bought out hundreds of subdivisions.”

 

Rate cases are the ultimate sleeping pill, Boyle said. They are long, complicated and boring. Having a county at the table to assist in the process can make a confusing and difficult process more fair and equitable.

 

Boyle added it also was important to resolve issues of culpability, such as whether a homeowners should be on the hook to pay for the full price of a water system if a developer has failed to put all phases of a subdivision on the ground.

 

Advocacy for ratepayers could come from a single county or multiple counties. Huber said it would require hiring outside counsel. Counties could represent constituents the same way cities assist ratepayers in other utility cases.

 

“There’s not a county commissioner, with a sizable population of ratepayers, that hasn’t seen people abused by these private water companies,” Gooden said. “It doesn’t matter whether you’re Republican or Democrat. There’s currently no solution. It’s going to take action at the Legislature.”

 

During her testimony, Huber also asked the committee to consider reconciling the codes around groundwater and surface water. Travis County has seen significant issues because of groundwater pumping from new subdivisions that are decreasing water flow.

 

“We have a subdivision that platted 150 homes on groundwater. A year ago this May, the six wells serving 100 homes started faltering,” Huber said. “So they dug more wells and got bigger tanks to keep pulling more water out of the ground. But now the neighboring areas are having their wells go dry.”

 

Travis County had joined a handful of counties in trying to regulate groundwater without the benefit of a groundwater management district, Huber said. The county has tweaked subdivision regulations, even introducing the dreaded “IP,” which was Huber’s shorthand for regulating the amount of impervious cover a dwelling could have. Local entities regulate impervious cover to maintain water quality.

 

Huber said she had no concrete solutions for resolving the water crisis, but noted that it had become a real issue for Travis County, one that might deserve consideration from a number of House committees.

 

Coleman said he recognized the seriousness of the issue. Coleman, a House member from Houston, said he had witnessed members come to heated exchanges over water issues, including senior and junior water rights.

 

“I know it’s a problem,” Coleman said.

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