The bill amends Section 13.181 of the Water Code to establish new regulations regarding rate increases for water or sewer utility services provided by certain municipally owned utilities. Specifically, it introduces provisions that allow for rate increases for ratepayers living outside the municipality's corporate limits, but only if the utility is owned by a municipality with a population exceeding one million and the rate increase coincides with the implementation of the utility's drought contingency plan. Additionally, it designates such a utility as a Class A utility for the purposes of any related proceedings.

The bill also clarifies that the changes will only apply to rate proceedings initiated on or after the effective date of the Act, which is set for September 1, 2025. Rate proceedings that begin before this date will continue to be governed by the existing law. This ensures a smooth transition and maintains the legal framework for ongoing proceedings while introducing new regulations for future rate increases.

Statutes affected:
Introduced: Water Code 13.181 (Water Code 13)