The bill, S.B. No. 2499, amends the Water Code to enhance the regulatory authority's considerations when approving rates for water or sewer utility services. Specifically, it requires the regulatory authority to take into account whether the utility is in compliance with the rules set by the Texas Commission on Environmental Quality, alongside other factors such as the utility's conservation efforts, service quality, operational efficiency, and management quality. This addition aims to ensure that utilities adhere to environmental standards while determining reasonable returns on invested capital.

Furthermore, the bill introduces a new subsection that mandates the regulatory authority to consider a utility's compliance with commission rules during the historic test year when assessing reasonable and necessary expenses. The changes will only apply to rate proceedings that commence on or after the effective date of the Act, which is set for September 1, 2025. Rate proceedings initiated before this date will continue to be governed by the existing law.

Statutes affected:
Introduced: Water Code 13.184, Water Code 13.185 (Water Code 13)