In the Face of Rapid Consolidation, Rural Water Customers Plead their Case

Photo by THIERRY ZOCCOLAN/AFP/Getty Images

Water rates are rising across rural Texas, say consumer advocates.

The face of the rural Texas water provider is changing. Jim Boyle, a lawyer with the group Texas Rate Payers United, says years ago most water companies were mom and pop operations, owned by families within the communities they served. Then the great roll-up began.

“We have three or four companies that have come into Texas, one from California, one from Pennsylvania,” he recently told the Texas House Committee on County Affairs. “They’ve come to Texas and they’ve bought hundred of subdivisions systems.”

But it’s not the consolidation that ‘s the problem. According to Boyle, it’s what happens afterwards. He says the companies are raising water rates across the state. When rural customers from unincorporated parts of Texas try to challenge the rate hikes before the Texas Commission on Environmental Quality, they’re faced with nearly insurmountable financial roadblocks.

“The cost is tremendous in these kinds of cases. Tens of thousands of dollars and they can’t do it,” said Boyle.

So consumer advocates are asking the legislature to change state law to allow county governments to represent rural ratepayers in those cases. If counties pool their resources to represent rural payers, they may have a better chance of keeping rates low. It’s an idea that has already has the support of some local officials.

“I can’t speak for Travis County as a whole, but I can speak for the mood of the Court and we’re very interested in perusing something along these lines,” Travis County Commissioner Karen Huber told the Committee.

Testimony before the Committee also caught the attention of Committee Chair, Garnet Coleman. Though he noted that even if a community manages to stop a rate hike, there’s nothing that says the next company to buy the utility wont try to raise rates again.

“Sounds like its a pretty good racket, you buy [the company] out, and you raise the rates, and you go to the rate case,” he said. “If [The rates] go down then you sell it to someone else and they do the same thing.”

Advocates hope the matter will be taken up in the 2013 legislative session.