TThe Public Utility Commission of Texas (PUCT) will decide on February 20 whether Aqua Texas’s proposed rates should take effect with or without refund protections while the rate case continues. This issue has become one of the most important procedural fights in the case, because it determines whether customers can be made whole if Aqua’s proposed rates are later found to be too high.
Why This Matters
Under current law, Aqua’s proposed rates will automatically take effect on March 9, 2026, unless the Commission orders interim rates. Interim rates preserve the Commission’s ability to order refunds or surcharges once final rates are set.
If interim rates are not approved:
- Aqua’s proposed rates take effect automatically
- Customers cannot receive refunds even if the Commission later lowers the rates
- Months of over‑collections would be permanent — a windfall profit for Aqua Texas
Intervenors, the Office of Public Utility Counsel (OPUC), and Commission Staff all argue that this would be unfair to customers. Staff notes that Aqua’s current rates are more than 20 years old and that the proposed increases could cause “severe rate shock” for many customers, with increases as high as 108% for some systems.
A Larger Problem: No Refunds = No Incentive for Utilities to Be Reasonable in Rate Cases
If the Commission allows proposed rates to take effect without refund protections, it creates a dangerous precedent for all water and sewer utilities in Texas. Without the possibility of refunds, a utility can propose inflated or aggressive rates, knowing that even if the Commission later rejects those rates, the utility keeps every dollar collected during the case. This eliminates any economic incentive for utilities to propose reasonable, defensible rates. Staff and OPUC warn that this outcome would undermine the fairness of the ratemaking process and shift all financial risk onto customers.
What Aqua Texas Argues
Aqua Texas opposes interim rates beyond March 9. They argue:
- The law does not allow interim rates past the 150‑day suspension period unless the utility agrees
- Once the suspension period ends, the proposed rates become the “legal rates” and are not subject to refund
- Past SOAH orders have taken this same position
What Staff, OPUC, and Intervenors Argue
Staff, OPUC, and Intervenors argue the opposite:
- The statute explicitly allows interim rates “until a final determination is made”
- Refund protection is essential for fairness
- The ALJ misinterpreted the law and ignored evidence of customer hardship
- The Commission has used interim rates in many past cases to protect customers
What Happens on February 20
The Commission will hear oral argument on Staff’s appeal of SOAH Order No. 5. This is the moment when Commissioners decide:
Should Aqua’s proposed rates take effect without refund protection—or should interim rates be put in place to protect customers until the final order?
Fair Water Texas will be present, and customers are encouraged to attend and offer public comment.ment.
