Relating to the enforcement of drought contingency plans by water and sewer utilities and the Public Utility Commission of Texas, the official text

S.B. No. 2662

AN ACT

relating to the enforcement of drought contingency plans by water

and sewer utilities and the Public Utility Commission of Texas.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Section 13.041(a), Water Code, is amended to

read as follows:

(a) The utility commission may regulate and supervise the

tariffs and business of each water and sewer utility within its

jurisdiction, including ratemaking and other economic regulation.

The commission may regulate water and sewer utilities within its

jurisdiction to ensure safe drinking water and environmental

protection. The utility commission and the commission may do all

things, whether specifically designated in this chapter or implied

in this chapter, necessary and convenient to the exercise of these

powers and jurisdiction. The utility commission may consult with

the commission as necessary in carrying out its duties related to

the regulation of water and sewer utilities.

SECTION 2. Section 13.042(a), Water Code, is amended to

read as follows:

(a) Subject to the limitations imposed in this chapter and

for the purpose of regulating rates and services so that those rates

may be fair, just, and reasonable and the services adequate and

efficient, the governing body of each municipality has exclusive

original jurisdiction over all water and sewer utility rates,

tariffs, operations, and services provided by a water and sewer

utility within its corporate limits.

SECTION 3. Section 13.136, Water Code, is amended by

amending Subsection (a) and adding Subsection (a-1) to read as

follows:

(a) Every utility shall file with each regulatory authority

tariffs showing all rates that are subject to the original or

appellate jurisdiction of the regulatory authority and that are in

force at the time for any utility service, product, or commodity

offered. Every utility shall file with and as a part of those

tariffs all rules and regulations relating to or affecting the

rates, utility service, product, or commodity furnished, including

the utility's drought contingency plan required by the commission.

(a-1) Notwithstanding Subsection (a), a provision of a

drought contingency plan does not constitute a rate as defined by

Section 13.002.

SECTION 4. Sections 13.250(b) and (d), Water Code, are

amended to read as follows:

(b) Unless the utility commission issues a certificate that

neither the present nor future convenience and necessity will be

adversely affected, the holder of a certificate or a person who

possesses facilities used to provide utility service shall not

discontinue, reduce, or impair service to a certified service area

or part of a certified service area except for:

(1) nonpayment of charges for services provided by the

certificate holder or a person who possesses facilities used to

provide utility service;

(2) nonpayment of charges for sewer service provided

by another retail public utility under an agreement between the

retail public utility and the certificate holder or a person who

possesses facilities used to provide utility service or under a

utility commission-ordered arrangement between the two service

providers;

(3) noncompliance with a drought contingency plan;

(4) nonuse; or

(5) [(4)] other similar reasons in the usual course of

business.

(d) Except as provided by this subsection, a retail public

utility that has not been granted a certificate of public

convenience and necessity may not discontinue, reduce, or impair

retail water or sewer service to any ratepayer without approval of

the regulatory authority. Except as provided by this subsection, a

utility or water supply corporation that is allowed to operate

without a certificate of public convenience and necessity under

Section 13.242(c) may not discontinue, reduce, or impair retail

water or sewer service to any ratepayer without the approval of the

regulatory authority. Subject to rules of the regulatory

authority, a retail public utility, utility, or water supply

corporation described in this subsection may discontinue, reduce,

or impair retail water or sewer service for:

(1) nonpayment of charges;

(2) noncompliance with a drought contingency plan;

(3) nonuse; or

(4) [(3)] other similar reasons in the usual course of

business.

SECTION 5. Section 11.1272, Water Code, is amended by

amending Subsections (c), (d), and (e) and adding Subsection (c-1)

to read as follows:

(c) A [By May 1, 2005, a] drought contingency plan required

by commission rule adopted under this section must include:

(1) specific, quantified targets for water use

reductions to be achieved during periods of water shortages and

drought; and

(2) reasonable procedures for the enforcement of

mandatory water use restrictions, including fines, water rate

surcharges, restriction of service, discontinuation of service, or

any other penalty.

(c-1) The entity preparing the drought contingency plan

shall establish the targets and enforcement procedures required

under Subsection (c).

(d) The commission, the utility commission, and the board by

joint rule shall identify quantified target goals for drought

contingency plans that wholesale and retail public water suppliers,

irrigation districts, and other entities may use as guidelines in

preparing drought contingency plans. Goals established under this

subsection are not enforceable requirements.

(e) The commission, the utility commission, and the board

jointly shall develop and update at least once every five years

model drought contingency programs for different types of water

suppliers that suggest best management practices for accomplishing

the highest practicable levels of water use reductions achievable

during periods of water shortages and drought for each specific

type of water supplier.

SECTION 6. This Act takes effect immediately if it receives

a vote of two-thirds of all the members elected to each house, as

provided by Section 39, Article III, Texas Constitution. If this

Act does not receive the vote necessary for immediate effect, this

Act takes effect September 1, 2025.

______________________________
______________________________

President of the Senate
Speaker of the House

I hereby certify that S.B. No. 2662 passed the Senate on

April 30, 2025, by the following vote: Yeas 31, Nays 0.

______________________________

Secretary of the Senate

I hereby certify that S.B. No. 2662 passed the House on

May 20, 2025, by the following vote: Yeas 128, Nays 19, two

present not voting.

______________________________

Chief Clerk of the House

Approved:

______________________________

Date

______________________________

Governor