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Watson, Nichols to lead investigation into water utility rate increases

Thursday, June 30, 2011

A group of Texas senators, co-chaired by Senators Kirk Watson and Robert Nichols, will investigate severe water and sewage rate increases by investor-owned utilities affecting thousands of people across Texas.

The joint subcommittee will look into water providers such as Monarch Utilities.  Following the adjournment of the 82nd regular Texas Legislative Session, Monarch notified customers living and working in large parts of Central and East Texas of a significant rate increase scheduled to take effect August 1.  Once this rate increase goes into effect, a typical Monarch customer could pay rates that are more than twice as high as those for the average water utility customer in a Texas city.

Monarch Utilities is a division of the California-based Southwest Water Company, and it is owned primarily by J.P. Morgan Asset Management.

“Texans all across the state don’t understand why their water and sewer rates are skyrocketing,” Senator Watson said, “and many of them are frustrated by the fact that hard-earned money is going to pad the pockets of  Wall Street executives.”

"Out-of-control water and sewer rates are issues the state cannot afford to ignore," Senator Nichols added. "This subcommittee will allow legislators to continue work from the legislative session to stop rate abuses by some investor-owned utilities."

Senators Watson and Nichols asked Governor Perry to add legislation related to water utility rates to the call of the special legislative session that concluded Wednesday, but he failed to do so.  Senator Watson also has written to the commissioners of the Texas Commission on Environmental Quality asking that they freeze Monarch's rates at current levels so customers can have more time to challenge and appeal the proposed rate increase.  And Senator Nichols filed several bills related to investor-owned water utilities, including a bill that was eventually passed to let landowners out of state-granted monopolies when utilities fail to provide service to an area.

The subcommittee, consisting of members of the Senate committees on Business and Commerce and on Natural Resources, is planning to hold its first public hearing in Austin on July 28, prior to the implementation of Monarch's proposed rate increase.