Rate Appeal
• Group of Districts in Austin area appealed City
of Austin Wholesale Water and Wastewater
Rates that became effective February 1, 2013
• appeal filed April 12, 2013 (water)
• and December 12, 2013 (wastewater)
Petitioners
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North Austin MUD No. 1
North town MUD
Wells Branch MUD
Travis County WCID No. 10 (water only)
Hearing Process
• Discovery lasted for months
• 10's of thousands of pages of documents
reviewed
• February 2015
• 8 days
The Law
• Appealed under 13.044 of the Texas Water
Code
• Enacted as a result of appeal of Austin
Wholesale rates in the late 1980's
The Law
• Intended to require direct de novo review of Austin’s
wholesale rates.
• 13.044(b) "Notwithstanding the provisions of any
resolution, ordinance, or agreement, a district may
appeal the rates imposed by the municipality by filing a
petition with the utility commission. The utility
commission shall hear the appeal de novo and the
municipality shall have the burden of proof to establish
that the rates are just and reasonable. The utility
commission shall fix the rates to be charged by the
municipality and the municipality may not increase
such rates without the approval of the utility
commission."
The Law
• Intended to avoid the public interest test
• However, Austin still claims that public interest
test should apply
Beneficiaries of 13.044
• Any district required to obtain water or wastewater
service from the consenting city in its consent
agreement
• 13.044(a) "This section applies to rates charged by a
municipality for water or sewer service to a district
created pursuant to Article XVI, Section 59, of the Texas
Constitution, or to the residents of such district, which
district is located within the corporate limits or the
extraterritorial jurisdiction of the municipality and the
resolution, ordinance, or agreement of the
municipality consenting to the creation of the district
requires the district to purchase water or sewer service
from the municipality."
Arguments
• Austin claims:
– followed correct process and allowed interested
parties to participate and have input
– costs are related to utility service
Arguments
• Petitioners claims:
– Austin’s rates not just and reasonable
– costs unrelated to provision of utility service
• millions of dollars in transfers out of utility fund to fund
a variety of other Austin departments and services
– costs not supported by evidence in the record
Judges' Rulings so far
• 13.044 applies
• Interim rate relief is available
• Austin has burden of proving up its rates
Status
•
•
•
•
Interim Rates (2012 rates) currently in effect
Closing Briefs have been filed
Reply briefs have been filed
Awaiting proposal for decision (PFD)
Appeal
• Expect the non-prevailing party to appeal
• Additional 45-90 days at PUC
• District court process could take years
Parallel Court Proceeding
• Austin claims PUC has no authority to set
interim rates
• Briefing by Petitioners and State agencies due
this month
• Hearing set for September
Legislature
• No efforts to repeal 13.044 during 2015
Session
• Vigilance in protecting 13.044 rights required
during future sessions
The Future
• Monitor Future Austin Rate Increase
• Continue Public Relations Efforts to bring
awareness to the community about Austin’s
use of Electric and Water/Wastewater Funds
for non-utility purposes
• Monitor any legislative efforts regarding
appeal of wholesale rates
Bill and Ted’s
Excellent Adventure
John J. Carlton
The Carlton Law Firm, PLLC
2705 Bee Cave Road
Suite 200
Austin, Texas 78746
(512) 614-0901
john@carltonlawaustin.com