Blue Mound searching for shutoff valve on water rate hikes

Posted Friday, Oct. 25, 2013  comments  Print Reprints

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If you don’t think Texas’ water future is at risk, look at Blue Mound.

Stuck with a private, for-profit water vendor instead of a public agency, the suburb north of Fort Worth is perpetually at odds with Sugar Land-based Monarch Utilities over rates that defy logic.

There is no free market for water in Blue Mound. Under Texas law, the city has no choice but to buy water from Monarch at almost any price the company convinces state regulators to approve.

The City Council struggles to keep water rates competitive, hoping to attract residents and businesses even though the average residential water bill is about $145 per month compared to $50 in Fort Worth or Saginaw.

That’s why the City Council voted this week to reject a 14 percent rate increase.

Instead, the council passed an ordinance dictating a rate cut for those using less than 5,000 gallons per month.

Monarch, a subsidiary of Covina, Calif.-based SouthWest Water Co., had filed the rate notice with the Texas Commission on Environmental Quality, an Austin-based agency governed by three full-time commissioners appointed by Gov. Rick Perry.

Texas state Sen. Jane Nelson and state Rep. Charlie Geren tried to help Blue Mound in the last legislative session. They passed a bill allowing Blue Mound (and Blue Mound only) to condemn the water company’s system.

Perry vetoed the bill. In a statement, the governor called the taking of private infrastructure a “disincentive to development.”

So by formally rejecting the increase, Blue Mound is asserting its only power.

More than a quarter of a million Texans buy from private, for-profit water sellers.

Under Texas law, cities can regulate private water rates by ordinance, but an administrative law judge and the TCEQ then review whether the rates are “just and reasonable.”

In a 2011 report, the Austin American-Statesman found the stripped-down TCEQ struggling to review rate requests that a supervisor said were averaging 40 to 60 percent.

A financial management company identified Texas as the most generous state in the country for granting private water vendors’ rate increases.

All Blue Mound can do is keep making noise and hope someone hears in Austin.

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