PUC hears arguments in water, wastewater case

The Public Utility Commission of Texas heard oral arguments Friday from attorneys representing the city of Austin as well as those representing a group of wholesale Austin Water utility customers who have challenged post-2012 water and wastewater rate increases.

Rather than take action, the commissioners opted to take some additional time to digest the details of the complex case and bring it back up at their next meeting, on Sept. 11.

When they reconvene, the commissioners will consider whether to affirm or deny a proposal for decision that administrative law judges Pratibha Shenoy and Beth Bierman filed in July.

The judges wrote in their proposal that the city failed to prove that the water and wastewater rates it set for the customers in question in 2013 and 2014 are “just and reasonable.” They recommended that the PUC order the city to roll back rates for those customers to earlier levels, refund revenue collected in excess of those levels and not recover expenses related to the case.

The customers involved in the case are the North Austin Municipal Utility District No. 1, Northtown Municipal Utility District, Travis County Water Control and Improvement District No. 10 and Wells Branch Municipal Utility District.

PUC attorney Sam Chang provided agency staff’s opinion. “Commission staff supports the proposal for decision in full, and we request that you adopt it in full,” he said.

Chang added that “the city established rates based on budgeted figures, but it didn’t provide any financial documents to support those budgeted figures with regards to whether they were consistent with actual historical cost.”

Attorney Gwen Webb provided oral arguments for the city. “We assert that there are significant legal issues associated with the contested case hearing,” she said.

The city, for example, has argued that the administrative law judges overseeing the case should have required the involved customers to prove that there was significant public interest in it prior to moving forward.

“This is contractual – the contracts are at issue, and the law is that when rates are set pursuant to contract, a public interest determination is required,” Webb said.

Attorney John Carlton, representing the petitioners, argued against this assertion. “It’s our position … that the Legislature intended for this particular subset of types of districts to not have to go through a public interest test because of their circumstances,” he said.

“Absent this appeal process,” Carlton summarized, “these customers – these wholesale customers – have no opportunity to assure that what they’re being charged is just or reasonable.”