New Braunfels council approves electric, water and sewer rate increases to fund infrastructure and reserves

The New Braunfels City Council on June 23 adopted ordinances adjusting electric, water and sewer rates for fiscal year 2026 and providing for adjustments in 2027, measures officials said are intended to fund long‑term capital projects, reduce rate volatility and build a power‑stabilization reserve.

City officials said the electric rate plan includes an annual contribution to a Power Stabilization Fund (PSF) that staff and consultants have sized at about $95 million to protect customers from extreme market events like Winter Storm Uri. The council approved the electric ordinance on a 6–1 vote; council member Carter voted no.

City staff and the public utilities consultant presented the measures as part of a multi‑year funding plan. Mr. Kelso, MBU staff representative who presented the plans, told council the PSF target reflects modeling done with outside experts and the authority’s integrated resource planning. He said the plan also funds major capital work, including an approximately $80 million rehabilitation of the Keeler wastewater treatment plant and three new electrical substations aimed at improving reliability.

Council members and staff described a multi‑layered strategy to reduce price volatility: long‑term power purchase hedging, maintaining an operating cushion and the PSF as a backstop. Mr. Kelso said Winter Storm Uri’s five‑day spike in 2021 produced roughly $95 million in wholesale power costs for the utility, driving the PSF target and the timeline to build it over several years.

The council hearing referenced a Citizens Advisory Panel that reviewed the utility plans and produced a report of recommendations — including support for affordability measures and suggestions on impact fees and growth assumptions. Mr. Kelso said the panel comprised 13 members meeting roughly 10 hours on the topic.

Council discussion and public comment also focused on customer programs and rebates. Staff highlighted an expanded suite of rebates and incentives for customers (heat pumps, smart thermostats, clothes washers, yard conversions, rain barrels and solar rebates up to $3,000) and said staff will boost utility bill assistance funding year over year. Kelso said MBU is increasing the assistance fund annually and intends it to remain available for qualifying households.

Councilor questions addressed hedging and generation strategy. Kelso said the city has solar contracts that make up about 30% of the current portfolio but that integrated resource planning points to dispatchable thermal generation (for example, natural gas or other dispatchable resources) plus storage to address extreme cold‑weather risk. He said a local hydroelectric project is unlikely to supply material baseload power because of limited, variable river flows and past low output from a small Canyon Lake facility.

The council approved the electric ordinance on second reading 6–1 (Ayes: Capizzi, Edwards, Spradley, Lebowski, Ryan, Mayor Leonard; Nay: Carter). The water and sewer ordinances were approved on second and final reading with unanimous recorded ayes.

The newly adopted ordinances take effect as stated in the respective texts; staff said the measures include triggers for future adjustments in FY2027 and beyond and that capital projects funded by the rates will proceed per the published capital improvement plan.

Votes at a glance: Electric rates — motion to adopt carried 6–1 (mover: Council member Ryan; second: Mayor Pro Tem Spradley). Water rates — adopted unanimously (mover: Council member Edwards; second: Council member Lebowski). Sewer rates — adopted unanimously (mover: Mayor Pro Tem Spradley; second: Council member Lebowski).

Officials said they will return with ongoing reporting to council and that staff will continue outreach about assistance programs and rebates.