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Bill clarifies which retail public utilities may use TCEQ "safe harbor" for acquiring troubled small systems
Summary
Senate Bill 565 would clarify that all types of retail public utilities are eligible to enter safe harbor agreements with the Texas Commission on Environmental Quality when acquiring small water systems with compliance issues; committee testimony supported the change as a way to encourage regional consolidation.
Senate Bill 565, presented by Senator Sparks and discussed in the committee, would clarify language in prior legislation (House Bill 3232) to ensure all types of retail public utilities are eligible for safe harbor agreements with the Texas Commission on Environmental Quality when acquiring small systems that have compliance problems.
Senator Sparks said HB 3232 was intended to encourage consolidation of small water systems into larger systems with broader rate bases so necessary investments could be financed without unsustainable rate increases for small‑system customers. He said stakeholders later raised questions about whether the earlier bill’s wording clearly applied to every class of retail public utility; SB 565 would resolve that ambiguity.
Jeremy Mazur of Texas 2036 testified in support and linked the proposal to broader infrastructure concerns, citing a recent engineers’ report card that downgraded drinking water and wastewater infrastructure grades and attributing part of the problem to fragmentation among many small utilities. He said SB 565 reduces a regulatory disincentive to consolidation.
No opposition testimony was recorded. The committee voted 6–0 to report SB 565 favorably and the chair moved to report the bill to local and uncontested status; no objection was recorded.
