Private Water Companies Come to Texas Bringing Soaring Rates, Little Recourse for Consumers
PFLUGERVILLE — When Robert White opened his water bill last month, his jaw dropped: $250 for a month's worth of water and sewer service. The 63-year-old construction contractor, who shares a three-bedroom home with his wife in the bucolic Springbrook Centre subdivision, said he likes to keep his lawn green and expects hefty water bills. "I just don't want to be hijacked," he said.
White's water service is provided by a private utility owned by California-based SouthWest Water Co. LLC. Just across the four-lane Pflugerville Parkway, where White's neighbors in the Springbrook Glen subdivision — a nearly identical grid of neatly arranged brick-faced homes — get their water from Pflugerville, rates are on average about 60 percent less.
And White's bill for water service may nearly double soon, if SouthWest Water gets the latest rate increase it has requested. "I have never felt so helpless," he said.
He's not alone. Across the state, a growing number of suburban Texans are getting their water from large, private corporations owned by investors seeking to profit off the sale of an essential resource. State figures show private companies are seeking more price increases every year, and many are substantial.
The Texas Commission on Environmental Quality, which regulates water and sewer rates for nonmunicipal customers, doesn't keep numbers, but "their rate increases tend to be 40 and 60 percent," said Doug Holcomb, who oversees the agency's water utilities division.
For years, small private companies have played a crucial role in Texas, providing water and sewer service in new developments outside of cities. Analysts say private companies will continue to fill an essential need in the future, when public money is projected to be insufficient to make the billions of dollars in costly upgrades needed in water and sewer systems.
Increasingly, however, the companies are neither small nor local. Over the past decade, multistate water utilities have expanded aggressively in Texas, drawn by the state's booming population and welcoming regulatory environment. A September report prepared by utility analysts for Robert W. Baird & Co., a financial management company, identified Texas water regulators as the most generous in the country for private water companies. Today, three out-of-state corporations own about 500 Texas water systems that serve more than 250,000 residents.