Our Water: What you need to know FAQ

Press Release: Four City Water Rate Relief request

Background Information: Four City Water Rate Relief request

Watch the Video of the Press Conference

The Cost of Water
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Why are you requesting this rate review?
We are asking the Public Utility Commission to conduct a review of our water rates with the North Texas Municipal Water District because the rates set under the six-decade old Water Supply Contract are discriminatory, are inconsistent with water conservation and are not in the public interest.

Our residents and businesses are paying too much for water under an outdated rate method that encourages water usage, is against the public interest and is inconsistent with conservation.
How much money has the City paid for water that was not used?
Over the past 15 years, we have paid $78 million for water we did not use.

Why are we paying so much money for water we are not using?
Our water rates are based on a “take or pay” system that is based on our greatest single year of use, which was about 26 billion gallons in 2001. Since then, the city has been required to purchase this amount every year, regardless of whether or not the city uses the entire amount of water.

With all of the growth that is taking place in North Texas, how is it possible that you won’t reach your highest volumes in the future?
Successful water conservation has changed the game and we are unlikely to use the minimum set during our greatest single year of usage.

Why can’t we just get out of our contract with the Water District?
The contract with the North Texas Municipal Water District is effectively indefinite. It extends until all bonds and interest shall be paid and throughout the life of the system.

If the current rate methodology is not working, what other options have been discussed?
A number of options have been discussed. Any changes to the rate methodology requires the unanimous agreement of all 13 member cities and the North Texas Municipal Water District Board of Directors, which is difficult to achieve.

Don’t we get a rebate for unused water?
Member Cities receive a small annual rebate for unused water, but it is only a fraction of the cost that has been paid. The water rebate is strictly for operational costs such as electricity and treatment chemicals.

If the Member Cities receive rate relief, will the Water District still be able to afford infrastructure improvements?
The Water District’s infrastructure cost projections are based on highest annual usage and do not consider our most recent water consumption numbers.

Will you remove yourself from the Water District?
Plano is a founding member of the NTMWD, and we have no intention of ending our membership. We continue supporting long-term water resource initiatives that are in the best interest of the entire region.

Why has this request been made to the PUC and not to the NTMWD?
For many years we have been trying to rectify the disparity in the effective rates that currently exist. We have participated in every possible process to seek a solution that all thirteen member cities and the Water District Board could agree upon, but these discussions have not resulted in the much needed changes. Our rate methodology review request to the Public Utility Commission is our next step.

What do you hope to accomplish with this request?
Our residents and businesses are paying too much for water under an outdated rate method. We are asking the Public Utility Commission to conduct a water rate methodology review in an effort to establish a rate structure that is equitable and serves the region’s long-term best interest.

Who are the Water District’s Member Cities?
Allen, Farmersville, Forney, Frisco, Garland, McKinney, Mesquite, Plano, Princeton, Richardson, Rockwall, Royse City and Wylie.

What is the difference between Member Cities and Customer Cities?
NTMWD Member Cities are the only guarantors for the District’s debt and are responsible for a proportional share of the debt issued while they are a member. Member Cities also appoint representatives to the Water District Board of Directors.