About Corix Utilities (Texas) Inc. (CUTX)
The Company presently serves approximately 5,500 water customers and 4,000 sewer customers around Texas Hill Country and along the Colorado River in Central and South Texas. On 8/1/2022 Corix Utilities (Texas) Inc. (Corix) filed a rate case with the Public Utility Commission of Texas (PUC) under Docket No. 53815.
The Company’s last rate case filing was filed in March of 2020, with interim rates effective in December of 2020 and final rates effective in September of 2021.
The Mitchell County gas system is NOT part of this filing.
About Corix Utilities (Texas) Inc. Rate Filing
Customers’ rates are based on a thorough cost, operations, and quality of service review by the TX PUC Staff as well as Office of Public Utility Counsel (OPUC). The Company’s current rates were set based on expense and infrastructure investment levels as of September 30, 2019. The new case (Docket No. 53815) seeks to establish rates based on expense and infrastructure levels as of March 31, 2022.
The costs of service and tariff rate proposals are more fully explained in Corix’s rate filing documentation which is made publicly available through the Commission’s website (https://www.puc.texas.gov/). All parties interested in this matter may obtain information either directly from Corix or by inquiring with the PUC at ph# (512) 936-7000. Customers may also visit the Commission’s website and search Docket “53815” at https://interchange.puc.texas.gov/.
When does the Company anticipate new rates will be effective?
The Company expects, based on previous rate filings and Commission statutory timelines, that new interim rates may be approved and effective late 2022 or early 2023 and final rates may be approved and effective 2nd quarter 2023. Interim rates are typically billed at a lower rate than the proposed final rates; however, should the final rates authorized be lower than the billed interim rates, a refund of the difference is possible.
RATE CHANGES PROPOSED:
What is changing with my water and sewer rates?
The table below shows a comparison of average water and sewer bills at current and proposed rates for a 5/8” residential customer assuming 5,000 gallons of usage.
SUBDIVISION-SPECIFIC CHANGES IN RATES:
Consolidation: Existing water and wastewater rate regions are proposed to be consolidated to one water rate region and one wastewater rate region, with the following exceptions: Gun & Rod water, Lometa wastewater, Ridge Harbor wastewater. These three rate regions are proposed to move towards full consolidation in two steps. First step is within the current filing, second step is in a future filing with a date TBD. There is no guarantee that rates will be consolidated as proposed by Corix.
What drove Corix to request a rate increase?
We have the responsibility to upgrade our infrastructure and make necessary improvements to continue to provide quality service. We also must comply with changing state and federal environmental regulations and maintain a safe working environment for our employees. It is well-accepted that water and sewer infrastructure across the country is aging and in need of significant investment to maintain proper service and address ongoing and emerging environmental concerns. Many of the Company’s systems are reaching the end of their useful life and must be replaced, rehabilitated, or upgraded to avoid system failures and meet rigorous compliance standards. To that end, Corix has invested $11 million in capital improvements since its last rate case, which are not included in your current rates.
Operating expenses have also increased due to inflationary pressures. Existing rates are based on September 30, 2019 expenses whereas proposed rates are based on March 31, 2022 expenses. Additionally, real property taxes have increased due to assessment increases driven by land values.
It is important to note that all investments driving the requested increase have already been incurred by the Company, and are benefitting customers before a change in rates is implemented.
Will the current purchased water and rate case surcharges continue?
The purchased water and rate case expense surcharges will continue to appear on bills as they have been. The rate case surcharge may be updated at the conclusion of this case. The purchased water surcharge is not proposed to be impacted by this filing.
Why are some requested rate increases higher or lower than others?
This is common when Companies work towards leveling rates for customers across its service areas. This practice is common in the utility industry (gas, electric), and this enables the Company to spread the impact of
its costs and system improvements across a larger customer base, which results in smaller, incremental increases over time. Levelized rates ultimately benefit all Corix customers and protects small stand-alone groups of ratepayers from solely bearing the cost of large infrastructure investments.
Why is the Company requesting a rate increase during challenging economic times?
Corix understands that no one likes rate increases and we make every effort to keep operating expenses to a reasonable minimum while maintaining a system that produces safe and reliable service. However, a rate increase is now needed to:
- Fund ongoing operations,
- Finance needed infrastructure improvements,
- Maintain compliance with federal, state, and local environmental regulations,
- Attract funds to meet future infrastructure investment needs
We are a major part of the critical infrastructure in our country that is needed every day and now more than ever. Our ability to ensure safe and reliable water and wastewater service to both commercial customers as well as to our individual household customers must be maintained. Everyone depends on us for all forms of sanitary practices that are so critical right now.
Existing rates do not reflect rising costs that have resulted from increased investment, inflation and compliance with expanding environmental and regulatory requirements. It is critical to note that regulatory obligations have not decreased in recent years. On the contrary, regulatory burden and requirements have continued to increase each year.
What investments has the Company made to its water and sewer infrastructure?
Since the Corix’s last rate case, approximately $11 million has been invested to improve and upgrade Corix’s water and sewer infrastructure. These investments have allowed the Company to continue providing safe and reliable service to its customers. Below is a list of major infrastructure investments made since the last rate case. Note this is not a complete list of improvements, as many smaller investments were made across the Company’s water and sewer systems.
1. Partially grant funded installation of AMI metering systems in Hill Country systems (Sandy Harbor, Smithwick Mills, Paradise Point, and Quail Creek)
2. Professional services and distribution system model development TCEQ AO
3. Plant improvements, pump and tank additions, pipe replacements and PRVs to comply with TCEQ AO (related to project above)
4. surge analysis and installation of ARVs for force main from LS1 to plant as required by an AO from TCEQ
5. Replacing old manual meters with AMI system using ultrasonic meters (effort to reduce non-revenue water loss)
6. Partially grant funded installation of AMI metering systems in Ridge Harbor
7. Replacement and expansion of irrigation system and pump station.
8. Replace 130kgal steel tank and addition of 44k fiberglass tank, added 1600' of 8" water main
9. Investigation of existing well #1, improvements to wells 2 and 3, and development and installation of well #4 and feed line from well to system, includes capital lease of groundwater rights.
10. Replaced failed Wonderware SCADA with VTSCADA system
11. Addition of chemical feed and wells to sequester iron in water
12. replacement and expansion of Spade line (12,400' ) in compliance with AO from TCEQ
13. Pipe replacement and installation of PRVs and additional valves to reduce excessive line breakage (500' of 6" pipe, 5200' of 6" pipe to replace 4" pipe)
14. Installed valves, PRVs, 13,450' of 6" pipe, road bores to unify two pressure planes to alleviate supply constraints in plant 1 through plants 2 and 3. This is for compliance with TCEQ AO
15. Replacement of and expansion of LS1 in response to AO from TCEQ.
What is involved in the process to review and approve the Company’s rate change request?
Rate change requests follow a statutory process very similar to a court proceeding. All requests for rate changes are audited by PUC and OPUC, which is completed through an extensive vetting of Company operating and financial data. These parties then provide their recommendations on the Company’s request to the Commission. The Commission holds public hearings where customers can enter comments into the record, and evidentiary hearings are held where Company and intervening party staff are cross-examined on the information supplied during the case. Hearing dates can be found on PUC’s website.
What options are available to customers who are struggling to manage their bills?
Customers can establish a deferred payment arrangement or payment plan if they may not be able to stay current on their water and sewer bills.
- A payment plan is an agreement with a customer to make a specified payment by a specified date. For example, a customer may agree to pay a balance ten days beyond the bill’s due date.
- A deferred payment arrangement is an agreement with a customer to pay off their balance in combination with future bills, in which installments are reflected on monthly customer bills.
Corix encourages customers to establish payment plans or payment arrangements that best meets their needs. No customer on a payment arrangement or plan who is current on that arrangement will be disconnected. Customers can call the Company’s Customer Experience team at 877-718-4396 or use our My Utility Connect mobile app to set up a payment arrangement or plan.
OTHER ITEMS OF NOTE IN THE RATE FILING:
What is the “Unique Billing Line Item”?
Current surcharges on the bill may include:
- Purchased water passthrough surcharge – previously these costs for our raw water were recovered via base rates and are now being recovered via surcharges, per direction from PUC Staff.
- Rate Case surcharge – these costs are necessary to recovery the expenses associated with rate case filings. The current surcharge will last for three years. The current rate case will yield an additional surcharge, which is unknown at present.