Politics
Texas SB 12 Utility Rate Comparison Rules Reach Austin Water Customers
Austin residents will see their monthly water and sewer bills recalculated against spending levels in Dallas, Houston and San Antonio beginning in the third quarter of 2026.
How we reported this
Texas Senate Bill 12 requires the state's 50 largest cities to publish and adjust utility rates using a standardized comparison index maintained by the Texas Commission on Environmental Quality. The measure took effect for billing cycles that begin after July 1. Austin Water serves 1.2 million residents inside city limits and must now submit quarterly reports that rank its residential rates against those of Dallas, Houston and San Antonio.
Why the rules apply now
The legislation was passed in the 2025 session after the Legislative Budget Board identified wide variation in per capita utility spending across major Texas cities. Austin's 2025 adopted water and wastewater budget totaled $512 million, while Dallas reported $487 million for a comparable population base. The new index uses those figures and consumption data to flag cities whose rates exceed the median by more than 8 percent.
Austin households using 8,000 gallons per month currently pay $68.40. Under the comparison formula the city projects an increase to $74.10 by October. Dallas customers at the same usage level pay $71.80 and are expected to see only a $2.40 rise. Local advocates note that Austin's higher rainfall-adjusted irrigation demand contributes to the gap the state index measures.
Next steps for residents and city staff
Austin Water will hold three public workshops in August to explain the calculation method. The city council must adopt any rate ordinance by September 15. The legislation states that cities failing to align rates within two reporting cycles face withholding of 5 percent of their annual state infrastructure grants. No additional local taxes are authorized by the bill itself.
Policy analysts say the immediate effect for most Austin single-family homeowners will appear on the October bill. Apartment complexes and commercial accounts fall under a separate tier that begins comparison in 2027. The Texas Commission on Environmental Quality will release the first statewide index update on August 10.