Texas water utility laws are split between two state agencies: the Public Utility Commission of Texas (PUC) handles rates, service areas, and consumer complaints, while the Texas Commission on Environmental Quality (TCEQ) handles drinking water quality, discharge permits, and environmental compliance. Between them, roughly 3,500 water systems across the state operate under rules that dictate what you pay, the quality of water you receive, and what you can do when something goes wrong.1Texas Commission on Environmental Quality. Water Utility Programs Regulated by the PUC
Which rules bite hardest depends on who owns your utility. Investor-owned utilities (IOUs) face the most direct PUC control over rates and service. Municipal utilities and water supply corporations run with more autonomy, though their customers can appeal rate changes to the PUC. Every system, regardless of ownership, answers to the TCEQ on water quality, wastewater discharge, and drought contingency planning.2State of Texas. Texas Water Code Chapter 26
Rate Changes and Your Right to Protest
Texas Water Code Section 13.182 requires every rate charged by a utility to be “just and reasonable.”3State of Texas. Texas Water Code 13.182 – Just and Reasonable Rates In practice, that means rates should cover a utility’s operating costs and allow a fair return on investment without overcharging customers. Investor-owned utilities have to file a rate application with the PUC and get approval before changing what they charge.4Public Utility Commission of Texas. FaucetFacts Investor Owned Utilities
Before an IOU can raise rates, it has to send you a statement of intent at least 35 days before the proposed effective date. That notice must include billing comparisons at 5,000 and 10,000 gallons so you can see the actual impact on your bill.5State of Texas. Texas Water Code 13.1871 – Class B Utilities Statement of Intent to Change Rates If the PUC receives protests from the lesser of 1,000 customers or 10 percent of ratepayers within 90 days of the rate change taking effect, the commission must set the case for a hearing.6Public Utility Commission of Texas. PUC Chapter 24.35 – Processing and Hearing Requirements for an Application to Change Rates
A different threshold applies to rate changes made by municipal utilities, water districts, or water supply corporations. The PUC will only take up an appeal there if it receives protests from the lesser of 10,000 or 10 percent of affected customers.7Public Utility Commission of Texas. Appealing Rate Changes by Utility Districts, Water Supply Corporations, and Municipally-Owned Utilities Once either threshold is met, the dispute goes to the State Office of Administrative Hearings (SOAH), where an administrative law judge reviews the evidence and makes a recommendation to the PUC.
Utilities can also recover certain specific costs, such as an increase in wholesale water prices, through interim rate adjustments that skip the full rate case but still require PUC review. Beginning September 1, 2025, new legislation (HB 2712) allows the PUC to evaluate future, historical, or combined test-year data in rate cases, aimed at better matching rates with the actual cost of maintaining aging infrastructure.8Public Utility Commission of Texas. Memorandum – Project No. 58326 – Implementation Activities 89th Legislature
When Your Water Can Be Shut Off
A utility can disconnect your service for nonpayment, but only after following a specific process. PUC rules require a separate written termination notice, either mailed or hand-delivered, at least 10 days before the disconnection date.9Public Utility Commission of Texas. Received a Disconnection Notice? Help Is Available The notice must state:
- The past-due amount owed
- The specific date service will be cut off
- All fees you would owe to restore service after a shutoff
- The utility’s office hours, phone number, and address
Other valid grounds for disconnection include violating utility rules in a way that interferes with other customers’ service, failing to meet deposit requirements, and noncompliance with a drought contingency plan.10Public Utility Commission of Texas. PUC Chapter 24.167 – Discontinuance of Service
Extreme Weather Protection
A utility cannot disconnect your water during an extreme weather emergency, defined as any period when the previous day’s high did not exceed 28°F and the forecast predicts temperatures at or below that level for the next 24 hours. During such emergencies, the utility also cannot impose late fees and must work with customers who request a payment plan for bills due during that period.11State of Texas. Texas Water Code 13.151 – Billing for Services Provided During Extreme Weather Emergency
Active Billing Disputes
If you have a complaint pending with the PUC, the utility must keep your service on as long as you pay the undisputed portion of your bill. That protection only lasts while the formal complaint is pending, so filing promptly matters if a shutoff notice is on the way.
Extra Time for Certain Utilities
If a utility that has been granted a waiver on payment location requirements disconnects you for late payment, it must give you an additional 14 days beyond the standard notice period before shutting off service. This extra buffer exists because customers of those utilities may have fewer convenient options for making payments.
Deposits, Billing, and Senior Exemptions
When you open a new residential water account, the utility may charge a security deposit, but PUC rules cap it at $50 for water service and $50 for sewer service. Residents aged 65 or older who have no delinquent balance at any water or sewer utility cannot be required to pay a deposit at all.12Public Utility Commission of Texas. PUC Chapter 24.159 – Service Applicant and Customer Deposit
Your deposit earns interest, and the utility must refund it with accrued interest after you have paid your bills on time for 18 consecutive billing periods. If you cancel service, or if the utility disconnects you, the deposit minus any unpaid balance must be refunded promptly.12Public Utility Commission of Texas. PUC Chapter 24.159 – Service Applicant and Customer Deposit
Service Standards You’re Entitled To
Every holder of a Certificate of Convenience and Necessity (CCN) must provide continuous and adequate service within its territory.13Public Utility Commission of Texas. Rules and Guidance for Water and Sewer Utilities On the engineering side, the Texas Administrative Code requires water distribution systems to maintain a minimum pressure of 35 psi at all points in the network under normal operating conditions. Systems designed for firefighting must maintain at least 20 psi under combined fire and drinking water flow, though that lower figure is not a general emergency standard.14Texas Administrative Code. Title 30 Chapter 290 Section 290.44 – Water Distribution
Utilities must meet both state and federal drinking water standards, and they conduct routine testing for contaminants like bacteria, lead, and nitrates. When water quality drops below regulatory thresholds, the utility has to notify customers and take corrective action. That can mean anything from issuing a boil-water notice to upgrading treatment infrastructure. The TCEQ monitors compliance through inspections, water quality reports, and drought contingency plan enforcement.
Lead Service Line Notices
Under the EPA’s Lead and Copper Rule Improvements, finalized in October 2024, drinking water systems nationwide must identify and replace all lead service lines within 10 years.15US EPA. Lead and Copper Rule Improvements Utilities must make their lead service line inventories publicly accessible and notify customers served by known or potential lead lines.16US EPA. Revised Lead and Copper Rule If you haven’t received any notification from your water system about lead pipes, you can request the inventory directly.
Federal funding through the Infrastructure Investment and Jobs Act (over $50 billion for water infrastructure) includes grants targeting lead reduction and emerging contaminants in small or disadvantaged communities.17US EPA. Drinking Water Grants and Other Financial Resources Utilities that receive these grants may be able to offset costs that would otherwise reach ratepayers.
How to File a Complaint
Start with the utility. Most billing disputes and service issues get resolved at that level, and the PUC expects you to try before escalating. If direct contact does not fix the problem and your utility is investor-owned, file a formal complaint with the PUC. The agency will review the complaint and may request documentation from both sides, including account records and meter readings.
When the PUC finds a violation, it can order corrective actions such as billing adjustments or refunds. If the PUC finds a utility failed to properly adjust a customer’s bill after the complaint process concluded, it can issue an order requiring the adjustment; ignoring that order for more than 30 days triggers administrative penalties.18State of Texas. Texas Water Code 13.4115 – Action to Require Adjustment to Consumer Charge
Municipal utilities and water supply corporations handle complaints internally first, though their rate decisions can be appealed to the PUC if enough customers object.
Informal and Formal Resolution
The PUC offers both routes. Informal resolution typically involves PUC staff mediating between the parties. If mediation fails, the dispute can escalate to a formal contested-case hearing at SOAH, where an administrative law judge reviews evidence, takes testimony, and issues a decision or recommendation.19State Office of Administrative Hearings. Welcome to the State Office of Administrative Hearings Customers can also pursue claims in civil court for contract breaches or wrongful disconnections, though litigation is slower and more expensive than the administrative options.
Federal Discrimination Complaints
If you believe a water utility that receives EPA funding has discriminated against you based on race, national origin, sex, disability, or age, you can file a civil rights complaint with the EPA’s External Civil Rights Division. The complaint must be in writing, identify the utility, describe the discriminatory conduct, and be filed within 180 days of the last act of alleged discrimination.20US EPA. Filing a Discrimination Complaint Against a Recipient of EPA Funds This is a separate track from PUC complaints and applies only to entities receiving federal financial assistance.
Penalties Utilities Face
The PUC enforces violations of Texas Water Code Chapter 13 and its own orders. Penalties can reach $5,000 per day per violation, with each day of continued noncompliance counted as a separate violation. The statute directs the commission to consider the nature and duration of the violation, the violator’s history, whether the violation was avoidable, any economic benefit gained, and the amount needed to deter future violations.21State of Texas. Texas Water Code 13.4151 – Administrative Penalty
The TCEQ enforces environmental and water quality violations under a separate structure. The general maximum is $25,000 per day per violation. That ceiling rises to $40,000 per day when three conditions are met: the violation involves an actual release of pollutants exceeding levels protective of human health, the violator has a prior violation of the same type, and the violation could have been reasonably anticipated and avoided.22State of Texas. Texas Water Code 7.052 – Maximum Penalty The TCEQ can also refer cases to the Attorney General for civil prosecution.
Beyond fines, enforcement tools include mandatory infrastructure improvements, operational changes, and CCN revocation for repeated noncompliance. In severe cases, the PUC may authorize a willing person, municipality, water supply corporation, or district to temporarily manage a failing utility. That authority applies when a utility has abandoned operations, been referred for receivership, or serves fewer than 10,000 connections and violates a final commission order regarding system capacity, pressure, or water treatment.23State of Texas. Texas Water Code 13.4132 – Operation of Utility That Discontinues Operation or Is Referred for Appointment of Receiver A temporary management order can last up to 360 days and be renewed once for the same period.
Getting Released From a CCN That Won’t Serve You
If you own land inside a utility’s service area and the utility cannot or will not provide adequate service, there is a way out. Texas Water Code Section 13.254 allows the owner of a tract of at least 50 acres, not in a platted subdivision already receiving service, to petition the PUC for expedited release from the CCN. The petition must show that the existing utility cannot serve the land at a level the landowner needs, and the petitioner must send a copy to the current certificate holder by certified mail on the same day the petition is filed. For rural landowners stuck in a service area where the utility has not extended infrastructure, this is the primary escape route.
One boundary worth flagging: there is currently no permanent federal water assistance program for low-income households. The Low Income Household Water Assistance Program (LIHWAP), created in 2020 as pandemic relief, expired in 2022. If you are struggling with a water bill outside an extreme weather emergency, your best move is to ask the utility directly about a deferred payment plan.