According to the Legislative Budget Board (LBB), SB 2692 is projected to result in a net negative fiscal impact of approximately $1.2 million over the FY 2026–27 biennium, with an ongoing annual cost of about $600,389 through at least FY 2030. This financial impact arises from the anticipated increase in workload at the Public Utility Commission of Texas (PUC) due to the bill’s revision of ratepayer petition requirements for appealing utility rate changes.

Under current law, an appeal to the PUC requires a petition signed by either 10,000 ratepayers or 10 percent of all impacted ratepayers. SB 2692 expands this by allowing petitions from just 10 percent of ratepayers in a single customer class, making it easier for small, organized groups to meet the filing threshold. The PUC expects that this change will significantly increase the number of eligible petitions and thereby the number of contested cases that the agency must process each year.

To handle the increased caseload, the PUC would need to hire four additional full-time staff members, including two attorneys, one engineer, and one financial examiner. These positions are intended to support the agency's legal, technical, and financial analysis roles in rate case hearings. The costs include salaries, benefits, and operational needs, as well as modest IT expenditures estimated at $10,800 annually.

Importantly, the fiscal note indicates that no significant cost is anticipated for local governments, suggesting that the impact is largely confined to state-level administrative resources.

SB 2692 offers a targeted and reasonable reform to the process for challenging water, sewer, or drainage rate increases in Texas. Currently, ratepayers who live outside city limits must gather a large number of signatures—either from 10,000 individuals or 10 percent of all affected customers—to appeal a rate increase to the Public Utility Commission (PUC). However, this standard doesn’t consider that utilities often charge different rates to different types of customers (e.g., residential, commercial, or industrial users). SB 2692 corrects this by allowing just 10 percent of a single customer class to initiate an appeal, making the process more accessible and fair for smaller or specialized groups.

This change strengthens individual liberty and promotes limited government by enhancing the ability of ratepayers to hold service providers accountable through an established legal process. It ensures that small customer classes, who may be more severely impacted by rate changes, aren’t locked out of the appeal system simply because they don’t represent a majority of total users.

However, the bill is not without cost. It does slightly expand the scope of government by requiring the PUC to process more appeals, which is expected to require four new state employees. This would result in a modest increase in taxpayer burden, estimated at $1.2 million over the next two years. Still, this expense is relatively small in the context of the state budget, and no significant costs are anticipated at the local level.

Importantly, the bill does not impose any new regulatory burdens on individuals or businesses. Instead, it removes a barrier to accessing the regulatory system already in place, making the process more equitable. It neither creates new mandates nor expands government control over utilities—it simply allows more Texans a fair shot at appealing decisions that affect their bottom line.

In layman’s terms, this bill is about giving ratepayers, especially smaller or commercial users, a better chance to push back when they believe their water bills have been unfairly increased. Given the modest cost, lack of new burdens, and strong support for fairness and accountability, Texas Policy Research recommends that lawmakers vote YES on SB 2692.

• Individual Liberty: The bill enhances individuals’ ability to seek redress from government-influenced entities (like municipally owned water utilities) by lowering the barrier to filing a rate appeal. Instead of needing support from a large and potentially unaffected customer base, smaller groups of ratepayers within a specific customer class (e.g., apartment complexes, small businesses, or industrial users) can now independently petition the Public Utility Commission (PUC) if they believe they are being charged unfairly. This directly empowers individuals and small communities to exercise oversight and defend their financial interests.
• Personal Responsibility: The bill does not shift responsibility away from individuals; it simply removes unreasonable procedural obstacles that prevent smaller customer groups from acting on their own behalf. Those who are directly impacted still have to organize and file a petition—they just no longer need unrelated parties to do it.
• Free Enterprise: The bill primarily affects municipal utilities, not private businesses in a competitive marketplace. It does not impose new regulations on the private sector and does not distort market forces. However, by promoting fairness and transparency in quasi-monopolistic utility systems, it indirectly supports the values of a fair and open system for consumers.
• Private Property Rights: Water and sewer rates directly affect property owners and businesses, especially those outside city limits, where competitive options are limited. When utilities raise rates, property owners can face increased costs without recourse. This bill strengthens their ability to push back against unjustified financial burdens, helping protect their control over and value of their property.
• Limited Government: While the bill does result in a modest increase in the size of the PUC’s staff, it does not increase government authority or regulatory reach. Rather, it ensures that the government’s existing regulatory system remains more responsive and equitable by creating fairer access to existing legal processes. It improves accountability without expanding government power over private behavior, and it reinforces the notion that government should serve citizens, not shield monopolies.

• HB 5197 (Same As)