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SB2662

Regular Session

Relating to the enforcement of drought contingency plans by water and sewer utilities and the Public Utility Commission of Texas.

Critical
Medium Cost
Effective:2025-09-01
SB2662
Critical
Relating to the enforcement of drought contingency plans by water and sewer utilities and the Public Utility Commission of Texas.
Critical Compliance Urgency
Requires immediate attention
Cost Impact
Medium
Effective
2025-09-01
Enforcing Agencies
Municipal Governing BodiesPUCTCEQ
Primary Author: Sen. Charles Perry
89th Texas Legislature
jdkey.com
01

Compliance Analysis

Key implementation requirements and action items for compliance with this legislation

Implementation Timeline

  • Effective Date: September 1, 2025
  • Compliance Deadline: September 1, 2025 (Utilities must have the amended tariff filed and stamped by the PUC by this date to legally enforce surcharges or disconnections).
  • Agency Rulemaking: The PUC, TCEQ, and TWDB will jointly develop model DCP programs every five years. Warning: Do not wait for new model rules to file your initial tariff amendment; the statutory filing requirement applies to your *current* plan as of the effective date.

Immediate Action Plan

  • 1. Q1 2025 Audit: Review your current Drought Contingency Plan. Ensure it contains specific, quantified targets and clear enforcement triggers.
  • 2. Draft Tariff Amendment: Prepare the legal text to insert the DCP into your tariff. Ensure the language matches your operational capabilities exactly.
  • 3. Update Billing Logic: Contact your software vendor immediately to ensure your system can handle conditional "drought surcharges" separate from standard consumption rates.
  • 4. File Early: Submit your tariff amendment to the PUC by August 1, 2025, to ensure approval by the September 1 effective date.
  • 5. Customer Notice: Issue a formal notice to all customers explaining that DCP violations will carry financial penalties and disconnection risks starting September 1.

Operational Changes Required

Contracts

  • Service Agreements: Utilities must update standard service agreements to explicitly reference the DCP section of the tariff. Customers must acknowledge that DCP violations constitute a breach of service.
  • Commercial Leases: Property owners and managers must amend leases to allocate financial responsibility for "drought surcharges" and liability for service interruptions caused by tenant water usage.

Hiring/Training

  • Enforcement Staff: Field operations teams require training on documenting specific violations (e.g., time-stamped photos of irrigation) before disconnecting service. Vague reports will not survive a PUC complaint.
  • Billing Operations: Staff must be trained to distinguish between standard usage rates and punitive "drought surcharges" to ensure accurate customer communication.

Reporting & Record-Keeping

  • Tariff Filing: The DCP must be formally filed with the PUC. If it is not in the tariff, you cannot enforce it.
  • Violation Documentation: Utilities must maintain a rigorous audit trail of customer noncompliance. The PUC is hiring specific enforcement staff (Attorneys and Engineers) to handle complaints regarding wrongful termination or excessive fines.

Fees & Costs

  • Billing System Updates: Utilities must reprogram billing software to trigger automatic surcharges based on drought stages defined in the tariff.
  • Legal & Administrative: Budget for legal counsel to draft the tariff amendment and manage the filing process in Q2/Q3 2025.

Strategic Ambiguities & Considerations

  • "Reasonable Procedures": The statute authorizes "reasonable procedures" for enforcement but does not define "reasonable." The PUC may strike down fines or disconnection protocols deemed excessive during a complaint hearing. Benchmarking against industry standards is essential until case law is established.
  • Tariff Amendment Process: While the bill states a DCP provision "does not constitute a rate," it must be filed *in* the tariff. The specific procedural mechanism (e.g., administrative approval vs. docketed proceeding) for updating *only* the DCP portion of a tariff remains undefined. Watch for PUC procedural guidance in early 2025.

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Information presented is for general knowledge only and is provided without warranty, express or implied. Consult qualified government affairs professionals and legal counsel before making compliance decisions.

02

Legislative Timeline

This bill's path through the Texas Legislature

Filed
Mar 13, 2025
Passed Senate
Apr 30, 2025
Passed House
May 20, 2025
Signed
May 30, 2025
TopicsCity GovernmentCity Government--utilitiesSpecial Districts & AuthoritiesSpecial Districts & Authorities--groundwater Conserve Dist.UtilitiesUtilities--water & SewerWaterWater--conservationDroughtPublic Utility Commission
03

Senate Authors

Sen. Charles PerryRepublican · Primary Author
Coauthors (2)

House Sponsor

Rep. Cody HarrisRepublican · Primary Sponsor

Bill Text(with markup)

View bill text in multiple formats on Texas Legislature website

Fiscal NoteView Original

Related Legislation

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More from Sen. Charles Perry

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Quick Reference

Frequently Asked Questions

Common questions about SB2662

Q

What does Texas SB2662 do?

SB2662 mandates that all investor-owned water and sewer utilities incorporate Drought Contingency Plans (DCPs) into their official tariffs filed with the Public Utility Commission (PUC) by September 1, 2025. This legislation transforms DCPs from passive internal documents into active regulatory instruments, granting utilities statutory authority to enforce water restrictions through fines, surcharges, and service disconnection, provided the plan is properly filed. Implementation Timeline Effective Date: September 1, 2025 Compliance Deadline: September 1, 2025 (Utilities must have the amended tariff filed and stamped by the PUC by this date to legally enforce surcharges or disconnections).

Q

Who authored SB2662?

SB2662 was authored by Texas Senator Charles Perry during the Regular Session.

Q

When was SB2662 signed into law?

SB2662 was signed into law by Governor Greg Abbott on May 30, 2025.

Q

Which agencies enforce SB2662?

SB2662 is enforced by Municipal Governing Bodies (for utilities within corporate limits), Public Utility Commission of Texas (PUC) and Texas Commission on Environmental Quality (TCEQ).

Q

How urgent is compliance with SB2662?

The compliance urgency for SB2662 is rated as "critical". Businesses and organizations should review the requirements and timeline to ensure timely compliance.

Q

What is the cost impact of SB2662?

The cost impact of SB2662 is estimated as "medium". This may vary based on industry and implementation requirements.

Q

What topics does SB2662 address?

SB2662 addresses topics including city government, city government--utilities, special districts & authorities, special districts & authorities--groundwater conserve dist. and utilities.

Legislative data provided by LegiScanLast updated: November 25, 2025

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