New Agreement Launches Fresh Approach to North Texas Water Rates
The North Texas Municipal Water District (NTMWD) and its 13 member cities, including the City of Garland, officially launched a fresh approach to how wholesale water costs will be structured going forward. This new method will encourage water conservation and ensure that all member cities pay uniformly for actual water usage, while still supporting infrastructure improvements and growth for future generations.
The previous NTMWD contract specified that each member city would be charged for water based on the year of its highest ever consumption. That method, commonly referred to as “take or pay,” resulted in Garland paying for water it didn’t use. Garland’s highest year of consumption was 2006, before conservation measures were common practice. Since implementing conservation, Garland has paid for about 20% more water each year than we actually use.
During the last 20 years, the region has increasingly recognized the need for ongoing water conservation, which “take or pay” penalizes. In fact, Garland residents use about half the gallons per capita per day than the state goal requires. In 2016, the cities of Garland, Mesquite, Plano and Richardson came together to request the assistance of the state’s Public Utility Commission (PUC) in creating a more equitable structure that allows ratepayers in all cities to benefit from their efforts to conserve water. An estimated 60% of all NTMWD ratepayers reside in those four cities.
During the past four years of discussion and negotiation, each of the member cities had to make compromises in order to reach an agreement that would be suitable for all 13. In order to change this methodology, all 13 member cities of the NTMWD had to unanimously agree. The new agreement and change in methodology was officially signed Thursday, Oct. 29, 2020.
The new approach will result in rates for member cities based on a five-year moving average of actual consumption, which is consistent with industry standards across the nation. In order to get approval from all the member cities, and avoid sharp rate increases for nine of them, a 13-year phase-in of the new methodology was critical for unanimous agreement. During that phase-in period, Garland will save an estimated $9 million in wholesale water costs with most of those savings materializing in the last five years.
“This is an important new era for North Texas water customers that will allow each of us to exercise responsible conservation measures, better align costs with usage as well as benefit future generations,” said Garland Mayor Scott LeMay. “I’m grateful to our fellow member cities and to the NTMWD for their willingness to compromise for the sake of the entire region.”
Mayor LeMay stressed that the new methodology is being phased-in and will keep water rates more steady in the future. “While rates won’t immediately drop as we begin paying under the new methodology, we will see cost savings going forward. In the long run, each of us will save money while also ensuring that we have a robust water system for the future.”
Representatives from all 13 member cities and the NTMWD took part in an official announcement and signing ceremony. Pictured above, Mayor LeMay signs the agreement.
An official publication of the City of Garland