The New Braunfels City Council recently approved the New Braunfels Utilities proposed two-year rate plan, effective August 1, 2023.
The first public hearing to consider adopting NBU’s proposed two-year rate plan was held on April 3, 2023, culminating a series of public involvement, including more than 15 public meetings since June 2022, the Texas public power utility noted.
The Fiscal Year 2024 and 2025 rate design included a cost of service analysis that modeled an equitable rate plan for each customer class.
As NBU’s customer count and system size increase, NBU’s expenditures in its Capital Improvement Program must also increase to keep pace with growth and replace aging infrastructure, the utility noted.
This investment in the future ensures that the NBU systems maintain compliance with regulatory agencies, such as the Texas Commission on Environmental Quality, and are prepared to meet the community’s electric, water, and wastewater needs for generations to come, it said.
The average NBU residential bill, with all three services (water, wastewater, and electric), will see an increase of 6.9% next fiscal year and 6.4% the following year.
New Braunfels Utilities’ water infrastructure remains its most significant and costly community investment, and the approved water rate design includes the most significant changes.
The two-year rate plan removes the current peak/off-peak season monthly charge distinctions from water rates to simplify the rate structure.
The water volume charge usage tiers have been modified for residential, small general service, and irrigation in order to more closely match the usage levels of the customers in each class and to strengthen conservation pricing signals.
The general service rate classification was split into small general service and large general service to more closely match the usage levels of customers in each class and to strengthen conservation pricing signals. The average system revenue increases expected from the approved rate plan for the water utility are 9.1% for FY 2024 and 13.4% for FY 2025.
The revenue requirements identified are driven primarily by the need to put into service acquired water supply and build infrastructure to keep up with growth and meet regulatory requirements. Capital needs for infrastructure are the most significant driver at 84%, with personnel and operating and maintenance expenses driving the remaining 16%.
The wastewater rate design was closely aligned with the cost of service analysis and includes increases in FY 2024 and 2025. The two-year rate plan reflects the need to recover sufficient revenues to continue equitably operating the system and meeting regulatory requirements.
Wastewater classifications remain unchanged, with the average system revenue increase expected from the approved rate plan for the wastewater utility being 7.3% for FY 2024 and 7.3% for FY 2025. The revenue requirements are driven primarily by the need to build and maintain infrastructure to meet regulatory requirements. Like NBU’s water line of business, the primary driver for additional revenue is capital at 87%, with operating and maintenance and personnel driving the remaining 13%.
The electric rate design provides for the electric utility’s revenue sufficiency, rate-setting equity, and financial stability and strength, reducing the debt needed to cover costs and ensuring financial strength and flexibility.
The average system revenue increases from the approved rate plan for the electric line of business are 4.8% for FY 2024 and 5.9% for FY 2025.
The revenue requirements identified are driven primarily by building and maintaining electric infrastructure to meet electric consumption needs. Capital needs for infrastructure are the most significant driver at 67%, with personnel and operating and maintenance expenses driving the remaining 33%.
The approved two-year rate plan affects NBU’s three lines of business, with the rate design for water changing the most. Year one of the FY 2024 and 2025 rate design is effective on August 1, 2023.
The NBU fiscal year is effective from August 1 through July 31.