Relating to the consideration of compliance with rules of the Texas Commission on Environmental Quality in approving rates for water or sewer utility services.

HB 5209 requires Texas water and sewer utility regulators to consider whether utilities complied with Texas Commission on Environmental Quality (TCEQ) rules when approving their rates. Specifically, it amends the Water Code to mandate that regulators evaluate a utility’s TCEQ compliance during the rate-setting process, including reviewing compliance during the utility’s historical test year. This applies to all rate proceedings beginning on or after September 1, 2025, affecting how utilities demonstrate operational adherence to environmental rules to secure favorable rate approvals. The bill directly impacts water and sewer utilities seeking rate increases by tying their regulatory outcomes to environmental compliance.