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SB 2327

Relating to the generation of electric power for sale by a water supply or sewer service corporation.

89th Legislature (2025) Introduced by Judith Zaffirini

SB 2327 authorizes Texas water and sewer utilities to generate and sell electric power, creating new revenue opportunities but raising regulatory and ratepayer protection questions.

Left pending in committee
#business&commerce--general(i0050) #corporations&associations(i0090) #utilities--electric(i0831) #utilities--water&sewer(i0002)
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Bill Summary · SB 2327

Legislative bill overview

SB 2327 permits water supply and sewer service corporations in Texas to generate electric power for sale, expanding their operational authority beyond traditional water and wastewater services. The bill would allow these utilities to develop renewable or conventional energy generation facilities and sell excess power to the grid or other entities.

Why is this important

Water and sewer utilities often have underutilized infrastructure, land, and operational expertise that could support energy generation—potentially creating new revenue streams to offset service costs for ratepayers. This could incentivize renewable energy deployment at water treatment facilities, which are energy-intensive operations, while helping utilities achieve financial sustainability.

Potential points of contention

  • Regulatory clarity: Unclear which state agency (Public Utility Commission, Texas Water Development Board, or local authorities) would oversee these utilities' power generation activities and whether existing utility regulation applies
  • Ratepayer protection: Concern that water/sewer customers could subsidize energy ventures or face rate increases if power generation operations underperform
  • Mission creep: Question of whether utilities should diversify into energy business or focus exclusively on core water/wastewater services; potential conflicts between missions if power generation competes for capital and management resources

Compiled from official sources — confirm details with the bill’s official record.

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