2. Rate Appeal Group of Districts in Austin area appealed City of Austin Wholesale Water and Wastewater Rates that became effective February 1, 2013 appeal filed April 12, 2013 (water) and December 12, 2013 (wastewater)

3. Petitioners North Austin MUD No. 1 North town MUD Wells Branch MUD Travis County WCID No. 10 (water only)

4. Hearing Process Discovery lasted for months 10's of thousands of pages of documents reviewed February 2015 8 days

5. The Law Appealed under 13.044 of the Texas Water Code Enacted as a result of appeal of Austin Wholesale rates in the late 1980's

6. The Law Intended to require direct de novo review of Austin’s wholesale rates. 13.044(b) "Notwithstanding the provisions of any resolution, ordinance, or agreement, a district may appeal the rates imposed by the municipality by filing a petition with the utility commission. The utility commission shall hear the appeal de novo and the municipality shall have the burden of proof to establish that the rates are just and reasonable. The utility commission shall fix the rates to be charged by the municipality and the municipality may not increase such rates without the approval of the utility commission."

7. The Law Intended to avoid the public interest test However, Austin still claims that public interest test should apply

8. Beneficiaries of 13.044 Any district required to obtain water or wastewater service from the consenting city in its consent agreement 13.044(a) "This section applies to rates charged by a municipality for water or sewer service to a district created pursuant to Article XVI, Section 59, of the Texas Constitution, or to the residents of such district, which district is located within the corporate limits or the extraterritorial jurisdiction of the municipality and the resolution, ordinance, or agreement of the municipality consenting to the creation of the district requires the district to purchase water or sewer service from the municipality."

9. Arguments Austin claims: – followed correct process and allowed interested parties to participate and have input – costs are related to utility service

10. Arguments Petitioners claims: – Austin’s rates not just and reasonable – costs unrelated to provision of utility service millions of dollars in transfers out of utility fund to fund a variety of other Austin departments and services – costs not supported by evidence in the record

11. Judges' Rulings so far 13.044 applies Interim rate relief is available Austin has burden of proving up its rates

12. Status Interim Rates (2012 rates) currently in effect Closing Briefs have been filed Reply briefs have been filed Awaiting proposal for decision (PFD)

13. Appeal Expect the non-prevailing party to appeal Additional 45-90 days at PUC District court process could take years

14. Parallel Court Proceeding Austin claims PUC has no authority to set interim rates Briefing by Petitioners and State agencies due this month Hearing set for September

15. Legislature No efforts to repeal 13.044 during 2015 Session Vigilance in protecting 13.044 rights required during future sessions

16. The Future Monitor Future Austin Rate Increase Continue Public Relations Efforts to bring awareness to the community about Austin’s use of Electric and Water/Wastewater Funds for non-utility purposes Monitor any legislative efforts regarding appeal of wholesale rates

17. Bill and Ted’s Excellent Adventure John J. Carlton The Carlton Law Firm, PLLC 2705 Bee Cave Road Suite 200 Austin, Texas 78746 (512) 614-0901 john@carltonlawaustin.com john@carltonlawaustin.com