Understanding Water Supply Corporations in Texas-- Frequently Asked Questions

What is a WSC?
WSC stands for “Water Supply or Sewer Service Corporation.” WSCs are non-profit,
member-owned and member-controlled corporations organized under Article 1434(a),
Vernon’s Texas Codes Annotated. As such, WSCs are subject to the laws and regulations
governing the operations of non-profit corporations.The operation of a WSC is the responsibilityof its board of directors. Directors are elected by the corporation members.

Is the WSC Required to Provide Me With Service?
Yes, if your property is located within the area granted under the WSC’s “Certificate of Convenience and Necessity” (CCN). If you are not sure whether your property is within a particular WSC's area, contact the WSC or the Texas Commission on Environmental Quality (TCEQ).

How Do I Become a Member and Get Service?
Most WSCs require you to fill out an application form. You may be asked to appear at a board meeting to formally request membership. You will be asked to pay a “membership” fee. You will become a member upon qualification for service and membership in accordance with the WSC’s tariff. The membership entitles you to (1) vote as a member/stockholder of the WSC, and (2) receive utility services. The amount of the membership or indication of interest fee is specified in the WSC’s tariff and can range from $50 to $250. The membership fees are generally used
as emergency reserve funds. If service is not readily available in your
area, you may be asked to pay an "Indication of Interest" fee in lieu of the membership fee. Once service is made available, the indication of interest
fee may be converted to a membership fee.

Will I Have to Pay Any Other Fees or Charges?
If a tap and meter are not already in place, you will be asked to pay a tap fee. The
tap fee generally includes the cost of labor and materials for installation and administrative costs. You may also be charged a buy-in, extension or capital recovery fee (applicant’s pro rata share of the WSC’s capital investment to
increase capacity).The total cost to obtain service may range from several hundred to several thousand dollars. The WSC retains ownership of the meter and distribution
lines. Charges (other than those for regular membership and tap fees) for the installation of service may be appealed to the TCEQ by applicants for service from a WSC.

What Are My Alternatives for Service?
Drill your own well.
Find an alternate service provider.
If there is another utility nearby, you could ask if it would be willing to serve your property. If it is willing and the WSC does not object, your property could be removed from the WSC’s certificated area and added to the other utility’s area. This requires TCEQ approval.

How Are WSC Facilities Funded?
In most cases, the money to construct the WSC’s water plants and pipelines comes from
loans provided by the Rural Economic and Community Development Service or the Texas
Water Development Board. Loan repayments and daily operational costs are generally paid off with revenue from water sales. Reserve funds established by capital recovery fees, developer contributions and other forms of private finance are other means of developing the water system. Because the funds and customer base are so limited, WSCs generally do not “over-build” to accommodate future growth. Therefore, each new applicant may have to pay his share of the cost of enlarging or extending the system.


Who Sets the Rates Charged by a WSC?
The WSC's board of directors sets the WSC’s rates. The term “rates” as it is used here includes charges for deposits, water and sewer service, connection fees, late charges, membership fees, etc. The rates set by the board of directors are not subject to review or approval by the TNRCC unless ten percent of the ratepayers petition the TNRCC to review the board’s decision changing the rates. This appeal
must be filed within 90 days following the effective date of the rate change.

Are WSCs Subject to the Open Meetings and Open Records Acts?
WSCs are required to comply with the Open Records and Open Meetings Act and are
subject to articles 1396-2.23, and 1396-2.23A, V.T.C.S., relating to the inspection of certain records of nonprofit corporations.