SAWS projects 42% revenue requirement jump in five-year financial outlook

SAWS projects 42% revenue requirement jump in five-year financial outlookA cost-of-service update by Carollo Engineers highlights a steep climb in water delivery funding needs to support the San Antonio utility's capital program through 2030.

Carollo Engineers projected a cumulative 41.9% increase in total revenue requirements from 2026 to 2030.

The Water Delivery business unit requires the steepest hikes, projected at 16.9% in 2026 and 15.9% in 2027.

Rising costs are attributed to the Capital Improvement Plan (CIP), including a $38.5 million generator and resiliency initiative.

Water Supply revenue requirements are projected to remain flat until 2028.

Specific rate adjustments for customer classes will be presented to the board in January 2026.

San Antonio Water System (SAWS) staff and consultants presented an updated financial outlook on December 9, revealing a projected 41.9% cumulative increase in revenue requirements across all business lines from 2026 through 2030. Jennifer Ivey of Carollo Engineers outlined the findings during a briefing on the utility's cost of service study, noting that while water supply costs remain stable in the short term, the utility's water delivery sector requires immediate and significant funding increases. The projections indicate that revenue requirements for Water Delivery will jump 16.9% in 2026 and 15.9% in 2027, contributing to a five-year cumulative increase of 64.7% for that specific business unit. SAWS President and CEO Robert Puente noted that the water delivery side is currently "under-recovering" and is bearing the cost of significant infrastructure projects. Among these is a $38.5 million generator and resiliency initiative, part of a broader 2025 Water Delivery capital program totaling nearly $380 million—a 99% increase over the five-year average. In contrast, Water Supply revenue requirements are projected to see no increases until 2028, while Wastewater requirements are forecast to rise between 6.4% and 10.3% annually over the five-year period. Cecilia Velasquez, SAWS Vice President of Customer Experience and Strategic Initiatives, explained that this analysis updates the 2022 rate study using the existing rate structure. Unlike the previous full study, this update does not involve a Rate Advisory Committee. Velasquez clarified that the figures presented are revenue requirement increases, not direct customer bill impacts. Carollo Engineers is currently finalizing the cost of service analysis to determine how these costs will be allocated among customer classes. Staff intends to present specific rate recommendations to the board in January 2026, with a final report expected in February.