SAWS approves rate hike to back $3.2B five-year capital plan

SAWS approves rate hike to back $3.2B five-year capital planThe San Antonio Water System board has authorized a multi-year rate plan, starting with a 7.9% residential increase in 2026, to fund critical upgrades at its aging water recycling centers and mitigate regulatory risks.

The board approved an amended 2026 budget that adds $349.8 million in planned projects, bringing the 2026 capital improvement program to $607.8 million.

The next five years will see $3.2 billion in capital investments, driven by the need to proactively maintain the wastewater system and meet a non-revenue water goal of 43 gallons per connection by 2035.

The 2026 budget includes $477.9 million for wastewater projects, representing 71% of the capital budget, with major investments planned for the Steven M. Clouse and Leon Creek water recycling centers.

To cushion the impact on lower-income customers, the utility increased the eligibility threshold for its Uplift Assistance Program from 125% to 150% of the federal poverty level.

The San Antonio Water System (SAWS) Board of Trustees has approved a 2026 budget amendment and a four-year rate plan designed to support a $3.2 billion capital improvement program (CIP) over the next five years. Approved during the board's May 19 meeting, the financial package includes a 7.9% average residential rate increase for 2026, which is projected to generate an additional $27.5 million in revenue during the final five months of the year. The multi-year strategy establishes firm rates for 2026 and 2027, while capping adjustments for 2028 and 2029 at or below cost-of-service recommendations. Utility leadership emphasized that the rate increases are critical to addressing aging infrastructure, accommodating regional growth, and avoiding costly regulatory violations. While SAWS delivered $2.6 billion in capital projects over the past five years without raising rates, officials noted that the scale and complexity of upcoming projects require a dedicated, long-term funding strategy. During the meeting, staff warned that delaying critical wastewater projects could lead to equipment failure, environmental issues, and steep fines. Regulatory penalties could reach $25,000 per day for standard violations, or up to $120,000 per day for violations under a consent decree. The amended 2026 CIP totals $607.8 million, adding nearly $349.8 million in newly planned projects. Wastewater infrastructure dominates the spending, accounting for $477.9 million, or 71% of the capital budget. Major near-term investments include $254.1 million for improvements at the Steven M. Clouse Water Recycling Center (WRC) and $84.7 million for the Leon Creek WRC. In a related action, the board awarded a $77.8 million construction contract to Webber Waterworks for hydraulic and solids improvements at the Leon Creek facility. Originally constructed in 1965, the plant requires extensive upgrades to process permitted peak flows and prevent bottlenecks. Beyond wastewater treatment, the $3.2 billion five-year plan targets significant distribution and collection upgrades. SAWS plans to replace 77 miles of water mains to help achieve its goal of reducing non-revenue water to 43 gallons per connection per day by 2035. The CIP also includes ongoing funding for state-mandated pump station generators to ensure system resiliency during extended power outages. To mitigate the financial impact of the rate hikes on vulnerable customers, the board approved an expansion of the utility's Uplift Assistance Program. The income eligibility threshold was raised from 125% to 150% of the federal poverty level, a move that staff noted could double the number of eligible households. Funding for associated customer assistance programs, including Plumbers to People and Laterals to People, was also increased.