COLLEGE STATION, Texas (KRHD) — The City of College Station has been ordered by the Public Utility Commission of Texas to repay $26.3 million to utility systems, despite the city's claims that it was following PUC guidelines.
- The repayment stems from a dispute over the inclusion of general fund transfers in the city's expenses, which College Station officials say were previously approved by the PUC but are now being retroactively challenged.
- A panel of judges had recommended a refund of $900,000, but the PUC disregarded this and demanded the full $26.3 million instead.
- College Station is suing the PUC to overturn the decision, but city officials reassure residents that the repayment won’t affect their utility rates.
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The Public Utility Commission of Texas (PUC) has ordered the City of College Station to repay $26.3 million to 34 major utility systems.
City leaders are pushing back, arguing that they are being penalized for following the commission's own guidelines.
"We filed a new report, and the staff retroactively decided that we should not have been declaring the costs for our general fund transfer for the last 20 years, even though the staff at that time had told us to include it," said a city official.
A general fund transfer occurs when a portion of a municipally owned utility’s revenue is sent to the city’s general fund. According to College Station Mayor John Nichols, the city had been including this transfer in its yearly expenses based on the PUC’s previous instructions. However, the PUC now claims the city should not have done so.
“They can’t point to a rule that says we should have excluded this part of our costs,” Nichols said.
The city took its case to the State Office of Administrative Hearings, where a panel of judges recommended that College Station refund $900,000 — however, the PUC disregarded that recommendation and is instead demanding the city pay $26.3 million.
"The bottom line is, at this point, we will be paying back the $26.3 million to the 34 entities, probably in the month of October," Nichols said.
At the same time, the city has filed a lawsuit in district court in Austin, seeking to overturn the PUC's decision.
Mayor Nichols reassured residents that this repayment will not impact their monthly utility rates.
"The main thing for citizens to understand is that we have the funding. It’s not going to take away from any other operational needs of the city. It’s in the electric fund," Nichols said.
"It just means we won’t be able to lower rates as early as we might have been able to otherwise."