# Who owns Texas’s private water—and whose costs end up on your bill?

**An investigation through October 30, 2026**

## The finding

At Treetop Estates, a small water system in Parker County, the inherited residential tariff charged $28.45 for 5,000 gallons. At Council Creek, in Burnet County, the same amount of water cost $92. After the systems entered CSWR-Texas’s consolidated tariff, their base and usage charges converged: $75.89 under the 2024 schedule and $89.72 under the 2026 schedule. These figures exclude separately assessed charges; they measure the same part of each tariff, at the same consumption and meter size. [1–4]

One customer group experienced a steep increase. Another initially experienced a decrease. Both came under the same owner and ultimately the same price schedule.

That is the structure underneath this story: **the physical water system is the unit of service, but the rate pool is the unit that spreads costs.** A sale can change both who owns the pipes and which customers pay for the owner’s wider collection of systems. The owner’s identity, the price paid, and the household bill are connected—but they are not interchangeable measurements.

This investigation assembled the Texas Public Utility Commission’s published investor-owned-utility registry, documented ownership chains for 11 platforms, and reconstructed 14 tariff groups covering 24 listed drinking-water systems. Within that panel, it verified three acquisition closings and tariff continuity, then joined four active physical systems to federal compliance records. It also examined the Quadvest transaction and the legislation governing acquisition valuation and rate consolidation.

The resulting evidence supports four findings:

- **The 2019 law changed acquisition incentives, but later laws changed how those costs can reach customers.** Fair-market-value valuation, the ability to request an existing tariff for newly acquired systems, and broader rate consolidation are separate mechanisms.
- **A customer can share acquisition costs from an FMV transaction even when their own system was purchased outside FMV.** The three matched sales used the ordinary route, then entered a rate proceeding that also included seven FMV acquisitions. Consolidation makes the exposure extend beyond the system sold.
- **Fewer recorded violations can mean better compliance administration without a demonstrated improvement in contaminant levels.** The four-system case series produces sharply different results across systems and violation types.
- **The largest current example is still a prospective rate story.** H2O America says Quadvest’s $483.6 million regulated purchase price will become its ratemaking rate base. The sale-approval order explicitly reserved that determination. H2O expects revised rates in 2028. [5–7]

The ownership work is an auditable beginning, not a completed statewide beneficial-ownership census. The registry contains 458 distinct certificate or registration identifiers. Forty-nine were matched to the 11 documented platforms; 409 remain unresolved in this investigation. Those are certificate counts, not customer shares. The workbook preserves every registry row and every unresolved match rather than filling gaps with guesses. [8]

## What the existing work already established

The basic concern did not begin in 2019. Texas Tribune reporting in 2012 and 2013 described large rural and small-town private-water rate increases. Those stories establish a longstanding affordability problem; they cannot be evidence of an effect caused by a law enacted six or seven years later. [9]

ABC13’s November 2025 report on a New Caney homebuyer is a different kind of evidence. The reported water and sewer base charges totaled $116.89 in October 2024 and $138.58 in September 2025: $21.69 more each month, or $260.28 annually, before using water. The utility was **Texas Water Utilities**, part of Nexus Water Group. It was not **The Texas Water Company**, H2O America’s subsidiary buying Quadvest. A high bill in a new subdivision does not, by itself, establish a before-and-after acquisition effect. [10]

Commercial analysts have already mapped much of this market. Bluefield Research marketed a Texas private-water ownership report in 2022 with 20 company profiles, county-level positioning, and transactions dating to 2015. It would be wrong to claim that institutional ownership of Texas water was just discovered, or that it first appeared after 2019. [11]

Academic work has also described how fair-market-value laws can raise the price sellers receive and enlarge the asset value recovered through rates. What remains poorly resolved is the Texas incidence: which approved valuation increases entered which rate pools, what existing and newly acquired customers then paid, and what service changed in return. [12]

The research gap is therefore narrower—and more useful—than another list of private-equity firms. It is a dated crosswalk from **system → transaction → legal utility → capital owner → rate pool → customer outcome**.

## Who owns the companies

“Owner” needs a stopping rule. A listed holding company is owned by its shareholders, not by its chief executive or by a single asset manager appearing in a shareholding table. A private fund manager is not identical to the pension funds, insurers, or other investors supplying the fund’s money. A cooperative’s members are a different ultimate constituency again.

The table reports the highest ownership or capital-control layer supported by the documents reviewed. It does not pretend to identify every fund investor or every intermediate subsidiary.

| Texas business or brand | Documented parent or capital chain | What is established—and what is not |
| --- | --- | --- |
| **The Texas Water Company / SJWTX; acquired Quadvest business** | H2O America → public shareholders | Quadvest closed October 1, 2026. Published CCN names can lag the asset transfer. [5–7] |
| **Texas Water Utilities; Corix Utilities Texas; related SWWC entities** | Nexus Water Group → BCI-managed infrastructure program plus the SWMAC/IIF/Bazos ownership structure | BCI’s audited statements show a 50% interest at December 31, 2024. The 2022 proposed merger chart traces the other half through IIF and Munich Re-backed Bazos. That older chart is not a verified October 2026 capitalization table. [13–15] |
| **Aqua Texas and related Aqua entities** | Essential Utilities → public shareholders | The announced American Water combination is not treated as completed in this map. Historical Aqua registry entries require separate status checks. [16] |
| **CSWR-Texas** | CSWR platform → Sciens Water-managed investment capital | The Texas utility’s immediate parent is documented; Sciens lists CSWR as an active investment. Ultimate fund investors are unresolved. [17] |
| **Undine Texas / Undine Texas Environmental** | Undine platform → Ridgewood Infrastructure-managed capital | Ridgewood lists Undine as an unrealized investment. A reported sale process is not evidence of a completed sale. Fund percentages and investors remain unresolved. [18] |
| **Blue Topaz, formerly T&W Water** | NW Natural Water → Northwest Natural Holding Company → public shareholders | This is separate from Hope Water/Hearthstone. [19] |
| **Liberty’s Texas water and sewer entities** | Liberty utility structure → Algonquin Power & Utilities → public shareholders | The holding-company relationship is established; this investigation does not enumerate every intermediary. [20] |
| **Texas Water Service / BVRT utilities** | TWSC → California Water Service Group → public shareholders | The September 2026 filing reports a 96.7% BVRT interest; the 3.3% minority interest remained outstanding. A proposed minority buyout is not the price of the entire utility portfolio. [21] |
| **Hope Water, formerly Hearthstone; Horseshoe Bend and Lone Star** | Hope Water → Hope Utilities → Ullico Infrastructure Fund | The fund is established; individual beneficial interests and every current intermediary are not. [22] |
| **HILCO United Services** | Wholly owned by HILCO Electric Cooperative → cooperative members | A for-profit operating subsidiary can have a member-owned ultimate parent. Water customers are not necessarily identical to the electric cooperative’s membership. [23] |
| **MidSouth water and wastewater subsidiaries** | MidSouth Electric Cooperative → cooperative members | A September 2026 agreement would transfer assets to the City of Conroe. The seller said operations would remain with MidSouth until approval and transfer. [24] |

Nexus illustrates why stopping at a familiar financial name is misleading. BCI manages money for pension and other public-sector clients. The proposed merger chart put the other 50% under SWMAC Holdco, itself split 75% to IIF Subway and 25% to Bazos. The arithmetic would imply 37.5% and 12.5% of the combined company, respectively, **under that proposed structure**. The application identifies Bazos with Munich Re and IIF Subway with IIF US Holding 2. These are dated ownership facts, not permission to call the company simply “owned by JPMorgan.” [13–15]

There is a second trap: an asset sale does not necessarily transfer the whole named company. Crystal Springs’ own website says it sold to Texas Water Utilities while retaining Spring Branch Crossing and Pine Rock/White Rock accounts. Its registry name therefore cannot be assigned wholesale to Nexus. The dataset leaves those certificates unresolved pending service-area-level reconciliation. [25]

And there is a third: neither government registry is a ready-made list of ultimate owners. The PUC file contains 460 rows, 384 distinct utility-name strings, and 458 distinct identifiers after duplicate certificates are reconciled. Its labels include cooperatives and associations. EPA’s “private” ownership category is also broader than for-profit investor ownership. GAO has specifically criticized inaccurate and outdated water-ownership information; its recommendation for better ownership definitions and verification remained open in February 2026. [8,26]

In the federal 2026 Q3 snapshot, 4,757 Texas systems are classified as active community water systems; 1,819 carry the broad private-owner code. That is not a count of 1,819 independently owned, for-profit companies available for acquisition. One company may operate many systems, and nonprofit or association ownership can appear within the private category. The proposition that “thousands of rural systems became an asset class” needs these units disentangled before it can be measured. [26,27]

An original data check exposed a practical join problem. The selected CSWR systems have Texas PWS identifiers but a Missouri value in the federal `STATE_CODE` field associated with their administrative address. Filtering that field for Texas would discard the very systems being investigated. The extraction uses the Texas system identifier/primacy relationship, not an owner’s mailing location, to define the state. The federal organization-name field is not used as proof of ultimate ownership. [27]

The sellers are not one category either. Treetop’s bill of sale names Tom and Barbara Crew alongside the utility corporation. Quiet Village’s seller was the estate of Donald Wilson, acting through its executor and beneficiary. Quadvest was a family-owned business building water and wastewater systems for new subdivisions; its lender’s case study identifies the Sequeira family and describes development-led growth. An estate exit, a small local utility sale, and a growing suburban platform are different economic events. This sample does not establish their statewide proportions. [1,38]

## How a sale becomes a claim on future bills

For a regulated utility, the annual revenue requirement can be represented as:

**Operating expenses + depreciation + taxes + allowed return × rate base**, with other authorized adjustments where applicable.

The rate base is the approved capital amount on which the utility may earn a return. It is not the utility’s annual revenue, not its stock-market value, and not automatically every dollar of the purchase price. The allowed overall return combines debt and equity financing; it is not a shareholder profit margin applied to the whole bill. [28]

Under Texas Water Code §13.305, created by HB 3542 in 2019, an eligible Class A or B buyer and seller can elect a valuation process. The PUC selects three experts. Each uses cost, market, and income approaches. The fair market value is the average of the three appraisals, and the acquisition’s ratemaking rate base is the **lesser of that value and the negotiated purchase price**. That amount is incorporated in the buyer’s next rate-base case. [29]

This changes the bargaining structure. Under an original-cost approach, paying the seller substantially more than the remaining eligible asset value may leave a premium shareholders cannot recover from customers. An FMV pathway can make more of the acquisition payment recoverable. That can support a higher bid, provide an exit for a small owner, and attract buyers able to assemble systems into a larger portfolio.

But the seller receives the acquisition payment. The payment itself does not replace a pump, repair a well, or hire an operator. Those improvements require separate spending. A defensible evaluation must distinguish the acquisition valuation from subsequent rehabilitation, then ask whether the resulting service and financing benefits justify both.

Texas did not leave the appraisal completely unconstrained. The implementing rule bars appraisers from taking the negotiated price into account and excludes specified speculative-growth and goodwill adjustments. Independent appraisals are a real constraint; the mechanism is not “pay anything and send the bill to customers.” At the same time, the statute is not limited to distressed rural systems. The PUC rejected a proposed restriction to small selling utilities because the legislation was broader. [30]

One especially consequential provision deserves more attention: the appraisal disregards the original funding source, including developer or customer contributions in aid of construction. That creates the possibility that infrastructure initially financed outside the utility’s investor capital can support an acquisition valuation later recovered through rates. It does **not** establish that a particular household paid twice. Proving that requires the contributed-asset records, their treatment in the seller’s prior regulatory rate base, and the buyer’s approved valuation. A financial-accounting write-up alone is insufficient. [29,30]

The 2019 law is only part of the story:

| Change | Mechanism | Why customers can experience it differently |
| --- | --- | --- |
| **2019: HB 3542 / §13.305** | Establishes an optional acquisition valuation for later ratemaking | Changes how much acquisition capital may enter rates; does not itself establish the customer’s new tariff. |
| **2021: HB 1484 / §13.3011** | Permits a buyer to request rates already approved for another system it owns | A newly acquired community can enter an existing tariff without a full new cost-of-service rate proceeding for that system, subject to PUC review. |
| **2023: HB 2373** | Repeals the statutory “substantially similar” restrictions on tariff consolidation | Broadens the ability to spread costs across a portfolio of systems with different local circumstances. |
| **System-improvement charges** | Permit recovery of qualifying infrastructure costs between general rate cases | A surcharge may concern new capital spending, not the acquisition price. Its docket and approved calculation must be checked. |

The statutes and implementing rules treat these as different decisions. A study that codes every post-2019 sale as the same treatment would combine valuation changes, tariff adoption, later rate cases, and infrastructure surcharges. [29–32]

This also changes the appropriate comparison group. A system that was never sold can still experience acquisition-related costs if it already shares the buyer’s consolidated tariff. Such customers are potentially affected participants, not clean “untreated” controls.

## What the matched tariffs show

The three documented closings were Treetop Utilities on December 23, 2020; Council Creek on January 29, 2021; and the Quiet Village II utility on September 9, 2021. The associated tariffs list five PWS identifiers; four active systems enter the quality analysis. Closing filings establish the transaction dates; acquisition and later approved tariffs establish the schedules. The broader 14-group panel is a convenience sample of schedules with extractable, comparable charges, not a representative sample or a transaction census. [1–4]

The comparison below holds consumption at 5,000 gallons a month and uses a standard 5/8- or 3/4-inch residential meter. It is a **tariff calculation in nominal dollars**, not a sample of paid invoices. It isolates base and volume charges because local pass-through charges, rate-case surcharges, and the 1% regulatory assessment must be tracked separately.

| System / service | Inherited base + volume charge | 2024 consolidated schedule | 2026 consolidated schedule | Change, inherited to 2026 |
| --- | ---: | ---: | ---: | ---: |
| Treetop Estates — water | $28.45 | $75.89 | $89.72 | +215.4% |
| Council Creek — water | $92.00 | $75.89 | $89.72 | −2.5% |
| Quiet Village II — water and sewer combined | $31.82 | $139.17 | $182.29 | +472.9% |

Quiet Village requires a careful denominator. Its inherited schedule labeled $12.62 plus $3.84 per thousand gallons **for water and sewer together**. The original rate application’s billing comparison splits that combined charge equally between the two services. Treating it as a water-only tariff would substantially misstate the increase. [2–4]

Consumption changes the result. Council Creek’s inherited water tariff was $70 plus $4 per thousand gallons for the first 4,000 gallons and $6 thereafter. The 2026 consolidated schedule is $61.60 plus $4.56 per thousand for the first 4,000, $9.88 for the next 10,000, and $19.76 above that. At 5,000 gallons, the base-plus-volume charge remains slightly below the inherited tariff. At 10,000 gallons, it is $139.12 versus $122—**14.0% higher**. [2,4]

This is why a single headline percentage cannot describe every customer. The sale’s closing date, the tariff’s effective date, the meter, consumption, the services purchased, and the customer’s entry into a common rate pool all matter.

The excluded charges are real. The 2024 tariff authorized a $1.60 monthly rate-case surcharge for each applicable service. The 2026 tariff has $1.86 for water and $2.14 for sewer, with specified recovery limits. Treetop and Quiet Village also have local pass-through provisions. For Quiet Village, the company’s published June 2026 schedule includes a sewer pass-through that was not found in the stamped 2026 sewer tariff examined. That source discrepancy is preserved in the workbook; a modeled total including it is not represented as a verified customer invoice. [3,4]

**All three matched acquisitions were outside the §13.305 FMV process.** A January 11, 2024 filing identifies the FMV acquisitions included in this rate case; Treetop, Council Creek, and Quiet Village are not among them. The final order specifically incorporates that distinction. These are therefore examples of substantial post-acquisition tariff changes without FMV being the transaction’s valuation pathway. [28,37]

That does not mean their acquisition premiums were zero. The 2024 order approves positive acquisition adjustments for eligible systems acquired outside FMV, alongside different treatment for FMV systems. It also includes operating and capital costs. The precise inference is that acquisition followed by tariff consolidation can redistribute customer charges dramatically, while **a bill difference alone cannot measure what the 2019 law added**. The appropriate test compares FMV acquisitions with otherwise comparable ordinary acquisitions, not merely all sales before and after 2019. [28]

There is a further complication: **outside FMV does not mean unexposed to FMV costs**. The same proceeding brought seven FMV acquisitions into the consolidated water and sewer tariffs. CSWR’s filing identifies their previously approved acquisition rate bases as follows. These are reported regulatory asset values, not seven verified cash purchase prices or seven acquisition premiums. [28,37]

| FMV acquisition | Closing date | Reported approved acquisition rate base |
| --- | --- | ---: |
| Leon Springs | February 28, 2022 | $3,893,000 |
| Copano Cove | May 19, 2022 | $1,500,000 |
| Carroll Water | May 31, 2022 | $1,250,000 |
| Texas Landing | June 23, 2022 | $1,400,000 |
| Aransas Bay | August 31, 2022 | $1,500,000 |
| Lake Limestone | September 21, 2022 | $850,000 |
| North Orange | October 31, 2022 | $1,750,000 |
| **Total** | | **$12,143,000** |

This is the most important consequence for measurement: the customers paying an acquisition-related revenue requirement need not be only the customers whose system was acquired under that law. The rate pool can move the burden. A comparison between “FMV customers” and “non-FMV customers” inside one consolidated tariff would miss that shared exposure.

The same filing shows a $1,193,311 adjustment between its plant-asset column and the total above. That number is tempting but cannot be called the premium over the sellers’ former regulatory rate bases: the plant column is not verified as the comparable pre-sale original-cost balance. The dataset preserves all three columns and labels the missing counterfactual explicitly.

Two prices can be recovered by combining documents. The North Orange and Leon Springs acquisition orders state that their purchase prices were below appraised FMV and therefore set the acquisition rate bases, while keeping the amounts in confidential attachments. The later public CSWR table supplies $1.75 million and $3.893 million. Read together, the documents support those purchase-price amounts by cross-document inference. They still do not supply the sellers’ comparable prior regulatory rate bases. [37,40]

Regulatory review also changes outcomes. In the 2024 CSWR case, the commission approved an overall return of 7.37%, compared with the requested 9.62%, and rejected an extra risk premium partly because the approved rates reduced the asserted business risk. That is evidence against assuming the regulator simply grants every request. [28]

## Did the water get better?

The analysis links the three sales to four active physical public-water-system identifiers. A fifth tariff-listed identifier, South Council Creek 1, is recorded as inactive since 1991 in the federal inventory even though it appears in the sale and tariff documents. That record discrepancy is unresolved; the identifier is excluded, not assigned a zero-violation result or treated as proof of physical closure. Federal records were deduplicated by **PWSID and violation ID**, because a violation can appear more than once with different enforcement actions. The counted date is the recorded beginning of the noncompliance period. “New violation records” is therefore the precise measure; these are not all violations active during an interval, unique contamination incidents, outages, or illnesses. [1,27]

The primary comparison uses the 36 months immediately before and after each closing. It separately counts health-based and other violations. A second comparison delays the post-sale window by 12 months to allow for an operational transition. The workbook includes annual results from 2017 through 2025 and separately labels partial 2026 observations.

| Physical system | New violation records: 36 months before → after | Health-based records: before → after | Interpretation |
| --- | ---: | ---: | --- |
| **Treetop Estates** | 11 → 1 | 0 → 0 | A large reduction in non-health records; no measured health-violation reduction from a zero baseline. |
| **Quiet Village II** | 43 → 8 | 0 → 0 | Fewer non-health records; not proof of uninterrupted service or absence of continuing violations. |
| **Council Creek Village** | 31 → 31 | 24 → 24 | Persistent quarterly radionuclide noncompliance. |
| **South Council Creek 2** | 27 → 30 | 24 → 24 | Persistent quarterly radionuclide noncompliance, with additional non-health records. |

The mixed result survives the lagged window. Post-sale totals become 1, 3, 35, and 40, respectively, while the health-based counts remain 0, 0, 24, and 24. Each Council Creek system had health-based violation onsets in all 12 quarters in both primary windows. The 24 records represent repeated quarterly breaches of two standards, not 24 independent accidents. [27]

The companies’ own 2025 consumer-confidence reports corroborate the unresolved contaminant problem. Council Creek Village’s report gives a highest combined-radium level of 44 pCi/L against a limit of 5 and a highest gross-alpha level of 131 pCi/L against a limit of 15. It says treatment options or a new source are being explored. South Council Creek 2 reports combined radium of 33.6 pCi/L against the same limit of 5 and describes work toward a new source. These are historical reported measurements and statements, not an assertion about today’s tap-water conditions. [33]

The Council Creek problem was inherited. A 2010 draft feasibility study prepared for TCEQ already documented gross-alpha and combined-radium exceedances in measurements from 2001–2008 and examined treatment, alternative groundwater, and a connection to another supplier. The study was a planning document, not proof that a remedy was built; its cost estimates are not current costs. It establishes the age of the problem, while the later records test whether the new ownership resolved it within the observed period. [41]

Conversely, the Treetop and Quiet Village records support a real improvement in compliance administration. It would be wrong to dismiss monitoring and reporting: those functions are necessary to know whether a system is safe. It would also be wrong to relabel a reduction in paperwork-related records as a measured reduction in contaminant exposure. Quiet Village’s 2025 report, for example, discusses a violation originating in 2024 even though no new violation onset appears in the 2025 count. [27,33]

The case series is small and deliberately selected for document matchability. It has no untreated comparison group and does not estimate a causal buyer effect. It measures three acquisitions, one buyer, and four systems. The price and quality windows also answer different questions: tariffs show later scheduled charges, while the primary compliance comparison covers the first three years of new ownership. They must not be presented as simultaneous experimental outcomes.

Research elsewhere gives the buyers’ argument a fair hearing. An August 2026 study of 15 Illinois municipal FMV sales to one buyer, compared with 34 municipal controls, reports large reductions in both health and non-health violations. The authors explicitly stop short of causal claims and do not estimate rate or affordability effects. It supports the possibility of service improvement; it does not establish that Texas customers must pay an acquisition premium to obtain it. [34]

The counterfactual matters. The relevant question is not only whether a buyer improves on a failing predecessor. It is whether that buyer and financing structure outperform feasible alternatives—another buyer, a member-owned organization, a public consolidation, or professional operation without an asset sale—at a comparable total cost.

## Quadvest: the largest lead is not yet an after-sale bill result

H2O’s acquisition has to be split into separate claims:

| Claim | What the documents establish |
| --- | --- |
| **Who bought the assets?** | H2O America’s Texas subsidiaries; the transaction closed October 1, 2026. |
| **How much was paid?** | H2O reported $542.7 million of total cash consideration at closing for the combined transaction. The negotiated base amounts were $483.6 million for regulated retail and $56.4 million for wholesale, before adjustments. |
| **What value does H2O expect in regulated rate base?** | $483.6 million for Quadvest’s regulated business, according to its disclosures. |
| **What did the reviewed sale order decide?** | The August 17 order authorized the transaction and explicitly did not decide the ratemaking rate base. |
| **When are new rates expected?** | H2O’s October 29 prospectus says it expects to file in the first half of 2027 and expects revised rates in 2028. These are company expectations. |

The latest status filing examined, dated October 19, reported the closing and said evidence addressing the transaction and customer deposits would be filed by November 2. The sale order also found that customer rates would not change because of the transaction. That immediate statement can coexist with a later rate case recognizing a larger asset value. Neither should be mistaken for the other. [5–7]

Nor is Quadvest simply a collection of stagnant rural systems. H2O describes rapid connection growth, subdivision development, a wholesale business, and a large pipeline of contracted future connections. That makes it a growth acquisition as well as a regulated utility acquisition. The law’s relevance extends beyond rescuing distressed systems. [6,7]

Price per customer is especially easy to get wrong here. The March prospectus described about 38,000 regulated retail **service connections** at December 2025; the October earnings release described 62,200 total active connections at September 2026, including wholesale and retail service. Water and sewer connections can also refer to the same household. Dividing $483.6 million by those different denominators would produce superficially comparable numbers describing different things. Future contracted connections are not present bill-paying households either. [6,7]

The buyer is not receiving a free return on day one. H2O discloses expected earnings dilution while financing the acquisition before new rates take effect. That supports a more precise economic account: the seller is paid at closing; the buyer funds the interval and faces regulatory and operating risks; customers may subsequently finance approved acquisition capital and improvements through rates. The allocation depends on the final orders and tariffs. [7]

This investigation does not report a realized Quadvest rate increase attributable to the acquisition, a finalized $483.6 million PUC rate-base award, or improved service after the sale. The reviewed evidence does not establish those outcomes yet.

## The alternative capital stack already exists in Texas

South Plains Water Supply Corporation provides a concrete alternative to a binary choice between an undercapitalized small owner and an investor-owned consolidator. Customers from four systems around Shallowater organized a water supply corporation after prolonged operating and quality problems. Communities Unlimited, which participated in financing the transition, describes loans supporting the transaction and a prior $3 million forgivable state loan. [35]

In February 2026, the Texas Water Development Board approved a further **$3.3 million grant** for improvements across all four sites, including wells, electrical equipment, meters, storage, pumps, and distribution. This is a documented capital source, not a hypothetical suggestion that a cooperative could somehow repair infrastructure for free. [36]

It is also not a demonstrated victory on every outcome. The participating organization’s August account says substantial quality and infrastructure needs remain. Grant approval is not completed construction, and member ownership is not proof of better water. [35]

The example changes the financing question. A grant shifts some costs away from the utility’s future bills to the public funding program. A sale price shifts cash to a seller and can create a later claim on customer revenue. These choices can coexist with professional management and consolidation. Public funding eligibility is program-specific: Texas’s Drinking Water State Revolving Fund explicitly includes eligible privately owned community systems. It would be incorrect to treat access to all public financing as exclusive to government or cooperative ownership. [35,36,39]

For public-versus-private comparisons, the honest denominator is the household’s total water-related burden: tariffs, relevant taxes or assessments, connection charges, and the incidence of public subsidies. A municipal bill and a private bill may not finance the same bundle of obligations. Conversely, the existence of municipal taxes does not excuse ignoring a private acquisition premium. Each must be measured.

## The measure that would answer the price question

A statewide series of announced acquisition prices divided by reported “customers” would not answer whether the 2019 law raised bills. It would mix water and sewer, asset and share purchases, wholesale and retail businesses, present and future connections, and growth systems with failing systems. It would also treat undisclosed prices as if they did not exist.

The more revealing measure is an **acquisition-only bill increment**. It can be constructed from regulatory records without pretending that every post-sale increase is acquisition profit:

1. Establish the seller’s remaining eligible original-cost rate base for the same assets and date, including the treatment of contributed infrastructure.
2. Record the acquisition rate base actually approved, separately from the announced cash price and the financial-accounting purchase-price allocation.
3. Identify the later rate case and the exact customer pool over which the approved acquisition amount is recovered.
4. Recalculate that approved rate model replacing only the acquisition valuation with the comparable original-cost amount, leaving repair capital, operating costs, financing assumptions, and rate design fixed.
5. Compare household charges at several consumption levels, for acquired customers and the buyer’s pre-existing customers separately.

The result would be an accounting counterfactual: the portion of the approved tariff associated with the valuation change, conditional on everything else in that rate case. It would not prove what would have happened if the sale had never occurred. A separate causal design would be needed for that claim.

An illustrative calculation shows the scale. If an additional $1 million entered rate base and were spread evenly over 1,000 accounts, an 8% allowed return plus 30-year straight-line depreciation would initially require about **$9.44 per account per month**, before taxes and other adjustments. Those are deliberately hypothetical inputs, not Quadvest’s approved financing or a forecast of any Texas customer’s bill. Actual allocation would follow the tariff’s customer classes and usage charges.

For service, the companion measure should be **quarters free of health-based noncompliance**, supplemented by contaminant concentrations, monitoring completeness, boil-water days, and outage duration. That requires validated active noncompliance intervals and return-to-compliance dates; a quarter with no new violation onset cannot automatically be treated as a compliant quarter. Reporting improvements and physical water-quality improvements should remain separate outcomes.

The dataset delivered with this report establishes the joining structure and a documented case series. It does not yet establish a statewide trend in comparable purchase price per unique customer, an acquisition-premium burden for every transaction, or a causal effect of Texas’s 2019 law. Missing purchase prices, prior regulatory balances, historical household counts, and complete outage records remain substantive gaps—not zeroes.

## What would change the conclusions

| Proposition | Assessment from the evidence reviewed | Evidence that would materially change it |
| --- | --- | --- |
| FMV can make a larger acquisition payment recoverable from customers | High confidence in the legal mechanism | A change in statute or controlling interpretation; an actual approved valuation below the assumed amount in a given case |
| Tariff consolidation redistributes costs across communities | High confidence in the reconstructed CSWR schedules | Corrected tariffs, meter/usage definitions, or effective-date evidence changing the comparisons |
| Every post-sale rate increase represents an acquisition premium | Rejected as an inference | A case-specific reconciliation separating acquisition valuation, repair capital, operating expense, and rate design |
| Private consolidation always improves health compliance | Not supported by this four-system series | Successor-system evidence, corrected federal records, or later verified sustained compliance and concentration improvement |
| Private consolidation never improves service | Also not supported | The observed compliance reductions and outside research already contradict such certainty; broader reliability and exposure data are still needed |
| The 2019 law caused a statewide rise in price per customer | Unestablished | A comparable transaction panel including prices, prior rate bases, current household counts, system condition, growth, and appropriate controls |
| Public or cooperative ownership always delivers cheaper, better water | Unestablished | Matched full-cost and service comparisons with grants, taxes, inherited condition, and management capacity accounted for |

The most consequential unanswered question is now precise: **how much extra customer revenue is generated by repricing already-existing assets, who receives the sale proceeds, and which customers carry that revenue requirement after consolidation?** Texas’s public records contain pieces of that answer. They do not currently join them for the customer.

## Sources and audit notes

All sources below were reviewed at the stated scope. Transaction and tariff calculations are independently reconstructed from the documents; they are not estimates copied from company marketing. “Current” refers to the evidence cutoff, not a promise that an owner or tariff will remain unchanged.

1. **Three acquisition closings and approvals.** PUC dockets 51065 (Treetop), 51031 (Council Creek), and 51089 (Quiet Village). Closing records: [Treetop](https://interchange.puc.texas.gov/Documents/51065_48_1104960.PDF), [Council Creek](https://interchange.puc.texas.gov/Documents/51031_47_1112011.PDF), [Quiet Village](https://interchange.puc.texas.gov/Documents/51089_55_1152663.PDF). Closing dates also checked against later approval records.
2. **Inherited CSWR tariffs and original billing comparison.** [PUC-stamped inherited tariff compilation](https://media.assets.sincrod.com/websites/content/web-cswr/file/a0825dd0-28a1-42af-b7bc-29a31c6d5160/168185a32d39474a8b23f235195e57e9.pdf), docket 53238 item 62, approved May 2, 2023; physical pages 14, 25 and 35 for Treetop, Council Creek and Quiet Village. Docket 54565 original application, Exhibit C: [first volume](https://interchange.puc.texas.gov/Documents/54565_5_1268957.PDF), physical pages 99–100, and [second volume](https://interchange.puc.texas.gov/Documents/54565_5_1268958.PDF), physical pages 1 and 3. The existing-bill columns corroborate the inherited calculations; proposed-bill columns are not used as approved rates.
3. **2024 CSWR final tariff.** [PUC-stamped compliance tariff](https://media.assets.sincrod.com/websites/content/web-cswr/file/v/1/9763a141-70ef-435c-b3fe-affe2a0571be/8c4ed835375d4286b20e71f01f60c51d.pdf), docket 56352 item 7, implementing docket 54565, approved stamp August 6, 2024. Water schedule physical page 9; water pass-throughs pages 12–14; sewer schedule and pass-through pages 31–32. Base/volume rates, rate-case surcharges, and pass-through pages read separately.
4. **2026 CSWR tariff and company schedule.** [PUC-stamped tariff, docket 59491 item 6](https://interchange.puc.texas.gov/Documents/59491_6_1654225.PDF), implementing docket 57386; [June 3, 2026 approval order](https://interchange.puc.texas.gov/Documents/59491_5_1652294.PDF) and [company June 3 schedule](https://centralstateswaterresources.com/wp-content/uploads/2026/06/Consolidated-Rates-06.03.26.pdf). Stamped tariff physical pages 13 and 38 contain the water and sewer schedules; page 20 contains Treetop and Quiet Village water pass-throughs. The company schedule's page 5 retains the Quiet Village sewer pass-through omitted from the stamped 2026 tariff reviewed. The rate pool for previously consolidated systems is distinguished from newly acquired systems with phase-in schedules.
5. **Quadvest regulatory status.** [Docket 59279, Order 13, August 17, 2026](https://interchange.puc.texas.gov/Documents/59279_66_1674692.PDF), especially opening scope and finding 65; [October 19 closing status](https://interchange.puc.texas.gov/Documents/59279_69_1694502.PDF). The public docket index was checked through the cutoff.
6. **H2O acquisition scope and closing consideration.** [March 2026 SEC prospectus](https://www.sec.gov/Archives/edgar/data/766829/000110465926022347/tm267546-1_424b5.htm); [October 26, 2026 earnings release](https://h2oamerica.gcs-web.com/news-releases/news-release-details/h2o-america-announces-third-quarter-2026-financial-results).
7. **Latest H2O rate and financing expectations.** [October 29, 2026 prospectus](https://www.h2o-america.com/static-files/6d5b61aa-261b-4d03-a886-78940896eabc), Quadvest acquisition discussion. Company expectations are not regulatory decisions.
8. **PUC registry.** [Texas Open Data, Water and Sewer Utilities](https://data.texas.gov/dataset/Public-Utility-Commission-of-Texas-Water-and-Sewer/auk8-env9), retrieved October 30, 2026; source update October 7. Raw rows deduplicated by certificate identifier; public contact details omitted from the delivered research tables.
9. **Pre-2019 journalism.** Texas Tribune, [2013 Blue Mound reporting](https://www.texastribune.org/2013/03/18/high-water-rates-cause-angst-texas-town/) and [2012 rural rate reporting](https://www.texastribune.org/texas-environmental-news/water-supply/texas-rural-water-rate-hikes-bring-scrutiny/).
10. **ABC13 household example.** [November 20, 2025 report](https://abc13.com/post/do-better-first-time-homebuyer-outraged-138-utility-base-fees/18176023/). Base charges summed from the article; not used as an acquisition event study.
11. **Prior market mapping.** [Bluefield Research, September 2022 report description](https://www.bluefieldresearch.com/research/private-water-utility-ownership-in-texas-competitive-landscape-geographic-positioning-and-market-trends/). Public description read; paid underlying report not reviewed.
12. **FMV mechanism literature.** [McKiernan and Warner, 2024](https://www.tandfonline.com/doi/abs/10.1080/07900627.2024.2400491). Primary indexed text reviewed; legal/case comparison, not a Texas causal estimate.
13. **Nexus operating footprint and formation.** [Texas service areas](https://nexuswatergroup.com/water-wastewater-utility-service-areas/united-states/texas/) and [April 2024 merger announcement](https://www.nexuswatergroup.com/2024/04/02/nexus-water-group-press-release/).
14. **BCI interest.** [2024 audited Infrastructure and Renewable Resources financial statements](https://www.bci.ca/wp-content/uploads/2018/03/IRR-Program-FS-2024_Secured.pdf), Note 7, printed page 24 / PDF page 26.
15. **Nexus proposed ownership structure.** [Kentucky PSC merger application, November 2022](https://psc.ky.gov/pscecf/2022-00396/tosterloh%40sturgillturner.com/11232022012827/1_-_Application.pdf), Figure 2, footnote 9, paragraph 12. Dated proposed structure; not an independently verified current cap table.
16. **Aqua parent.** [Essential Utilities 2025 Form 10-K](https://www.sec.gov/Archives/edgar/data/78128/000007812826000050/wtrg-20251231x10k.htm), and [Aqua Texas](https://www.aquawater.com/about-aqua/states-we-serve/aqua-texas).
17. **CSWR parent and sponsor.** PUC docket 54565 order and [Sciens Water current portfolio](https://scienswater.com/portfolio/). Sponsor statements about performance are not substituted for the independent compliance analysis.
18. **Undine sponsor.** [Ridgewood Infrastructure portfolio](https://ridgewoodinfrastructure.com/undine/) and [Undine customer information](https://www.undinellc.com/customers/frequently-asked-questions/).
19. **Blue Topaz.** [NW Natural Water utilities](https://www.nwnaturalwater.com/utilities) and [corporate site](https://www.nwnaturalwater.com/).
20. **Liberty.** [Liberty corporate ownership description](https://libertyutilities.com/) and [Texas Silverleaf tariff](https://texas.libertyutilities.com/uploads/2019-10-30%20Final%20Water%20Utility%20Tariff%20-%20Silverleaf%2011.22.21.pdf).
21. **BVRT ownership.** [California Water Service Group September 2026 Form 10-Q](https://www.calwatergroup.com/investors/financials-filings-reports/sec-filings/content/0001628280-26-068293/cwt-20260930.htm), filed October 29, 2026.
22. **Hope/Ullico.** [Ullico acquisition announcement](https://www.ullico.com/ullico-closes-acquisition-of-regulated-utility-platform/), [Hope Water](https://hopewater.com/about-us/), and [Hope Utilities](https://hopeutilities.com/esg/).
23. **Cooperative parent.** [HILCO United Services](https://hilco.coop/hilco-united-services).
24. **Pending public acquisition.** [MidSouth September 2026 announcement](https://www.midsouthelectric.com/news-releases/msec-water-and-wastewater-press-release-9-25-26/).
25. **Partial asset sale.** [Crystal Springs Water Company](https://www.cswci.com/), service/account notice read October 30, 2026.
26. **Ownership-data limitations.** [GAO-21-291](https://www.gao.gov/products/gao-21-291), including recommendation status. The literature notes distinguish large-system price associations from acquisition effects.
27. **Original compliance calculations.** EPA ECHO [SDWA bulk-data documentation](https://echo.epa.gov/tools/data-downloads/sdwa-download-summary) and [download](https://echo.epa.gov/files/echodownloads/SDWA_latest_downloads.zip), 2026 Q3 snapshot. Exact extraction, distinct keys, windows, anomalous-date flags, and selected raw records accompany the dataset.
28. **CSWR 2024 rate order.** PUC docket 54565, reproduced in a [Tennessee commission filing](https://tpucdockets.tn.gov/archive/filings/2024/2400044ns.pdf), Texas order pp. 3–5 and findings 56–84. The copy is an attached Texas order; the surrounding Tennessee advocacy brief is not treated as a Texas finding.
29. **2019 statute.** [HB 3542 enrolled text](https://capitol.texas.gov/tlodocs/86R/billtext/html/HB03542F.htm), especially §13.305(c), (f), (g), (k).
30. **PUC implementing rule.** [Project 49813 adoption order](https://ftp.puc.texas.gov/public/puct-info/agency/rulesnlaws/subrules/water/subchb/24.41/49813adt.pdf), discussion and adopted §24.238. Later consolidation legislation is considered separately from this 2020 rule’s historical text.
31. **Tariff portability and consolidation.** [HB 1484 enrolled text](https://capitol.texas.gov/tlodocs/87R/billtext/html/HB01484F.htm), [HB 2373 enrolled text](https://capitol.texas.gov/tlodocs/88R/billtext/html/HB02373F.htm), and [PUC water rules](https://ftp.puc.texas.gov/public/puct-info/agency/rulesnlaws/subrules/water/ch24complete.pdf).
32. **Infrastructure charges.** [SB 700 enrolled text](https://capitol.texas.gov/tlodocs/86R/billtext/html/SB00700F.HTM) and [2026 adopted rules](https://www.sos.state.tx.us/texreg/archive/May12026/Adopted%20Rules/16.ECONOMIC%20REGULATION.html). No proposed surcharge is represented as approved without its order.
33. **Company 2025 water-quality reports.** [Council Creek Village](https://centralstateswaterresources.com/ccr/2025/TX/Council%20Creek%20Village%20TX0270014%20Consumer%20Confidence%20Report%202025.pdf), [South Council Creek 2](https://centralstateswaterresources.com/ccr/2025/TX/South%20Council%20Creek%202%20TX0270080%20Consumer%20Confidence%20Report%202025.pdf), and the Treetop/Quiet Village reports retained with the source metadata. Contaminant tables visually checked.
34. **Evidence consistent with improvement.** [Barnes and Powell, Public Administration Review, August 2026](https://onlinelibrary.wiley.com/doi/10.1111/puar.70174), methods, results, and limitations. One buyer/state; rates outside study scope; authors refrain from causal claims.
35. **South Plains transition.** [Communities Unlimited, August 10, 2026](https://communitiesu.org/blog/2026/08/10/rural-water-system-ownership-shallowater/). Participant/lender account, attributed as such; unresolved quality needs acknowledged.
36. **South Plains grant.** [Texas Water Development Board, February 19, 2026](https://texaswaternewsroom.org/pressreleases/2026-2-19_south_plains.html). Grant approval and intended projects, not completed construction.
37. **FMV classification of the CSWR cases.** [CSWR January 11, 2024 filing, docket 54565 item 2476](https://interchange.puc.texas.gov/Documents/54565_2476_1358685.PDF), printed page 6, enumerates the FMV acquisitions. The three matched transactions are outside that list; the final order’s finding 70 addresses the updated classification. This does not imply zero ordinary acquisition adjustments.
38. **Quadvest seller and business model.** [BOK Financial / Bank of Texas client case study](https://www.bankofoklahoma.com/commercial/client-successes/family-owned-water-utility-thrives-on-liquidity). Historical lender account of the family ownership and development business, not a source for current customer counts or the completed acquisition price.
39. **Public financing eligibility.** [TWDB Drinking Water State Revolving Fund](https://www.twdb.texas.gov/financial/programs/DWSRF/index.asp), eligible applicants and projects; [October 2025 program guidance](https://www.twdb.texas.gov/financial/instructions/doc/TWDB-0115.pdf), page 6.
40. **Cross-document purchase-price inference.** [North Orange acquisition order, docket 53483](https://interchange.puc.texas.gov/Documents/53483_40_1278741.PDF), findings 53–56 and ordering paragraph 6; [Leon Springs order, docket 52410](https://interchange.puc.texas.gov/Documents/52410_59_1212960.PDF), findings 40–43 and ordering paragraph 6. Each states that the purchase price determines the approved rate base because it is below FMV; the public amounts come from source 37, not from accessing the confidential attachments.
41. **Council Creek engineering history.** [Draft feasibility assessment prepared for TCEQ, August 31, 2010](https://www.beg.utexas.edu/files/content/beg/research/TCEQ_ss/Draft_Council%20Creek%20Village.pdf), executive summary and alternatives analysis. Interim-review draft, not a current engineering estimate or construction record.