Frequently Asked Questions

NTMWD is a wholesale water provider and charges its cities and communities about one-third of a penny per gallon for safe drinking water. That covers paying to acquire the water, storage, transportation, treatment, and testing, and then delivering it to cities and water providers who in turn, pipe it to North Texas homes and businesses.

The cities and communities we serve establish the water rates they charge and bill their customers. They also have to pay for the facilities, pipes, and systems to store and distribute water to homes and businesses. Most cities set water rates in tiers based on water usage. The less water people use, the lower their rates. Homeowners who have large lawns and water frequently will usually pay a higher rate.

To understand how your community calculates its water rates, visit your provider's website. We have links to NTMWD Member Cities and Customers on our water system page.

Water delivered to a home or office is a service, not just a commodity. For every $1 we charge our member cities, about 15% covers the actual cost of water. That cost goes up and down, depending on how much water a community uses. The remaining 85% pays for fixed costs. These costs add up and do not change, no matter how much water a city uses.

Fixed costs include:

• Operating, maintaining, and expanding the pipes, pumps, motors, and facilities to capture, store, treat, and deliver water.
• Repairing aging and leaking pipes.
• Repaying bonds secured to finance new infrastructure and water sources to meet future needs.
• Meeting strict government regulations to keep water safe and protect the environment.
• Employing highly specialized technical experts required to do all this work.

One of the best ways to manage your water bill is to conserve water both indoors and outdoors. The most water savings are gained by only watering your yard when it needs it - which is usually no more than twice a week during hot summer months. This helps stretch our existing water supplies and may delay the need for new projects we must invest in. It also can make your monthly water bill more affordable. To help determine when and how much to water your yard, sign up for a free weekly watering recommendation at WaterMyYard.org.

The North Texas Municipal Water District does not use property taxes or any other form of general taxation as a revenue source. Its revenues are generated by the services it provides. NTMWD has contractual relationships with the cities served which allow the District to issue bonds to finance the development of projects needed to provide its services.

The State of Texas requires water providers to receive sufficient revenues from the cities they serve to pay their debt service, operations and maintenance costs. The cities must then charge a sufficient amount to cover both our wholesale costs and the costs of operating their own distribution systems. These contracts must be approved by the state Attorney General in order for water providers to issue bonds.

If a city consumes less water than its minimum annual demand, the NTMWD Board of Directors typically rebates the variable cost of operations for unused power (pumping) and chemicals (treatment). The NTMWD must still charge cities to cover annual fixed costs for maintaining the regional pipelines and facilities, constructing capital projects, and repaying debt, regardless of how much water is consumed.

The Associated Press recently reported that rising water costs are an issue facing providers nationwide, especially in drought-prone regions.

The NTMWD and all water utilities are challenged with increasing costs for maintaining and rehabilitating aging infrastructure, building pipelines and reservoirs for anticipated population growth, as well as implementing new technologies to comply with changing regulatory requirements. Additionally, large water projects take years - often decades - to complete the required environmental permitting, resulting in significant upfront investments before customers receive the benefit.

While water is essential, many experts believe it has been undervalued considering the systems needed to ensure water flows from our taps 24/7. The NTMWD operates and maintains the following key components of the regional water system which serves communities in several counties and covers 2,200 square miles:

• 6 water treatment plants - 806+ million gallons per day capacity
• 566 miles of transmission pipelines
• 9 raw water pump stations
• 8 treated water pump stations
• 77 City delivery points

Despite the complexity and scope of this system, a gallon of water from NTMWD costs our customers less than one-quarter of a penny. As our region continues to grow, the District is responsibly planning new projects to prepare for projections that the region is expected to double in population over the next 40 years.

Even with a continued focus on conservation programs to stretch existing supplies, NTMWD will need to have another major water source, the Bois d'Arc Lake (Bois d'Arc Lake) in Fannin County, online as early as 2020. The Bois d'Arc Lake will become part of the regional water system serving all of our North Texas customers. Thus, each of these communities will share in this investment.

Water has provided the essential foundation for communities in North Texas to grow over the last several decades. Cities in our region continue to make headlines for welcoming major new businesses, recognized as among the healthiest housing markets, and consistently ranking as some of the best places to live in America. A reliable water supply is critical to meet the needs of current and future generations of residents, as well as to support businesses, jobs, and economic prosperity in our region. Based on population growth projections, NTMWD water demands will increase 1.5 times over the next 40 years.

Collin County recently updated its population growth projections to include 1.3 million more residents than previous estimates. On top of future growth, the last several years of drought and required watering restrictions may have masked the full effects of recent growth on water demands.

The NTMWD appreciates the commitment of all the cities and residents in north Texas to conserve water during recent years of drought. The efforts were vital to help stretch existing supplies. Without these measures, our reservoirs would have been even more severely depleted.

Fortunately, record rainfall last May refilled our reservoirs - averting prolonged water shortages in our region. However, conservation remains a key component of meeting our future water needs. We must continue to use water wisely, especially in landscapes where a large percentage of water is consumed.

The combination of watering restrictions over the last several years followed by significant spring rains means the region has consumed less water than normal. Reduced consumption has presented significant challenges for the cities and communities we serve as they must cover ongoing fixed costs while collecting fewer revenues.

Once residents resumed "normal" post-drought watering schedules (with little to no restrictions in place), water consumption increased dramatically from July through October 2015. This demonstrates that our water customers still require the system capacity to meet higher water demands when needed. The NTMWD must build and maintain the system to meet those highest potential needs.

Without outdoor watering restrictions in place, the total regional consumption from July through September 2015 was similar to pre-drought demands in 2011 as residents returned to more frequent outdoor watering patterns. The NTMWD has the responsibility to make sure the infrastructure and system is prepared to meet those peak demands today and in the future, especially since North Texas is among some of the fastest-growing regions in the nation.

The NTMWD must collect enough revenue to cover the regional water system fixed costs of the pipes and facilities that have been constructed to meet the highest potential water demands. Fixed costs include the repayment of bonds that have funded past projects and debt service on new projects. Other fixed costs are from ongoing operations, maintenance, and rehabilitation of the system to maintain reliability and comply with environmental regulations.

Eleven of our municipal customers signed one water supply contract when it was last amended in 1988 - two cities signed similar contracts when they joined the District later - Allen (1998) and Frisco (2001). The contract is structured so that each city pays for its allocation of the costs for the entire regional water system based on its year of highest annual usage. This is a common cost allocation method to determine proportionate cost-sharing among regional users of a water or energy system. By cost-sharing with fellow customers rather than each city building its own separate infrastructure and systems, each city has saved significantly over the last several decades.

The NTMWD has built (and issued bonds for) the infrastructure costs to meet the cities' historic peak demands and must collect enough revenue to make the bond payments and cover ongoing maintenance costs for those pipelines and systems, regardless of the amount of water used. If any of the individual cities had issued bonds independently to build their own system, they would have to repay that debt regardless of today's customer usage.

For fiscal year 2015 to 2016, the NTMWD wholesale water rate for the cities we serve is $2.29 per 1,000 gallons of treated water. This rate is made up of two components:

1. $1.88 per 1,000 gallons funds the fixed/capital costs (infrastructure), and
2. $0.41 cents per thousand gallons for the actual amount of water consumed.

Each city then determines its own end-user rates for residential, commercial, and industrial customers to cover the NTMWD wholesale water costs plus the city's own system and operating costs - typically setting different rates based on tiers or levels of usage so that consumers using higher amounts pay a higher rate.

The "take or pay" term used to describe the water supply contract means that the cities pay the fixed costs component of the wholesale water rate based on the highest year of consumption, even if in subsequent years they don't reach that same level of water use. This ensures the fixed system costs are covered regardless of the amount of water used. The cities and their customers receive an annual rebate for the variable costs, such as chemicals and power not used for treatment and delivery, based on each city's actual consumption for that year.

Cities don't pay for "unused" water - they pay an allocation of the regional water infrastructure and system costs based on the maximum amount of potential capacity each city needs. The cities and their customers are paying for water service, not just the water molecules that are delivered.

With watering restrictions and conservation resulting in reduced revenues to cover fixed costs, some Member Cities have questioned the structure of the water supply contract and are interested in exploring alternate methods for allocating the regional system costs across all participating cities and customers.

Because all 13 participating cities signed the current water supply contract, it will take all 13 to discuss and agree to any changes. Previous analysis and studies related to adjusting a city's annual commitment to water system capacity have shown that lowering one city's percentage would increase the proportionate share of costs for other participating cities.

The NTMWD supports participating cities coming together to discuss alternatives to the current water supply contract and is open to considering a change with agreement and support from the cities.

If a city consumes less water than its minimum annual demand, the NTMWD Board of Directors typically rebates the variable cost of operations for unused power (pumping) and chemicals (treatment). The NTMWD must still charge cities to cover annual fixed costs for maintaining the regional pipelines and facilities, constructing capital projects, and repaying debt, regardless of how much water is consumed.