Magnolia Water · Docket U-37584
LPSC approves Magnolia Water's billing for 3 more years.
On June 17, the Public Service Commission locked in three more years of Magnolia Water's automatic rate increases. In Slidell that is $116 a month before a single drop comes out of the tap, about 3x the average water bill in Louisiana.
What I told the Commission
I am Chris Justin, a licensed professional engineer and a former consultant to this Commission. I testified against the extension and asked them to send Magnolia to a full, open-book rate case instead.
"Don't rubber-stamp this self-dealing sleight of hand. Send it to a full rate case and make him show the riches he is hiding."
They approved it anyway.
To make customers think they would finally be held accountable, Magnolia embraced a deceitful "audit." An audit the company itself welcomes is not accountability.
The part meant to sound like good news
Don't mistake the audit for a win.
Here is what that audit can actually do for your bill.
- Less than $1 a month Over the last three years, Staff already threw out about $2.4 million Magnolia tried to bill you for: things like donations, gifts, and costs with no receipts. You were never charged it. Spread across Magnolia's customers, that is less than a dollar a month, gone before your bill was ever printed.
- Under $4 a month Even if this new audit found four times as much waste, that is still under four dollars a month. And Louisiana law allows no refund, so not one dollar of it comes back to you.
- $0 from the real fix The only thing that could truly lower your bill was a full, open-book rate case that forces the Missouri parent company's books open. The Commission voted not to require it.
An audit of the Louisiana books was never going to fix a bill driven by the Missouri parent company. Catching that is exactly the job of an engineer who can read the filing.
What happened on June 17
The Public Service Commission approved three more years of Magnolia's automatic rate increases, after looking at only half the company. They reviewed the Louisiana subsidiary's books. They never opened the Missouri parent, CSWR, to see how much of your $116 flows back to it as profit.
They did order an audit of Magnolia's billing and service, but it is toothless: it bars the public from joining, it stops at the Louisiana subsidiary's door, and it does not pause a single increase. No commissioner and no staff member examined the parent company's finances all morning. The only people who raised them were the customers at the public microphone.
These filings run hundreds of pages, written dense on purpose. Chris Justin is a licensed engineer who consulted for this Commission, and he read this one. Here is what was on the record, under oath, from the Commission's own staff:
- They can't verify the money. Magnolia says it has invested $422 million in Louisiana. Asked if she could verify that number, the Commission's own auditor, who confirmed under oath she is not an engineer, testified: "No. I can't verify that." The rate base she actually ran through the formula was about half that.
- No guarantee on your rates. Asked whether approving this protects customers from future increases, she testified: "There is no guarantee."
- The highest minimums in the state, about three times the typical Louisiana bill. By the Commission's own rate comparison, Magnolia charges the highest water and sewer minimum bills in Louisiana. You can use zero water and still owe roughly three times what a typical Louisiana household pays for water and sewer.
- Nobody talked to customers. Staff confirmed it never spoke with a single customer during the case.
How Magnolia Water is gouging Louisiana
Nobody checked what Missouri charges Louisiana.
Magnolia does not really stand on its own. It is owned by CSWR, a for-profit company in Missouri. The parent allocates its own overhead and affiliate costs down to Magnolia, and those charges get built into the rate you pay. Whether the parent is charging Magnolia a fair price, or marking it up and shipping your money to Missouri, is the single biggest question about your bill.
In this case, that question was never investigated. Not by the staff. Not by the hearing officer. Here is what is missing from the record the Commission approved:
- No review of the affiliate charges. The Commission's staff did no analysis of the payments between Magnolia and its parent and sister companies. No test of whether what Missouri bills Louisiana is a fair, arm's-length price.
- Customers asked for exactly this, and were turned down. The people who intervened asked the Commission to examine the parent and affiliate books and the cost-sharing records. The hearing officer recommended approving the extension without requiring that review.
- The one audit on file does not cover it. The only financial audit in the record is a routine accounting opinion that the books add up. A clean accounting opinion does not mean the parent's charges are reasonable. Those are two different questions.
You cannot tell whether your bill is fair until someone opens the affiliate ledger and checks the parent's charges line by line. In this case, no one did. That is exactly the kind of thing an engineer on the Commission would force onto the table.
How your bill climbed, one order at a time
Every step on this chart is a decision by the Public Service Commission. Watch what a Magnolia customer owes for using zero water, not a single drop, climb with each one. Scroll to follow it.
Tier II zero-usage minimum · Slidell / St. Tammany, about 85% of Magnolia customers · milestones, not to scale
Before Magnolia Water took over, a typical bill for an empty house, zero water used, ran about $30 a month. (Customer-reported; each system Magnolia bought had its own legacy rate, no single tariff.)
Magnolia's first rate case. The bill you pay before using a single drop jumps to $87.35. It was an uncontested settlement, not a single customer in the room.
The automatic formula ratchets it again, to about $88.49. Water down, sewer up, but the formula keeps running, year after year.
Up again, to about $108.97. The water you actually use never changed. The fixed charge did, and that is the part of the bill you cannot lower by conserving.
Today. $116.42 a month for zero water. Not a single drop. About three times the Louisiana average, and the highest water and sewer minimums in the state.
The Public Service Commission approved the extension, locking this structure in for three more years instead of requiring a full, open-book rate case. It also ordered a toothless audit that bars the public and does not pause a single increase.
What I told themTier II zero-usage minimum: the Slidell and St. Tammany subdivisions (Eden Isles, Meadows, Belair, Greenleaves), about 85 percent of Magnolia's customers and the highest of its three tiers. The 2021 and 2025 figures are the as-approved tariff; the 2023 and 2024 figures are computed from the LPSC Staff Report's own stated percentage changes; the pre-Magnolia figure is customer-reported. A separate $8 million pandemic surcharge, about $0.80 a month on sewer bills, is layered on top and is not included in these figures. Milestones, not to scale.
The record, line by line
Six things sitting on the public record in this case. This is the record the Commission approved three more years of increases on.
- The 2020 rate deal was never contested. When the Commission first set Magnolia's rates and this automatic formula, not a single customer was in the room. It was an uncontested settlement between Magnolia and Commission staff, with no one there to push back. LPSC Order U-35822, 2021
- They cannot verify the $422 million. Magnolia's whole case rests on having invested $422 million in Louisiana. The Commission's own auditor would not stand behind that number under oath, and the rate base she actually ran through the formula was about $233 million, barely half of it. Hearing testimony, February 9, 2026
- A guaranteed 9.5% return, rolled forward without a real review. The formula hands Magnolia a 9.5% guaranteed return on its investment, year after year. Extending it lets that return roll forward automatically, instead of forcing the company to open its books in a full rate case and prove the number is still fair. LPSC Order U-35822
- Every hike lands on the part of your bill you cannot avoid. The usage rate, $4 per 1,000 gallons, has never changed. Every increase has been loaded onto the fixed base charge instead, and the sewer charge is entirely fixed. Conserving water does nothing to lower your bill. LPSC Order U-35822
- The $8 million pandemic add-on. Last year the Commission turned $8 million of unpaid pandemic-era bills into a charge on sewer customers for the next ten years. It was not even the staff's recommendation. The vote was 3 to 2, and two commissioners, including Coussan, voted no. LPSC Docket U-37570, August 20, 2025
- The parent company's books stay closed. Magnolia is owned by CSWR, a Missouri company. The hearing officer recommended approving this extension without ever requiring CSWR to open its consolidated books, the records that would show how much of your bill is corporate overhead and payments to affiliated companies. In Missouri, where the state's public counsel was able to dig into those same parent-company dealings, the record showed CSWR executives taking 43 to 68 percent raises in a single year, no-bid contracts with insider-connected vendors, and CSWR's own auditor flagging potential fraud risks. ALJ recommendation, U-37584; Missouri PSC Docket WR-2023-0006, OPC surrebuttal testimony, 2023
For three years, these families have had to prove they were being overcharged, while Magnolia never had to prove it wasn't. This morning the Commission made that the rule for three more years.
The service those bills are buying
Highest bills in the state. This is the service.
Magnolia's whole case for these rates is that it rescues broken systems. Its own president told this Commission, under oath, that before Magnolia took over, sewage was running into creeks and ditches, and that the company spent millions to fix it.
This is the Greenleaves neighborhood in Mandeville, in June 2026. These are Magnolia customers, paying the highest water and sewer bills in the state.
Sewage is the Louisiana Department of Environmental Quality's job, not the Public Service Commission's. But the Public Service Commission is the body that, on June 17, locked in three more years of the highest water and sewer bills in the state. A Magnolia household can use zero water and still owe about $116 a month. This is what that buys.
And it leads straight back to the money. Magnolia earns its guaranteed profit on what it builds, not on the upkeep that keeps sewage in the pipe. The money to maintain these systems is already in the rates you pay every month. Whether it stays in the ground here or gets shipped to the parent company in Missouri is the question the Commission voted not to open the books on.
"Clean water shouldn't be controversial. We're asking for accountability, transparency, and long-term solutions to protect Louisiana's waterways."
A Greenleaves resident
Why this keeps happening
It is too late to undo Magnolia's broken billing structure. But decisions like this happen because no one on the panel can read the filing and stop it. We don't have an engineer on the Commission. From electric to water to gas, this same issue comes up over and over. Until we get an engineer on the Commission, we are going to keep making bad deals with our utility companies.
Stay on top of it. The next Magnolia filing, and the next fight like it, is already coming. Get the alerts below and I will keep you posted.
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Frequently Asked Questions
What just happened?
On June 17, 2026, the Public Service Commission approved three more years of Magnolia's automatic rate increases. Chris Justin testified against it and asked them to send Magnolia to a full, open-book rate case instead. They approved the extension anyway, and ordered a billing audit that bars the public and does not pause a single increase.
Now that it's approved, am I locked into three more years of rate hikes?
Essentially yes. The extension keeps Magnolia's automatic rate formula running through about 2028, with a step almost every year, and pushes off the full open-book review until roughly 2029. That is exactly why Magnolia wanted the extension instead of a regular rate case.
Didn't the Commission also order an audit?
Yes, but it is toothless. It bars the public from taking part, it stops at Magnolia's Louisiana books and never opens the Missouri parent company's profits, and it does not pause a single one of the approved increases. Magnolia's president said he welcomed it. An audit that changes nothing about your rates is not accountability.
And the dollars show why it is not the win it sounds like. This same review has run every year, and over the last three years it threw out about $2.4 million Magnolia asked to charge, well under a dollar a month per household, money you were never billed because Staff removes it before your rate is set. Even if this audit found four times as much, that is still under $4 a month, and Louisiana law allows no refund. The one thing that would actually change your bill, a full open-book rate case that could finally force the Missouri parent company's books open, is exactly what the Commission voted not to require.
Why is my bill so high when I barely use any water?
Because almost none of your bill depends on how much water you use. Magnolia's usage rate has not changed in years. Every increase has been piled onto the fixed base charge, and the sewer charge is entirely fixed. You can conserve all you want and your bill barely moves. A Magnolia household can use zero water and still owe about $116 a month.
Is there anything left to do?
The rate vote is done, and Louisiana law does not let the Commission refund what you have already paid. But the fight is not over: Magnolia's parent-company books still have not been opened, the next filing is always coming, and the real fix is putting someone on the Commission who can read these filings and stop the next bad deal. Get on the email list above and Chris will keep you posted.
Can't this just be fixed by the next commissioner?
Not retroactively. Louisiana law does not let the Commission refund money you have already been charged. A future commissioner can change the formula going forward, and the real chance to force Magnolia's books open comes at the full rate case, around 2029. That is why who sits on the Commission matters.
Why can't I just drill my own well?
For most Magnolia customers, you legally can't. State health rules require homes near an approved water main to connect to it, exclusive-territory rules keep any competitor from running a line, and many St. Tammany subdivisions were built to require central water. The deal is supposed to be simple: the company gets a monopoly, and in exchange you get safe, reliable, fairly priced service. Magnolia took the monopoly. Customers got the highest water bills in the state.
What is a "Formula Rate Plan," and why does it matter?
It is an automatic formula that lets Magnolia raise rates year after year without a full hearing. A regular rate case is the opposite: it forces the company to open its books, put every cost on the record, and prove the numbers are real, with the public able to push back. Magnolia asked to keep the automatic formula so it never has to do that. Its own auditor was asked under oath whether she could verify the $422 million the company claims it invested. Her answer: "No. I can't verify that."
Who regulates Magnolia, and who do I contact?
The Louisiana Public Service Commission sets Magnolia's rates. Your commissioner has a vote: Slidell, the North Shore, and the Florida Parishes are Commissioner Skrmetta; south Louisiana is Commissioner Coussan.
Who is behind this page?
Chris Justin, a licensed professional engineer who consulted for the Public Service Commission and is a No Party candidate for that Commission. These filings are dense on purpose, so almost no one reads them. This page pulls out what matters in plain language so Magnolia customers know what was decided, and why it keeps happening.