Water District’s 2026 capital improvement program focuses on increasing the use of existing water supplies in North Texas, including “Texoma Two-Step” program
(WYLIE, TX – Sept. 29, 2025)—The North Texas Municipal Water District will invest an estimated $1.7 billion during the 2026 fiscal year as part of its ongoing capital improvement program to support reliable essential services in the North Texas region.
NTMWD’s Board of Directors approved the District’s 2026 fiscal year budget at its most recent board meeting on Sept. 25. The District’s budget will increase by 10 percent to $902 million in 2026, including about $492 million for debt service related to capital improvement projects.
NTMWD issues long-term debt to finance the majority of its capital improvement program. NTMWD’s capital projects are critical to ensure uninterrupted water, wastewater, and solid waste service delivery now and in the future.
More than $1.3 billion of 2026’s Capital Improvement Program will be devoted to ensuring a safe, reliable water supply for North Texas, with a major focus on increasing the use of District’s existing water supplies in Lake Texoma and Bois d’Arc Lake. These improvements are part of NTMWD’s Long Range Water Supply Plan, which includes strategies to meet future water demands in the District’s service area for the next 50 years.
The improvements include the “Texoma Two-Step” program, a series of projects featuring two new pipelines that will transport additional water from Lake Texoma to NTMWD’s Leonard and Wylie Water Treatment Plants. These pipelines will allow NTMWD to make further use of available water supply in Lake Texoma by blending salty Texoma water with water from Lavon and Bois d’Arc Lakes, increasing available water supplies for the region. Construction will begin in late 2026, with completion of the pipelines slated for late 2029.
“With demand for water continuing to increase rapidly in our region, it’s important that we make the best use of our existing water supplies, including our water rights in Lake Texoma,” said Jenna Covington, NTMWD Executive Director and General Manager.
The new Texoma pipeline project will add about 90 million gallons a day of pipeline capacity from Lake Texoma by 2029, helping NTMWD to meet the need for additional water supplies in the District’s rapidly growing service area, especially during peak summer demands.
“While the Texoma Two-Step program is one piece of our plan to meet the growth in our region, it won’t be enough on its own,” Covington said. “It will take billions of dollars in infrastructure investments in the coming years to keep up with the growth and economic development we’re seeing in the region. Water conservation is our first and cheapest supply of water, but new water supplies will be needed in the near term to support the continued growth of the Texas economy.”
In addition to the Texoma pipelines, the District will invest more than $250 million in an expanded pump station and new pipeline that will deliver water from the Leonard Water Treatment Plant to the eastern part of NTMWD’s service area, including cities like Farmersville, Josephine, and Nevada that have been experiencing rapid growth.
The District has received approval for Texas Water Development Board (TWDB) funding for the pipeline and pump station projects. The funding is estimated to save up to $95 million for NTMWD’s Member Cities and Customers, based on the District’s internal projections.
NTMWD’s planned capital improvement spending in 2026 follows about $1.1 billion in capital investments by the District in fiscal year 2024 and nearly $1.2 billion in 2025.
NTMWD funds its budget through the wholesale rates it charges Member Cities and Customers for water, wastewater and solid waste services. The District’s 2026 fiscal year wholesale water rate for Member Cities will be $4.14 per 1,000 gallons, up 7.5 percent from $3.85 in 2025.
The District continues to plan for rising wholesale rates in the coming years, as additional ongoing investments in infrastructure will be required to meet rapid growth in the region. More information on NTMWD’s wholesale rates is available on the District’s website, including updated wholesale rates for NTMWD’s water, wastewater and solid waste systems.