Current through Reg. 50, No. 13; March 28, 2025
(a) In determining
whether to grant or amend a certificate of convenience and necessity (CCN), the
commission will ensure that the applicant possesses the financial, managerial,
and technical capability to provide continuous and adequate service.
(1) For retail water utility service, the
commission will ensure that the applicant has:
(A) a public water system approved by the
Texas Commission on Environmental Quality (TCEQ) that is capable of providing
drinking water that meets the requirements of Texas Health and Safety Code,
chapter 341, TCEQ rules, and the TWC; and
(B) access to an adequate supply of water or
a long-term contract for purchased water with an entity whose system meets the
requirement of paragraph (1)(A) of this subsection.
(2) For retail sewer utility service, the
commission will ensure that the applicant has:
(A) a TCEQ-approved system that is capable of
meeting TCEQ design criteria for sewer treatment plants, TCEQ rules, and the
TWC; and
(B) access to sewer
treatment and/or capacity or a long-term contract for purchased sewer treatment
and/or capacity with an entity whose system meets the requirements of paragraph
(2)(A) of this subsection.
(b) When applying for a new CCN or a CCN
amendment for an area that would require construction of a physically separate
water or sewer system, the applicant must demonstrate that regionalization or
consolidation with another retail public utility is not economically feasible.
To demonstrate this, the applicant must at a minimum provide:
(1) for applications to obtain or amend a
water CCN, a list of all retail public water and/or sewer utilities within one
half mile from the outer boundary of the requested area;
(2) for applications to obtain or amend a
sewer CCN, a list of all retail public sewer utilities within one half mile
from the outer boundary of the requested area;
(3) copies of written requests seeking to
obtain service from each of the retail public utilities referenced in paragraph
(1) or (2) of this subsection or evidence that it is not economically feasible
to obtain service from the retail public utilities referenced in paragraph (1)
or (2) of this subsection;
(4)
copies of written responses from each of the retail public utilities referenced
in paragraph (1) or (2) of this subsection from which written requests for
service were made or evidence that they failed to respond within 30 days of the
date of the request;
(5) if a
neighboring retail public utility has agreed to provide service to a requested
area, then the following information must also be provided by the applicant:
(A) a description of the type of service that
the neighboring retail public utility is willing to provide and comparison with
service the applicant is proposing;
(B) an analysis of all necessary costs for
constructing, operating, and maintaining the new facilities for at least the
first five years of operations, including such items as taxes and insurance;
and
(C) an analysis of all
necessary costs for acquiring and continuing to receive service from the
neighboring retail public utility for at least the first five years of
operations.
(c)
Notwithstanding any other provision of this chapter, a Class A utility may
apply to the commission for an amendment of a water or sewer CCN held by a
municipal utility district, other than a municipal utility district located
wholly or partly inside of the corporate limits or extraterritorial
jurisdiction of a municipality with a population of two million or more, to
allow the Class A utility to have the same rights and powers under the CCN as
the municipal utility district.
(1) An
application filed under this subsection must include:
(A) information identifying the
applicant;
(B) the identifying
number of the CCN to be amended;
(C) the written consent of the municipal
utility district that holds the certificate of convenience and
necessity;
(D) a written statement
by the municipal utility district that the application is supported by a
contract between the municipal utility district and the utility for the utility
to provide services inside the certificated area and inside the boundaries of
the municipal utility district; and
(E) a description of the proposed service
area by:
(i) a metes and bounds survey
certified by a licensed state land surveyor or a registered professional land
surveyor;
(ii) the Texas State
Plane Coordinate System;
(iii)
verifiable landmarks, including roads, creeks, or railroad lines; or
(iv) if a recorded plat of the area exists,
lot and block number.
(2) No later than the 60th day after the
Class A utility files the application, the commission will review an
application filed under this subsection and determine whether the application
is sufficient.
(3) Once the
application is found sufficient, the commission will:
(A) find that the amendment of the
certificate is necessary for the service, accommodation, convenience, or safety
of the public; and
(B) grant the
application and amend the certificate.
(4) Chapter 2001 of the Texas Government Code
does not apply to a petition filed under this subsection. The applicant,
municipal utility district, or commission staff may file a motion for rehearing
of the commission's decision on the same timeline that applies to other final
orders of the commission. The commission's order ruling on the application may
not be appealed.
(5) The commission
may approve an application filed under this subsection that requests to amend a
CCN with area that is in the extraterritorial jurisdiction of a municipality
without the consent of the municipality.
(6) TWC §13.241(d) and §13.245 and
subsections (e),(f), and (g) of this section do not apply to an application
filed under this subsection.
(d) The commission may approve applications
and grant or amend a CCN only after finding that granting or amending the CCN
is necessary for the service, accommodation, convenience, or safety of the
public. The commission may grant or amend the CCN as applied for, or refuse to
grant it, or grant it for the construction of only a portion of the
contemplated facilities or extension thereof, or for only the partial exercise
of the right or privilege and may impose special conditions necessary to ensure
that continuous and adequate service is provided.
(e) In considering whether to grant or amend
a CCN, the commission will also consider:
(1)
the adequacy of service currently provided to the requested area;
(2) the need for additional service in the
requested area, including, but not limited to:
(A) whether any landowners, prospective
landowners, tenants, or residents have requested service;
(D) written application or requests for
service; or
(E) reports or market
studies demonstrating existing or anticipated growth in the area;
(3) the effect of granting or
amending a CCN on the CCN recipient, on any landowner in the requested area,
and on any retail public utility that provides the same service and that is
already serving any area within two miles of the boundary of the requested
area. These effects include but are not limited to regionalization, compliance,
and economic effects;
(4) the
ability of the applicant to provide adequate service, including meeting the
standards of the TCEQ and the commission, taking into consideration the current
and projected density and land use of the requested area;
(5) the feasibility of obtaining service from
an adjacent retail public utility;
(6) the financial ability of the applicant to
pay for the facilities necessary to provide continuous and adequate service and
the financial stability of the applicant, including, if applicable, the
adequacy of the applicant's debt-equity ratio;
(7) environmental integrity;
(8) the probable improvement in service or
lowering of cost to consumers in that area resulting from the granting of the
new CCN or a CCN amendment; and
(9)
the effect on the land to be included in the requested area.
(f) The commission may require an
applicant seeking to obtain a new CCN or a CCN amendment to provide a bond or
other form of financial assurance to ensure that continuous and adequate retail
water or sewer utility service is provided. The commission will set the amount
of financial assurance. The form of the financial assurance will be as
specified in §
24.11 of this title (relating to
Financial Assurance). The obligation to obtain financial assurance under this
chapter does not relieve an applicant from any requirements to obtain financial
assurance in satisfaction of another state agency's rules.
(g) Where applicable, in addition to the
other factors in this chapter the commission will consider the efforts of the
applicant to extend retail utility service to any economically distressed areas
located within the applicant's certificated service area. For purposes of this
subsection, "economically distressed area" has the meaning assigned in TWC
§15.001.
(h) for two or more
retail public utilities that apply for a CCN to provide retail water utility
service to an unserved area located in an economically distressed area as
defined in TWC §15.001, the commission will conduct an assessment of the
applicants to determine which applicant is more capable financially,
managerially and technically of providing continuous and adequate service. The
assessment will be conducted after the preliminary hearing and only if the
parties cannot agree among themselves regarding who will provide service. The
assessment will be conducted considering the following information:
(1) all criteria from subsections (a)-(g) of
this section;
(2) source-water
adequacy;
(3) infrastructure
adequacy;
(4) technical knowledge
of the applicant;
(5) ownership
accountability;
(6) staffing and
organization;
(9) fiscal
management and controls;
(10)
compliance history; and
(11)
planning reports or studies by the applicant to serve the proposed
area.
(i) Except as
provided by subsection (j) of this section, a landowner who owns a tract of
land that is at least 25 acres and that is wholly or partially located within
the requested area may elect to exclude some or all of the landowner's property
from the requested area by providing written notice to the commission before
the 30th day after the date the landowner receives notice of an application for
a CCN or for a CCN amendment. The landowner's election is effective without a
further hearing or other process by the commission. If a landowner makes an
election under this subsection, the requested area must be modified to remove
the electing landowner's property. An applicant that has land removed from its
requested area because of a landowner's election under this subsection may not
be required to provide retail water or sewer utility service to the removed
land for any reason, including a violation of law or commission rules.
(1) The landowner's request to opt out of the
requested area must be filed with the commission and must include the following
information:
(A) the commission docket number
and CCN number if applicable;
(B)
the total acreage of the tract of land subject to the landowner's opt-out
request; and
(C) a metes and bounds
survey for the tract of land subject to the landowner's opt-out request, that
is sealed or embossed by either a licensed state land surveyor or registered
professional land surveyor
(2) The applicant must file the following
mapping information to address each landowner's opt-out request:
(A) a detailed map identifying the revised
requested area after removing the tract of land subject to each landowner's
opt-out request. The map must also identify the outer boundary of each tract of
land subject to each landowner's opt-out request, in relation to the revised
requested area. The map must identify the tract of land and the requested area
in reference to verifiable man-made and natural landmarks such as roads,
rivers, and railroads;
(B) digital
mapping data in a shape file (SHP) format georeferenced in either NAD 83 Texas
State Plane Coordinate System (US Feet) or in NAD 83 Texas Statewide Mapping
System (Meters) for the revised requested area after removing each tract of
land subject to any landowner's opt-out request. The digital mapping data must
include a single, continuous polygon record; and
(C) the total acreage for the revised
requested area after removing each tract of land subject to the landowner's
opt-out requests. The total acreage for the revised requested area must
correspond to the total acreage included with the digital mapping
data.
(j) If
the requested area is located within the boundaries or extraterritorial
jurisdiction of a municipality with a population of more than 500,000 and the
municipality or a retail public utility owned by the municipality is the
applicant, a landowner is not entitled to make an election under subsection (i)
of this section but is entitled to file a request to intervene in order to
contest the inclusion of the landowner's property in the requested area at a
hearing regarding the application.
