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Rules and Guidance for Water and Sewer Utilities

If you wish to start a water or sewer utility, it is important to become familiar with the associated rules and requirements. Various water and sewer utilities are regulated in different ways, based on state law. The Public Utility Commission of Texas (PUC) will provide, upon request, electronic and paper copies, at a reasonable cost, of the Public Utility Regulatory Act (PURA) and adopted rules from Texas Water Code, Chapters 13.016, 13.043, and 13.187.

Certificates of Convenience and Necessity (CCNs)

A Certificate of Convenience and Necessity (CCN) grants a CCN holder the exclusive right to provide retail water and/or sewer utility service to an identified geographic area. Chapter 13 of the Texas Water Code requires a CCN holder to provide continuous and adequate service to the area within its CCN boundary. Municipalities and districts normally are not required to have a CCN; however some municipalities and districts do have a CCN. A district or municipality may not provide services within an area for which another utility holds a CCN unless the district or municipality has a CCN itself for that area. Water and sewer utilities are certified to provide services in various types of service areas. The most common are (but are not limited to):

Bounded Service Areas: These are areas that form closed boundaries. These boundaries often follow identifiable physical and cultural features such as roads, rivers, streams and political boundaries.

Facilities+200 Feet: These are service areas of utilities and are represented by power/electrical lines; however, they also include a buffer of a specified number of feet (usually 200 feet). The lines can, but may not necessarily, correspond to distribution lines or facilities in the ground and which normally follow along roads.

Facilities Only: Facilities only lines are granted for a "point of use" service area that covers only the customer connections at the time the CCN is granted. Facility Only service lines can, but may not always, correspond to the location of the utility's distribution lines in the ground.

What happens when CCNs overlap?

Dual certification occurs when CCN areas overlap. In areas of dual certification, the customer has the choice of which utility to request service from, as long as all of the required extensions and connection fees are paid to the chosen utility.

Who provides water or sewer service to my property?

The PUC's CCN Viewer enables users to view, print and download retail water and sewer utility CCN service area boundaries. Additionally, the viewer allows users to determine if there are existing retail utility providers that hold a CCN for a particular site or area.

To help identify the water and/or sewer CCN holders in a particular area, please E-mail the Water Utilities Division mapping staff at water@puc.texas.gov. In the subject line of your E-mail write: "Attention Mapping Staff".

How do I apply to obtain or amend a CCN?

If you decide to apply to obtain or amend a water or sewer CCN, you will be required to complete the Application to Obtain or Amend a Water or Sewer CCN form. Instructions on how to complete the CCN application are available here.

As part of the application process, you will be required to demonstrate that you have the financial, managerial and technical capability to provide continuous and adequate service to the requested area. You will also need to provide sufficient mapping information to identify the area being requested. If you plan on serving a new area that will require a new water or sewer system to be built, you will be required to contact the Texas Commission on Environmental Quality (TCEQ) to seek approval of your water or sewer system.

How do I apply to Sell, Transfer, or Merge a Utility

If you decide to sell, transfer or merge a utility, you must first submit an Application for Sale, Transfer, or Merger (STM) of a Retail Public Utility form. In addition to the form there is a separate document with instructions on how to complete the STM form. As part of the application process, you will be required to demonstrate that you have the financial, managerial and technical capability to provide continuous and adequate service to any other utility services areas you may already serve, plus the area you are seeking to acquire.

What if I need to change the rates for my CCN service area?

Investor-Owned Utilities (IOUs) must first file a Rate/Tariff Application Change form before changing retail water or sewer rates. As part of the application process, you will be required to provide information regarding the utility’s cost of service, depreciation and rate of return.

Can I get an exemption from the requirement of having a CCN?

If you:

  • are a water IOU or a non-profit Water Supply Corporation with fewer than 15 potential connections
  • are not already located inside the service area of a CCN holder
  • provide only water service

then you qualify to register as an exempt utility.

To apply for an exemption for a water CCN, you must file an Application for an Exempt Utility Registration form.

Note: there are no exemptions for sewer utilities with fewer than 15 potential connections.

Rules, Forms and Publications for Water Utilities

For copies of the forms mentioned above or other water or sewer related forms, please click “Forms”. For guidance documents and publications, please click “Get the Facts” found in our consumer section. For copies of the PUC’s water related rules, please click “Rules and Laws” to see Chapter 22, Subchapter P of the PUC’s rules and Chapter 24, the PUC’s Substantive rules for water and sewer utilities.

How to contact the PUC Water Utilities Division

Questions or requests for additional information may be sent to us at water@puc.texas.gov. To help speed up our response time, please be as specific as possible regarding your question(s) or request(s). Include the entity names and numbers for the CCNs in question. Please provide your name, address, phone number, and the best way to contact you. You may also call our Water Utilities Division at 512-936-7405.