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.
What is a Utility Annual Report and when is it due?
Please see the publication: Annual Reports: A Guide for Utilities.
Certificates of Convenience and Necessity (CCNs)
A Certificate of Convenience and Necessity (CCN) grants a CCN holder the exclusive right to provide retail water 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 are not
required to have a CCN to serve in areas that are not already being lawfully served by another retail public utility; however, some municipalities and districts choose to obtain
a CCN to protect their service area from encroachment. A district may not provide retail water or sewer service within the CCN service area of a retail public utility or within
the boundaries of another district without the retail public utility's or district's consent, unless the district has a CCN to provide retail water or sewer utility service to
that area. Similarly, a municipality may not provide retail water or sewer service within the CCN service area of a retail public utility unless the municipality has a CCN to
provide retail water or sewer utility service to that area.
Types of Certificated Service Areas:
Bounded Service Areas:
A certificated service area with closed boundaries that often follows identifiable physical and cultural features such as roads, rivers, streams and political boundaries.
A certificated service area represented by lines on a map. They include a buffer of a specified number of feet (usually 200 feet). The lines on a map normally follow
along roads and may correspond to distribution lines or facilities in the ground.
A certificated service area represented by lines on a map. They are granted for a "point of use" that covers only the customer connections at the time the CCN is
granted. Facility only service lines normally follow along roads and may correspond to the distribution lines or facilities in the ground.
Frequently Asked Questions about Certificates of Convenience and Necessity (CCNs)
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 email@example.com. 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. 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?
- 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.