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Establishing a New Water or Sewer Utility


This page lists questions used in determining whether there is a need to establish a new water or sewer utility and, if the need exists, how to do so.

Before bringing water or sewer service to a new development, you must first consider the following questions:

If you determine that you need to set up a new utility, you may wish to contact the Texas Commission on Environmental Quality (TCEQ) to learn which permits and/or approvals are required. TCEQ can also provide the requirements for designing and building a water or sewer system.

If, after contacting the PUC, you believe that you have the resources to establish a successful new water or sewer utility, one option available is to create a sole proprietorship or a for-profit water or sewer utility corporation (called an investor-owned utility, or IOU, under the PUC's rules). Another option is to create a nonprofit water supply or sewer service corporation (WSC). To pursue either of these options, you must:

  • Create a corporation through the Texas Secretary of State's Office.
  • Submit plans, specifications and proof of a reliable water supply for your proposed water system to the TCEQ.
  • Obtain a discharge permit from the TCEQ for the proposed sewer treatment plant or arrange to connect with a neighboring system.
  • Secure funding for the proposed utility.
  • Obtain a CCN delineating the service area.
  • Set up a tariff showing your schedule of rates and service rules.

For information about these utility types and their regulations, see Rules and Guidance for Water Utilities.

Further Guidance

Water: What is My Source presents options for determining whether there is an entity that provides retail water or sewer utility service to your area and, if so, who does