By Yost H.B. No. 2677
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to the requirement of water utilities to obtain a
1-3 certificate of convenience and necessity.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Section 13.181, Water Code, is amended to read as
1-6 follows:
1-7 Sec. 13.181. Power to Ensure Compliance; Rate Regulation.
1-8 Subject to this chapter, the commission has all authority and power
1-9 of the state to ensure compliance with the obligations of utilities
1-10 under this chapter. For this purpose the regulatory authority may
1-11 fix and regulate rates of utilities, including rules and
1-12 regulations for determining the classification of customers and
1-13 services and for determining the applicability of rates. A rule or
1-14 order of the regulatory authority may not conflict with the rulings
1-15 of any federal regulatory body. Except Section 13.192, this
1-16 subchapter shall apply only to a utility and shall not be applied
1-17 to municipalities, districts, or water supply or sewer service
1-18 corporations. The commission may adopt rules which authorize a
1-19 utility which is permitted under Section 13.242(c) to provide
1-20 service without a certificate of public convenience and necessity
1-21 to request or implement a rate increase and operate according to
1-22 rules, regulations, and standards of service other than those
1-23 otherwise required under this chapter provided that rates are just
2-1 and reasonable for customers and the utility and that service is
2-2 safe, adequate, efficient, and reasonable.
2-3 SECTION 2. Section 13.242, Water Code, is amended to read as
2-4 follows:
2-5 Sec. 13.242. Certificate Required. (a) Unless otherwise
2-6 specified, a utility or water supply or sewer service corporation
2-7 may not in any way render retail water or sewer utility service
2-8 directly or indirectly to the public without first having obtained
2-9 from the commission a certificate that the present or future public
2-10 convenience and necessity will require that installation,
2-11 operation, or extension, and except as otherwise provided by this
2-12 subchapter, a retail public utility may not furnish, make
2-13 available, render, or extend retail water or sewer utility service
2-14 to any area to which retail water or sewer utility service is being
2-15 lawfully furnished by another retail public utility without first
2-16 having obtained a certificate of public convenience and necessity
2-17 that includes the area in which the consuming facility is located.
2-18 (b) A person that is not a retail public utility or a
2-19 utility or water supply corporation that is operating under
2-20 provisions pursuant to Subsection (c) may not construct facilities
2-21 to provide water or sewer service to more than one service
2-22 connection not on the property owned by the person and that are
2-23 within the certificated area of a retail public utility without
2-24 first obtaining written consent from the retail public utility. A
2-25 person that violates this section or the reasonable and legal terms
3-1 and conditions of any written consent is subject to the
3-2 administrative penalties described by Section 13.4151 of this code.
3-3 (c) The commission may by rule allow a utility or water
3-4 supply corporation to render retail water service without a
3-5 certificate of public convenience and necessity if the utility or
3-6 water supply corporation has less than 15 potential connections and
3-7 is not within the certificated area of another retail public
3-8 utility. <Not later than September 1, 1990, a utility or water
3-9 supply or sewer service corporation that has been previously
3-10 exempted from the certificate requirements because of operations,
3-11 extensions, or service in progress on September 1, 1975, shall
3-12 submit to the commission a completed application to obtain a
3-13 certificate of public convenience and necessity for the service
3-14 being provided on September 1, 1975. The commission shall grant a
3-15 certificate of public convenience and necessity to the customer
3-16 locations currently being served by the utility or water supply or
3-17 sewer service corporation that were also being served on September
3-18 1, 1975.>
3-19 SECTION 3. Section 13.250(d), Water Code, is amended to read
3-20 as follows:
3-21 (d) Except as provided by this subsection, a <A> retail
3-22 public utility that has not been granted a certificate of public
3-23 convenience and necessity may not discontinue, reduce, or impair
3-24 retail water or sewer service to any ratepayer without approval of
3-25 the regulatory authority. Except as provided by this subsection, a
4-1 utility or water supply corporation that is allowed to operate
4-2 without a certificate of public convenience and necessity under
4-3 Section 13.242(c) may not discontinue, reduce, or impair retail
4-4 water or sewer service to any ratepayer without the approval of the
4-5 regulatory authority. Subject to rules of the regulatory
4-6 authority, a retail public utility, utility, or water supply
4-7 corporation described in this subsection may discontinue, reduce,
4-8 or impair retail water or sewer service <except> for:
4-9 (1) nonpayment of charges;
4-10 (2) nonuse; or
4-11 (3) other similar reasons in the usual course of
4-12 business.
4-13 SECTION 4. Section 13.254, Water Code, is amended to read as
4-14 follows:
4-15 Sec. 13.254. Revocation or Amendment of Certificate.
4-16 (a) The commission at any time after notice and hearing may revoke
4-17 or amend any certificate of public convenience and necessity with
4-18 the written consent of the certificate holder or if it finds that
4-19 the certificate holder has never provided, is no longer providing,
4-20 or has failed to provide continuous and adequate service in the
4-21 area, or part of the area, covered by the certificate.
4-22 (b) Upon written request from the certificate holder, the
4-23 executive director may cancel the certificate of a utility or water
4-24 supply corporation authorized by rule to operate without a
4-25 certificate of public convenience and necessity under Section
5-1 13.242(c).
5-2 (c) If the certificate of any public utility is revoked or
5-3 amended, the commission may require one or more public utilities to
5-4 provide service in the area in question.
5-5 SECTION 5. The importance of this legislation and the
5-6 crowded condition of the calendars in both houses create an
5-7 emergency and an imperative public necessity that the
5-8 constitutional rule requiring bills to be read on three several
5-9 days in each house be suspended, and this rule is hereby suspended.
5-10 COMMITTEE AMENDMENT NO. 1
5-11 Amend H.B. 2677, SECTION 2, subsection (c), on Page 3, Line
5-12 1, after the word "a" and before the word "utility" add the
5-13 following language "municipality or".
5-14 Amend H.B. 2677, SECTION 2, subsection (c), on Page 3, Line
5-15 3, after the word "the" and before the word "utility" add the
5-16 following language "municipality has given notice under Section
5-17 13.255 of this code that it intends to provide retail water service
5-18 to an area or if the".
5-19 Yost