TABLE OF CONTENTS

I. Introduction ....................................................................................................... 1
II. Background on Decertification of CCNs .......................................................... 1
III. Section 1926(b) Federal Debt Protection .......................................................... 1
IV. CCN Decertification by Expedited Release ...................................................... 2
A. Statutory Expedited Release.............................................................................. 2
B. Streamlined Expedited Release Under SB 573 ................................................. 3
C. Early Petitions Using the SB 573 Streamlined Expedited Release Process...... 4
D. Aqua WSC Lawsuits Challenging Decertification............................................ 5
E. Compensation to the Incumbent Utility ............................................................ 5
V. TCEQ Rulemaking............................................................................................ 6
VI. Conclusion......................................................................................................... 6

I. INTRODUCTION

In the most recent session of the Texas Legislature, additional mechanisms were added to the Texas Water Code for landowners to utilize in determining which retail water or sewer service provider will serve their properties. Senate Bill 573 (“SB 573”) streamlined and modified the applicability of the existing “expedited release” process, which authorizes certain landowners to petition the Texas Commission on Environmental Quality (TCEQ) to have their property removed from the existing retail service provider’s certificate of convenience and necessity (CCN), which is the service area for the provider as designated by the TCEQ. This paper discusses the basics of decertification, the reach of SB 573 and the first petitions processed under the new legislation, as well as some of the remaining issues in implementing the new expedited release process.

II. BACKGROUND ON DECERTIFICATION OF CCNs

A CCN is a permit issued by the TCEQ that authorizes and obligates a retail public utility to furnish, make available, render, or extend continuous and adequate retail water or sewer utility service to a specified geographic area. While all retail public utilities can attempt to secure CCNs, “utilities” (which generally include private entities) and water supply corporations are required to obtain a CCN from the TCEQ before rendering retail water or sewer utility service directly or indirectly to the public.

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