Water & Sewer Utilities in Texas

What Is a Certificate of Convenience and Necessity?

In Texas, a Certificate of Convenience and Necessity (CCN) gives a retail public utility (i.e. water and sewer company) exclusive right to providing services to a certain area.

Because they have a monopoly, the CCN holder is legally obligated to provide “continuous and adequate” utilities to the designated area, and other utility companies cannot infringe upon those boundaries. CCNs, therefore, are closely related to the water rights of both individuals and business owners.

Attorney Mark McPherson’s first water rights case, in fact, involved a CCN dispute. He spent three days in a contested case evidentiary hearing opposing a CCN holder’s application to cancel its CCN, which would have left his client with no water supply.

The TCEQ’s Executive Director argued that the CCN should be canceled, but the administrative law judge accepted Mark’s argument and determined that the application to cancel the CCN should be denied.

This case played a significant role in Mark’s decision to focus his practice exclusively on environmental and water rights. He is now dedicated to serving both real estate developers and the owners of utility companies throughout the state of Texas.

Contact McPherson Law Firm PLLC at (214) 722-7096 today to learn more. Our Dallas environmental law attorney is here to support your transactions and fight for your rights to vital utilities.

How We Serve Real Estate Developers

Removing Properties from CCNs

In previous decades, people could obtain CCNs over vast geographic areas with little to no financial ability to provide the area with continuous and adequate service. Landowners, meanwhile, had very few rights to participate in the granting, amendment, or termination of the CCN.

Once land was included in a CCN Certificated Area, a landowner could not remove their land without going through a costly and time-consuming contested case proceeding at the TCEQ. As a result, the CCN holder could require hefty payments from landowners before consenting to remove their land from the Certificated Area, unless the landowner had the resources to go through the expensive contested case process—and this was rarely the case.

Now, however, landowners in a CCN Certificated Area have additional rights to participate in the CCN permitting process. In some instances, landowners can remove their land from the CCN area using expedited removal processes administered by TCEQ. Nevertheless, companies may still be motivated to prioritize profit over property owners’ needs. 

If you are considering buying land in a CCN Certificated Area, you owe it to yourself to conduct appropriate due diligence on the ability of the CCN holder to provide continuous and adequate service to the tract of your desire. Under certain circumstances, state law may allow you to remove a property from the CCN Certified Area to obtain less costly service. But this process can be highly complex and costly without qualified support.