*1 The Attorney General of Texas July 25, 1984 JIM MATTOX
Attorney General
Supreme Court Building P. 0. BOX 12646 Au~lin, TX. 7671 l- 2546 [51214752501] Telex 910/674-1367 Telecopier 5121475.0266 Mr. Charles E. Neml:: Executive~Director Texas Department o:i Water Resouries P. 0. Box 13087, C;x),ltol Station Austin, Texas 78'1 .l Opinion No. JM-181 Re: Validity of agreement between the city of Denison Utility Authority and the Greater Texoma 714 Jackson, Suite 700 Dear Mr. Nemir: Dallas, TX. 75202.4506 214/742-6944 You ask whethI,:: the Greater Texoma Utility Authority [hereinafter the Authority] ma); contract with the city of Denison to acknowledge 4624 Alberta Ave., Suite 160 Denlson's exclusf?,t right to provide water service to certain El Paso, TX. 799052793 geographical areas of Grayson County. Certain of these areas comprise 9151533.3464 service areas of thz Authority. In effect, you inquire as to whether
the Authority may llind itself to provide service within these areas ,,lOOt Texa$, Suite 700 only with the consl?llt of the city of Denison. ,ouston, TX. 77002-3111
713/223?s6M The Greater 1'e:xoma Utility Authority was created by the Sixty-
sixth Legislature, Acts 1979, chapter 97. The Authority Is a con- servation and reclmation district pursuant to article XVI, section 59 806 Broadway, Suite 312 of the Texas Comjtitution. Initially, the jurisdiction of the Lubbock, TX. 79401.3479 606/747-5236 Authority included only the cities of Denison and Sherman. However,
additional areas hme been annexed by the Authority. In 1983, the city of Denison requested that the Authority formally agree not to 4309 N. Tenth. Suite B provide water servt,:e to certain areas of Grayson County served by the McAllen. TX. 76501.1685 5121882.4547 city of Denison. In Banker v. Jefferson County Water Control and Improvement 200 Main Plaza. Suite 400 District No. One, :?I7 S.W.2d 130 (Tex. Civ. App. - Beaumont 1955, writ San Antonio, TX. 76205.2797 ref'd n.r.e.). the court held that a water district created uursuant 512/225-4191 to article XVI, tzection 59 is vested with certain gove&uental functions. Among ,cllese functions is the duty to determine the persons An Equal Opportunity/ to whom and the conditions upon which any water owned by the district Affirmative Actlon Employer is sold. The court held that such governmental functions are in the
nature of police ptxrers and that: The police power of a government or of a governme:1:al agency can never be abdicated or bargained away, and is inalienable even by express grant. Id. at 134.
- *2 r . Mr. Charles E. Nemir - Page 2 (JM-181) The attempt of the Alchority to bargain away its governmental duty to the city of Denison is in direct conflict vith Banker and is therefore unenforceable. However, such a contractual provision is unnecessary in the present situation.
Both the city of DelLson and the Authority are regulated by article 1446~. V.T.C.S., the Public Utility Regulatory Act (PURA) as retail public utilities. Section 49(a) of PURA provides:
'Retail public utility' means any person, corporation, waiisr supply or Sewer service corporation, munL:ipality, political subdivision or agency. or cooperative corporation, now or hereafter operat:lug, maintaining, or controlling in Texas facilitL,?s for providing retail utility service.
As such, section 50(2) of PURA requires both entities to obtain a certification of convenience! and necessity for any area they seek to serve :
Except as otherwise provided in this article no retail public ut3lity may furnish, make available, render, or extend retail public utility service to any area to which retail utility service is being lawfully furnishad by another retail public certificate of prlblic convenience and necessity that includes t:x area in which the consuming facility is located.
As provided in section 50(2) of PURA. only one retail public utility may obtain a certificate oj' convenience and necessity for any given area. The city of Deniscxl is certificated by the Public Utility Commission to provide water service within certain areas of Grayson county. The Authority therefore may not be certificated for that area. The result is that t:he Authority cannot nor need not bargain away a governmental right which it does not possess.
SUMMARY The Greater 'I'rxoma Utility Authority may not contract with tha city of Denison to acknowledge Denison's exc1usix.e right to provide water service to certain geographical areas of Grayson County, some of which <,omprise service areas of the Authority, and bind itself to provide service therein only with the consent of the city of Denison.
Very truly yours L-LAG
a JIM MATTOX Attorney General of Texas u. 798 *3 Mr. Charles E. Nemir - Page :; (JM-181)
TOM GREEN
First Assistant Attorney Genwal
DAVID R. RICHARDS
Executive Assistant Attorne:r General
Prepared by Jerry Benedict
Assistant Attorney General
APPROVED:
OPINION COMMITTEE
Rick Gilpin, Chairman
Jerry Benedict
David Brooks
Colin Carl
Susan Garrison
Jim Moellinger
Nancy Sutton