The Attorney General of Texas
July 25, 1984
JIM MATTOX
Attorney General
Supreme Court Building Mr. Charles E. Neml:: Opinion No. JM-181
P. 0. BOX 12646
Au~lin, TX. 7671 l- 2546
Executive~Director
51214752501 Texas Department o:iWater Resouries Re: Validity of agreement
Telex 910/674-1367 P. 0. Box 13087, C;x),ltol
Station between the city of Denison
Telecopier 5121475.0266 Austin, Texas 78'1.l and the Greater Texoma
Utility Authority
714 Jackson, Suite 700
Dallas, TX. 75202.4506 Dear Mr. Nemir:
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
El Paso, TX. 799052793
Denlson's exclusf?,t right to provide water service to certain
9151533.3464 geographical areas of Grayson County. Certain of these areas comprise
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:xomaUtility Authority was created by the Sixty-
sixth Legislature, Acts 1979, chapter 97. The Authority Is a con-
806 Broadway, Suite 312 servation and reclmation district pursuant to article XVI, section 59
Lubbock, TX. 79401.3479 of the Texas Comjtitution. Initially, the jurisdiction of the
606/747-5236
Authority included only the cities of Denison and Sherman. However,
additional areas hme been annexed by the Authority. In 1983, the
4309 N. Tenth. Suite B city of Denison requested that the Authority formally agree not to
McAllen. TX. 76501.1685 provide water servt,:eto certain areas of Grayson County served by the
5121882.4547 city of Denison.
200 Main Plaza. Suite 400 In Banker v. Jefferson County Water Control and Improvement
San Antonio, TX. 76205.2797 District No. One, :?I7S.W.2d 130 (Tex. Civ. App. - Beaumont 1955, writ
512/225-4191 ref'd n.r.e.). the court held that a water district created uursuant
to article XVI, tzection 59 is vested with certain gove&uental
functions. Among ,cllesefunctions is the duty to determine the persons
An Equal Opportunity/
Affirmative Actlon Employer to whom and the conditions upon which any water owned by the district
is sold. The court held that such governmental functions are in the
nature of police ptxrersand 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.
p. 797
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,?sfor 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:heAuthority cannot nor need not bargain
away a governmental right which it does not possess.
SUMMARY
The Greater 'I'rxomaUtility Authority may not
contract with tha city of Denison to acknowledge
Denison's exc1usix.eright 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.
L-LAG
Very truly yours
a
JIM MATTOX
Attorney General of Texas
u. 798
Mr. Charles E. Nemir - Page :; (JM-181)
TOM GREEN
First Assistant Attorney Genwal
DAVID R. RICHARDS
Executive Assistant Attorne:rGeneral
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
p. 799