Untitled Texas Attorney General Opinion ( 1984 )

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