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 

714 Jackson, Suite 700 

Dallas, TX. 75202.4506 

214/742-6944 

4624 Alberta Ave., Suite 160 

El Paso, TX. 799052793 

9151533.3464 

,,lOOt Texa$, Suite 700 

,ouston, TX. 77002-3111 

713/223?s6M 

806 Broadway, Suite 312 

Lubbock, TX. 79401.3479 

606/747-5236 

4309 N. Tenth. Suite B 

McAllen. TX. 76501.1685 

5121882.4547 

200 Main Plaza. Suite 400 In Banker v. Jefferson County Water Control and Improvement 

San Antonio, TX. 76205.2797 District No. One, :?I7 S.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 

An Equal Opportunity/ 

Affirmative Actlon Employer 

The Attorney General of Texas 

July 25, 1984 

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 

and the Greater Texoma 

Utility Authority 

Dear Mr. Nemir: 

You ask whethI,:: the Greater Texoma Utility Authority [hereinafter 

the Authority] ma); contract with the city of Denison to acknowledge 

Denlson's exclusf?,t right to provide water service to certain 

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 

only with the consl?llt of the city of Denison. 

The Greater 1'e:xoma Utility Authority was created by the Sixtysixth Legislature, Acts 1979, chapter 97. The Authority Is a conservation and reclmation district pursuant to article XVI, section 59 

of the Texas Comjtitution. Initially, the jurisdiction of the 

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 

provide water servt,:e to certain areas of Grayson County served by the 

city of Denison. 

to article XVI, tzection 59 is vested with certain gove&uental 

functions. Among ,cllese functions is the duty to determine the persons 

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 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. 

p. 797 
Mr. Charles E. Nemir - Page 2 (JM-181) 

r . 

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 
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 

p. 799