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 DistrictNo. 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 AnEqualOpportunity/ 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 OpinionNo.JM-181 Re: Validity of agreement between the city of Denison and the Greater Texoma UtilityAuthority Dear Mr. Nemir: You askwhethI,::

the GreaterTexoma UtilityAuthority [hereinafter the Authority] ma);contract with the city of Denison to acknowledge Denlson's exclusf?,t right to provide water service to certain geographicalareas of GraysonCounty. Certain of these areas comprise service areas of thz Authority. In effect,you inquire as to whether the Authority may llinditself to provide servicewithin these areas onlywith 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 conservationand reclmation districtpursuant to articleXVI, 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 providewater servt,:e to certainareas of Grayson County servedby the city of Denison.

to article XVI, tzection59 is vested with certain gove&uental functions. Among ,cllese functions is the duty to determine thepersons to whom and the conditionsupon which any water ownedby the district is sold. The court held that such governmental functions are in the nature of policeptxrers and that: The police power of a government or of a governme:1:alagency can never be abdicated or bargained away, and is inalienableeven by express grant. Id. at 134. -

p. 797Mr. 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 conflictvith 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 retailpublic 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 requiresboth entities to obtain a certificationof convenience! and necessity for any area they seek to serve: Except as otherwise provided in this article no

retailpublic ut3litymay furnish,make available, render, or extend retailpublicutility service to any area towhich retail utility service is being lawfully furnishad by another retail public certificate of prlblicconvenience 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 Deniscxlis 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 governmentalrightwhich it does not possess. SUMMARY The Greater 'I'rxoma Utility Authority may not contractwith tha city of Denison to acknowledge Denison's exc1usix.e right to providewater 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 trulyyours 

# L-LAG

a
JIM MATTOX Attorney General of Texas

u. 798Mr. Charles E. Nemir - Page :; (JM-181)

TOM GREEN FirstAssistantAttorney Genwal DAVID R. RICHARDS ExecutiveAssistantAttorne:r General Preparedby Jerry Benedict AssistantAttorney General APPROVED: OPINION COMMITTEE Rick Gilpin, Chairman Jerry Benedict David Brooks Colin Carl SusanGarrison JimMoellinger Nancy Sutton

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