The bill, S.B. No. 947, amends the Water Code to clarify the process for municipalities seeking a certificate of public convenience and necessity to provide water or sewer services in areas they have incorporated or annexed. Key changes include the removal of provisions that required the utility commission to determine compensation for property rendered useless or valueless by the certification. Instead, the bill mandates that if a municipality requests the transfer of specific property from a retail public utility, the utility commission must determine adequate and just compensation for that property, as well as for any damages or adverse effects on property that remains with the retail public utility after the certification.

Additionally, the bill stipulates that municipalities or franchised utilities may take possession of transferred property pending appeal, provided they pay the established compensation. It also emphasizes that if a municipality files for certification on behalf of a franchised utility, both entities must be joined in the application, and the franchised utility is responsible for all required payments to compensate the retail public utility for any property transfer or damage. The changes will apply only to proceedings that commence after the bill's effective date of September 1, 2025.

Statutes affected:
Introduced: Water Code 13.255 (Water Code 13)