The regulations surrounding water use are as complex as the waterways that branch across the state. In addition to state and federal regulations, cities, counties and conservation districts may have a say in water issues, which often cross jurisdictional boundaries. Both drought and flooding bring special considerations, and, as in all areas of environmental law, water regulations change frequently. With extensive experience in all aspects of water use, from permitting to litigation, our environmental attorneys bring clarity to this complicated field.

Water Rights and Usage

The regulation of water in Texas differs depending on whether the source of supply is surface water or groundwater. We help clients identify and secure water supply for their operations from a variety of sources, which include the following:

  • Surface water: We help clients obtain rights to divert and use surface water, including purchasing and amending water rights permits and certificates of adjudication. We also advise clients on the applicability of water rights exemptions, including the domestic and livestock exemption. In addition to assisting clients with their immediate water needs, we have been instrumental in helping our clients receive consideration in the Texas Water Development Board’s State Water Plan, a crucial step in planning for significant future water needs.
  • Groundwater: We are also experienced with the laws and regulations governing the use of groundwater, and we represent clients in purchasing and permitting groundwater rights and in litigation over withdrawals from groundwater aquifers. We understand the statutory authority – and the limitations on that authority – of groundwater conservation districts, and we represent clients in hearings, rule making proceedings, and litigation involving groundwater districts.
  • Purchase and re-use: If sources of surface water or groundwater are limited or unavailable, another option is to enter into a contract to purchase water from an existing water supplier. We help clients negotiate those contracts and identify cost-effective strategies for obtaining a water supply. We have also helped clients develop innovative projects that involve the re-use of water for a number of applications, including landscaping, irrigation, and a variety of industrial purposes.

Special Districts and Water Utilities

We represent retail public utilities, including municipal utility districts, special utility districts, investor-owned utilities, and non-profit water supply corporations in various organizational, regulatory, and rate matters. We have represented clients in complex transactions involving the formation of special districts, including municipal utility districts and special utility districts. We are also experienced in obtaining regulatory approval for the sale, transfer, and merger of water utilities through the STM application process at the Public Utility Commission of Texas (PUCT) and for the adoption of impact fees in compliance with TCEQ rules and chapter 395, Local Government Code. We have also represented water utilities and other clients in hearings at the State Office of Administrative Hearings (SOAH) and the PUCT (and its predecessor the TCEQ) in disputes over service areas and certificates of convenience and necessity, water service costs, and the wholesale supply of water.

Because of our extensive experience representing these types of entities, we are able to provide a comprehensive suite of services to water districts, water supply corporations and investor-owned utilities, including assistance with organizational and operational issues, such as customer service policies, compliance with Open Meetings Act requirements, and election laws. We also have extensive experience with the following:

  • Water rate proceedings: We have specific expertise in representing utilities in water rate proceedings, which can be an area of controversy. We take a proactive approach to helping clients plan for and position rate adjustments to enhance opportunities for success. We have also achieved excellent results for our clients in major contested case hearings.
  • Certificates of Convenience and Necessity: Certain retail public utilities are required to obtain a certificate of convenience and necessity (CCN) from the PUCT before they may provide retail water or sewer service. We have helped clients obtain CCNs and negotiate transfer, cancellation and dual certification agreements. Our attorneys are experienced in all of the issues surrounding CCNs in Texas, including amendments; appraisals; de-certification, including “expedited release” of large tracts; federal debt Section 1926(b) protection; and financial assistance available to providers in economically distressed areas.

We have also represented utilities in litigation and contested case hearings to protect their service areas from encroachment by neighboring utilities and cities.

Edward C. Small

Partner, Austin

Alisha Mehta

Associate, Austin

Jesse S. Lotay

Partner, Houston
  • Represented a major real estate developer to obtain authorization from the TCEQ to use water reclaimed from the discharge of a wastewater treatment plant for conveyance and use at a golf course area and also in subdivision common areas. Representation included contract negotiations over the business terms by which a nearby city provided the reclaimed water to our client.
  • Represented the developer of a major South Texas area power plant project in successful negotiations with a river authority to reserve raw water supply for purposes of developing the project.
    Represented clients in contractual negotiations for the long term purchase of raw water from various river authorities and districts, including Sabine River Authority, Tarrant Regional Water District, Guadalupe-Blanco River Authority and Brazos River Authority.
  • Represented a major golf course owner to acquire a surface water rights permit from TCEQ, including obtaining authorization for the impoundment and diversion of state waters and the storage of groundwater using the bed and banks of a reservoir.
  • Represented a municipal utility district in a contested hearing at SOAH to successfully obtain new water and sewer certificates of convenience and necessity, and to expand the district’s retail service areas. The matter was contested by a developer and by a competing investor-owned utility, each of which also sought certification to a portion of the area.
  • Successfully represented a municipal utility district seeking to increase its retail service impact fees, both in contested proceedings at the TCEQ and thereafter in board proceedings instituted pursuant to the requirements of Chapter 395 of the Local Government Code.
  • Represented a large special utility district in successful negotiations with a major river authority to acquire wholesale treated water under long-term water supply contract. Also, represented the client before the board of a local groundwater district in the successful application to increase the permitted volume of groundwater pumped.
  • Represented an investor-owned utility in obtaining required regulatory approvals of the TCEQ and TWDB and successfully closing the multimillion dollar purchase of a large nonprofit water supply corporation, including obtaining required approvals for utility rates and the transfer of the existing retail water certificate of convenience and necessity to our client. We later represented the same client in successful negotiations with a city and river authority to acquire additional facilities and expand the client’s certificated service area.
  • Represented a land developer to obtain amendments to three water utility CCNs covering the development property so as to conform the utility CCNs to the property boundaries and thereby enable a single utility provider to service the entire development.
  • Represented wholesale purchaser of water in challenge of rate increase, and successfully obtained order from administrative law judge adopting lower interim rates during pendency of rate appeal pursuant to Texas Water Code 13.043.
    For various clients, we have drafted and assisted in the passage of legislation to create special utility districts, including one of the largest, geographically, in the state.
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