We were recently informed by a utility company that it would be 4-5 years before they could provide water service for land we purchased. Here are your options as a property owner for annexing or de-annexing into the service area of a utility company or even becoming your own utility provider.
If you have a property in an area that is being serviced by a utility company for water and or sewer or maybe you are adjacent to an area that is being serviced by a utility company, you can actually annex into their CCN. So, CCN stands for certificate of convenience and necessity. It’s just a fancy way of saying the service area for a utility company. Once you’re in the CCN of a utility company, whether they’re providing water and or sewer, they have sole authority to deliver those services to you, so no other utility company can service your property. Now, these utility companies have to offer consistent and reliable service in accordance with Chapter 13 of the Texas Water Code.
So, what happens if you are next to a service area and you want to be annexed in? Well, this can be a lengthy process. But, what will take place is you will need to contact the CCN, or excuse me, you’ll need to contact the utility provider saying that I want to be annexed into your CCN. This process can take some time. But, firstly, they’re going to need to approve with their board that they annex you into their CCN and you need to let them know how many LUEs you are requesting. LUE is an acronym that stands for living unit equivalent. Again, just another fancy way of saying something different. It’s essentially, it’s a water tap. So, you are going to request how many water taps you want or how many sewer taps, for example. And, then they will have to conduct a feasibility analysis to see if they have capacity to serve your property. Once that is done, then they will need to file a petition with the Texas Public Utility Commission to see if they are approved to do so.
Now, what happens if you are in a service area of a utility company and they say that they can’t provide services? Well, this is happening to us right now with one of our properties. We want to do a residential subdivision and we went to the utility provider and they said, “sorry we will not be able to service you for four to five years.” You can imagine how that threw a monkey wrench in our plan. So, we’re looking at alternate resources. So, how are we approaching this? Well, we can actually annex into an adjacent CCN for different water and sewer provider. This is a very lengthy process, it’s going to take probably up to 12 months and attorneys will be involved. Rough costs from what we’ve been told is $25-30,000, but of course that can vary. So, there are possibilities that you can either de-annex or annex into a new CCN. Again, that stands for certificate of convenience and necessity for these utility providers.
What if you have a large tract of land in the middle of nowhere and there is no CCN even close by? You can actually apply to create your own CCN and be a utility provider. This is a very, very lengthy process and you will have to work with both the Public Utility Commission of Texas, as well as the TCQ, which is the Texas Commission on Environmental Quality. But, it can be a resource for you as well. But, that again, very lengthy process and it’s going to involve a lot of engineers, a lot of attorneys as well. So, I would recommend that you do your homework on that. That’s usually not a viable outlet for most people that are looking to develop land.
Feel free to reach out to us with questions or other topics you’d like to see covered.
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