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Texas Certificate of Convenience and Necessity (7-TX-c)

According to Sec. 37.051(a) of the Public Utility Regulatory Act (PURA) an electric utility or other person may not provide service to the public unless they first obtain from the Public Utility Commission of Texas (PUCT) a certificate that states that the public convenience and necessity requires or will require the installation, operation, or extension of the service.

This flowchart illustrates the process for obtaining a Certificate of Convenience and Necessity ("certificate") in the state of Texas.

A certificate, or certificate amendment, is required for a new generating unit - a new electric generating unit constructed, owned, or operated by a bundled electric utility. According to PUCT Substantive Rule 25.5, "bundled utility" means conducting both transmission and distribution activities and competitive energy-related activities on a bundled basis without structural or functional separation of transmission and distribution functions from competitive energy-related activities.

A certificate, or certificate amendment, is not required for the following:

(1) A contiguous extension of those facilities described in PURA 37.052;
(2) A new electric high voltage switching station, or substation;
(3) The repair or reconstruction of a transmission facility due to emergencies. The repair or reconstruction of a transmission facility due to emergencies shall proceed without delay or prior approval of the commission and shall be reported to the commission in accordance with PUCT Sub. Rule 25.83.
(4) The construction or upgrading of distribution facilities within the electric utility’s service area.
(5) Routine activities associated with transmission facilities that are conducted by transmission service providers. Nothing contained in the following subparagraphs should be construed as a limitation of the commission’s authority as set forth in PURA. Any activity described in the following subparagraphs shall be reported to the commission in accordance with PUCT Sub. Rule 25.83. The commission may require additional facts or call a public hearing thereon to determine whether a certificate of convenience and necessity is required. PUCT Sub. Rule 25.101.

In addition, a CCN is only required if the power producer is a public utility and a "retail electric utility".

A "retail electric utility" means a person, political subdivision, electric cooperative, or agency that operates, maintains, or controls in this state a facility to provide retail electric utility service.

If a power producer is not a "retail electric utility" then the developer is not required to obtain a certificate of convenience and necessity for the power plant. This is also true for Independent Power Producers (IPPs).

Certificate of Convenience and Necessity Process

7-TX-c.1 - Application for a Certificate of Convenience and Necessity and Associated Documents

According to PUCT Sub. Rule 25.101, all applications for certificates of convenience and necessity must be filed on commission-prescribed forms so that the granting of certificates, both contested and uncontested, may be expedited. Forms may be obtained from the Central Records Department.

The developer must include evidence to show they have received the consent, franchise, or permit required by the proper municipal or other public authority.

7-TX-c.2 - Notice of Application to Interested Parties

The PUCT must give notice to interested parties and to the Office of Public Utility Counsel when an application for a certificate is filed.

7-TX-c.3 to 7-TX-c.4 - Is there a Request for a Hearing?

The PUCT will conduct any hearing requested.

Any person or electric cooperative interested in the application may intervene at the hearing. Motions to intervene must be filed within 45 days from when the application is filed.

Developers are necessary parties to hearings on applications, and need not file a motion to intervene in order to participate as parties. PUCT staff representing the public interest have standing to participate in all proceedings before the PUCT, and need not file a motion to intervene. PUCT Sub. Rule 22.

7-TX-c.5 - Review Application Materials

The PUCT will review the application materials for completeness.

7-TX-c.6 to 7-TX-c.7 - Does PUCT Approve the Permit?

The PUCT may grant an application and issue a certificate only if it finds that the certificate is necessary for the service, accommodation, convenience, or safety of the public, and complies with the statutory requirements in PURA 37.056.

The PUCT may issue a certificate as applied for, or refuse to issue it, or issue it for the construction of a portion of the contemplated system or facility or extension thereof, or for the partial exercise only of the right or privilege. The commission shall render a decision approving or denying an application for a certificate within one year of the date of filing of a complete application for such a certificate, unless good cause is shown for exceeding that period. PUCT Sub. Rule 25.101.

7-TX-c.8 - Certificate of Convenience and Necessity

The PUCT must grant each certificate on a nondiscriminatory basis after considering:

  • the adequacy of existing service;
  • the need for additional service;
  • the effect of granting the certificate on the recipient of the certificate and any electric utility serving the proximate area; and
  • other factors.

7-TX-c.9 - Follow Construction and Operation Standards

In determining standard practice, the PUCT will be guided by the provisions of the American National Standards Institute, Incorporated, the National Electrical Safety Code, and such other codes and standards that are generally accepted by the industry, except as modified by this commission or by municipal regulations within their jurisdiction. Each electric utility must construct, install, operate, and maintain its plant, structures, equipment, and lines in accordance with these standards, and in such manner to best accommodate the public, and to prevent interference with service furnished by other public utilities insofar as practical. PUCT Sub. Rule 25.101.

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