(a) This section applies only to a municipality with a population of 500,000 or more.
(b) Except as provided by Subsections (c), (c-1), and (c-2), the utility commission may not grant to a retail public utility a certificate of public convenience and necessity for a service area within the boundaries or extraterritorial jurisdiction of a municipality without the consent of the municipality. The municipality may not unreasonably withhold the consent.

(c) If a municipality has not consented under Subsection (b) before the 180th day after the date the municipality receives the retail public utility’s application, the utility commission shall grant the certificate of public convenience and necessity without the consent of the municipality if the utility commission finds that the municipality:
(1) does not have the ability to provide service; or
(2) has failed to make a good faith effort to provide service on reasonable terms and conditions.
(c-1) If a municipality has not consented under Subsection (b) before the 180th day after the date a landowner or a retail public utility submits to the municipality a formal request for service according to the municipality’s application requirements and standards for facilities on the same or substantially similar terms as provided by the retail public utility’s application to the utility commission, including a capital improvements plan required by § 13.244(d)(3) or a subdivision plat, the utility commission may grant the certificate of public convenience and necessity without the consent of the municipality if:
(1) the utility commission makes the findings required by Subsection (c);
(2) the municipality has not entered into a binding commitment to serve the area that is the subject of the retail public utility’s application to the utility commission before the 180th day after the date the formal request was made; and
(3) the landowner or retail public utility that submitted the formal request has not unreasonably refused to:
(A) comply with the municipality’s service extension and development process; or
(B) enter into a contract for water or sewer services with the municipality.
(c-2) If a municipality refuses to provide service in the proposed service area, as evidenced by a formal vote of the municipality’s governing body or an official notification from the municipality, the utility commission is not required to make the findings otherwise required by this section and may grant the certificate of public convenience and necessity to the retail public utility at any time after the date of the formal vote or receipt of the official notification.
(c-3) The utility commission must include, as a condition of a certificate of public convenience and necessity granted under Subsection (c-1) or (c-2) for a service area within the boundaries of a municipality, that all water and sewer facilities be designed and constructed in accordance with the municipality’s standards for water and sewer facilities.
(c-4) The utility commission must include, as a condition of a certificate of public convenience and necessity granted under this section for a service area within the extraterritorial jurisdiction of a municipality, that all water and sewer facilities be designed and constructed in accordance with:
(1) the commission’s standards for water and sewer facilities applicable to water systems that serve greater than 250 connections; or
(2) the commission’s standards for water and sewer facilities applicable to water systems that serve 250 or fewer connections, if the utility commission determines that:
(A) standards for water and sewer facilities applicable to water systems that serve 250 or fewer connections are appropriate for the service area; and
(B) regionalization of the retail public utility or consolidation of the retail public utility with another retail public utility is not economically feasible under § 13.241(d).
(c-5) Subsections (c-1), (c-2), (c-3), and (c-4) do not apply to:
(1) a county that borders the United Mexican States and the Gulf of Mexico or a county adjacent to such a county;
(2) a county with a population of more than 30,000 and less than 36,000 that borders the Red River; or
(3) a county with a population of more than 100,000 and less than 200,000 that borders a county described by Subdivision (2).
(c-6) Subsections (c-1), (c-2), (c-3), and (c-4) do not apply to:
(1) a county with a population of 170,000 or more that is adjacent to a county with a population of 1.5 million or more that is within 200 miles of an international border; or
(2) a county with a population of more than 40,000 and less than 50,000 that contains a portion of the San Antonio River.
(d) A commitment described by Subsection (c)(2) must provide that the construction of service facilities will begin within one year and will be substantially completed within two years after the date the retail public utility’s application was filed with the municipality.
(e) If the utility commission makes a decision under Subsection (d) regarding the grant of a certificate of public convenience and necessity without the consent of the municipality, the municipality or the retail public utility may appeal the decision to the appropriate state district court. The court shall hear the petition within 120 days after the date the petition is filed. On final disposition, the court may award reasonable fees to the prevailing party.