AIRW 2017-7, L.P.; 600 Westinghouse Investments, LLC; 800 Westinghouse Investments, LLC; Texas Commission on Environmental Quality; And Jonah Water Special Utility District v. City of Georgetown, Texas

ACCEPTED
15-24-00132-CV
FIFTEENTH COURT OF APPEALS
AUSTIN, TEXAS
9/19/2025 4:34 PM
No. 15-24-00132-CV CHRISTOPHER A. PRINE
CLERK
IN THE COURT OF APPEALS FOR THE FILED IN
FIFTEENTH JUDICIAL DISTRICT OF TEXAS
15th COURT OF APPEALS
AUSTIN, TEXAS
9/19/2025 4:34:50 PM
AIRW 2017-7, L.P.; 600 WESTINGHOUSE INVESTMENTS , LLC; 800A. PRINE
CHRISTOPHER
WESTINGHOUSE INVESTMENTS, LLC; TEXAS COMMISSIONClerk
ON
ENVIRONMENTAL QUALITY; AND JONAH WATER SPECIAL UTILITY DISTRICT

v.

CITY OF GEORGETOWN

On Appeal from the 261st District Court of Travis County, Texas,
Cause No. D-1-GN-23-001004

REPLY BRIEF OF APPELLANT
TEXAS COMMISSION ON ENVIRONMENTAL QUALITY

KEN PAXTON KELLIE E. BILLINGS-RAY
Attorney General of Texas Chief, Environmental Protection
Division
BRENT WEBSTER
First Assistant Attorney General SARA J. FERRIS
Assistant Attorney General
RALPH MOLINA State Bar No. 50511915
Deputy First Assistant Attorney Sara.Ferris@oag.texas.gov
General
Office of the Attorney General
AUSTIN KINGHORN Environmental Protection Division
Deputy Attorney General for Civil P.O. Box 12548, MC-066
Litigation Austin, Texas 78711-2548
(512) 463-2012 | Fax: (512) 320-0911
WILLIAM PETERSON
Solicitor General
COUNSEL FOR THE TEXAS
WILLIAM F. COLE COMMISSION ON
Principal Deputy Solicitor General ENVIRONMENTAL QUALITY
TABLE OF CONTENTS

TABLE OF CONTENTS ...........................................................................ii

INDEX OF AUTHORITIES ...................................................................... v

GLOSSARY OF TERMS AND ABBREVIATIONS ...............................viii

RECORD REFERENCES ......................................................................... x

ISSUES PRESENTED (RESTATED) ...................................................... xi

ARGUMENT ............................................................................................. 3

I. The Commission’s regionalization determination is
consistent with Texas regionalization policy. The
City’s contention to the contrary demonstrates its
disappointment with the law as written and with
granting AIRW’s permit but does not demonstrate
reversible legal error. ....................................................................... 3

A. The City invites the Court to create
prerequisites that the Legislature did not.
Formal municipal denial is not a required for
compliance with regionalization policy................................... 4

i. Texas courts, including in The Commons
of Lake Houston makes clear that
municipal formalities are not
determinative of parties’ rights to
progress through the judicial (or
administrative) process. ................................................. 6

ii. Whittington does not apply here. ................................... 7

B. The City misinterprets the plain language of
the statute’s policy and regionalization
provisions. ............................................................................... 8

ii
i. The City misreads the plain language of
Texas’s policy on water quality. ..................................... 8

ii. The City misreads section 26.0282 and
improperly attempts to restrict the
discretion granted to the Commission by
the Legislature. ............................................................ 11

iii. The City’s cost concept is unduly narrow
and inappropriately restricts the
Commission’s discretion in considering
regionalization.............................................................. 12

iv. The Commission’s Order is based on
substantial evidence..................................................... 17

C. The Commission properly exercised its
discretion and appropriately considered
regionalization....................................................................... 19

i. The Commission did not abuse its
discretion or inappropriately consider
irrelevant facts or non-statutory criteria
in reaching Finding of Fact No. 45. ............................. 20

ii. The Commission did not act arbitrarily or
fail to consider relevant facts or
mandatory factors. ....................................................... 21

iii. The Commission’s Order complies with
all statutory requirements. .......................................... 23

II. The City provides no valid basis for finding
reversible error. The Commission properly exercised
its authority, ensuring that Texas water quality
standards are met and granting the permit in an
order supported by substantial evidence. ...................................... 24

iii
A. The City failed to overcome evidence
supporting the application with credible
controverting evidence. ......................................................... 25

B. The City’s arguments regarding the sufficiency
of AIRW’s application provide no basis for
reversal here.......................................................................... 31

CONCLUSION AND PRAYER ............................................................... 34

CERTIFICATE OF COMPLIANCE ........................................................ 36

CERTIFICATE OF SERVICE................................................................. 36

iv
INDEX OF AUTHORITIES

Cases

Boerne to Bergheim Coal. for Clean Env’t v. Texas Comm’n
on Envtl. Quality,
657 S.W.3d 382 (Tex. App.—El Paso 2022, no pet.) ........................ 7

City of Austin v. Whittington,
384 S.W.3d 766 (Tex. 2012)........................................................ 7, 12

City of El Paso v. Pub. Util. Comm’n of Texas,
883 S.W.2d 179 (Tex. 1994)............................................................ 22

In re Dallas County,
697 S.W.3d 142 (Tex. 2024).............................................................. 8

N. E. Indep. Sch. Dist. v. Riou,
598 S.W.3d 243 (Tex. 2020)............................................................ 15

R.R. Comm’n of Texas v. City of Austin,
524 S.W.2d 262 (Tex. 1975)............................................................ 15

Sanchez v. State,
499 S.W.3d 438 (Tex. Crim. App. 2016) ........................................... 9

Save Our Springs All., Inc. v. Texas Comm’n on Envtl.
Quality,
713 S.W.3d 308 (Tex. 2025), reh’g denied (June 20,
2025) ....................................................................... 17, 18, 19, 22, 23

State v. Hollins,
620 S.W.3d 400 (Tex. 2020).............................................................. 8

Sw. Pub. Serv. Co./Pub. Util. Comm’n of Texas v. Pub. Util.
Comm’n of Texas,
962 S.W.2d 207 (Tex. App.—Austin 1998, pet. denied)................... 2

v
Tex. Utils. Elec. Co. v. Pub. Util. Comm’n,
881 S.W.2d 387 (Tex. App.—Austin 1994), aff’d in
relevant part, 935 S.W.2d 109 (Tex. 1996) .................................... 21

Texas Comm’n on Envtl. Quality v. Maverick Cnty.,
642 S.W.3d 537 (Tex. 2022)............................................ 2, 20, 21, 34

Texas Comm’n on Envtl. Quality v. San Antonio Bay
Estuarine Waterkeeper,
714 S.W.3d 270 (Tex. App.—[15th] 2025, pet. filed) ..................... 19

Texas Health Facilities Comm’n v. Charter Med.-Dall., Inc.,
665 S.W.2d 446 (Tex. 1984).......................................... 18, 19, 22, 23

TGS-NOPEC Geophysical Co. v. Combs,
340 S.W.3d 432 (Tex. 2011)............................................................ 29

The Commons of Lake Houston, Ltd. v. City of Houston,
711 S.W.3d 666 (Tex. Mar. 21, 2025) ............................................... 6

TJFA, L.P. v. Texas Comm’n on Envtl. Quality, 632 S.W.3d
660 (Tex. App.—Austin 2021, pet. denied) ...................................... 8

Constitution & Statutes

Texas Const. Art. 2, § 1 ............................................................................. 2

Tex. Gov’t Code

§ 311.011(a) .................................................................................... 29
§ 311.021(a) ...................................................................................... 9
§§ 2001.001-.903 ........................................................................viii, 1
§ 2001.060 ....................................................................................... 24
§ 2001.141(c) ................................................................................... 24
§ 2001.173 ....................................................................................... 17
§ 2001.174 ............................................................. 1, 2, 17, 18, 20, 21
§ 2001.174(2)(E).............................................................................. 18
§ 2001.174(2)(F) .............................................................................. 19
§ 2003.047(e)................................................................................... 24
§ 2003.047(f) ................................................................................... 24

vi
§ 2003.047(i-1)-(i-2) ........................................................................ 26
§ 2003.047(i-1)-(i-3) ........................................................................ 13
§ 2003.047(l) ................................................................................... 24
§ 2003.047(m) ................................................................................. 24

Tex. Water Code

§ 13.241(d) ...................................................................................... 10
§ 26.003 ....................................................................... 3, 4, 5, 8, 9, 23
§ 26.023 ................................................................................... 4, 5, 27
§ 26.027 ............................................................................... 4, 5, 6, 22
§ 26.0282 ....................................................... 3, 4, 5, 6, 11, 12, 20, 23
§ 26.030 ........................................................................................... 29
§ 26.030(b) ...................................................................................... 29
§ 26.081 ............................................................................... 3, 4, 5, 10

Rules

30 Tex. Admin. Code

§ 305.43 ........................................................................................... 33
§ 305.64(a) ...................................................................................... 32
§ 307.3(a)(67) .................................................................................. 27
§ 307.5............................................................................................. 27
§ 307.5(b) ........................................................................................ 28
§ 319.9(a) ........................................................................................ 27
ch. 351............................................................................................. 10

Other Authorities

Acts 2013, 83rd Leg., ch. 170 (H.B. 1600), § 2.42, eff. Sept.
1, 2013 ............................................................................................ 10

Adam Hayes, Fixed Cost: What it is and How its Used in
Business, Investopedia (May 22, 2025). ......................................... 14

Tejvan Pettinger, Types of Costs, Economics Help (June 1,
2019) ............................................................................................... 14

vii
GLOSSARY OF TERMS AND ABBREVIATIONS

Term Meaning

AIRW Appellant AIR-W 2017-7, L.P., the applicant in the
TCEQ contested case, Intervenor in District Court
APA Administrative Procedure Act, Tex. Gov’t Code
§§ 2001.001–.903
Application AIR-W 2017-7 L.P.’s application for a new TPDES
permit in TCEQ Docket No. 2021-1214-MWD
AR Administrative Record. Contained within the SCR.
CCN Certificate of Convenience and Necessity
City Appellee City of Georgetown
Commission Appellant Texas Commission on Environmental
Quality (Commission or TCEQ)
COL Conclusion of Law
CR Clerk’s Record; See also SCR
ED Executive Director of the Texas Commission on
Environmental Quality
FOF Finding of Fact
IPs Implementation Procedures for the Texas Surface
Water Quality Standards
Jonah Appellant Jonah Water Special Utility District,
Intervenor in District Court.
NSSA Non-Standard Service Agreement
Order TCEQ’s final order, issued November 28, 2022
Permit AIRW-7’s wastewater permit. TPDES Permit
Number WQ0015878001 (SCR-AR 66 at 18-52)
PFD Proposal for Decision

viii
RR Reporter’s Record
SCR Supplemental Clerk’s Record. The SCR contains
the Administrative Record
TCEQ Texas Commission on Environmental Quality
(Commission)
TPDES Texas Pollutant Discharge Elimination System
Westinghouse Appellants 600 Westinghouse Investments, LLC
Entities and 800 Westinghouse Investments, LLC

ix
RECORD REFERENCES

Reporter’s Record

The Reporter’s Record is cited in this brief as “RR [page number].”

Clerk’s Record

The Clerk’s Record is cited in this brief as “CR [page number].”

Supplemental Clerk’s Record and the Administrative Record

The Administrative Record (AR) consists of three components—

administrative documents, evidentiary exhibits, and transcripts. The AR

was entered into evidence in the district court proceedings as Joint

Exhibit 1. RR at 5. The Supplemental Clerk’s Record (SCR) contains the

AR (Joint Exhibit 1), the contents of which have item numbers assigned.

Citations to the AR will be to SCR-AR [item number] (Example: SCR-AR

11 (ED’s Response to Public Comment) at 1).

x
ISSUES PRESENTED (RESTATED)

1. Did the district court err in reversing the final order of the
Commission based upon the Commission’s regionalization
determination?

2. Was the final order of the Commission granting AIRW’s wastewater
permit supported by substantial evidence and based upon
applicable law and reasoned decision-making?

xi
TO THE HONORABLE FIFTEENTH COURT OF APPEALS:

The City of Georgetown (City) provide no basis for this Court to find

the Commission committed reversible error in granting AIRW 2017-7,

L.P’S (AIRW’S) wastewater permit. Instead, the City’s argument urges

this Court to adopt a new, a strained interpretation of regionalization

policy—one the agency charged with its determination did not. However,

like the district court, the City misses a fundamental fact: the Legislature

did not require the Commission to deny the City’s wastewater permit to

be consistent with regionalization, and the City has cited to no statutory

authority providing otherwise.

The City simply disagrees with the Commission’s decision,

disputing the evidence the Commission determined was persuasive and

now improperly requests this Court to re-weigh the evidence before it.

The City’s argument goes beyond the scope of review afforded to agency

decisions under the Administrative Procedure Act. 1 Tex. Gov’t Code

§ 2001.174. “When applying the substantial-evidence rule, ‘a court may

not substitute its judgment for the judgment of the state agency on the

weight of the evidence on questions committed to agency discretion.’”

1 Administrative Procedure Act (APA) Tex. Gov’t Code §§ 2001.001-.903.

1
Texas Comm’n on Envtl. Quality v. Maverick Cnty., 642 S.W.3d 537, 544

(Tex. 2022) (quoting Tex. Gov’t Code § 2001.174).

The final order of the Texas Commission on Environmental Quality

(Commission) is a valid exercise of the Commission’s discretion and is

consistent with the plain language of the Texas Water Code and

Commission rules. See SCR-AR 66. The Order expressly relies on the

applicable legal standards for permit issuance and is wholly supported

by substantial evidence. Nothing more is required of the Commission,

and the district court’s reversal of the Order is error. The Commission

properly concludes that all legal and technical requirements are met and

that the permit will protect human health and safety, the environment,

and physical property. The district court’s re-weighing of the evidence is

improper and is a violation of the doctrine of separation of powers. Texas

Const. Art. 2, § 1; Tex. Gov’t Code § 2001.174; Sw. Pub. Serv. Co./Pub.

Util. Comm’n of Texas v. Pub. Util. Comm’n of Texas, 962 S.W.2d 207,

215 (Tex. App.—Austin 1998, pet. denied).

Accordingly, this Court should reverse the district court’s judgment

and affirm the Commission’s Order granting the permit.

2
ARGUMENT

I. The Commission’s regionalization determination is
consistent with Texas regionalization policy. The City’s
contention to the contrary demonstrates its disappointment
with the law as written and with granting AIRW’s permit
but does not demonstrate reversible legal error.

The City contends that the Commission committed reversible error

in granting AIRW a wastewater permit rather than requiring connection

to the City’s facilities. However, this determination is entirely within the

Commission’s jurisdiction to make. The Commission acted as the Texas

Water Code allows and properly considered relevant factors in

determining that the permit is consistent with regionalization policy. See

Tex. Water Code §§ 26.003, 26.0282, 26.081.

The issue of regionalization for wastewater treatment is largely a

policy decision without significant statutory direction. The Texas Water

Code requires the Commission to encourage and promote regionalization

but not to require it. See Tex. Water Code §§ 26.003, 26.0282. 26.081. The

statute’s regionalization provisions are permissive and do not provide

any specifics for conducting an evaluation of individual permit

applications, leaving this exercise to the Commission in its discretion. See

Tex. Water Code §§ 26.003, 26.0282, 26.081.

3
The City’s brief raised no new issues regarding the Commission’s

regionalization determination.

A. The City invites the Court to create prerequisites that
the Legislature did not. Formal municipal denial is not
a required for compliance with regionalization policy.

The City incorrectly argues that AIRW did not meet the statutory

prerequisites for wastewater permitting. City’s Br. at 2, 25. This

argument adds requirements for approval that are not present. The

City’s vision of regionalization policy goes beyond what the law requires

and unreasonably restricts the Commission’s discretion and authority

under the policy. The Commission—and only the Commission—is

authorized to originally hear and decide whether granting a permit is

consistent with regionalization policy. Tex. Water Code §§ 26.003, 26.027;

26.0282, 26.081; see also Tex. Water Code § 26.023 (“The commission . . .

has the sole and exclusive authority to set water quality standards for all

water in the state”). This is the regulatory scheme created by the

Legislature; the Texas Water Code does not—explicitly or implicitly—

require a formal denial from the City of Georgetown in order for the

permit to be consistent with regionalization or for the Commission to

4
consider AIRW’s application and issue the requested permit. Tex. Water

Code §§ 26.003, 26.023, 26.027; 26.0282, 26.081.

Further, nothing requires the Commission to formally deny the

City’s annexation or waiver of annexation request before a permit can be

approved by the Commission, and the City has cited to no authority to

demonstrate the contrary.

The City’s hyperfocus on its own decision-making authority over

annexation loses sight of the fact that a developer’s inquiry into the

availability of wastewater service from the City is but one consideration

the Commission has the discretion to consider when exercising its

authority over wastewater permits. See Tex. Water Code § 26.0282.

A municipal decision of whether to require annexation and land

use changes as a condition of agreeing to serve the planned development

is not—and should not be construed as—a condition-precedent to waste

water permitting. Instead, it is a fact/factor properly within the

Commission’s consideration when determining need and availability

when granting a permit. See Tex. Water Code § 26.0282; SCR-AR 98. And

the Commission acted properly in treating it as such.

5
i. Texas courts, including in The Commons of Lake
Houston makes clear that municipal formalities
are not determinative of parties’ rights to
progress through the judicial (or administrative)
process.

The Texas Water Code does not limit availability considerations in

the manner the City advocates. Tex. Water Code § 26.0282. No formal

denial from the City or its council is required for the Commission to

properly determine that AIRW’s permit is needed and complies with

regionalization policy. Tex. Water Code § 26.0282. Actions and positions

taken by a city can indicate a final decision has been made, even without

a formal determination. See The Commons of Lake Houston, Ltd. v. City

of Houston, 711 S.W.3d 666, 685 (Tex. Mar. 21, 2025). Regardless, what

the Georgetown decided about providing wastewater service to the

planned development in this case is not determinative of whether the

wastewater permit should be issued. The “final and authoritative

determination” on a wastewater permit (including considering

regionalization) turns on the Commission’s decision—just as the

Legislature envisioned. See Tex. Water Code §§ 26.027, 26.0282; The

Commons of Lake Houston at 684.

6
ii. Whittington does not apply here.

The City argues that there can be no denial or unavailability of

service unless its city council formally acts. City’s Brief at 19, 24. To

support its stance, the City cites to City of Austin v. Whittington, 384

S.W.3d 766, 785 (Tex. 2012) an inverse-condemnation case where the

Court considered whether the city council’s determination of necessity

was fraudulent. The Texas Supreme Court stated that to make such a

determination, “we look to official materials such as orders, resolutions,

and minutes.” Id.

But municipal action or inaction is peripheral to the question before

this Court. The Court should look to confirm that the Commission has

made all required considerations and acted rationally, based upon

substantial evidence. “The breadth of the word ‘consider’ in [the statute]

limits our obligation to scrutinize TCEQ’s conduct . . . . The Court’s job is

to determine whether TCEQ took into account the [required

consideration], not how much they considered it.” Boerne to Bergheim

Coal. for Clean Env’t v. Texas Comm’n on Envtl. Quality, 657 S.W.3d 382,

399 (Tex. App.—El Paso 2022, no pet.) (emphasis in original). The record

is clear—the Commission considered the availability of service by

7
Georgetown when determining need for the wastewater permit. The City

simply disagrees with the result of that consideration.

B. The City misinterprets the plain language of the
statute’s policy and regionalization provisions.

The City ignores the Texas Water Code’s plain language and long-

held canons of construction such as reading the statute as a whole and in

context. But the Court should first look to the plain meaning of the

statute’s words, considering the context and framework of the statute as

a whole. TJFA, L.P. v. Texas Comm’n on Envtl. Quality, 632 S.W.3d 660,

667 (Tex. App.—Austin 2021, pet. denied). “We interpret statutes

according to their plain language, but in context—not isolation.” State v.

Hollins, 620 S.W.3d 400, 407 (Tex. 2020); see In re Dallas County, 697

S.W.3d 142, 158 (Tex. 2024).

i. The City misreads the plain language of Texas’s
policy on water quality.

First, the City reads a phrase out of context in section 26.003, the

Texas Water Code’s overall policy regarding water quality, and suggests

that “all reasonable methods” would require impossibility or formal

municipal denial in order for the Commission to conclude that service is

not available from the City and grant AIRW’s permit. Tex. Water Code

8
§ 26.003. But this is not what the statute provides. As an initial matter,

section 26.003 is the State’s water quality policy. Read in context, the

phrase “and use all reasonable methods to implement this policy” is

referring to implementing the water quality policy as a whole and

authorizes the Commission to use multiple methods to accomplish the

State’s goal of protecting water quality. Tex. Water Code § 26.003.

Additionally, every word the Legislature uses has meaning. See

Tex. Gov’t Code § 311.021(a); Sanchez v. State, 499 S.W.3d 438, 442 (Tex.

Crim. App. 2016) (courts presume that “every word in a statute has been

used for a purpose and that each word, phrase, clause, and sentence

should be given effect if reasonably possible”). The Legislature’s use of

the word “reasonable” here matters. “Reasonable” logically eliminates

unreasonable but technically possible methods.

Moreover, the words “all reasonable” in section 26.003 modifies

methods of implementation. If “use all reasonable methods to implement”

is applied to regionalization implementation, the Commission satisfies

this standard. However, the City’s argument completely ignores that the

Commission has implemented regionalization policy by multiple methods

and instead focuses on how the Commission has applied the policy in this

9
case. The Commission primarily implements regionalization through its

adopted rules that establish designated regional areas served exclusively

by designated regional entities. See 30 Tex. Admin. Code ch. 351; see Tex.

Water Code § 26.081. The Commission expressly found in this case there

was no applicable regional area or entity. SCR-AR 66 at FOF 49.

Additionally, prior to water and wastewater ratemaking authority

being transferred to the Public Utility Commission of Texas, the

Commission also implemented regionalization policy through its utility

certification process which designated a specific service area for each

utility. See e.g. AR 99; see also Acts 2013, 83rd Leg., ch. 170 (H.B. 1600),

§ 2.42, eff. Sept. 1, 2013.2

Relevant here, the Commission implements regionalization policy

outside of regional areas today on a case-by case-basis for each permit

application, as described in its webpage guidance. SCR-AR 98. The

2 SCR-AR 99 is a 2003 Commission’s Water Supply Division’s guidance document

related to regionalization for public water systems and new water and wastewater
CCNs. The Commission lost its jurisdiction over CCNs to the Public Utility
Commission of Texas in 2014, making the Water Supply Division’s guidance
document largely obsolete. See Tex. Water Code § 13.241(d) (“Before the utility
commission grants a new certificate of convenience and necessity for an area which
would require construction of a physically separate water or sewer system, the
applicant must demonstrate to the utility commission that regionalization or
consolidation with another retail public utility is not economically feasible.”). The
2003 guidance document is no longer available as an active publication on the
Commission’s website.

10
reasonableness of these methods is undisputed; the City has not

challenged the case-by-case-approach as unreasonable but instead

challenges the Commission’s application of this approach to AIRW’s

permit application proceeding.

ii. The City misreads section 26.0282 and improperly
attempts to restrict the discretion granted to the
Commission by the Legislature.

A plain language reading of section 26.0282 leaves the Commission

with discretion to determine need for the permit, including availability of

service, and nothing in the statutory language mandates an outcome to

the agency:

In considering the issuance, amendment, or
renewal of a permit to discharge waste, the
commission may deny or alter the terms and
conditions of the proposed permit, amendment, or
renewal based on consideration of need, including
the expected volume and quality of the influent and
the availability of existing or proposed areawide or
regional waste collection, treatment, and disposal
systems not designated as such by commission
order pursuant to provisions of this subchapter. . . .

Tex. Water Code § 26.0282 (emphasis added). In contrast, the City asks

to this Court to limit the Commission’s discretion and dictate what

“availability” means, i.e. to require the municipal ‘political process’ and

to conflate ‘unavailable’ with formal denial. The City further seeks to

11
have its view strictly applied as requiring permit denial. This is not what

the Legislature intended, and it would be a violation of the doctrine of

separation of powers to construe the statute in this manner and re-weigh

the evidence to arrive at the City’s preferred outcome.

Contrary to the clear statutory language, the City also reads

section 26.0282 as restricting the scope of the Commission’s

considerations, rather than providing discretion to consider need in

permitting. Again, the restrictions advocated by the City are not

statutory. See Whittington, 384 S.W.3d at 785 (construing plain language

of Local Government Code and rejecting argument equating “necessary”

with “absolutely necessary”).

iii. The City’s cost concept is unduly narrow and
inappropriately restricts the Commission’s
discretion in considering regionalization.

The City argues that the controlling cost question is the comparison

of the cost of connection versus the cost of constructing the facility. While

this is a valid consideration, the Commission determined that the two

costs were only separated by approximately $300,000 and costs did not

compel denying the permit for regionalization considerations. See SCR-

AR 66 FOFs 43-46. The Commission considered the evidence presented

12
on other costs, including “the higher property tax rate inside the City

than outside it in the unincorporated area and the City’s condition of

annexation to connect to its system,” and the fact that “connecting carries

with it an approximately $20 million cost due to diminution in property

value.” SCR-AR 66 at FOF 45; see SCR-AR 74 (Application) at pdf 105-

108 (also in the record as SCR-AR 107 and SCR-AR 108); SCR-AR 87

(Perkins Direct) at 13; SCR-AR 93 (Colliers appraisal report); SCR-AR 94

(Tuckfield Direct) at 24-25.

While Finding of Fact No. 45 is supported by evidence, including

information in the application, the City did not present testimony to

counter the tax rate question or the diminution in value figures, despite

evidence being required under the Government Code to rebut the prima

facie demonstration that all state legal and technical requirements are

met. See Tex. Gov’t Code § 2003.047(i-1)-(i-3); SCR-AR 74 (Application)

at pdf 105-108. Instead, the City incorrectly argued that the Commission

has no authority to consider property value changes, and the projected

costs were speculative. City’s Brief at 10, 25-26. But the Water Code does

not limit the Commission’s consideration of cost as the City seeks, and its

argument is rooted in a misunderstanding of cost concepts.

13
The City claims the $20 million diminution in property value

related to the higher property tax rate inside the city is not a cost and

cannot be considered. City’s Br. at 25-27; see SCR-AR 66 at FOF 45.

Contrary to the City’s argument, changes in property tax rates and

valuation are changes to a fixed operating cost and properly considered.

“Fixed costs are commonly related to recurring expenses not directly

related to production, such as rent, interest payments, insurance,

depreciation, and property tax.” 3 An increase in tax valuation or tax rate

is considered an increased cost because it directly affects the amount of

taxes that must be paid.4 Here, AIRW witness Janet Sims provided the

Commission with information that the annual cost of property taxes is

an operating expense that would not otherwise be incurred, and zoning

restrictions and other costs of connection further add to the total cost of

service. SCR-AR 108; see SCR-AR 180 at 368:20-24.

3 Adam Hayes, Fixed Cost: What it is and How its Used in Business, Investopedia

(May 22, 2025)
https://www.investopedia.com/terms/f/fixedcost.asp#:~:text=Fixed%20costs%20inclu
de%20any%20number,%2C%20depreciation%2C%20and%20some%20utilities.

4 The change in valuation may also represent an opportunity cost difference between

two options like in this case and is therefore also an economic cost. See Tejvan
Pettinger, Types of Costs, Economics Help (June 1, 2019),
https://www.economicshelp.org/blog/4890/economics/types-of-costs/.

14
Further, AIRW limited its argument and proof on lost value of the

property to tax impact; it did not seek include in its $20 million figure

any other impact when sold beyond taxes. SCR-AR 59 at 43. “Rather,

AIRW’s estimate of a $20 million diminution in property value was

attributable solely to a higher property tax rate inside the City than

outside it in the unincorporated area.” Id.

Additionally, there is no authority limiting cost considerations in

the Commission’s regionalization analysis, and the record evidence,

including testimony by credible witnesses, supports the Commission’s

findings and conclusions. See Appellant TCEQ’s Br. at 33-34.

Regardless of whether the $20 million tax-related diminution in

value is considered a “cost,” the Commission’s consideration of this

impact is consistent with its guidance on regionalization, as it could also

be considered as an “other relevant factor” under the same listed

scenario. SCR-AR 98 at 2; see N. E. Indep. Sch. Dist. v. Riou, 598 S.W.3d

243, 251 (Tex. 2020); R.R. Comm’n of Texas v. City of Austin, 524 S.W.2d

262, 279 (Tex. 1975) (“The courts are not bound by the reasons given by

Boards or Commissions in their orders, or by any particular ground made

the basis of their rulings, provided there is a valid basis for what they

15
do.”) (citation omitted). The Commission acted within its discretion to

consider the $20 million cost, consistent with its published guidance, and

based on the record evidence before it.

The City incorrectly argues that the Commission does not have

jurisdiction to consider property value in considering regionalization. The

City grasps at straws, citing to a commission guidance page on public

comments for proposed permits and decades-old documents from

inapplicable solid waste permitting proceedings and obsolete regulatory

schemes. City’s Br. at 27-29; See Supra at 12-13. None apply here or

compel finding reversible error.

But the City conflates two distinct questions: 1) Regionalization—

how the agency might evaluate costs associated with regionalization

(which the City concedes the Commission has the authority to consider); 5

and 2) Impact of the Permitted Activity—how a proposed wastewater

treatment plant might lower a nearby landowner’s property value (which

the Commission indisputably does not have jurisdiction over) (as

distinguished from effect on aesthetic interests, use and enjoyment and

other factors). In Finding of Fact No. 45, the Commission is not

5 City’s Br. at 8, 10.

16
considering property value impact for landowners or the applicant when

determining the impact of the permitted activity. SCR-AR 66 at FOF 45.

It is instead considering this cost as part of its regionalization

determination, per its authority granted under Texas Water Code.

section 26.0282.

iv. The Commission’s Order is based on substantial
evidence.

The City makes two contentions that misstate judicial review under

the substantial evidence rule. Tex. Gov’t Code § 2001.174. First, the City

states that “[w]hen a TCEQ’s decision to grant a wastewater discharge

permit is reviewed for substantial evidence, it is subject to a de novo

review.” City’s Br. at 6. The City is mistaken; it is not the Commission’s

decision that is subject to de novo review. Compare Tex. Gov’t Code

§ 2001.174 (Review Under Substantial Evidence Rule) with 2001.173

(Trial De Novo Review). Rather, de novo review of a question of law, i.e.

whether there is a statutory grounds for reversal, is not the same as de

novo review of the Commission’s decision. As the Court in Save Our

Springs noted, “[u]nder the APA, a court reviewing an agency’s decision

in a contested case ‘may not substitute its judgment for the judgment of

the state agency on the weight of the evidence on questions committed to

17
agency discretion.’” Save Our Springs All., Inc. v. Texas Comm’n on Envtl.

Quality, 713 S.W.3d 308, 320 (Tex. 2025), reh’g denied (June 20, 2025)

(quoting Tex. Gov’t Code § 2001.174).

Second, the City misunderstands the substantial evidence standard

itself. The City argues that “substantial evidence in the administrative

record indicates that there is available capacity at an existing

[wastewater treatment plant]. City’s Br. at 15. But that’s not the relevant

inquiry. The question is not whether the City’s case was supported by

substantial evidence. The substantial evidence standard asks if the

“administrative findings, inferences, conclusions, or decisions” of the

Commission are “reasonably supported by substantial evidence

considering the reliable and probative evidence in the record as a whole.”

Tex. Gov’t Code § 2001.174(2)(E). The “evidence in the record actually

may preponderate against the decision of the agency and nonetheless

amount to substantial evidence.” Texas Health Facilities Comm’n v.

Charter Med.-Dall., Inc., 665 S.W.2d 446, 452 (Tex. 1984). Here, the

Commission’s Order is supported by ample evidence, as reflected in the

proposal for decision and the Order itself. The Court should not now re-

weigh that evidence.

18
C. The Commission properly exercised its discretion and
appropriately considered regionalization.

“Only in narrow circumstances will an agency decision be reversed

as ‘arbitrary and capricious’ when it is supported by substantial

evidence.” Texas Comm’n on Envtl. Quality v. San Antonio Bay Estuarine

Waterkeeper, 714 S.W.3d 270, 282 (Tex. App.—[15th] 2025, pet. filed)

(citing Texas Health Facilities Comm’n v. Charter Med.-Dall., Inc., 665

S.W.2d 446 (Tex. 1984)). In the case at issue, the Commission acted

rationally, properly exercising its considerable discretion when

considering the regionalization question, consistent with the Water Code

and its own published guidance.

Under the Government Code, if an agency’s final order is supported

by substantial evidence, the agency acts arbitrarily or abuses its

discretion only if it “fails to consider a mandatory factor, considers an

irrelevant factor, considers appropriate factors but reaches a completely

unreasonable result, or fails to follow its own regulations.” See Save Our

Springs 713 S.W.3d at 320; Tex. Gov’t Code § 2001.174(2)(F). None of

these exist here.

19
i. The Commission did not abuse its discretion or
inappropriately consider irrelevant facts or non-
statutory criteria in reaching Finding of Fact No. 45.

The arbitrary and capricious standard looks at consideration of

relevant factors not facts. The “relevant fact” consideration is a

substantial evidence question, and the weight given to the evidence is for

the Commission to decide. Tex. Gov’t Code § 2001.174; Maverick Cnty.,

642 S.W.3d at 544. The Commission acted properly in considering the

record evidence. See Supra at 15-16; Appellant TCEQ’s Br. at 33-34.

Further, the City’s argument that the Commission improperly

considered “non-statutory criteria,” and abused its discretion when

considering the $20 million diminution in value is without merit. The

Texas Water Code provides the Commission with broad authority to

determine need and availability when considering AIRW’s permit. The

Commission’s guidance reflects this broad authorization, allowing for

consideration of “other relevant factors” and cost considerations. See

SCR-AR 98 at 2; Supra at 17-19.

It would be unreasonable for the Commission to ignore the intended

recipients of the wastewater service—the proposed development of 880

homes—and inconsistent with section 26.0282 which authorizes the

20
Commission to consider need in in wastewater permit cases. See SCR-AR

66 at FOF 2; SCR-AR 74 at pdf 4. The effect of the City’s required

conditions for service would nullify the proposed development that is

seeking wastewater service. Nothing in the statute suggests it should be

read as prohibiting the Commission from taking these costs into account

in its regionalization consideration.

ii. The Commission did not act arbitrarily or fail to
consider relevant facts or mandatory factors.

The weight given to evidence is for the Commission to decide.

Courts consider the “relevant fact” question only in the context of review

under the substantial evidence standard. Tex. Gov’t Code § 2001.174;

Maverick Cnty., 642 S.W.3d at 544. And the Commission’s findings

clearly indicate that the Commission did consider the availability

question and the relative cost of connection versus building the proposed

facility. See FOFs 40-44, 51-52. Texas Courts look to the final order itself

to determine what considerations it is based upon. Tex. Utils. Elec. Co. v.

Pub. Util. Comm’n, 881 S.W.2d 387, 416 (Tex. App.—Austin 1994), aff’d

in relevant part, 935 S.W.2d 109 (Tex. 1996).

Further, the City fails to explain what considerations are

regionalization “factors” and also fails to explain what factors in

21
regionalization are mandatory (versus permissive) or provide support for

such contentions. See Save Our Springs, 713 S.W.3d at 320 (agency acts

arbitrarily “if it fails to consider a mandatory factor . . . .”); City of El Paso

v. Pub. Util. Comm’n of Texas, 883 S.W.2d 179, 184 (Tex. 1994) (Agency

decision is arbitrary if agency “failed to consider a factor the Legislature

directs it to consider”).

The Water Code sections referenced by the City do not contain

mandatory criteria for consideration. The Court in Save Our Springs

considered and rejected similar contentions regarding section 26.027 of

the Water Code: “SOS erroneously describes section 26.027 of the Water

Code as establishing mandatory criteria that TCEQ must consider in

conducting an antidegradation review. It plainly does not.” Save Our

Springs, 713 S.W.3d at 328. There, the Texas Supreme Court clarified

that it was not a close call—that section 26.027 “broadly authorizes” or

“generally allows” the Commission to deny a permit that is contrary to

any rule or law, “but it neither states nor directs TCEQ to consider any

criteria in granting a permit.” Save Our Springs, 713 S.W.3d at 329.

The Court also illustrated the difference by discussing Texas Health

Facilities Commission v. Charter Medical-Dallas, Inc.:

22
The Legislature directed the agency to establish
criteria for determining whether to grant a
certificate of need for a proposed project [and] . . .
specifically identified five criteria that “the
commission must include” in its rules for making
that determination. We held that those mandated
criteria . . . are the type of factors that fall within
the scope of fact findings that must be
accompanied by a statement of underlying facts. In
contrast, the Legislature’s requirement that the
agency consider six additional factors in
developing additional criteria did not. . . . section
26.027 of the Water Code does not mandate any
specific findings, criteria, or factors for issuing a
discharge permit.
Save Our Springs, 713 S.W.3d at 329 (citing Charter Med.-Dall., 665

S.W.2d at 449-450, 451). But unlike the statute in Charter Med.-Dall.,

neither section 26.003 nor section 26.0282 include mandatory criteria.

Additionally, here, the Commission’s Order expressly demonstrates

in its conclusions of law that each of the City’s cited statutory provisions

were considered. SCR-AR 66 at COLs 10-11; see Id. at FOF 33. The City

simply disagrees with the outcome.

iii. The Commission’s Order complies with all
statutory requirements.

The Commission applies its case-by-case approach to

regionalization outside of regional areas (and outside the utility

23
certification context) by requiring permit applicants to have explored

service from potentially available nearby providers; requiring

information and review in the application process; referring the topic as

an issue to be addressed in contested case hearing; and by considering

the record developed as a result. Tex. Gov’t Code §§ 2001.141(c),

2003.047(e),(f),(l),(m); see Tex. Gov’t Code § 2001.060; SCR-AR 98. The

outcome of applying this case-by-case approach is not the equivalent of a

“method of implementation” under the State’s water quality policy; it is

simply the result from one method of implementation (case-by-case)–

which has not been challenged here.

II. The City provides no valid basis for finding reversible error.
The Commission properly exercised its authority, ensuring
that Texas water quality standards are met and granting the
permit in an order supported by substantial evidence.

The City again invites the Court to reweigh the evidence and

reassess the credibility of the witnesses, arguing that the evidence before

the Commission was insufficient to support its findings that the permit

meets the Texas Surface Water Quality Standards and is protective of

water quality, existing uses, and public health. See SCR-AR 66 at FOF

26-32, 55-61, 65-70, 74-75. The City’s argument is improper and without

merit.

24
A. The City failed to overcome evidence supporting the
application with credible controverting evidence.

The City did not provide credible evidence challenging the draft

permit’s compliance with water quality standards and fails to rebut this

point now with any explanation, simply stating that this “is not the case.”

City’s Br. at 32. But it is the case. As the administrative law judges

explained, beyond a hypothetical, the City did not provide any actual

evidence to show that the permit would not be protective of the health of

nearby residents. SCR-AR 59 (PFD) at 49; see id. at 47-48 (“The city’s

arguments were conclusory and unverifiable due to a lack of underlying

data to support its conclusions.”)

Further, with regard to the City’s contentions on inadequate

frequency of E. coli sampling, Commission agreed with the following

analysis of the administrative law judges: 1) that the permit’s E. coli

sampling frequency is sufficient, with no need for a variance from the

standardized monitoring for the facility (SCR-59 at 49); 2) that the

evidence showed that the “permit’s requirements for E. coli limitations

and chlorine residual, as well as monitoring and sampling frequency, are

sufficient to protect human health” (Id.); and 3) the operational

25
requirement protections sufficient to ensure protection of water quality.

(Id. at 74). See also SCR-AR 66 at FOF 12-13, 55-59, 74-75.

The City was required to present evidence in the contested case to

rebut the prima facie demonstration that all requirements are met, and

the permit is protective of human health. Tex. Gov’t Code § 2003.047(i-1)-

(i-2). Subsection (i-2) states “a party may rebut the presumption in

paragraph (1) of this subsection by presenting evidence regarding the

referred issues demonstrating that the draft permit violates a specifically

applicable state or federal legal or technical requirement.” Id. (emphasis

added) Despite this clear statutory requirement, the City did not do so.

Additionally, the record evidence, including the application itself

and other documents, as well as the testimony of four expert witnesses

demonstrates that the antidegradation review and the permit itself

satisfies the applicable water quality standards and support the

Commission’s Order. See SCR-AR 71-77 (prima facie demonstration),

84 (Price Direct), 87 (Perkins Direct), 111 (ED’s Response to Comments),

124 (Cooper Direct), 127 (Lueg Direct), and 129 (TCEQ Implementation

Procedures); see also Appellant TCEQ’s Br. at 43-48.

26
Moreover, the City completely ignores the testimony of expert

witness Gordon Cooper. Mr. Cooper testified that the permit requires

testing for total suspended solids, ammonia nitrogen, total phosphorus,

E. coli, and BOD,6 with testing frequencies determined by rule in section

319.9(a), which sets out appropriate monitoring requirements for this

type of facility. 30 Tex. Admin. Code § 319.9(a), Table 1; SCR-AR 124 (ED

Ex. GC-1) at 10; SCR-AR 181 (Tr.) at 670. Mr. Cooper also testified that

the AIRW draft permit complies with all applicable Commission rules

and regulations and therefore is protective of water quality. SCR-AR 124

(ED Ex. GC-1) at 13.

Contrary to the City’s contentions, expert witness Jenna Lueg

considered the relevant aesthetic values in her review. See SCR-AR 127

at 9; SCR-AR 130 (Lueg’s JL-4) at 3-4. The Commission’s “Procedures to

Implement the Texas Surface Water Quality Standards” (IPs)7 provides

more insight into aesthetic parameters, listing such things as turbidity

6 Biochemical Oxygen Demand.

7 SCR-AR 129; see 30 Tex. Admin. Code §§ 307.3(a)(67) (defining standards
implementation procedures), 307.5 (antidegradation policy and implementation
procedures); Water Quality Division, Procedures to Implement the Texas Surface
Water Quality Standards (RG-194) (June 2010) (IPs), see also Tex. Water Code
§ 26.023 (“The commission by rule shall set water quality standards for the water in
the state . . . [and] has the sole and exclusive authority to set water quality standards
for all water in the state”).

27
and stating that such parameters “may also” be addressed with narrative

criteria along with the other assessments performed under the IPs for

evaluating impacts on water quality. SCR-AR 129 (IPs) at 20 and 57. Ms.

Lueg’s testimony and exhibits, as well as the draft permit, indicate these

were taken into account. See SCR-AR 130 at 3-4; SCR-AR 127 at 9; see

e.g., SCR-AR 73 at 0002 (prohibiting discharge of floating solids, visible

foam or visible oil).

Further, the City misreads a statement made by Ms. Lueg on land

uses, implying that her consideration was lacking. See City’s Br. at 34-

35. However, the cited statement indicates appropriately that Ms. Lueg

does not always look at what a nearby future development “will become”

but instead focuses circumstances at the time of the application and

“existing uses” as required by the Commission’s rules. SCR-AR 181 at

696:3-4, 700:21-701:13 (Lueg Cross); see SCR-AR 181 at 684 (Cooper

Cross); 30 Tex. Admin. Code § 307.5(b).

Moreover, the City provided no evidence to support its claim that

the green space is recreational or that it should be considered a park.

City’s Br. at 37. In contrast, AIRW’s witness testified that the future

green space is not a park. SCR-AR 180 at 417:20-418:8 (Sims Redirect);

28
see also SCR-AR 59 at 51-52 (preponderance of the evidence did not show

discharge impermissibly will go into water that crosses or abuts any

park, playground, or schoolyard).

Section 26.030(b) does not use the term “park” in isolation; it is

listed in a series of three locations: “park, playground, or schoolyard” the

latter two indisputably being designated areas of play. “Park” should be

read in context with its associated words. Tex. Gov’t Code § 311.011(a);

TGS-NOPEC Geophysical Co. v. Combs, 340 S.W.3d 432, 441 (Tex. 2011)

(“[N]oscitur a sociis, or ‘it is known by its associates’ directs that similar

terms be interpreted in a similar manner”). Because the City points to no

evidence that the future green space is intended to be recreational (as

opposed to aesthetic or a noise buffer from a nearby roadway) or is

intended to be used instead as a park, interpreting section 26.030 to

apply to AIRW’s permit would be counter to the statutory context and

legislative intent.

The City’s contention that the review of existing uses was

insufficient to support the Commission’s Order also fails. City’s Br. at 35.

Specifically, the City contends that ponds used for watering cattle were

not considered. However, as AIRW’s expert witness Janet Sims testified

29
on cross-examination, a receiving pond’s use, whether it is used for

watering cattle or in a residential neighborhood is protected by this

permit’s standards which are designed to protect human health. SCR-AR

180 at 393:2-24.

Further, impact on aquatic life and terrestrial life such as livestock

was considered during the permit review, and these considerations were

directly addressed in the Executive Director’s response to public

comments. SCR-AR 111 (ED’s Response to Comments) at 10. The

Executive Director’s response also confirmed that operations following

the permit limitations will be safe for terrestrial and aquatic life. Id. at

10-11.

The City also contends that the permit does not satisfy odor

prevention requirements because County Road 111 is being moved and

will result in the 150-foot buffer zone requirement not being met. The

City’s Br. at 36. However, record evidence supports the Commission’s

Order. See SCR-AR 74 at pdf 16, 70; SCR-AR 87 at 7:13-16; SCR-AR 124

at 11:5-11; SCR-AR 180 at 417-18, 452:10-14; see also SCR-AR 71-77.

AIRW witness Mark Perkins confirmed on cross-examination that

the 150-foot requirement would still be met even after the road is moved

30
because of where property lines are located and as shown on the map in

evidence, there is more land between where the road currently is and

where the nearby ranch is located. SCR-AR 180 at 452:10-14; see id. at

452-454.

B. The City’s arguments regarding the sufficiency of
AIRW’s application provide no basis for reversal here.

The City complains of alleged insufficiencies with the AIRW’s

permit application, ignoring that the record before the Commission was

more fully developed through the contested case process.

Testimony established that the application went through both an

administrative and a technical review, which provides Commission staff

an opportunity to determine whether any portions of the application are

missing information that is needed to complete review. SCR-AR 124

(Cooper Direct) at 11. Mr. Cooper also explained that staff also has the

opportunity during this review process to request additional information,

and that staff did so in this case. Id. As a result of this process, the

application was declared administratively and technically complete. Id.

Further, the City’s contentions ignores that the record supporting the

Commission’s Order is not limited to the application; it was further

developed in the contested case hearing process.

31
The City is also dissatisfied that the Westinghouse affiliates and

the presumptive future operator, Jonah Water Special Utility District

(Jonah), were not included on the application and permit. City’s Br. at

39. But the application correctly identified AIRW as the current owner of

the facility and the permit was issued only to AIRW. SCR-AR 66 at FOF

6 and pdf 18 (Permit).

Jonah is not the permittee, nor is it currently the owner or operator

of the facility. SCR-AR 43 (Non-Standard Service Agreements (NSSAs)

contemplating future transfer of ownership/operator responsibilities to

Jonah). If, in the future, Jonah wishes to become the owner and operator

of the facility to fulfill its obligations under the NSSAs, it will have to

formally apply to the Commission to transfer the permit. 30 Tex. Admin.

Code § 305.64(a) (Permits are “issued in personam and may be

transferred only upon approval of the commission”).

This principle is reiterated in the permit itself in Condition 5:

Prior to any transfer of this permit, Commission
approval must be obtained. The Commission shall
be notified in writing of any change in control or
ownership of facilities authorized by this
permit . . . . A permit may be transferred only
according to the provisions of 30 TAC § 305.64
(relating to Transfer of Permits) and 30 TAC

32
§ 50.133 (relating to Executive Director Action on
Application of WQMP update).

SCR-AR 66 (Order and Permit) at pdf 29. Additionally, the Commission’s

Order plainly states that it is granting AIRW’s application (not Jonah’s),

and the permit is issued to AIRW alone. SCR-AR 66 (Order and Permit)

at 17, 18. Because the Commission did not authorize Jonah to discharge

under the permit approved in the underlying proceeding, AIRW was not

required to list Jonah as a co-applicant.

Similarly, there was no need to list the Westinghouse affiliates as

co-applicants. If the entities are one and the same, there is no need to do

so. Cf. 30 Tex. Admin. Code § 305.43 (requiring owner and operator to be

listed on permit application if the facility is owned by one person and

operated by another and special circumstances exist). This is not a case

where the facility owner and operator are different entities. As the

administrative law judges noted, “no parties disputed that 600

Westinghouse is an affiliate of AIRW and that the entities are under

common control.” SCR-AR 59 at 60.

Additionally, the record evidence demonstrates that the

Commission staff had sufficient information to evaluate this aspect of the

application, including information from AIRW on the three related

33
companies, what property they owned, their relationship to the proposed

development and facility, and to each other. See e.g. SCR-AR 74 at 105-

106; SCR-AR 107; SCR-AR 181 at 639:24-6:40:10.

The City’s attempts to undermine the Commission’s Order by

pointing to perceived application deviations amount to little more than a

disagreement about what the City believes AIRW should have provided

and fails to provide a basis for reversal. Courts have long held that the

agency is tasked with weighing the evidence before it. The Commission

did that here, and the district court improperly reversed the

Commission’s Order. See Maverick Cnty., 642 S.W.3d at 544.

CONCLUSION AND PRAYER

The permit granted by the Commission satisfies each regulatory

requirement, including regionalization, and promotes the maintenance

of water quality through its terms. Substantial record evidence supports

the Commission’s Order granting the AIRW’s permit. Based upon the

evidence presented, the Commission acted reasonably in granting the

AIRW’s permit.

For these reasons, the Texas Commission on Environmental

Quality respectfully prays that this Court reverse the district court’s

34
judgment and render judgment affirming the Commission’s Order in all

respects. The Commission further prays for such other and further relief

to which it may be entitled.

Respectfully submitted,

KEN PAXTON KELLIE E. BILLINGS-RAY
Attorney General of Texas Chief, Environmental Protection
Division
BRENT WEBSTER
First Assistant Attorney General/s/ Sara J. Ferris
SARA J. FERRIS
RALPH MOLINA Assistant Attorney General
Deputy First Assistant Attorney State Bar No. 50511915
General Sara.Ferris@oag.texas.gov

AUSTIN KINGHORN OFFICE OF THE ATTORNEY
Deputy Attorney General for Civil GENERAL OF TEXAS
Litigation P.O. Box 12548 (MC-066)
Austin, Texas 78711-2548
WILLIAM PETERSON (512) 463-2012
Solicitor General (512) 320-0911 (Fax)

WILLIAM F. COLE Attorneys for Texas Commission
Principal Deputy Solicitor General on Environmental Quality

35
CERTIFICATE OF COMPLIANCE

I certify that the Reply Brief of Appellant, Texas Commission on
Environmental Quality, contains 6,776 words and therefore complies
with the word limit found in Tex. R. App. P. 9.4(i)(2)(B).

/s/ Sara J. Ferris
SARA J. FERRIS

CERTIFICATE OF SERVICE

I certify that the Reply Brief of Appellant, Texas Commission on
Environmental Quality, was electronically filed with the Clerk of the
Court using the electronic case filing system of the Court, and that a true
and correct copy was served upon counsel for each party of record, listed
below, by electronic service or email on September 19, 2025:

John J. Carlton William A. Faulk, III
john@carltonlawaustin.com cfaulk@spencerfane.com
Kelli A. N. Carlton Carlota Hopkins-Baul
kelli@carltonlawaustin.com chbaul@spencerfane.com
Erin R. Selvera Maris M. Chambers
erin@carltonlawaustin.com mchambers@spencerfane.com
Michael Parsons SPENCER FANE, LLP
michael@carltonlawaustin.com 816 Congress Ave., Suite 1200
THE CARLTON LAW FIRM, PLLC Austin, TX 78701
4301 Westbank Dr., Suite B130
Austin, TX 78746-6568 Patricia Erlinger Carls
tcarls@tcarlslaw.com
Attorneys for Jonah LAW OFFICE OF PATRICIA
Water Special District ERLINGER CARLS
3100 Glenview Ave.
Andrew B. Davis Austin, TX 78703
andrew@lkcfirm.com
William T. Thompson Attorneys City of Georgetown, TX
will@lkcfirm.com
Todd Disher
todd@lkcfirm.com

36
LEHOTSKY KELLER COHN, LLP
408 W. 11th Street, 5th Floor
Austin, TX 78701

Helen S. Gilbert
hgilbert@bartonbensonjones.com
BARTON BENSON JONES, PLLC
7000 N. MoPac Expwy, Suite 200
Austin, TX 78731

Edmond McCarthy
Ed@ermlawfirm.com
MCCARTHY & MCCARTHY, LLP
1122 Colorado St., Suite 2399
Austin, TX 78701

Attorneys for AIRW 2017-7, L.P.,
600 Westinghouse Investments,
LLC, And 800 Westinghouse
Investments, LLC

/s/ Sara J. Ferris
SARA J. FERRIS

37
Automated Certificate of eService
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Colton Halter on behalf of Sara Ferris
Bar No. 50511915
colton.halter@oag.texas.gov
Envelope ID: 105857371
Filing Code Description: Brief Requesting Oral Argument
Filing Description: Reply Brief of Appellant TCEQ
Status as of 9/19/2025 4:37 PM CST

Associated Case Party: City of Georgetown

Name BarNumber Email TimestampSubmitted Status

Patricia Carls 3813425 tcarls@tcarlslaw.com 9/19/2025 4:34:50 PM SENT

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Edmond McCarthy 13367200 ed@ermlawfirm.com 9/19/2025 4:34:50 PM SENT

William Faulk 24075674 cfaulk@spencerfane.com 9/19/2025 4:34:50 PM SENT

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Michael Parsons 24079109 michael@carltonlawaustin.com 9/19/2025 4:34:50 PM SENT

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Colton Halter colton.halter@oag.texas.gov 9/19/2025 4:34:50 PM SENT

Todd Disher todd@lkcfirm.com 9/19/2025 4:34:50 PM SENT

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Associated Case Party: Texas Commission on Environmental Quality

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Colton Halter on behalf of Sara Ferris
Bar No. 50511915
colton.halter@oag.texas.gov
Envelope ID: 105857371
Filing Code Description: Brief Requesting Oral Argument
Filing Description: Reply Brief of Appellant TCEQ
Status as of 9/19/2025 4:37 PM CST

Associated Case Party: Texas Commission on Environmental Quality

Name BarNumber Email TimestampSubmitted Status

Kellie E.Billings-Ray Kellie.Billings-Ray@oag.texas.gov 9/19/2025 4:34:50 PM SENT

Erin K.Snody Erin.Snody@oag.texas.gov 9/19/2025 4:34:50 PM ERROR

Sara Ferris sara.ferris@oag.texas.gov 9/19/2025 4:34:50 PM SENT

Bobby Salehi bobby.salehi@tceq.texas.gov 9/19/2025 4:34:50 PM ERROR

Evan Greene evan.greene@oag.texas.gov 9/19/2025 4:34:50 PM SENT

Associated Case Party: AIRW 2017-7, LP

Name BarNumber Email TimestampSubmitted Status

Andrew Davis andrew@lkcfirm.com 9/19/2025 4:34:50 PM SENT

Associated Case Party: AIRW 2017-7, L.P.

Name BarNumber Email TimestampSubmitted Status

Yahaira De Lara ydelara@bartonbensonjones.com 9/19/2025 4:34:50 PM SENT

Michael Cotton michael@lkcfirm.com 9/19/2025 4:34:50 PM ERROR

Associated Case Party: Jonah Water Special Utility District

Name BarNumber Email TimestampSubmitted Status

John Carlton john@carltonlawfirm.com 9/19/2025 4:34:50 PM ERROR