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

Reversed and Rendered and Memorandum Opinion filed December 30, 2025

In The

Fifteenth Court of Appeals

NO. 15-24-00132-CV

AIRW 2017-7, L.P.; 600 WESTINGHOUSE INVESTMENTS, LLC; 800
WESTINGHOUSE INVESTMENTS, LLC; TEXAS COMMISSION ON
ENVIRONMENTAL QUALITY; AND JONAH WATER SPECIAL
UTILITY DISTRICT, Appellants
V.
CITY OF GEORGETOWN, TEXAS, Appellee

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

MEMORANDUM OPINION

Appellant Texas Commission on Environmental Quality (the “Commission”)
issued an order granting a wastewater discharge permit to appellant AIRW 2017-7,
L.P. (“AIRW”), allowing it to construct and operate a new wastewater treatment
plant in Williamson County, Texas. Appellee the City of Georgetown (the “City”)
sought judicial review of the Commission’s decision in the trial court, which
reversed. The Commission, AIRW, and other parties before the trial court with an
interest in this matter—600 Westinghouse Investments, LLC, 800 Westinghouse
Investments, LLC, and Jonah Water Special Utility District—appealed to this Court.
Because we conclude that substantial evidence supports the Commission’s decision,
we reverse the trial court’s judgment and render in favor of appellants.

BACKGROUND

The federal Clean Water Act regulates the discharge of pollutants into a water
of the United States through the National Pollutant Discharge Elimination System
framework. 33 U.S.C. §§ 1251–1389. Pursuant to this framework, the United States
Environmental Protection Agency has the authority to issue wastewater permits to
allow such discharges, which it has delegated to the State of Texas. 33 U.S.C.
§ 1342(a)(l), (b); 63 Fed. Reg. 51164 (Sept. 24, 1998). The Texas Legislature in turn
has authorized the Commission to administer the State’s wastewater-discharge
permitting program under the Texas Water Code. Tex. Water Code § 26.027.

AIRW, 600 Westinghouse Investments, LLC, and 800 Westinghouse
Investments, LLC (collectively, “Developers”) are developing an approximately
128-acre tract of land in the City’s extraterritorial jurisdiction, seeking to build
hundreds of housing units and two duplex developments. This land consists of two
residential properties, the Mansions of Georgetown III and Luxe of Georgetown,
with the former owned by 800 Westinghouse and the latter by 600 Westinghouse, as
well a tract owned by AIRW. To acquire wastewater service for these properties, the
Developers contacted several wastewater service providers in the area, including the
City. City personnel informed the Developers that in order to receive wastewater
services, the Developers must agree to let the City annex their properties. City
personnel maintained this position despite repeated attempts by the Developers to
negotiate another solution.

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AIRW thereafter applied to the Commission for a wastewater permit to
construct and operate a wastewater treatment plant on its own property and to
discharge wastewater from this facility. The Commission’s executive director
concluded AIRW’s application met with all applicable statutory and regulatory
requirements and issued a draft permit. The City and Jonah Water Special Utility
District (“Jonah Water”) objected to the executive director’s decision and requested
a contested case hearing, which led to the application being forwarded to the full
Commission. The full Commission issued an interim order referring the matter to
the State Office for Administrative Hearings (“SOAH”) for a contested case hearing
on eight issues raised by the City. One of these issues was whether the permit was
consistent with the Commission’s regionalization policy, which encourages the
combination of community wastewater systems for improved planning operation or
management. Other issues the City raised relevant for our purposes include (1)
“[w]hether the draft permit is protective of water quality and the existing uses of the
receiving waters;” (2) “[w]hether the draft permit is protective of the health of the
nearby residents;” (3) “[w]hether the draft permit complies with applicable
requirements regarding nuisance odors;” (4) “[w]hether the application is
substantially complete and accurate;” and (5) “[w]hether the draft permit complies
with [the Commission’s] antidegradation policy and procedures . . . .”

Before the hearing began, the Westinghouse entities entered into Non-
Standard Service Agreements with Jonah Water, agreeing that Jonah Water would
own and operate the new wastewater facility after the wastewater permit was issued
and transferred to Jonah Water. Jonah Water consequently changed its position to
support the issuance of the permit. After the contested case hearing, the two
Administrative Law Judges (“ALJs”) presiding over the hearing recommended the
permit be granted. The Commission issued a final order granting the wastewater

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permit to AIRW and issued findings of fact and conclusions of law supporting its
decision. The City moved for rehearing, which was denied by operation of law.

The City filed a petition for judicial review in the Travis County District Court
challenging the Commission’s order on the basis that it is not supported by
substantial evidence and that the Commission reached its decision arbitrarily and
capriciously, given the eight issues the City raised in the contested hearing. The
Developers and Jonah Water intervened as defendants. After a hearing, the trial court
issued a final judgment reversing and remanding to the Commission for further
proceedings. The trial court based its decision solely on its conclusion that the
Commission’s approval did not comply with Texas’s regionalization policy:

1. Defendant [the Commission] erred by determining that the Permit
complies with Texas’s regionalization policy.

2. Because Intervenor AIRW failed to seek a waiver from Plaintiff’s city
council, there is no way to know whether the city council would be
willing to waive the annexation requirement. It is unreasonable to
assume that City staff—who are bound by the city council—speak for
the city council, which is not bound and has both the power to waive
requirements and the ability to act under political considerations. This
means that Defendant should not have determined both that (1) Plaintiff
denied Intervenor AIRW service; and (2) connection to Plaintiff’s
system would cost Intervenor AIRW $20 million.
The Developers, the Commission, and Jonah Water (collectively, “Appellants”) then
appealed.

STANDARD OF REVIEW

The City on appeal contends that the Commission’s order issuing AIRW a
wastewater permit was not supported by substantial evidence and was made
arbitrarily and capriciously.

The focus of this Court’s review, as in the trial court, is on the Commission’s

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order. Tex. Comm’n on Env’t Quality v. San Antonio Bay Estuarine Waterkeeper,
714 S.W.3d 270, 282 (Tex. App.—15th Dist. 2025, pet. filed). We review the order
for substantial evidence. Save Our Springs All., Inc. v. Tex. Comm’n on Env’t
Quality, 713 S.W.3d 308, 320 (Tex. 2025). Under substantial evidence review, we
reverse the Commission’s decision only if the City’s substantial rights have been
prejudiced because the order was:

(A) in violation of a constitutional or statutory provision;
(B) in excess of the agency’s statutory authority;
(C) made through unlawful procedure;
(D) affected by other error of law;
(E) not reasonably supported by substantial evidence considering the
reliable and probative evidence in the record as a whole; or
(F) arbitrary or capricious or characterized by abuse of discretion or
clearly unwarranted exercise of discretion.

Tex. Gov’t Code § 2001.174(2).

“Whether there is substantial evidence to support an agency’s decision is a
question of law.” Tex. Dep’t of Pub. Safety v. Flores, No. 15-24-00018-CV, 2024
WL 4887998, at *2 (Tex. App.—15th Dist. Nov. 7, 2024, no pet.) (mem. op.).
Substantial evidence review “does not allow a court to substitute its judgment for
that of the agency.” R.R. Comm’n of Tex. v. Torch Operating Co., 912 S.W.2d 790,
792 (Tex. 1995). “Review under the substantial-evidence rule is highly deferential—
the issue is not whether the agency’s decision is correct, but whether the record
demonstrates a reasonable basis for it.” N.E. Indep. Sch. Dist. v. Riou, 598 S.W.3d
243, 251 (Tex. 2020). Substantial evidence supporting an administrative agency’s
decision “requires only more than a mere scintilla, and ‘the evidence [i]n the record
actually may preponderate against the decision of the agency and nonetheless
amount to substantial evidence.’” R.R. Comm’n, 912 S.W.2d at 792–93 (quoting Tex.

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Health Facilities Comm’n v. Charter Med.-Dall., Inc., 665 S.W.2d 446, 452 (Tex.
1984)). “The findings, inferences, conclusions, and decisions of an administrative
agency are presumed to be supported by substantial evidence, and the burden is on
the contestant to prove otherwise.” Tex. Comm’n on Env’t Quality v. Maverick Cnty.,
642 S.W.3d 537, 547 (Tex. 2022) (quoting Charter Med.-Dall., 665 S.W.2d at 453).

In contested cases regarding wastewater permit applications such as this, “the
draft permit prepared by the executive director of the commission, the preliminary
decision issued by the executive director, and other sufficient supporting
documentation in the administrative record of the permit application establishes a
prima facie demonstration” that the permit “meets all state and federal legal and
technical requirements . . . .” Tex. Gov’t Code § 2003.047(i-1). A party may rebut
this prima facie demonstration “by presenting evidence that . . . demonstrates that
one or more provisions in the draft permit violate a specifically applicable state or
federal requirement.” Id. § 2003.047(i-2).

“Arbitrariness is a distinct ground for reversal.” Save Our Springs, 713
S.W.3d at 320. An agency “acts arbitrarily or abuses its discretion 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.” Id.

Lastly, we review the meaning of a statute de novo. Davis v. Morath, 624
S.W.3d 215, 221 (Tex. 2021). “When construing a statute, our primary objective is
to determine the Legislature’s intent which, when possible, we discern from the plain
meaning of the words chosen.” Mosaic Baybrook One, L.P. v. Simien, 674 S.W.3d
234, 253 (Tex. 2023) (quoting In re Est. of Nash, 220 S.W.3d 914, 917 (Tex. 2007)).
Words not “statutorily defined bear their common, ordinary meaning unless a more
precise definition is apparent from the statutory context or the plain meaning yields

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an absurd result.” Fort Worth Transp. Auth. v. Rodriguez, 547 S.W.3d 830, 838 (Tex.
2018). Regarding regulations, “[w]hen a state agency adopts an administrative rule,
it commits itself to follow the plain meaning of the promulgated text, which courts
should interpret as they would a statute . . . .” Port Arthur Cmty. Action Network v.
Tex. Comm’n on Env’t Quality, 707 S.W.3d 102, 104 (Tex. 2025).

ANALYSIS

Appellants challenge the trial court’s judgment, arguing that substantial
evidence supports that the Commission’s order issuing the AIRW wastewater permit
is in accordance with Texas’s regionalization policy. The City disagrees, contending
substantial evidence does not support the permit’s compliance with Texas’s
regionalization policy and that the Commission’s decision was made arbitrarily and
capriciously. The City further contends that the Commission erred in issuing the
permit on five other grounds not listed in the trial court’s judgment. Namely, it erred
in concluding that (1) the permit is protective of water quality and the existing uses
of the receiving waters; (2) the permit is compliant with Commission
antidegradation policy and procedures; (3) the permit protects human health or
provides for sufficient operational requirements; (4) the permit violates the
applicable requirements on nuisance orders; and (5) the permit application was
substantially complete and accurate. We will address these issues in turn.

I. Substantial Evidence Supports that the AIRW Wastewater Permit
Complies with Texas’s Regionalization Policy.
The Commission is authorized to “issue permits and amendments to permits
for the discharge of waste or pollutants into or adjacent to water in the state.” Tex.
Water Code § 26.027(a). It is the policy of the State of Texas “to encourage and
promote the development and use of regional and area-wide waste collection,
treatment, and disposal systems to serve the waste disposal needs of the citizens of

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the state and to prevent pollution and maintain and enhance the quality of the water
in the state.” Id. § 26.081(a). In deciding whether to issue a wastewater permit, the
Commission “may deny or alter the terms and conditions of [a] proposed permit”
based on the “availability of existing or proposed areawide or regional waste
collection, treatment, and disposal systems . . . .” Id. § 26.0282. Further, the state
will use “all reasonable methods to implement this policy” of “encourage[ing] and
promot[ing] the development and use of regional and areawide waste collection,
treatment, and disposal systems to serve the waste disposal needs of the citizens of
the state . . . .” Id. § 26.003.

The Commission implemented this policy through a guidance document
entitled “TCEQ Regionalization Policy for Wastewater Treatment”, which states:

TCEQ may approve new, renewal, and major amendment applications
for discharges of wastewater in any of the following situations where:
...

• The applicant requested service from wastewater
treatment facilities within the 3 miles, and the request
was denied.
• The applicant can successfully demonstrate that an
exception to regionalization should be granted based
on costs, affordable rates, and/or other relevant factors.
The focus of the parties’ dispute is whether the Commission’s order complied with
the terms of its regionalization policy. Specifically, the parties contest whether the
City denied Developers’ request to access the City’s wastewater treatment facilities
and whether AIRW demonstrated that it should be excepted from the regionalization
policy based on cost.

Appellants argue the Commission’s order complies with the regionalization
policy because there is substantial evidence that the City declined to provide

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Developers with access to its wastewater treatment facilities and that the cost
exception to regionalization applies. The City responds that it did not deny
Developers access to its wastewater services and that the Commission wrongly
considered the diminution in value of the Westinghouse entities’ residential property
developments as a cost to AIRW to connect to the City’s wastewater facilities. We
hold that substantial evidence supports the Commission’s determination that an
exception to regionalization applied to the permit at issue on the basis of cost.

The Commission in its findings of fact and conclusions of law sections in its
order issuing the permit stated that “[c]osts weigh in favor of granting AIRW’s
application” and that “[t]he Application demonstrates compliance with TCEQ’s
regionalization policy,” respectively. The record contains several reports and
assessments of costs. Upon request of the Commission to submit additional
information to justify the proposed permit, AIRW, through its consultant Perkins
Engineering Consultants, Inc. (“Perkins”), sent the Commission a letter justifying
the need for a permit. In the letter, Perkins examined the cost of connecting to the
City and assessed that the cost of complying with the City’s annexation condition
would reduce the value of the residential developments by $20 million. It based these
annexation costs “on lost value of the property when sold, payment of additional
City taxes and fees, and costs to comply with the City’s zoning requirements.”
Perkins reasoned that due to the improved value of the land resulting from the
residential development projects constructed, “the annual taxes owed to the City will
be between $580,600 and $725,750” and that “[t]he lost value of the property
attributable to City taxes alone are estimated to be between $13,000,000 and
$18,000,000 under the arrangements proposed by the City as conditions of service.”

Perkins also notes that the City informed AIRW that some of the land must be
dedicated to uses other than residential, such as commercial, and that changing the

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use from the planned residential use “represents further loss of value attributable to
the conditions of services proposed by the City.” Perkins concluded that it would be
less costly for AIRW to build its own facility “on the order of $5 million,” which is
substantially less than the $20 million lost in diminished property value by
connecting to the City.

Other record evidence includes an appraisal report by Colliers International
Valuation & Advisory Services comparing the projected annexed value of the
residential development properties against their non-annexed value. Colliers
estimated that there would be a $20 million differential in value of the properties,
assuming the projects are completed. Colliers also provided a comparison of the
stabilized tax estimate of the properties, projecting that $3,111,601 would be the
estimate if the properties are not annexed and $3,801,301 would be the estimate if
they are. Under substantial evidence review, evidence supporting an administrative
agency’s decision “requires only more than a mere scintilla” regardless of whether
the evidence in fact preponderates against the agency’s decision. R.R. Comm’n, 912
S.W.2d at 792–93. The assessments provided above constitute “more than a scintilla
of evidence” that the diminution in value of the residential projects resulting from
connecting with the City’s wastewater services is a cost that the Commission may
consider as a basis for excepting AIRW from regionalization.

The City objects that diminution in value is not a “cost,” which contemplates
actual expenditures, as opposed to a projected valuation of a property. The City
contends the “cost” here is the expenditures to connect the residential developments
to the City’s wastewater services. The City maintains diminution in property value
is irrelevant to the regionalization policy and that the Commission’s consideration
of it was arbitrary and capricious. We disagree. The issue of what “cost” means must
be understood within a statutory context that gives the Commission significant

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discretion to determine whether a proposed permit complies with its regionalization
policy. The Texas Water Code does not prescribe specific requirements to be in the
regionalization policy, only that the Commission “tak[e] into consideration” the
policy “to encourage and promote the development and use of regional and areawide
waste collection, treatment, and disposal systems to serve the waste disposal needs
of the citizens of the state . . . .” Tex. Water Code § 26.003. The Water Code only
requires the use of “all reasonable methods to implement” the policy. Id. Other
contextual evidence of the Commission’s significant discretion comes from a
provision on assessing proposed wastewater permits, which states that the
Commission “may deny or alter the terms and conditions of [a] proposed permit”
based on the “availability of existing or proposed areawide or regional waste
collection, treatment, and disposal systems . . . .” Id. § 26.0282 (emphasis added).

With this context in mind, we examine the plain meaning of the word “cost”
in the regionalization policy, which is undefined in the statute. Fort Worth, 547
S.W.3d at 838 (“Words not statutorily defined bear their common, ordinary meaning
unless a more precise definition is apparent from the statutory context or the plain
meaning yields an absurd result.”). Black’s Law Dictionary contains numerous
definitions of “cost”, including a definition encompassing the City’s understanding:
an “expense incurred to achieve some end; the amount charged or price paid for
something; an expenditure made for the purpose of procuring something.” Cost,
BLACK’S LAW DICTIONARY (12th ed. 2024). But it also includes the term
“opportunity cost”, which means “[t]he cost of acquiring an asset measured by the
value of an alternative investment that is forgone . . . .” Opportunity Cost, BLACK’S
LAW DICTIONARY (12th ed. 2024); see also Implicit Cost, BLACK’S LAW
DICTIONARY (12th ed. 2024) (“See opportunity cost.”).

The estimated $20 million diminution of property value is an opportunity cost.

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AIRW connecting to the City’s wastewater services will mean foregoing the
“alternative investment” of building its own wastewater plant and acquiring $20
million in property value for the residential developments. Through the lens of
opportunity cost, connecting with the City will result in a projected $20 million cost.
Appellants have provided evidence for the basis of this cost—such as city taxes and
fees and potential zoning requirements—as discussed in more detail in the
assessments of costs in the record. The meaning of “cost” encompassing
“opportunity cost” in the policy is “reasonable.” Tex. Water Code § 26.003.
Notwithstanding this point, diminution in property value would additionally
constitute a “relevant factor”—an independent basis for an exception to
regionalization. Diminution in property value is a factor a company accounts for,
like costs, when evaluating whether to build a facility and considering it as a
“relevant factor” is a “reasonable method” of implementing regionalization.

The City also objects that, when reviewing a permit application, the
Commission cannot include any consideration of property value and zoning because
consideration of those issues is outside of its authority. In support of its position, the
City points to a webpage on the Commission’s website, which states “[t]he issues
TCEQ can consider when we review a permit application are set by the Legislature
through state law. Under those laws, we do not have the authority to consider certain
matters when we review a permit application.” Concerns Outside of TCEQ’s
Authority, TEX. COMM’N ENV’T QUALITY,
https://www.tceq.texas.gov/agency/decisions/participation/permitting-
participation/concerns-outside-of-tceqs-authority (last visited Nov. 12, 2025).
Further down the webpage, the Commission notes that “some matters fall outside of
our jurisdiction” and lists “[z]oning” and “[e]ffects on property values” as two such
matters. Id. The City contends the Commission acted arbitrarily and capriciously in

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considering the diminution of property value—and zoning as a component of that
assessment—as a cost because it was outside the Commission’s authority to do so.

Looking at the cited webpage in full context, it becomes clear that the cited
language is inapplicable here. The webpage pertains to what concerns of the general
public the Commission can legally consider as to the permitting process. It does not
relate to what the Commission can consider under its regionalization policy. The
webpage at issue falls under the website heading “Pending Permits: Participating in
the Process,” which in turn falls under the heading “Public Representation and
Participation.” Id. Further contextual evidence comes from the guide provided on
the webpage, “Issues Outside TCEQ’s Jurisdiction: Answers to Public Comments
We Receive.” Id. Under this guide, the sections on zoning and property value show
that these limitations are directed to public commentators and not the permit
applicant:

Location/Zoning
Commenters express concern regarding the location of the facility,
and/or whether it complies with current local zoning ordinances.
Response: Generally, TCEQ does not have jurisdiction to consider
facility location choices made by an applicant when determining
whether to approve or deny a permit application, unless a statute or rule
specifically requires the Commission to consider some aspect of the
location.
...
Property Value
Commenters express concern about possible devaluation of property
in the area.
Response: TCEQ does not have jurisdiction to consider whether the
proposed activity will impact development, property values, property
transactions, or investment property when determining whether to
approve or deny a permit application . . . The Executive Director’s
review of a permit application is limited to whether the application and

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proposed activities meet the requirements of applicable TCEQ rules.

TCEQ External Relations Division, Issues Outside TCEQ’s Jurisdiction: Answers
to Public Comments We Receive, GI-650 at 1–2 (2024)
https://www.tceq.texas.gov/downloads/agency/decisions/participation/gi-650-
issues-outside-tceqs-jurisdiction-x.pdf (emphasis added). These questions and
answers denote that the Commission cannot consider public concern over where the
permit applicant places its facility or how the applicant’s proposed activity affects
the surrounding area unless the law or Commission rules state otherwise. Nothing in
this guide or the webpage discuss the regionalization policy. Moreover, the guide
makes clear that the sources of these limitations are statutes and administrative rules.
The City points to no such statutes or rules—or any binding authority 1—prohibiting
zoning and property values from being considered as costs. Indeed, as discussed
earlier, the Water Code gives the Commission significant discretion to determine
what constitutes a cost under its regionalization policy, so long as it employs
“reasonable methods” in doing so. Tex. Water Code § 26.003.

The City further objects that the Commission acted arbitrarily and
capriciously in considering the diminution of value of the residential properties as a
cost to AIRW because AIRW, the permit applicant, does not own those properties.
The City notes that AIRW owns the property where the wastewater facility will be
built but that the Westinghouse entities own the properties where the residential
developments are to be built. It is true that AIRW does not own the residential
developments, but the City cites to no provision in the regionalization policy or

1
The City cites to responses to public comments and interim orders made by the then Texas
Natural Conservation Commission executive director—now the Commission—stating it lacked
the statutory authority to consider property values. These responses and interim orders may reflect
past practice, but they are not the law and do not usurp the Commission’s discretion to use
“reasonable methods” to implement regionalization. Tex. Water Code § 26.003.

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elsewhere stating that the diminished property value of third parties can never be
considered as a cost to the permit applicant. In some circumstances this may be the
case, but the consideration of the lost property value to the Westinghouse entities
here is “reasonable” given the relationship between AIRW and the Westinghouse
entities and the broader context at play here. Id. The Westinghouse entities are
affiliates of AIRW and it is undisputed that all three are engaging in a joint project
to build residential housing. It is also undisputed that AIRW wishes to build a
wastewater plant with the specific purpose to serve Westinghouse entities’
developments. Without these residential developments, there would be no reason to
build the wastewater plant—the value of the plant is tied to these developments.
Given this interconnectedness of AIRW and the Westinghouse entities’ projects, it
is reasonable to consider the diminution of the Westinghouse entities’ developments
as a cost 2 serving as a basis to except AIRW’s permit from regionalization. 3

We hold that substantial evidence supports that the Commission’s order
granting AIRW’s wastewater permit complies with the Commission’s
regionalization policy.

II. Substantial Evidence Supports the Commission’s Order that the
Permit is Protective of Water Quality.
The City argues generally that the evidence in the record does not support a
conclusion that AIRW’s permit is protective of water quality and the existing uses
of receiving waters, including protection of aquatic and terrestrial wildlife, as
required by the Texas Surface Water Quality Standards (“Water Quality Standards”)
that the Commission promulgated. Appellants respond that there is substantial

2
As well as a “relevant factor.”
3
As this resolution disposes of the issue, we do not reach the argument of whether the
request to connect to the City’s wastewater services was denied.

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evidence that the permit complies with water quality standards and that the City,
which had the burden to present evidence disputing the accuracy of AIRW’s water
quality evidence, failed to do so. We hold that there is substantial evidence that the
permit is protective of water quality.

The Water Quality Standards provide that it is the policy of this state to
“maintain the quality of water in the state consistent with the public health and
enjoyment, the propagation and protection of terrestrial and aquatic life, and the
operation of existing industries . . . .” Tex. Water Code § 26.003; 30 Tex. Admin.
Code § 307.1; see also id. § 307.1–10. For this argument, the City does not specify
any provision in the Water Quality Standards that the draft permit does not comply
with. Rather, it only cites to witness testimony opining that the draft permit lacks
adequate sampling. Appellants, on the other hand, cite testimony and documentation
from Commission and AIRW personnel affirming that the draft permit protects
water quality based on an analysis of model results for the receiving water the
proposed discharge is to go into as well as an assessment on the impact of such
discharge on aquatic life and human health. This evidence supports AIRW’s permit
being protective of water quality by more than a scintilla and so constitutes
substantial evidence. R.R. Comm’n, 912 S.W.2d at 792–93.

III. Substantial Evidence Supports the Conclusion that the Permit
Complies with the Degradation Policy and Procedures.

The City argues that the Commission abused its discretion in issuing the
AIRW permit because the record does not support that the permit complied with
antidegradation policy and procedures. Specifically, the City contends the
Commission in its antidegradation review failed to properly assess whether the
permitted activities would disturb or impermissibly degrade existing water quality.
Appellants respond that the record contains sufficient evidence that the Commission

16
properly conducted this inquiry.

By Commission rule, degradation means “a lowering of water quality by more
than a de minimis extent, but not to the extent that an existing use is impaired.” 30
Tex. Admin. Code § 307.5(b)(2). Commission rules “prescribe antidegradation
standards for permitted discharges into three tiers of waterways.” Save Our Springs,
713 S.W.3d at 313. At issue here are Tiers 1 and 2. Under Tier 1, “[e]xisting uses
and water quality sufficient to protect those existing uses must be maintained.” 30
Tex. Admin. Code § 307.5(b)(1). Under Tier 2, “[n]o activities subject to regulatory
action that would cause degradation of waters that exceed fishable/swimmable
quality are allowed” absent special circumstances not relevant here. Id.
§ 307.5(b)(2). “Fishable/swimmable waters are defined as waters that have quality
sufficient to support propagation of indigenous fish, shellfish, terrestrial life, and
recreation in and on the water.” Id. In sum, “TCEQ may issue a waterway discharge
permit to the City only if it has determined that the permitted activities would neither
(1) disturb existing water uses nor (2) degrade the water.” Save Our Springs, 713
S.W.3d at 313–14. The City argues that the Commission’s antidegradation review
failed to consider (1) the narrative standard for the protection of aesthetic values; (2)
the land uses around the receiving water body; (3) criteria protective of livestock
watering, irrigation, or terrestrial wildlife; and (4) aquatic life in the downgradient
stream to which treated wastewater would eventually flow.

The record provides substantial evidence that the Commission complied with
the antidegradation policy and procedures in issuing the permit. As neither party
disputes, the Commission conducted a Tier 1 and 2 antidegradation analysis. The
record contains evidence that this analysis considered the four matters the City
raises. On aesthetic values, the permit itself prohibits discharges that would violate
aesthetic standards such as visible oil, foam, froth, and floating solids. One of the

17
Commission’s expert witnesses who conducted the analysis, Jenna Lueg, testified
that she reviewed whether the discharges would cause turbidity in the affected
waters. Preventing and minimizing these effects are specifically required by the rule
on aesthetic parameters the Commission promulgated. 30 Tex. Admin. Code
§ 307.4(b)(2), (5)–(7). This testimony is substantial evidence of compliance.

On land uses, the City takes issue with Ms. Lueg’s testimony that she does not
always look at how proposed discharges will affect developments that are still under
construction. The development under construction here is a green space in a
residential development. Contrary to what the City claims, the antidegradation
review does not look to future land uses. The Tier 1 and 2 antidegradation review
focuses on the preservation of “existing uses” of water. 30 Tex. Admin. Code
§ 307.5(b)(1)–(2). Ms. Lueg affirmed in her testimony that she writes permits “based
on the circumstances that are on the ground at the time the application is prepared
and filed” and not what might be developed at a site later. A Commission permit
reviewer involved in reviewing the permit, Gordon Cooper, also testified to the
same. This testimony is substantial evidence that current land uses were considered.
The City cites to no law, rule, or guidance requiring the Commission to evaluate how
discharges will affect speculative future land uses.

Looking to criteria protective of livestock watering, irrigation, terrestrial
wildlife, and the status of aquatic life, the record evidences the Commission
considered these matters in its executive director responses to public comments. In
one of those responses, the executive director states the draft permit sets effluent
limitations and requires AIRW to operate the wastewater facility in compliance with
Commission regulations on water quality standards to address these concerns. These
requirements are reflected in the permit itself. On complying with these water quality
standards, the executive director states “[w]ater in the state must be maintained to

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preclude adverse toxic effects on aquatic life, terrestrial life, livestock, and domestic
animals resulting from contact, consumption of aquatic organisms, consumption of
water, or any combination of the three.” The executive director’s response and the
draft permit are substantial evidence that the effects of the future discharge were
considered.

IV. Substantial Evidence Supports that the Permit is Protective of Human
Health.

The City argues the Commission abused its discretion in issuing the AIRW
draft permit because the permit failed to include conditions requiring more frequent
monitoring and other operational requirements to prevent the discharge of
wastewater during potential future operational disruptions. The City specifically
points to the permit’s not requiring redundant units and storage facilities as a backup
for treatment failures or power outages. The City claims the failure to include such
requirements makes it unreasonable for the Commission to maintain that the permit
protects the health of nearby residents. The City also contends that the Commission
failed to include measures to ensure inadequately treated wastewater will not be
discharged to the receiving stream. Appellants respond that these conditions are not
required by the regulations and that the permit contains protections for human health.
We agree with Appellants.

The City cites to no law or regulation requiring a permit to include any of the
above conditions. The record contains witness testimony that redundant facilities,
such as a second clarifier, are not required by Commission rules and are not
necessary given the size of the wastewater facility at issue. One of the City’s
witnesses who believed two clarifiers were necessary also conceded the rules do not
require it. Moreover, as Appellants note, the permit contains conditions and
operational requirements to protect human health. Witness Dr. Janet Sims testified

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that the permit protects human health through disinfection of treated effluent and
monitoring the chlorine residual and E. coli bacteria. She testified that monitoring is
required five times a week and that samples will be collected and analyzed for E.
coli. Dr. Sims concluded that the average permit limit is 126 colony forming
units/most probable number per 100 milliliters, the “criteria established in the [Water
Quality Standards] for the protection of human health for primary contact
recreational uses.” 30 Tex. Admin. Code § 307.7(b)(1)(A). The above testimony
constitutes substantial evidence that the permit is protective of human health and that
the Commission did not abuse its discretion on issuing the permit on this basis.

V. Substantial Evidence Supports that the Permit Complies with
Applicable Nuisance Odor Requirements.
The City argues that the Commission acted arbitrarily in issuing the AIRW
permit because it failed to meet the applicable nuisance odor requirements and failed
to consider possible adverse effects of the proposed discharge on a greenspace, as
mandated by Section 26.030(b) of the Texas Water Code. Appellants respond that
record evidence supports that applicable nuisance odor requirements are met and
that the greenspace at issue is not subject to the requirements of Section 26.030(b)
because it is not a park.

On the nuisance odor requirements, Commission regulations mandate that the
permittee must meet one of three alternatives “as a compliance requirement to abate
and control a nuisance of odor prior to construction of a new wastewater treatment
plant unit . . . .” 30 Tex. Admin. Code § 309.13(e). One of these alternatives is that
the wastewater plant “not be located closer than 150 feet to the nearest property line
. . . .” Id. § 309.13(e)(1). The parties do not dispute AIRW chose this option and
owns a 150-foot buffer zone between its wastewater plant and the nearby Patterson
Ranch property. The City claims that the permit only temporarily meets this buffer

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requirement because the abutting County Road 111 is set to be realigned. Once
realigned, the City asserts the buffer zone will be lost because the road will no longer
buffer the wastewater plant from the Patterson Ranch subdivision. But evidence in
the record indicates that even with the forthcoming realignment there will still be a
150-foot buffer zone. The buffer zone map shows the buffer runs from the treatment
plant units to a “Facility Boundary” and not to any road. An AIRW witness also
testified that the 150-feet requirement will still be met after the realignment because
a 150-feet buffer will still exist “between the treatment units and the nearest property
line.” Substantial evidence therefore supports that the permit complies with the
applicable nuisance order requirements and that the Commission did not abuse its
discretion in issuing the AIRW permit on these grounds.

Turning to the potential adverse effects of proposed discharge on a
greenspace, Section 26.030(b) states the Commission in issuing a permit to
discharge effluent “shall consider any unpleasant qualities of the effluent, including
unpleasant odor, and any possible adverse effects that the discharge of the effluent
might have on the recreational value of the park, playground, or schoolyard.” Tex.
Water Code § 26.030(b) (emphasis added). The parties agree that there is planned
greenspace on Patterson Ranch but they dispute whether such greenspace is a “park”
under Section 26.030. The City asserts the greenspace is a park while Appellants
contend that the greenspace is not a park because a park must be recreational and the
City cites to no evidence that the greenspace will be recreational.

As “park” is undefined in the statute, we look to its plain meaning. Fort
Worth, 547 S.W.3d at 838 (“Words not statutorily defined bear their common,
ordinary meaning unless a more precise definition is apparent from the statutory
context or the plain meaning yields an absurd result.”). Black’s Law Dictionary in
relevant part defines “park” to mean “[a] large open area usu[ally] with grass and

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trees, esp[ecially] in a city or town, for public recreation” and “[a] large grassy area
of usu[ally] private land surrounding a big house in the countryside.” Park, BLACK’S
LAW DICTIONARY (12th ed. 2024). The former definition supports an understanding
of “park” focused on recreation while the latter is broader and could encompasses
non-recreational uses. Given the emphasis in Section 26.030(b) on the “recreational
value” of the places listed, we hold that the first definition applies here. This is
buttressed by those places listed surrounding the word park, “playground” and
“schoolyard,” which are both places of recreation. TGS-NOPEC Geophysical Co. v.
Combs, 340 S.W.3d 432, 441 (Tex. 2011) (“The canon of statutory construction
known as noscitur a sociis, or ‘it is known by its associates’ directs that similar terms
be interpreted in a similar manner.”).

The City asserts that the greenspace is recreational but specifies no evidence
supporting this claim. Appellants, on the other hand, cite to Dr. Sims’ testimony
affirming that there is no “evidence of parks, playgrounds, or schools on the
Patterson Ranch” and, although acknowledging the existence of the greenspace,
affirmed it was not a “public park.” The City has the burden to “present[] evidence
that . . . demonstrates that one or more provisions in the draft permit violate a
specifically applicable state or federal requirement.” Tex. Gov’t Code § 2003.047(i-
2). Given the lack of evidence of recreational use provided, we hold the City failed
to meet its burden to demonstrate the permit violated the requirements of Section
26.030(b).

VI. Substantial Evidence Supports that AIRW Provided All Information
Reasonably Required by the Commission for Its Permit Application.

Section 26.027(b) of the Texas Water Code states that “[a] person desiring to
obtain a permit or to amend a permit shall submit an application to the commission
containing all information reasonably required by the commission.” The

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Commission after receiving the application must determine if it is administratively
complete. 30 Tex. Admin. Code § 39.418(a). The City argues the Commission
improperly reviewed AIRW’s permit application because it was not substantially
complete under Section 26.027(b) due to its having allegedly incomplete and
inaccurate responses and not listing Jonah Water and 600 Westinghouse Investments
as applicants. Appellants respond that the record evidence shows the information
AIRW provided in its application was sufficient and that Jonah Water and 600
Westinghouse did not need to be listed as applicants. We agree with Appellants.

On incomplete and inaccurate responses in the permit application, the City
claims that AIRW’s application does not include information on the need of the
proposed wastewater plant, data on population estimates and growth rates of the
planned residential communities, accurate maps of existing nearby wastewater
facilities and the area where the wastewater facility at issue is planned to be built,
information on whether the City denied wastewater services, an accurate notice
document, accurate responses to an administrative report, and whether the facility at
issue will be above the 100-year floodplain level. The City separately claims that
Jonah Water and 600 Westinghouse needed to be listed as permit applicants because
it alleges the former will operate the facility and the latter co-owns the facility.4 But
the City cites to no law or regulation requiring the Commission to receive and
consider this information before it can issue a permit. Indeed, Section 26.027(b) sets

4
We note that Commission regulations require “the owner of a facility to submit an
application for a permit . . . .” 30 Tex. Admin. Code § 305.43(a). The City does not argue this rule
applies to 600 Westinghouse or Jonah Water, but even if it did, this rule does not mandate these
entities be listed as permit applicants. Concerning 600 Westinghouse, Appellants provide
evidence, unrebutted by the City, that 600 Westinghouse conveyed the property at issue to AIRW
and so does not own the facility. Regarding Jonah Water, even assuming it is currently an operator
of the wastewater facility, Commission regulations only require an operator to be a permit
applicant if the Commission “determines that special circumstances exist where the operator or the
operator and the owner should both apply for a permit . . . .” Id. The City does not present evidence
that the Commission made such a determination.

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minimum requirements for applicants who are individuals but not for entities. Tex.
Water Code § 26.027(b)(1)–(5).

Section 26.027(b) does not otherwise impose requirements on the
Commission but rather puts guardrails on what information it can require from an
applicant—namely that such information be “reasonable.” Record evidence shows
the Commission in its decision granting the permit determined that “[t]he
Application included all required information and was substantially complete and
accurate.” Mr. Cooper also testified that Commission staff during its review process
requested additional information from AIRW and as a result of this process declared
the application administratively and technically complete. Substantial evidence
supports that the Commission received and considered all information it reasonably
required from AIRW’s permit application. For the reasons stated above, we reverse
the trial court’s judgment and render judgment affirming the Commission’s order
granting AIRW the wastewater permit at issue.

/s/ April Farris
April Farris
Justice

Panel consists of Chief Justice Brister and Justices Field and Farris.

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