(a) A district that owns or operates raw water pipelines that convey surface water, groundwater, or both surface water and groundwater, through more than 10 counties for municipal and industrial purposes may:
(1) develop, generate, transmit, or distribute water power and electric energy inside the district's boundaries for its own use;
(2) purchase electric energy from any available source for use at a facility the district owns, operates, and maintains inside the district's boundaries;
(3) enter into an agreement to acquire, install, construct, finance, operate, make an addition to, own, or operate an electric energy generating, transmission, or distribution facility jointly with another person; or
(4) sell or otherwise dispose of any of the district's interest in a jointly owned facility described by Subdivision (3).
(b) A district governed by this section:
(1) is subject to the transmission line certification provisions of Chapter 37, Utilities Code;
(2) may not generate electricity by means of hydroelectric generation.
Official text of the Texas Water Code as published by the Texas Legislative Council.