Legal Definitions - certificate of convenience and necessity

Definition: A certificate issued by a government agency that allows a utility or transportation company to operate in a specific area. This certificate is also known as a certificate of public convenience and necessity.

Example: Let's say a new electric company wants to provide service in a certain area. They would need to apply for a certificate of convenience and necessity from the government agency that regulates utilities. The agency would review the application and determine if the new company is necessary to meet the needs of the community and if it would be convenient for customers to have another option. If the agency approves the application, the new company would be granted the certificate and allowed to operate in that area.

Explanation: The example illustrates how a certificate of convenience and necessity is used to regulate the operation of utility and transportation companies. The government agency reviews applications to ensure that new companies are necessary and will provide a convenient option for customers. This helps to prevent unnecessary competition and ensures that customers have access to reliable services.