Texas Commercial Energy v. TXU Energy Inc.

Applying the filed rate doctrine, along with other common-law defenses that are normally part of the federal antitrust legal landscape, gives effect to the legislature's intent to have the Public Utility Regulatory Act complement other state and federal antitrust provisions.

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Click here for the full text of this decision FACTS:Texas Commercial Energy, an energy retailer, appeals the district court’s dismissal of its lawsuit against TXU Energy Inc., a generator of electric power, and 23 other defendants. TCE argues that the district court erred by applying the filed rate doctrine to preclude it from recovering damages it allegedly sustained when TXU allegedly manipulated its market position to create substantial price increases in the short-term energy market. HOLDING:Affirmed. Defendants who engage in anticompetitive activities based on filed rates are subject to scrutiny under the antitrust laws and to possible criminal sanctions or equitable relief. Moreover, contrary to TCE’s assertions, the filed rate doctrine is very much a part of current federal antitrust law, the court points out. It has been consistently applied as a defense to antitrust actions by various circuits and by the U.S. Supreme Court for decades. The court finds that applying the filed rate doctrine, along with other common-law defenses that are normally part of the federal antitrust legal landscape, gives effect to the Legislature’s intent to have Public Utility Regulatory Act “complement other state and federal antitrust provisions.” Texas Utility Code 39.158(b). The court rejects TCE’s state antitrust arguments that applying the filed rate doctrine would displace provisions set out in the Texas Free Enterprise and Antitrust Act, or that the filed rate doctrine as a whole does not apply to the TFEAA. TCE contends that the filed rate doctrine is inapplicable because PURA does not require rates in the BES market to be filed with Public Utility Commission of Texas, which does not set or approve these rates. The court agrees with the approach taken by other circuits who have addressed this issue in the context of rates filed with PUCT’s federal counterpart, Federal Energy Regulatory Commission. In Town of Norwood, Massachusetts v. New England Power Co., 202 F.3d 408 (1st Cir. 2000), the 1st U.S. Circuit Court of Appeals concluded that the filed rate doctrine applied to market-based energy rates because FERC was “responsible for ensuring”just and reasonable’ rates and, to that end, wholesale power rates continue to be filed and subject to agency review.” PUCT’s oversight over the market is sufficient to conclude that the Balancing Energy Service market energy rates are “filed” within the meaning of the filed rate doctrine, the court concludes. TCE argues that the filed rate doctrine should not be applied because antitrust exemptions should be narrowly construed. It morphs this general assertion into a more specific allegation that its claims are exempt from the filed rate doctrine under the “competitor exception.” Assuming such an exception exists, TXU has affiliated retail electric providers as part of its subsidiaries. However, TCE is not a competitor to TXU in the context of this case because all of it claims of market manipulation are focused solely on TXU’s actions as an electric generation company. OPINION:Emilio M. Garza, J.; Garza and Benavides, JJ.

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