CPS Energy v. Public Utility, 03-14-00340-CV (TexApp Dist 08/31/2017)
CPS is a utility owned by San Antonio that delivers electricity to its customers through distribution lines attached to poles it owns. Telephone and cable companies entered into contracts with CPS to lease space on these poles in exchange for a set fee per pole. In 2005, the Texas legislature amended the public utility statute to cap the rate being charged by entities like CPS, require them to not discriminate for or against other entities, and to charge a uniform rate. The legislature also directed the state commission to calculate and establish a maximum-allowable rate. CPS thereafter sought to charge the contracting parties the maximum-allowable rate, which was significantly higher than the rate in their contracts. For several years, one of the utilities refused to pay the higher rate and only paid the contract rate. When a second utility took this position, CPS initiated a proceeding before the commission. The commission issued an order finding that CPS favored one utility by accepting the contract rate instead of the invoiced rate, and that the invoiced rate charged by CPS was higher than the rate allowed by law. The lower court reversed a portion of the commission's order. The parties appealed. The court first held that the commission had authority to determine the maximum-allowable rate that CPS could charge, taking into account specific CPS inputs in determining its rate. The court next held that the lower court erred in rejecting a factual finding made by the commission (estimating the number of attachments per pole), which was supported by record evidence, and not adequately rebutted by the utilities. The court also held that the default rate of return established by the FCC was the only rate of return that applied to CPS and was not rebuttable, and that the Commission's refusal to apply this rate of return for one of the billing years was arbitrary and capricious. The court also agreed that CPS did not violate the statute when one utility refused to pay the higher rate because CPS charged the utility the uniform rate, and the statute only required equal charges. CPS Energy v. Public Utility Commission of Texas, Court of Appeals, No. 03-14-00340-CV, 8/31/17.
|September 15, 2017 at 12:00 AM
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