1 “Qual if yi ng f acili ty” (“QF ”) means a

qualif yi ng sm all power pr od uct ion facility o r a qua lif ying cog en era ti on faci li ty as def in ed by se cti ons (17 )(C ) an

d (1 8)( B) of

the Federal Power Act ,16 U. S.C. § 796( 17)(C ), (18)(B ) (1994 ). Tex . Gov’ t Code A nn . § 2302 .001 (W

est 200 0). 

### TEXA S COU RT O F AP PEAL S, THIR D DISTRIC T, AT AU STIN
NO. 03-01-00187-CV
Power Resour ce Group, Inc., Appel

lant v. Public Utility Comm

ission of Texas and Texas-New Mexico Power

Company, Appellees

FROM THE DISTRICT CO URT OF TRAVIS COUNTY, 345T H JUDICIAL DIST RICT NO. 99-06000, H ONORABLE F. SCOTT MCCOWN, JUDG E PRESIDING

In t his a pp ea l, we mus t de t er mine w he t he rt he Pu blic U t ilit y Co mmiss io n of Te xas erredin inter pr et ing its s ubst ant ive ru le 23. 66, go ver ning t he obli gation of el

ectric util ities to purchase energy and capacity f

rom qualify

in g faci li ties. 1 Power Resour ce Gr ou p, Inc ., challenge s t he Commi ssion’s refusa

l to fi nd a re quir ement in

the rule i mposi ng upon util

ities an obl

iga tion to enter i n to contracts o ff

ered by qualif yi ng f acili tiesi n ca pa b l e of pr ovi di n g en ergy or c ap ac i ty wi th i n n i n ety day s of such of f er. I n T ex as , t he pr imar y enf

o r ce ro f t he Pu blic Util

ity Regulator y Pol

ic ie s Act of 1978 (“PURPA ”), a fede ral statut e enacted i

n part to encourage de ve l opm en t of cogeneration f

acili ties as an al ternative s ource of energy, is the C omm is si on. The Comm

is si on is authorized to enact rules2 We ref er to the Comm

is si on and Texas-New Mex ic o Power Company

coll ectivel y as appel le es un les s w e r ef

er t o a p ar t y in it s in di vid ua l ca pa cit y. 2 imp os ingan

obl i gation upon

a util i ty to purc

ha se p ower f

rom a QF. See Tex . U t il. Co de Ann
. § 11.002(c) (West Supp. 2002). As contem pla ted by PURPA, the Comm

is si on en acted rule 23.66( d)(1) (C) to re gul ate th e rel ati on sh i p b etw een ut ili

t ies and QFs. In implement ing and inter pr et ingit s r ule , t he n, t he Co mmiss io n d et er mined t ha t it co uld bes t ser ve the purposes of PUR PA by i m pos i ng an obl i ga ti on u pon a u t ilit y t o pu r ch as e e ne r gy— bu t no t co nt r ac t fo rit—w it hin n i n ety da ys of n otif i cation of the a va i l ab i l i ty of such energy

f rom a QF. In so do ing, t he Comm is si on struck a bal ance b etween i

nsuri ng a m arket for QFs b

y e ncouragin g the devel

opmen t o f en ergy and r equ iring ut ilit ies t o pu r ch as e t ha t en er gy.

The que st ion o n app eal, t hen, is whet her t he Co mmi ssio n misi nt er pr et ed t he rule or it i s other wi se i nv al i d. In si x p oi nts of erro r, P owe r Reso urce c ont ests t he district c our t’s judg ment (i ) af f i rm i ng the Com m i ss i on’ s i nte rpreta ti on o f rule 23 . 66 an d ( ii) granting appell ees’ 2 moti ons

f or sum mary j udgm en t. Holdi n g th e Co mmi

ssio n’s int er pr et at ion o f rule 2 3. 66 w as r eas ona ble and Pow er Re sou rc e’ s c l ai m s to b e wi

th out m eri t, w e af f i rm th e d i str i ct c our t’s j udgm en t. FACTUAL AND P

ROCEDURAL BACKGROUND Power Resource and Texas-New Mex ic o Po wer (“TNMP”) began contract nego t iatio ns i

n e arl y 1996 f or Power Resource t o su pp ly ene r gy a nd ca pa cit y t o T NM P fr o m a propo sed co gene ra t ion facility t o be built in Lew isvil le, T exas . I n Sep t embe r 1 996 , w hi le s t ill nego t iating with TNMP, Power Resource fi

le d for and r ece ived a s elf-ce rt ifi cat ion nu mber fro m the3 The req ui rem en ts f or s el f -ce rti f i ca ti on are go verned by

FERC regul

ati ons. See 18 C.F.R. § 292.2 07(a) ( 2001)
. 3 Federal Energy Regulator y C omm

is si on (“FERC”) for the Lewi svi ll e projec t. 3 Re lying o n t his cer t ifi cat ion, Power Resource deman ded that TNMP sign

a l ong-term purchase ag r ee me n t. Neg ot iatio ns between

Power R esourc e an

d TNMP conti

nue d un til Jan uary 2, 1998 , when Power Resource ma

de i ts “last fi rm of fer.” Contract negotiations en ded when TNMP rejected Power Re so ur ce ’s pr o po sa l.

Power Resource fi

le d a peti ti on wi th th e C om m i ss i on re qu esti n g th e C om m i ss i on to force TNMP to contract with Power Resource for the purchase of en ergy an d c ap ac i ty f rom i ts prop ose d L ew i sv

i l l e p roj ec t. W

he n T NMP f i l ed a m oti on t o d ismi ss, t he Co mmi

ssio n re ferr ed t he ma tt er to the Stat e Off

ic e of Ad mini

st ra t ive Hea rings. Afte r a n evident iary hear ing, t he ad mini st ra t ive la wjudg e de nied T NMP ’s mot ion, co ncluding that r ule “ 23.66( d)(1) (C) doe s not negat e TNMP ’s du ty to negotiate and contract with [Power Res ource ] b as ed

on [Po wer Res ource ]’ s i

n ab i l i ty to deliv er power withi

n 90 days.” TNMP app ealed t he ALJ’s ru ling to the Comm

is si on, which i ssued an o rd er re ver sing t ha t de t er minat io n, an d d ismis sing Po we rRe so ur ce ’s co nt r ac t an d fr au d c laims agains t TNMP. The Comm is si on concl

uded that TNMP was not o bl iga ted under rule 23 .66 t o contract with Power Reso urce t o pur chase power and capacity from the Lewi svi ll e pro ject because Power Re so ur ce co uld no t de live rpo we ro rca pa cit y fr o m t he Le wis ville pr o jec t wit hinnin et y da ys after Power Resource’s January 1998 off er. Power Resour ce then f il ed suit in distr ict c ou rt app ealing t he Co mmi

ssio n’s final or der . P ow er Reso ur ce no w ap pea ls the dist rict co ur t ’s judg ment g ra nt ing4 The par t ies ag re e t hat t he r elevant r ule go ve r ning t his appeal isrule 23.66( d)(1)(C), as am ended i n A pril 1985. See 10 Tex . Reg. 1 414, 14 15 (19 85). T heparti es al so s t ipulat e t hat t he Ap r il 1985 versi

on of the rul e nev

er app ear ed in t he T ex as Ad minist r at ive Co de
. Alt ho ug h w e r ely on the rule as

it appears i

n the Texas Register , we ci te to the Texas A

dm i nistrati ve Code. Su bseq uent to this action, rul e 23.66 was repealed and rep la ced in 199 9 wi th rul e 25.2 42. See 23 Tex. Reg. 11521 (1998 ), adopted 24 Tex . Reg. 3 846 (1 999) (c odi f i ed at 16Tex . Ad

m i n. C ode § 25 .242). 4 app ellees’ mo t ions fo r su mmary judgment and a ffi rming t he Co mmi

ssio n’s o rd er dismissing

Power Resource’ s cl

ai m s agai nst TNMP. DISCUSSI ON By it s t hir d p o in

t of er ror, P ower Re sou

rce ch al l en ge s th e C om m i ss i on’ s i nte rpreta ti on of rule 23.66 as ultra vires and i nva li d. Power Resour ce agrees t hat t his app eal pr imarily co ncer ns whe n, wit h re spe ct t o a n unbuilt QF in Te xas, a ut ili t y incurs a legally enfor cea ble obligat ion t o purchase energy . Tha t det er minatio n t ur ns o n t he co rr ect inter pr et at ion o f the langua ge in r ule 23.66( d)(1)(C ), 4 re quir ing eac h elect ric u t ili t y to “pur chas e ene rg y and ca pac ity fro m a qua lif ying f ac i l i ty . . . w it hin 9 0 d ays o f being no t ifi ed by the qua lif

ying facili t y that suc h ener gy is or will be av aila ble . . . .”

16 T ex . A dm

i n. Code § 23 .66(d)(1 )(C) (19 99). Pow er Re sou rc e c on ten dsth at, mer ely b y ob tai n i n g Q F s tatu s a n d ten deri

n g a se l f -i m pos ed com m i tmen t t o pro vi de e nergy, a cog en era ti on facility cre at es a legally enfor cea ble obligat ion by which it can uni la t er ally c o mpe l a uti l i ty to contract f

or the QF ’sf

uture en ergy producti on. The Com

m i ss i onr es po nd s t ha t t he rule contempl ates bot h t hat t he QF ( i) no t ify t he ut ili t y of its intent to invok e its st at ut or y right t o d emand t he utili ty purchase its e ner gy and ( ii) h av e t he ca pa cit y t o mak e e ne r gy a va ilable t o t he ut ilit y wit hin ninety da ys of su ch no t ifi

cat ion.5 Al thoughnot bi

nd i ng , th e i nte rpreta ti on of a re gul ati on by the adm in is trat iv e agency charged wi th i ts enf orcem en t is en titl ed to grea

t weight. See S

tate v . PublicUtil. C

omm’n , 883 S.W.2d 190, 196 (Tex. 1994) (citin g Dodd v. Meno , 8 70 S .W. 2d 4, 7 (Tex. 1994), and Tarrant Appraisal Dist. v. Moore , 845 S. W .2 d 82 0, 823 (T ex. 199 3) ). We nec essa rily l oo k t o t he administr at iveco nst ru ct ion o f the ru le in ques t ion and det er mine “whet her t he ad mini st ra t ive i nte rpreta ti on ‘i s pl ai nl y e rroneous or in

consi stent with the regul

ation.’” Public

Util. Comm ’n v. Gulf States Utils . Comm ’n , 809 S.W.2d 201, 207 (Tex. 1991) (citi ng Un it ed St at es v. La rion off

, 431 U.S. 864, 872 (1977) (quot in

g Bowles v. Seminole Rock Co. , 325 U.S. 410, 414 (1 945 )) ). Thu s, a bsent evi dence t hat t he Com

m i ss i on i s d i sreg ardi n g th e p l ai n l an gu ag e of i ts r ul es , w e l ook to i ts expertise in ca libr at ing t he va r io us t ec hnic al a sp ec t s o f t his c o mple x st at ut o ry sc he me a nd in in t egr at ing t he var io us po licy co nsid er at io ns o f a t ra nsitio ning indust ry. T he ag ency re spo nsible for re gulat ingan i ndu stry must be affo rd ed s ufficient flexibi lity to det er mine and

carry out itsmandate. See Cities for Fair Util. Ra tes v

. Publ ic Ut il. Co mm’n , 924 S.W.2d 933, 942 (Tex. 199 6)
. We will re ver se t he Co mmi ssio n when it fails to follow t he cl ear, unam bi guous lan guage of i ts own regulations, that is, when i ts acti ons a re arb i trary and caprici

ous. Id. (citi

ng Lew is v. J acksonvi lle Bld

g. & Loan As s’n , 540 S.W.2d 307, 310 (Tex. 1976), and Ex pa rt e R ol off , 510 S.W .2d 913 , 915 (Tex. 19 74)). Sub se cti on (1)(C) specif

ies t he ci rcum stances un der which an

el ectric util

ity is required to purchase energy

and cap aci

ty. See 16 Tex. Admi

n. Code § 23 .66(d )(1)( C). The ru le states, Each ele ct r ic u t ilit y sha ll purchase en ergy an d c ap ac i ty f rom a q ua l i f y i n g f ac i l i ty wi th a de sig n c ap ac it y o f 10 0 K w o rmo r e w it hi n 90 days o f being no t ifi ed by t he qua lif ying faci li ty that such en

ergy an d capaci ty are or wil

l b e avai la ble, provided that t he ele ct r ic uti l i

ty h as s uf f i cien t in terconn ection f aci l i tie s av ail ab l e. If an ag re ement to purchase en erg y and ca pac ity is not re ache d wit hin 90 d ays aft er t he qu alify ing6

faci li ty provides such

notif ic ation, the agreem

ent, if and wh en achi eved, sh all b ear a retro active eff

ective date for the purchase of energy (a nd cap acit y) de livered t o t he ele ct r ic ut ili

t y cor re spo ndent wit h t he 90 t h day fo llowing su ch no ti ce. . . . If an agr eement to purchase en erg y an d c ap ac i ty i s n ot rea ch ed upon com pleti on of constru cti on of t he inte rc onn ec t io n facilities o r 9 0 da ys afte r no t ifi cat ion by t he qua lif ying fac ilit y t ha t su ch en er gy a nd ca pa cit y ar e o rwill be av ail able, t he ag re em en t, if and wh en ach i ev ed, shall bear a r et ro act ive effect ive dat e fo r t he purchase of e ner gy and ca paci ty de l i v ered to th e e l ec tri

c u ti l i ty cor re sp on den

t wi th t he t ime of inte rc onne ct ion o r t he 90 t h day, whi chever i s lat er . No t hing in t his subse ction sh

all b e construedi

n such a m an n er so as to pr ec l

ude a qu al i f y i n g f ac i l i ty f rom notif yi ng an d contracting

f oren ergy an

d/or capacity

with a util ity prior to 90 da ys b ef o r e d eliv er y o f su ch en er gy a nd / o rca pa cit y. Id. ( emp ha sis ad de d)
. Ac co r din g t o t he Co mmiss io n, t he r eq uir eme nt in t he rule to purchase i s n ot t he sa me as a re qui

rem en t to contract . T he Co mmi ssio n asse rt s t hat its int er pr et at ion is co nsist ent wi th the pla in la nguage of the

rule an d that an al ternative readi

ng would ren

der the rule’ s ni

nety-day notifi cation pro vi sion m

eani ngl ess. Power Res ource c onten

ds that, under a

correc t i nte rpreta ti on of the rule, a ut il

ity m ust co nt ract to purchase en

ergy an d capaci ty wi thin ni nety day s af ter receivi ng the QF’ s self-i

mposed co mmi t ment to de l i

ve r s uc h p ower, re ga

rdl es s of whether the QF i

s capabl e of del iv erin g the power wit hin t ha t pe r io d. T his is

so, according to Po wer Resource, because: (i) FER C reg ulati ons r equi re util ities to “ of

f er to purchase

avai l ab l e e l ec tric ene

rgy f rom cog en era ti on an d s mallpow er producti on faci li tieswhi ch obtai n qu al i f y i ng s tatus un der” PURPA; (i

i) rul e 23.66 requiresutili

ties to purchase energy or cap acit y from a Q F wit hin ninety days o f being no t ifi ed bythe QF that such

en erg y or ca paci ty is o rwill be av aila ble ; a nd ( iii) any agreem ent reached

aft er t he ex pir at io n o f nine t y da ys w ill bear a n e ffec t iv e date

of th e n i n eti eth da y f oll owi n g n oti ce , by i m pl i ca ti on , a uti l i ty i s req ui re d to contract w ith a Q F wi

thi n n i nety d ays of rece i vi ng s uch noti ce. Al

though the standard of revi ew7

requires us to determi

ne wh ether the Comm

is si on’s i nterpretat ion i

s reasonab le , not whether Power Resource’s i

nterpretat ion i

s m ore plausi ble, we address Power Resource’s contentions because we agree with its po sition that “[o] nly one o f the[ par ties’] i n te r pr et at io ns o f Ru le 2 3. 66 ( d) ( 1) ( C) is cons i sten t wi th b oth the l

anguag e of

the R ul e i tself and FER C’s regul ati ons.” Pow er Re sou rc e f i rs t con ten dsth at, beca use facility co nst ru ct ion and operation are not pr er eq uis it es t o o bt ain ing QF st at us , ne it he rar e t he y impe dim ents to en forci ng PUR PA o blig ations. An unbuilt QF may ver y well be ent itled t o c er t ain pr ot ect ions a fford ed by PU RPA. Howev er, nothin g in PURPA requi

res a u t ilit y t o co nt r ac t wit h a QF mer ely because it obtain s QF sta tus . C ongr es s d

i d n ot i n ten d th e i n cen ti v es of PURP A to crea te a ri sk-f re e en v i ron men t. Un der feder al law, a ut ili t y’s obligat ion t o p ur chas e ar ises o nly f or “ener gy and ca paci ty w hich is m ade avail

able from a qualif yi ng f acili ty.” 18 C.F .R . § 292.303(a) (2001) ( emp ha sis ad de d)
. Re gu lat io n 3 93 . 30 4, en t it led “P ur ch as es ‘a s a va ilable ’ o rpu r su an t t o a le ga lly enf orceable obli

gation,” pr ovides: Each q ual i fy i ng f aci l i ty shal l hav e the opti on ei

ther: (1) To provide en

ergy as the qua lify

in g facility det er mines such e ner gy t o be available for such purch

ases, i n wh ic h cas e t he r at es fo r su ch purchases sha ll be based o n t he pu r ch as ing ut ilit y’s av o ide d c o st s c alc ula t ed at t he t ime of de live ry; or (2) To provi

deen erg y or ca pa ci ty pur suan t to a legally enforceable obligation f or the del i very of e nergy or capaci ty ov er a s peci f i ed term
. . . . Id. § 292.3 04(d) (e

m phasi s ad ded). Po wer Reso ur ce a rg ues t hat , p ur sua nt t o F ER C re gulat ions, “the t er m ‘le ga lly

en fo r ce ab le o blig at io n’ u nq ue st io na bly re pr ese nt s a ‘ve hicle’ by which a ut ili t y can be8

required to purchase QF po we r . ” P o we rRe so ur ce fur t he rcla ims t hat merely o bt aining QF st at us a nd t ende ring a self-i

mposed co mmi t ment t o s upp ly powe r c re at es su ch a leg ally enforc eable o bligat ion. FERC h as ex pr es sl y de l eg ate d to th

e state s th e a uth ori ty to determi

ne wh en a le ga lly en fo r ce ab le obli

gation to purchase powerari se s: “ It i s u

p to the Sta

tes , not [FE RC] , t o d et er mine the sp ec ific param

etersof i ndi vi dual QF po we rpu r ch as e a gr ee men t s, inc lud ing t he da t e a t wh ich a le ga lly en fo r ce ab le obli

gation i s i ncurred under State law.” Metropolitan Edison Co. , 72 FERC 61, 10 5, 61,050 (July

6, 1995) . Acceptin

g Power Resource’s in

terpret ation would l

ead to t he an

omal ous r es ult of a llowing an u nbuilt Q F t o p re vent ut ili t ies fro m cont ra ct ingwit h a co mplet ed Q F simply by sel f -certif y i ng a nd b ei ng th e f i rst to off er power f

or sal e. If thi s we re the case, t here would be l ess incent ivet o t imely

co mplet e t he QF’s c onstruction. Each pr o visio n o f a s t at ut e mu st be r ea d w it hin th e c ontex

t of the en tire statutory sch em e. See Bridgestone/Fires tone, Inc. v. Glyn-Jones , 878 S.W.2d 132 , 13 3 (T ex. 1 994 ); Barr v. Be rnhard , 56 2 S. W .2d 844 , 84 9 (T ex . 19 78)(“ On e p rovi si on will not be given a meaning o ut of ha rmo ny or incons iste nt wit h ot her pr ovisio ns, a ltho ugh it might be sus cepti bl e to such a con structi

on if stan di ng a l one.” ). PURPA wa s des i gn

ed to i n su rea m ar ket for readi ly available pow er , not to pr ema t ur ely

co mmit uti

l i ti es to long- ter

m pow er con tra cts . Al th oug h a u ti l i ty ca n b e c om pe l l ed to purchase energy

from a QF up o n t he cr ea t io n o f a le ga lly enfo r ce ab le o blig at io n, su ch o blig at io n is notcreated, as Power Resource co ntends, pursuant to FERC regulations. Pursuant to FERC reg ul ati on 292 .20 3, to q

ual i f y asa Q F, a c ogene

rati on faci li ty m ust meet all applicable o per at ing and eff ic ie ncy standards speci

fi ed i n regulation 292.205 ( a) and (b ) , an d me et t he o wn er ship cr it er ia specifi ed i n r eg ul ati on 2 92. 206 . 18 C.F .R. § 29 2.2 03( b) (1) , (2 ). In

con trast, th e s el

f -ce rti f i ca ti on9

procedu re o nly r eq uir es t he ap plying fac ilit y t o file it s a pp lic at ion wit h t he Co mmi ssio n, a nd co nc ur r en t ly

serve on eac

h el ectric util ity to whi ch i t expects to provide power , an d th e state regul atory authority of

each state where the f

acili ty an d each af fected util ity is located, a

noti ceof self-ce rt ifi cat ion. See id. § 2 92 . 20 7( a) ( ii). A leg all y e n fo r ce ab le o blig at io n d o es no t ar ise simp ly because a company

receives a

se lf- ce r t ific at io n nu mbe rfo ran un bu ilt fa cili t y, and then dem ands that a util ity co ntrac t t o accept its power in the future. Acco rdingl y, we reject Power Resource’s first co nt ent ion. Power Resource next ar gues that , because rule 23.66 req uires util ities t o purchase energy and c apa city no late r t han ninet y days aft er being noti f i ed tha t such en erg y an d c ap ac i ty i s or will be ava ilable, und er st at e law, t hat means “t he uti l i ty m us t contract

to purchase QF po we rwit hin 90 da ys of recei

vi ng a sel f-i mposed com

mi tment f rom the QF that the QF wi ll deliv er an d c ap ac i ty to th e u ti l i ty at some futur

e date .” (Em

phasi s ad ded.) P ower Re source

f urthe r con tends th at t he re t ro act iveef

f ecti ve date prov i sion su pports i ts read i ng. See 16 T ex. Adm

in . Code § 23.66 (d)(1)(C ). That pr ovisi

on stat es: If an ag re em en t to pu rc h as e en ergy

an d c ap ac i ty is not reached

withi n 90 day s af ter t he qua lif yingfacility pro vides .
. . not ifi cat ion [ t hat it is a q ualifyi ng facility], t he ag re em en t, if and whe n ac hieve d, sha ll bea r a re t ro ac t ive e ff ectiv e dat e fo r t he purchase of e ner gy (a nd ca pac ity) d elivered t o t he elec t ric u t ili t y cor re spo ndent wi

th the 90th day

followi ng such notice. Id. T his lan

guage do es not su pport Power R esourc e’s proposed i nterpretati on. W

hen co nst ru ingstatutes, th

e pl ai n m ean i ng of words is to be gi

ven e f f ect wh enev er practi cab l e. See Te x. Gov’t Co de Ann. § 311.021(2) (West 1998) ; Quantum Chem. Corp. v. Toennies , 47 S.W.3d 473,10

479 (Tex. 2001) (“

A basi c ru l e of sta tutory constru cti on is tha t we e nfor ce t he pla in me ani ng of an unam bi guous statute.”). The rul e’s f irst sen tence speci

fi es when “e ac h e lec t r ic u t ilit y sha ll purchase en ergy an d c ap ac i ty ,”th e l ast se n ten ce sp ec i f i es th at “ contracting

f orenergy and/or capaci

ty” m ay occur at an y t ime, inc lud ing pr io rt o nine t y da ys. T o r ea d t he rule as Po we rRe so ur ce su gg es t s w o uld give “pu rc hase ” t he sa me meaning as “c o nt r ac t . ” W e mu st pr es ume t ha t ev er y wo r d in a s t at ut e is used for a purpose and gi

ve ef fect to each sen

tence, cl ause and wo rd if reasonabl e and possi

ble. Texas Workers ’ Comp. Ins. Fund v. Del Indus., Inc. , 35 S.W.3d 591 , 593 (Te x. 2 000 ) ( quo t ing Perkins v. State , 367 S.W .2d 140 , 146 (Tex. 19 63)). Powe r Re sou rce ’s i nte rpreta ti on r un s af oul of t hi s pri n ci pl e. A ddi ti on al l y , Power Re sou rc e’ s a rgum en t con cern i n g th e retroacti

v e e f f ec ti v e date prov i si on is witho ut merit beca use t he langu age re lating to an agr eemen t “ if and when ach

i ev ed,” contempl ates a possib le , not a m

an da tory ob l i ga ti on . Power

Re sou rc e f ai l s to demon strate

t hat t he Commi ssion’s in

terpret ation of i

ts own rul e is u

nre ason ab l e. We hold the Co mm issi on’s i nte rpreta ti on of rul e 23.66 follows the rul e’s pl ai n l anguage an

d that the Com m i ss i on did no t er rin rejecting Power Resource’s proposed in terpret ation of the rul

e. Fin ally, Po we rRe so ur ce as se r t s t ha t , if t he Co mmiss io n’s in terpre t at io n is c o rr ec t , rule 23.66 is preem

pted by federal

law b ecause it im

pedes the development of QFs. Because n o federal reg ul ati on im poses a ni nety-day requi

remen t, it contends tha

t the Com m i ss i on’ s i nte rpreta ti on o f rule 23.66 bo t h c o nflic t s w it h fe de r al la w a nd su bve r t s it “by imp o sing ad dit io na l, op pr essive c ond itio ns upo n” QFs . Unde r t he Su pr emacy Claus e o f the Uni ted St ates Constitution, a state law or re gul ati on i s pre em pted an d “wi thout ef f ect” on l y i f i t conf l i cts wi th f edera l l aw. U.S. Const. art . VI, cl. 2.11 In suppor t o f i

ts pree mption argumen

t, Power Re source ci

tesFE RCreg

ul ati on 29 2.3 04 . Reg

ul ati on 29 2.3 04 pr ov i de s i

n perti n en t pa rt: Each q ual i fy i ng f aci l i ty shal l hav e the opti on []: (2) To provide

en erg y or ca pa ci ty pur suan t to alegally enfor cea ble obligat ion fo r t he de liver y o f en er gy o rca pa cit y o ve ra s pe cifie d t er m, in whi ch case the rates f

or such pur chas es sha ll, at t he o pt ion o f the qua lif ying facili t y exerc ised p rio r t o t he be gi nn i ng of the s peci f i ed term
. . . . 18 C.F.R. § 292. 304( d)( 2). Po wer Reso urce c ont ends that , under the Co mm issi on’s i nte rpreta ti on of rule 23 . 66 ( d) ( 1) ( C) , a q ua lifying fa cilit y co uld no t inc ur a le ga lly enfo r ce ab le obli gation unde

rt his prov i si on without the cap ac i ty

to deliv er energy withi n ni nety day s of n

ot if yi ng a util ity of i ts QF st at us . T his a r gu men t er r o ne o us ly as su mes t ha t a le ga lly enfo r ce ab le obligat ion ar ises o nly when a uti l i ty is compel le d t o c ont ra ct wit h a QF. The last sentence i n rule 23.66(d)(1)(C) co ntempl ates that QFs and util

ities m ay en te r into bilatera l agreements for the pu rchase o f energy prior t o t he QF’s ab i l i ty to suppl y power. Thus, contrary to Power Resour ce ’s as se rti on , a le ga lly enfo r ce ab le obl i ga ti on could ari se between

a QF an d util ity if , at any ti me , ev en pri or to the n

i netie th da y be f ore t he QF co uld suppl

y power, the parties en

tered into a bi

la teralco nt r ac t . Fo rt he se r ea so ns, we ho ld t he Co mmiss io n’s int er pr et at io n is not incons is tent with, and theref

ore not preempted by

, federal la w. Because wehol

d that ru l e 2 3.6 6 i s n

ot pre em pte d by f ed era l l aw an d the C om

m i ss i on was wi th i n i ts a uth ori ty to deter m i n e th at a l eg al l y en f orce ab l e ob l i ga

ti on d oesnot exist unless t he qua lif ying f ac i l i ty i s c ap ab l e of

pr ov i di n g en ergy wi th i n n i n ety da y s of n oti fy in g the ut ilit y o f it s qua lif ying faci lit y status, we o verrul e Power Resource’s third poi nt of error. Because of our5 Al

thoughPo we rRe so ur ce list s t en po int s o f er r o r , t he y br ief o nly six. Th e re m ai

ni ng f ou r poi nts a ppea r to be subs

um ed wi thi n othe r poi nts of error. 6 Because Po wer Reso ur ce a nd T NMP neve r en t er ed in to aco nt ra ct and a ny “breac h” t ur ns upon t he dis po sit io n o f t he ad minist r at ive ap pe al, we c onc lud e t ha t t he r e is no leg ally e nfo r ce ab le obli gation f or TNMP t o have b

reached. 12 dis po sit io n o f t his poi

n t of er ror, we n ee d n ot ad dr es s P owe

r Res ource ’s

poi n ts of err or one, two, four, and f

iv e. 5 See Tex. R. App. P. 47.1. By i ts six th point of error, Po wer Resource contends the di strict court erred i n grant ing TNMP’s mot ion for summary j udgment o n Pow er Reso urce’s contract 6 and f raudclai ms. Power Resource contends thatT NM P c o mmit t ed fr au d b ec au se it r ep r es en t ed t ha t it would contract wi th Power R esourc e f or ene rgy wh en , i n fact , T NMP had no intent ion o f ent er ing into suc h a contract with Power Resource. An actionab le

fraud cl ai m requi res proo f that(1) a materi al
m i srep res en tation wa s ma de , ( 2) t he sp ea ke rkn ew it wa s fa ls e when ma d e o rmad e it r ec kle ss ly withoutany

knowle dge of i

ts tr uth, (3) t he represen

tation was m

ade wi th the in tent t hat it sho uld be actedup on

b y th e p ar ty , a n d ( 4) th e p ar

ty ac ted i n re l i an ce up on th e rep re se

n tati on to it s dam

age. SeeFormosa P

lastics Corp. v. Pres idio Eng’rs & Contractors, Inc. , 960 S.W.2d 41, 47 (Tex . 1998)
. A future promi se to act constitutes fraud onl y when m ad e w i th th e i nte nti on, de si gn an d pu rpos e of decei vi ng—a pr omise mad e wit h no int ent ion o f per for ming the act. Id. To prevail, a plai ntif f m ust establi sh that t he promise wasf

al se a t the ti me i t was m ade. Schindler v. Austw

ell Farmers

Coop. , 841 S. W.2d 853 , 85 4 (T ex. 1 992 ); Spoljaric v. Percival Tours , Inc. , 7 08 S .W. 2d 4 32, 434 (T ex. 1986) ; Stanfield v. O'Boyl e , 462 S. W.2d27 0, 27 2 ( T ex . 19 71 )
. Alt ho ug h apa r t y’s int en t is determi ned at th e ti me th e p ar ty made th e rep re se n tati on , i t m ay b e i n f er re d f rom th e p ar ty ’s ac ts subs equ ent to the repre sen tation
. See Spolj

aric , 708 S.W.2d at 434. H owev er, f ail ure t o pe r fo rm,13

st anding alo ne , is not evide nce of the promi sor’s i

ntent not t o perform wh

en the promi se was m

ade, altho ugh t hat fact is a circ umst ance t o be cons i dered , wi th other s, to estab l i sh

i nten t. Id. ; see also Schindler , 841 S.W.2d at 854.

The sta nd ard f or revi ew i ng a m oti on for summary judg ment is well e stablis

hed: (1) t he mova nt for sum

ma ry j udgme nt hasthe burden of

showi ng that no genui ne i ssue of m

aterial fact ex i sts and that the m

ovant is entitled t o ju dgment as a matt er of law ; (2 ) in de ciding wh ethe r there is a di sputed materi al

fact issue p re cluding s ummary judg ment, evidenc e favo ra ble to t he no n-mo vant will be t ake n as t ru e; and (3 ) e ver y reas ona ble inferenc e must be indulge d in favo r o f the non- movant and an y doubts resol ve d i n i ts f avor. Nixon v. M

r. Prop. Mgmt. Co. , 690 S. W.2 d 54 6, 548 -4 9 ( Te x. 1985)
. Wh

en a def endan t seeks to obtai

n s um mary j udgm en t b as ed on a p l ai n ti f f ’s i n ab i l i ty t o p ro ve it s cas e, t he defend ant must co nclusively dispr ove at least one element of e ach o f the pla in tif f’ s causes of a cti on. See Lear Siegler, Inc. v. Perez , 819 S.W.2d 470, 471 (Tex. 1991)
.

In it s mo t io n fo rsu mmar y jud gme n t, T NM P a ss er t ed t ha t t he r e w as no ac t io na ble misrepr ese nt at ion and no reasonable rel ian ce on any representations made by TNMP as a matte r of la w. In su pp o rt o f its su mmar y jud gme nt mo t io n, TN MP o ffer ed t he a ffi da vit o f its p re sident and c hief executi ve of f i cer, K ev ern Joy ce , ex pl ai ni ng TNM P’ s rea sons f

or neg oti ati

ng , but not co nt ra ct ing, w ith P ow er Reso ur ce. Altho ugh P ow er Reso ur ce c ont ends t hat t he af f i dav i t by Mark Wilson, Po we rRe so ur ce ’s pr es id e nt, su pports i ts f raud c l ai m s, n one of Joy ce’ s statemen

ts are contro verted

by Power Resource. Instead, W i l son’ s statemen

ts are c oncl

usory and nonspe ci f

i c. See Li feIns. Co. of Va. v. Gar-Dal, Inc. , 570 S.W .2d 378 , 381-8 2 (Tex . 1978) . Furth er, Powe r Re so ur ce fails t o o ffer a s ing le s pe cific misr ep r es en t at io n ma de by T NM P. T ha t T NM P u lt imat ely14

deci ded not t o contr act with Power Resource is al one i nsuf fi ci ent to est abl

is h that TNMP never in tended to contract wi

th Power Res ource. Spoljari

c , 708 S.W.2d at 434. Because Power Resource off ersn othi n g to co nt ro ver t TN MP ’s s ummar y jud gme nt pr o o f, we hol d TNMP aff irm ative ly negated at least one esse nt ial element o f Po wer Reso ur ce’s frau d claim. We o ver ru le po int o f err or six. CONCLU SION We hol d the C om

m i ss i on’ s i nte rpreta ti on of rul e 2 3.6 6(d ) i s rea son

ab l e a nd not preempted

by federal la wand t hat t he Co mmi

ssio n did no t act ar bitr ar ily or cap ricio usly in refusing to compel TNMP to contract with Power Resource. Havin g overruled

Powe r Re sou rce ’s poi nts of error, we a ffi

rm t he dist rict co ur t ’s judg ment g ra nt ingapp ellees’ mo t ions fo r su mmary judgment and af fi rmi ng the Comm i ssi on’s order di sm

i ssi ng Power R

esource’ s cl

ai m s f or fraud a gai nst TNMP.

Jan P. Patterson, Justice Be f ore J us ti ce s K i dd, Ye akel

an d Pa tters on Af fi rmed File d: January

10, 2002 Publish