The Honorable Ron Glower Opinion No. H-919 

Chairman 

Consumer Affairs Sub-Committee Re: Effective date of 

State Senate 

State Capitol 

Austin, Texas 

Building 

78711 

section 24 of the Public 

Utility Regulatory Act, 

article 1446c, V.T.C.S., 

authorizing municipalities 

to hire rate consultants 

and be reimbursed by 

utilities. 

Dear Senator Clower: 

You have requested our opinion concerning the effective 

date of section 24 of the Public Utility Regulatory Act, 

article 1446c, V.T.C.S. This section provides: 

The governing body of any municipality 

shall have the right to select and engage 

rate consultants, accountants, auditors, 

attorneys, engineers, or any combination 

thereof, to conduct investigations, present 

evidence, advise and represent the governing 

body r and assist with litigation on public 

utility ratemaking proceedings; and the 

public utility engaged in such proceedings 

shall be required to reimburse the governing 

body for the reasonable costs of such services. 

The effective date of the Act was September 1, 1975, 

as provided in section 88. This is the applicable date unless 

section 87 was intended to delay the exercise of the section 

24 power by municipalities. Section 87 provides: 

p. 3851 
. I 

The Honorable Ron Clower - page 2 (S-919) 

(a) The regulatory authority shall 

assume jurisdiction and all powers and 

duties of regulation under this Act on 

January 1, 1976, except as provided in 

Subsection (b) of this section. 

(b) The regulatory authority shall assume 

jurisdiction over rates and service of public 

utilities on September 1, 1976. 

The definitions section of the Act provides in section 

2(g) ,that: 

The term 'regulatory authority,' 

when used in this Act, means, in 

accordance with the context where it is 

found, either the commission, the railroad commission, or the governing,body of 

any municipality. 

It is clear that regulatory authority as used in section 

87 means the Public Utility Commission, and we so applied 

it in Attorney General Opinion H-752 (1975). It is not so 

clear that the term was also intended to include municipalities 

so as to limit the exercise of the power given in section 24. 

The general plan of the Act is that municipalities were 

to continue to regulate utilities within their boundaries 

while the commission was being organized and phased in to 

assume portions of that jurisdiction. See sections 2, 5, 22, - 

87, 88, 90. 

Section 24 is an unequivocal grant of authori.ty to 

municipalities. It is not dependent upon a concurrent 

assumption of new jurisdiction. Section 24 is a power which 

could be exercised in conjunction with the jurisdiction which 

the municipalities already had, and which the Act required 

that they continue to exercise during the transition period. 

Sec. 22. 

It is obvious that section 24 was intended to change 

the law concerning the expenses of rate proceedings from 

the ruling of the-court in the case of Southwestern Bell 

Telephone Co. v. City of Port Arthur, 491 S.W.2d 187-x. 

Civ. ADD. -- Beaumont 1973. writ ref'd n.r.e.). That case 

held tgt a city's attempt.to charge such expenses to the 

P. 3852 
. I 

The Honorable Ron Clower - page 3 (H-919) 

utility in addition to charges provided in a franchise 

agreement was void. 

The legislative intent to change the law on this point 

is clear. Section 21 provides: 

If a municipality performs regulatory 

functions under this Act, it may make such 

other charges as may be provided, in the 

applicable franchise agreement, together 

with any other charges permitted by this 

Act. 

We believe that "under this Act" in this section refers 

to a municipality's performance of regulatory functions as 

authorized or required by the Act, which includes the continued 

exercise of their pre-existing jurisdiction and authority 

between September 1, 1975 and September 1, 1976, the transition period during which the commission was being established 

and phased in. 

We do not believe that the Legislature intended section 

87 to delay or limit the exercise of the section 24 authority 

by municipalities, and thus the general effective date of 

September 1, 1975, is the applicable one for section 24. This 

interpretation is in accord with the general plan of the Act, 

the purpose stated in section 2 "to establish a comprehensive 

regulatory system which is adequate to the task of regulating 

public utilities . . ." and with the requirement of section 

89 that the Act be liberally construed "to promote the effectiveness and efficiency of regulation of public utilities." 

You also ask whether a municipality must enact an 

enabling ordinance or take any other action in order to 

exercise its authority under section 24. The Legislature 

may give municipalities such powers as it sees fit. Blessing 

v. City of Galveston, 42 Tex. 641 (Tex. Sup. 1875). The 

exercise of the Power given under section 24 is not conditioned 

upon any action by the-municipality, and thus none is necessary. 

P. 3853 
The Honorable Ron Clower - page 4 

SUMMARY 

(H-919) 

The effective date of section 24 of the 

Public Utility Regulatory Act, giving 

municipalities authority to require 

regulated utilities to reimburse the 

reasonable costs of rate consultants 

and other experts in ratemaking proceedings, is September 1, 1975. 

truly yours, 

Attorney General of Texas 

APPROVED: 

qcsb 

DAVID M. KENDALL, First Assistant 

(-I!&&JA&mR 

C. ROBERT HEATH, Chalrman 

Opinion Committee 

p. 3854