I

No. 03-14-00340-CV

IN THE THIRD COURT OF APPEALS

AUSTIN, TEXAS

APPELLANTS, CPS ENERGY, TIME WARNER CABLE TEXAS LLC,

AND SOUTHWESTERN BELL TELEPHONE COMPANY D/B/A AT&T//

CROSS-APPELLANT, PUBLIC UTILITY COMMISSION OF TEXAS

V.

APPELLEE, PUBLIC UTILITY COMMISSION OF TEXAS// CROSSAPPELLEE, CPS ENERGY, TIME WARNER CABLE TEXAS LLC AND

SOUTHWESTERN BELL TELEPHONE COMPANY D/B/A AT&T

On appeal from D-l-GN-13-001238 (Consolidated)

inthe 250th Judicial District Court, Travis County, Texas

CPS ENERGY'S BENCH NOTEBOOK

CPS ENERGY

Curt D. Brockmann

cdbrockmann(5),cpsenergv.com

145 Navarro

P.O. Box 1771

San Antonio, Texas 78296

(210) 353-5689 (Voice)

(210) 353-6832 (Facsimile)

HERRERA & BOYLE, PLLC

Alfred R. Herrera

State Bar No. 09529600

aherrera@herrerabovlelaw.com

816 Congress Avenue, Suite 1250

Austin, Texas 78701

(512) 474-1492 (Voice)

(512) 474-2507 (Facsimile)

April 22,2015
No. 03-14-00340-CV

IN THE THIRD COURT OF APPEALS

AUSTIN, TEXAS

APPELLANTS, CPS ENERGY, TIME WARNER CABLE TEXAS LLC,

AND SOUTHWESTERN BELL TELEPHONE COMPANY D/B/A AT&T//

CROSS-APPELLANT, PUBLIC UTILITY COMMISSION OF TEXAS

V.

APPELLEE, PUBLIC UTILITY COMMISSION OF TEXAS// CROSSAPPELLEE, CPS ENERGY, TIME WARNER CABLE TEXAS LLC AND

SOUTHWESTERN BELL TELEPHONE COMPANY D/B/A AT&T

On appeal from D-l-GN-13-001238 (Consolidated)

kth in the 250m Judicial District Court, Travis County, Texas

CPS ENERGY'S BENCH NOTEBOOK

CPS ENERGY

Curt D. Brockmann

cdbrockmann@cpsenergy.com

145 Navarro

P.O. Box 1771

San Antonio, Texas 78296

(210) 353-5689 (Voice)

(210) 353-6832 (Facsimile)

HERRERA & BOYLE, PLLC

Alfred R. Herrera

State Bar No. 09529600

aherrera@herrerabovlelaw.com

816 Congress Avenue, Suite 1250

Austin, Texas 78701

(512) 474-1492 (Voice)

(512) 474-2507 (Facsimile)

April 22,2015
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TAB1

V.T.C.A., Transportation Code § 311.001

§ 311.001. General Authority of Home-Rule Municipality

Effective: June 19, 2009

(a) A home-rule municipality has exclusive control over and under the

public highways, streets, and alleys ofthe municipality.

(b) The municipality may:

(1) control, regulate, or remove an encroachment or obstruction on a public

street or alley ofthe municipality;

(2) open or change a public street or alley ofthe municipality; or

(3) improve a public highway, street, or alley ofthe municipality.

(c) Notwithstanding Subsection (a) or (b) or Section 311.007. before a

municipality with a population of 1.9 million or more may install traffic

( calming measures within the municipality, the governing body of the

c municipality must:

[ (1) publish standards and criteria, which must include sufficient notice to

allow the governing body to receive and consider public comments from

P residents within one-halfmile ofthe proposed traffic calming measure;

(2) on request of affected residents, schedule and hold a public meeting

before implementation ofthe measure; and

(3) ifthe measure involves the closure of a street to motor vehicular traffic,

before the closure:

(A) hold a public hearing on the issue ofthe closure; and

(B) approve the closure by a majority vote.

Court ofAppeals No. 03-14-00340-CV CPS Energy's Bench Notebook

April 22,2015
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TAB 2

In this chapter:

V.T.C.A., Government Code § 1502.001

§ 1502.001. Definitions

(1) "Combined system" means any combination of one or more of the

following:

(A) an electric system;

(B) a water system;

(C) a sewer system;

(D) a solid waste disposal system;

(E) a drainage utility system; and

(F) a natural gas system.

(2) "Public security" has the meaning assigned by Section 1201.002.

(3) "Utility system" means an electric, water, sewer, solid waste disposal,

drainage utility, or natural gas system. The term includes one or more

combined systems.

Court ofAppeals No. 03-14-00340-CV CPS Energy's Bench Notebook

April 22, 2015
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TAB 3

V.T.C.A., Government Code § 1502.070

§ 1502.070. Management and Control of Utility System

Effective: May 18, 2013

(a) Management and control of a utility system may be vested in:

(1) the municipality's governing body; or

(2) a board of trustees named in the proceedings adopted by the

municipality and consisting of not more than:

(A) five members, one ofwhom must be the mayor ofthe municipality;

(B) seven members, one of whom must be the mayor ofthe municipality,

ifthe municipality is located in a county:

(i) with a population of at least 800,000; and

(ii) that is located on an international border; or

(C) seven members, one ofwhom must be the mayor ofthe municipality,

ifthe municipality is located in a county:

(i) with a population of at least 375,000;

(ii) that is located on an international border; and

(iii) that borders the Gulfof Mexico.

(b) The compensation of the trustees shall be specified by the proceedings.

The compensation may not exceed five percent of the gross receipts ofthe

utility system in any year.

(c) The proceedings of the municipality may specify the terms of office of

the board oftrustees, their powers and duties, the manner of exercising those

powers and duties, the election ofsuccessor trustees, and any matter relating

to the organization and duties ofthe board. On any matter not covered by the

proceedings, the board of trustees is governed by the laws and rules

governing the municipality's governing body, to the extent applicable.

Court ofAppeals No. 03-14-00340-CV CPS Energy's Bench Notebook

April 22, 2015
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TAB 4

Tex. Gov'tCode

p § 1502.070

i

City of San Antonio

City Council Controls Rights of

Way (ROWs)

ROW

Agreements

Pole Attachment

Agreement

ENERGY

f§>

ROW

Agreements

TIME WARNER

CABLE

Pole Attachment

Agreement

Governed by Independent Board of j

Trustees

Enter into Pole Attachment

Agreements

Court ofAppeals No. 03-14-00340-CV CPS Energy's Bench Notebook

April 22,2015
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TAB 5

EXHIBIT

7Zsc~GL\

Court ofAppeals No. 03-14-00340-CV

EXHIBIT A

34

CPS Energy's Bench Notebook

April 22,2015
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TAR 5

POLE UCBBE mgHOff

TUB Asruomt entered late tela ZJ97* day ofPtOUBBtef, 1«6f» by *ad

between the City of Ban antealo, Texas* sating through the City Public £ervloe

Beard of au Jataale, a aaaloipal board of said City, hereinafter called

"Ueaaaor" eod.sogers Cablesystau of Texas, lac. hereinafter called "Ueeasee."

VXTIBSSETH:

Za eaaalderetien of tha BStual eevenaats. tent* sad rmnrittlona bamla

contained, tbt parties hereto da hereby asteally eevcniat aad agree as follows I *

1. aauaod la tfala

"Uceaaar'a poles" eases eleetrle dlatribuUoa systaa utility pales

Of

•Uncasce's faciliUai" Beaaa Ueenaae's cables, wires, aupportung

atraad. brackets, erap ulm. tapoffa, llaa aapliflara. paver supplies

aad ether eatiipaeat used la eeaneetloa with tee apsratloa of Ueessee'a

i. "•——'ty aateaae talevialea ayatea.

m "feiat bear* ansae aay pabllo utility, geveroaestal body, or other

entity uhlan owe poles to Balsa Ueeaaar is extended Joint use ettaeaaeat privilege* aad to whoa Ueeaaar faaa esteaded Joint use

•rtecbnaot privileges of Uecaaer'e poles'.

IF*

m

[

"Other Licensee* naaaa aay eatity, ether than licensee berela or a

Joint User, to uboa Ueeaaar hee or hereafter shall extead the

privilege of attsenlag facilities to Ueeeaor's poles.

2. Ueeaaar agrees to great to Lioeesea. to tbe extent it aay lawfully da • so ead aubjeot to the tarns aad condltiona of tUa Asrecacnt.

revocable, aoaanelualve lleenooe to attach pertteaa of UeoBeec'a

feclXltleB to Ueeaaar'e poles, where reasonably available sad where

each) aaa will sat iaterfare with Ueeoeor's aervlee reejuiraMBta or tha aso of lta facilities by othera. Tula Ucenee la for tha provision of

Ucanacofa eeaaaaltr aateBaa taleeiaioa aarrlee attain these pertleaa

af the Ua*assr*s serviea area in ublefa the Ueesaee bss beea

fraanhtsed by appropriate aotboritlaa. Ueeasee hereby agrees to ha

bound by the teres aad cnndltfnmi hereof.

ATOCBHBIIT PZMII8 Agg BHIgS

3. Prior to aafclBg aay attaebaaat appUeatlaas hereaader, Ueeasee shall

obtaia. aad open reeuaat eball anbalt to Ueeaser, evidence,

aatiefectcry to Ueeaaar, of e freaehlse or other eatboriey authsrixiss

Licensee to ereet aad ajaiataia for the purposes sat eat la Seotlea 2

hereof, lta faculties within the public streets, highways, allays.

utility eaaaeeata, ether thoroughfares, aad ea private property

situated la Ueeasar?a serviea area, aad of say other necessary eoaaeat

35

Court ofAppeals No. 03-14-00340-CV CPS Energy's Bench Notebook

April 22,2015
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TAB 6

Attachment 2

Joint Use Pole Contact Agreement

Court of Appeals No. 03-14-00340-CV

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CPS Energy's Bench Notebook

April 22, 2015
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TAB 6

B. LESSOR, Joint Users and OTHER LESSEES reserve the right to utilize and/or

maintain LESSOR'S poles and -to operate their facilities thereon in such

manner as sill best enable then to fulfill their service requirements.

ARTICLE VI - RIGHTS OF WAT FOR LESSEE'S ATTACHMEhTS

Hhile the LESSOR and.the LESSEE.sill cooperate as far as nay be practicable

in obtaining rights of way for both parties on Joint poles, ao guarantee la given

by the LESSOR of permission from property owners, municipalities or others for

the use of its poles by the LESSEE, aad if objection is nade thereto and the

LESSEE is ana hie satisfactorily to adjust the matter within a reasonable tine,

the LESSOR may at aay time -upon sixty (60) days notice in writing to the LESSEE,

require the LESSEE to remove its attachments from the poles -involved; And the

LESSEE shall, within six months after receipt of said notice, remove lta

attachments from -such poles at its sole expense.

ARTICLE VII - IMTBRgSBgHSB

While it Is not foreseen, should the-LESSEE'S operations in any way

interfere with LESSOR'S operational functions or needs or if LESSEE'S activities

constitute disruption or interference, LESSOR shall have the right to immediately

terminate 'the Agreement and LESSEE will be required to remove all equipment

within a reasonable period of time at lta sole coat.

ARTieLB Till - HAIBTEMASCB OF POLES AHD AITACHMEHTS

The LESSOR shall maintain its Joint poles in a safe and serviceable

condition and in accordance with the specifications mentioned in Article III and

shall replace said poles as they become defective. LESSEE'S rights under this

5

53

Court ofAppeals No. 03-14-00340-CV CPS Energy's Bench Notebook

p> April 22,2015
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TAB 7 - SECTIONS OF UTILITIES CODE SHOWING DISTINCTION

BETWEEN DUTY TO "CHARGE" AND TO "COLLECT" A RATE

Sec. 17.002. DEFINITIONS.

In this chapter:

(7) "Service provider" means any entity that offers a

product or service to a customer and that directly or

indirectly charges to or collects from a customer's bill an

amount for the product or service on a customer's bill

received from a billing utility.

Sec. 31.002. DEFINITIONS.

In this subtitle:...

(15) "Rate" includes a compensation, tariff, charge, fare,

toll, rental, or classification that is directly or indirectly

demanded, observed, charged, or collected by an electric

utility for a service, product, or commodity described in the

definition of electric utility in this section and a rule,

practice, or contract affecting the compensation, tariff,

charge, fare, toll, rental, or classification that must be

approved by a regulatory authority.

Sec. 39.302. DEFINITIONS.

In this subchapter:

(7) "Transition charges" means nonbypassable

amounts to be charged for the use or availability of electric

services, approved by the commission under a financing

order to recover qualified costs, that shall be collected by

an electric utility, its successors, an assignee, or other

collection agents as provided for in the financing order.

Sec. 41.002. DEFINITIONS.

In this chapter:

(2) "Rate" includes any compensation, tariff,

charge, fare, toll, rental, or classification that is directly or

indirectly demanded, observed, charged, or collected by an

electric cooperative for any service, product, or commodity

and any rule, practice, or contract affecting the

compensation, tariff, charge, fare, toll, rental, or

classification

Sec. 64.002. DEFINITIONS.

In this chapter:

(5) "Service provider" means any entity that offers a

product or service to a customer and that directly or

indirectly charges to or collects from a customer's bill an

amount for the product or service on a customer's bill

received from a billing utility.

Court ofAppeals No. 03-14-00340-CV

Sec. 33.008. FRANCHISE CHARGES.

(b) If a municipality collected a charge or fee

for a franchise to use a municipal street, alley, or public

way from an electric utility, a municipally owned utility,

or an electric cooperative ... is entitled to collect from

each electric utility, transmission and distribution utility,

municipally owned utility, or electric cooperative that

uses the municipality's streets, alleys, or public ways to

provide distribution service a charge based on each

kilowatt hour of electricity delivered by the utility to

each retail customer whose consuming facility's point of

delivery is located within the municipality's boundaries.

Sec. 36.403. STANDARDS AND PROCEDURES

GOVERNING SECURITIZATION AND

RECOVERY OF SYSTEM RESTORATION

COSTS.

(0 For purposes of this subchapter,

"transition charges," ... includes nonbypassable

amounts to be charged for the use of electric services,

approved by the commission under a financing order

to recover system restoration costs, that shall be

collected by an electric utility, its successors, an

assignee, or other collection agents as provided for in

the financing order. ...

Sec. 55.176. CHARGE FOR 800-TYPE CALLS.

(g) The commission may not impose on a local

exchange company the duty or obligation to:...

(2) bill or collect for the use of the pay

telephone;...

(V.A.C.S. Art. 1446c-0, Sec. 3.2625(d).)

CPS Energy's Bench Notebook

April 22,2015
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8
«a TAB 8 - Substantial Evidence In Record Supporting PUCT's Finding That

[ Actual Data Supports Average Number ofAttaching Entities ofThree

1. "Unless attachers such as TWC have been making unauthorized attachments to

CPS Energy poles, there is no sound basis to the position that billing data presents

an inaccurate picture ofthe number of attachments." - A. R. Part II ofIII, Binder

15, CPS Energy Ex. I8A, Rebuttal Testimony ofRicardo Lopez at 20:11-16.

2. "In this worst-case, hypothetical and unrealistic scenario, I took the smallest

possible number of poles with CPS Energy and at least one attaching entity. ... I

then divided all billed attachments, plus all known COSA attachments, by

this smallest number of possible joint use poles." - A. R. Part II ofIII, Binder

16, CPS Energy Ex. 19B, Supplemental Rebuttal Testimony of Ricardo Lopez

(Confidential) at 16:8-14. [Emphasis added.]

3. "The result ofthis worst-case calculation was 3.12 average attaching entities. Of

this amount, COSA attachments represent 0.02 out ofthe 3.12 average number of

attaching entities. This demonstrates that my original statement that there is

m virtually no impact to including COSA attachments is accurate, even in the

worst-case scenario." - A. R. Part II of III, Binder 16, CPS Energy Ex. 19B,

Supplemental Rebuttal Testimony of Ricardo Lopez (Confidential) at 17:5-10.

[Emphasis added.]

4. "[According to CPS Energy GIS data, there are only 1,616 CPS Energy fiber

attachments to distribution poles. Inclusion of CPS Energy fiber would only

increase the worst-case theoretical maximum by 0.01 up to 3.13 average number

of attaching entities." - A. R. Part 11 of III, Binder 16, CPS Energy Ex. 19B,

Supplemental Rebuttal Testimony ofRicardo Lopez(Confidential)at 17:19-18:2.

5. "COSA has approximately 1,240street intersections with traffic signals within the

city limit... Assuming four attachments to CPS Energy poles at each of these

intersections produces 2,000 as the total number of COSA attachments for traffic

cables." - A.R. Binder Part II of III, Binder 15, CPS Energy Ex. 18B, Rebuttal

Testimony ofRicardo Lopez (Confidential)at 21:10-18.

6. "Also COSA has installed approximately 500 cameras and 700 wi-fi antennas

throughout the city limit ... This increases COSA's worst case total number of

attachments on CPS Energy poles to approximately 3,200." - A.R. Binder Part II

of III, Binder 15, CPS Energy Ex. 18B, Rebuttal Testimony of Ricardo Lopez

(Confidential) at 21:19-22:1.

7. "Adding the 3,200 attachments to the calculation for average number of attachers

would change the number for the year 2007 from 2.23 to 2.24. ... As

demonstrated by this exercise, there is virtually no impact to including the

COSA attachments." - A. R. Part II of III, Binder 15, CPS Energy Ex. 18B,

Rebuttal Testimony ofRicardo Lopez(Confidential) at 22:1-8. [Emphasis added.]

Court of Appeals No. 03-14-00340-CV 1 of 3 CPS Energy's Bench Notebook

April 22,2015
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TAB 8 - Substantial Evidence In Record Supporting PUCT's Finding That

Actual Data Supports Average Number of Attaching Entities ofThree

8. "[T]he total number of attachments for an entity such as AT&T or TWC does not

change significantly from year to year." - A.R. Part II of III, Binder 15, CPS

Energy Ex. 18B, Rebuttal TestimonyofRicardo Lopez (Confidential) at 27:15-16.

9. "The most current calculation of pole attachments was performed in 2009 ...The

validity ofthe original count [from 2000] is not in question because it is based on

a statistically valid survey, and, moreover, the original count is constant for the

most part. This establishes that the AT&T pole count is reasonably accurate and

not a 'guess.'" - A. R. Part II of III, Binder 15, CPS Energy Ex 18B, Rebuttal

Testimony ofRicardo Lopez (Confidential) at 27:18-24.

10. "The only attachments with the greatest difference between billing data and field

^ survey results, thus, are the AT&T attachments. The difference is due to the fact

that they are based on a statistical sampling from 2000, but the difference is not

significant." - A.R. Part II of III, Binder 15, CPS Energy Ex. 18A, Rebuttal

Testimony ofRicardo Lopez at 20:6-8.

11. "Considering the magnitude of AT&T's original pole count from the 2000

sampling, and the fact that the only significant change to the pole count is the

addition of new attachments, the most current calculated number of AT&T pole

contacts is a reasonably accurate number. - A.R. Part II ofIII, Binder 15, CPS

Energy Ex. 18A, Rebuttal TestimonyofRicardo Lopez at 20:11-14.

12. "More importantly, CPS Energy's average number of attaching entities is based

on its actual data, and its actual data is further supported by a statistically valid

survey. By contrast no party in this proceeding that is challenging CPS Energy's

average number of attaching entities has come forward with any data to support a

number different than what CPS Energy's actual data show." - A. R. Part II ofIII,

Binder 16, CPS Energy Ex. 19B, Supplemental Rebuttal Testimony of Ricardo

Lopez (Confidential) at 20:12-20.

13. "In Exhibit SSPAE-1, I provide the calculation for CPS Energy's maximum

allowable pole attachment rates for test years 2004 through 2009 (billing years

2005 through 2010) using the prior Telecom Formula." A. R. Part II of III,

Binder 16, CPS Energy Ex. 20A, Second Supplemental Rebuttal Testimony of

Paul A. Escamilla (Redacted) at 8:21-23.

14. At Exhibit SSPAE-1: See tables (attached) showing year-by-year data used to

calculate maximum allowable pole attachment rate. A. R. Part II ofIII, Binder

16, CPS Energy Ex. 20B, Second Supplemental Rebuttal Testimony of Paul A.

Escamilla (Confidential) at Exhibit SSPAE-1.

15. "Information is received from the Overhead Engineering Department which

details the quantities of pole contacts and the rate to be charged per contact to

each entity that is attached to CPS Energy's poles. Staff within Current Asset

Court of Appeals No. 03-14-00340-CV 2 of3 CPS Energy's Bench Notebook

April 22, 2015
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TAB 8 - Substantial Evidence In Record Supporting PUCT's Finding That

Actual Data Supports Average Number of Attaching Entities of Three

Management then prepares the invoices and records the billings in CPS Energy's

SAP accounting system. The invoices are then printed out and mailed to the

customers. The invoices for pole contacts are prepared on an annual basis." A. R.

m Part II ofIII, Binder 14, CPSEnergy Ex. 4, Direct Testimony ofDavid J. Ramirez

at 5:11-16.

16. "Please see the attached spreadsheet ["Exhibit - Pole Contacts Summary"] which

details the quantities of contacts, the rates and the amounts billed to each pole

contact customer for the calendar years 2005 through 2009 inclusive." A. R. Part

p" // ofIII, Binder 14, CPS Energy Ex. 4, Direct Testimony of David J. Ramirez at

6:3-5.

17. See attached, "Exhibit - Pole Contacts Summary" A. R. Part II ofIII, Binder 14,

CPS EnergyEx. 4, Direct Testimony ofDavid J. Ramirez at 8-14.

Court ofAppeals No. 03-14-00340-CV 3 of 3 CPS Energy's Bench Notebook

April 22, 2015
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