The Attorney General of Texas 

May 7, 1981 

MARK WHITE 

Attorney General 

Honorable James E. Nugent 

Chairman 

Railroad Commission of Texas 

P. 0. Box 12967 

Austin, Texas 78711 

Opinion No. MW-335 

Re: Whether an individual citizen 

ratepayer may appeal from a 

municipal gas rate ordinance as a 

party under section 26(a) of article 

1446c, V.T.C.S. 

Dear Chairman Nugent: 

You have asked the following questions: 

1. May an individual citizen ratepayer appeal 

from a municipal gas rate ordinance as a “party to a 

rate proceeding before the governing body of a 

municipality” under section 26(a), article 1446c, 

V.T.C.S., or is such individual limited to the appellate 

procedure set forth in section 26(b)? 

2. If said individual can appeal from a municipel 

gas rate ordinance under section 26(a), is such appeal 

dependent upon a showing of special injury not 

common to other ratepayers? 

3. If said individual can appeal from a municipal 

gas rate ordinance under section 26(a), can said 

individual, without formal party designation by the 

city council, attain party status within the meaning 

of section 26(a) through active participation before 

the city council, i.e., by submitting written statements of position, cross-examining utility witnesses, 

and engaging in informal discovery with the utility? 

The facts are as follows: after considering on nine occasions a 

proposal for a rate increase submitted by Entex, Inc., the San Marcos city 

council passed a rate ordinance setting Entex’s rates. Thereafter, a San 

Marcos resident contested the ordinance by filing with the Railroad 

Commission an instrument entitled “In re: The Appeal of Lena Green, on 

behalf of Residential Consumers of Natural Gas Services Supplied by Entex, 

Inc., in the City of San Marcos, from action by the City of San Marcos, 

Texas.” This instrument alleged that the commission had jurisdiction to 

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Honorable James E. Nugent - Page Two (Mw-335) 

entertain the appeal wider article 1446c, section 26(a), V.T.C.S. (The Public Utility 

Regulatory Act, or “PURA”), which provides that: 

(a) Any party to a rate proceeding before the governing 

body of a municipality may appeal the decision of the governing 

body to the commission or railroad commission. 

The ratepayer had not complied with section 26(b), which provides that: 

(b) Citizens of a municipality may appeal the decision of 

the governing body in any rate proceeding to the commission or 

railroad commission through the filing of a petition for review 

signed by the lesser of 20,000 or 10 percent of the number of 

qualified voters of such municipality. 

Entex filed a plea to the jurisdiction of the Railroad Commission asserting that 

the ratepayer lacked standing to appeal under section 26(a) because she was not a 

“party” to the rate proceeding. The stipulated facts reveal that although Ms. Green’s 

attorney participated in several council hearings on the Entex matter, no motion 

requesting intervention as a party to the proceeding was filed with the city council and 

the ratepayer’s name does not appear in the minutes of the council hearings Because 

the ratepayer was not an original party to the proceeding and was not later designated 

as a party by the city council, Entex contends that she is not a party under section 

26(a). Ms. Green, on the other hand, takes the position that active participation in the 

proceeding before the council is sufficient to confer party status upon her. 

Your fist question is whether a citizen ratepayer may appeal from a municipal 

gas rate ordinance as a “party” under section 26(a) or whether such individual is in all 

. instances limited to the appellate procedure set forth in section 26(b). We do not think 

the legislature intended to preclude citizens from ever qualifying as parties and are 

therefore of the opinion that a citizen may qualify as a party and appeal under section 

26(a). The critical inquiry concerns the criteria that must be satisfied in order for a 

citizen to become a party within the meaning of that section. 

The PURA does not define the term “party. I’ However, section 4 of article 1446~ 

states that “[tl he Administrative Procedure and Texas Register Act applies to all 

proceedings under this Act except to the extent inconsistent with this Act.” The 

Administrative Procedure and Texas Register Act (hereinafter “APTRA”) defines a 

‘party” as “each person or agency named or admitted as a party.” V.T.C.S. art. 6252- 

13a, S3(5). Considering these sections together, we conclude that the definition of 

“party” in APTRA also applies to the PURA; accordingly, a “party” under section 26(a) 

is “each person or agency named or admitted as a party. I’ In this context, we note that 

although APTRA does not apply to proceedings before municipal governing bodies, we 

are concerned with determining who may appeal decisions of those bodies to the Public 

Utilities Commission or to the Railroad Commission, which are governed by APTRA. 

Having concluded that a “party” is “each person or agency named or admitted as 

a party,” we must ascertain the meaning of the phrase “named or admitted.” May an 

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Honorable James E. Nugent - Page Three (~9-335) 

individual not originally named as a party to a proceeding be “admitted” as a party only 

by formally requesting and receiving designation as a party by the governing body? Or 

may one become a party through active participation in the proceeding? 

Absent any indication of the meaning of “named or admitted as a party” in either 

the PURA or APTRA, we must resort to outside sources to assist us in determining the 

meaning that the le&lature most likely intended to ascribe to the phrase. See 

Huntsville Ind. School District v. McAdams, 221 S.W. 2d 546 (Tex. 1949). One such 

source is case law. Texas case law, however, affords little help in this inquiry. 

Several cases have dealt with attempts bv citizen rateoavers to aooeal municioal rate 

ordinances, see e. San Antonio Independent School Di.&rict v. City of San Antonio, 

550 S.W. 2d --Y 262 Tex. 1976); Tuck v. Texas Power and Light Co., Inc., 543 S.W. 2d 214 

(Tex. Civ. App. - Austin 1976, writ refd n.r.e.); Schenker v. City of-San Antonio, 369 

S.W. 2d 626 (Tex. Civ. App. - San Antonio 1963, writ rePd n.r.e.1, but these cases 

involved attempted appeals to the courts rather than to administrative agencies. 

Moreover, each case was decided on the basis of whether the complainant had 

exhausted his administrative remedies, was a proper representative ln a class action, 

or had a justiclable interest in the controversy sufficient to permit suit in state court. 

In our view, they offer little help in determining what the legislature intended when it 

authorized appeak to the Public Utility Commission or the Railroad Commission by 

persons “named or admitted as a party” to a rate proceeding. 

State v. Gutschke, 233 S.W. 2d 446 (Tex. 1950), is cited in the briefs submitted to 

us for the proposition that the failure to file pleadings or to otherwise indicate a desire 

to become a party at the municipal level &es not preclude an individual from 

qualifying as a “party” under section 26(a). In Guts&&e, a county judge denied an 

application for a retailer’s on-premises beer license and the applicant appealed under 

former article 667-6 of the Penal Code. The district court granted the application, 

and the Texas Supreme Court held that the citizen-protestants could challenge that 

ruling in the Court of Civil Appeals. The court noted that article 667-6 “evidently 

contemplates that [proceedings before the county judge1 shall be of less than judicially 

formal character, without requirement of any written. . . pleadings [as al prerequisite 

to. . . becoming a party to the cause. . . .‘I 233 S.W. 2d at 448. 

In our opinion, however, Gutschke is not dispositive of the issue before us. First, 

article 667-6 set up an entirely different regulatory scheme and employed different 

terminology than that involved in the PURA, which was enacted 25 years later. This is 

important in view of the Gutschke court’s emphasis upon the fact that its decision 

turned upon the precise wowarticle 667-6. Second, the significance, if not the 

validity, of Gutschke has since been undercut by the Texas Supreme Court’s decision in 

Stone v. Texas Liquor Control Board, 417 S.W. 2d 385 (Tex. 1967L Stone, which also 

construed former article 667-6, pointed out that Gutschke did “not hold that the 

statutory authorization to participate in the hearingthe county judge carries 

with it the right of appeal to the courts” 417 S.W. 2d at 386. Whatever limited 

assistance Gutschke might have provided in this inquiry has, in our view, been eroded 

by the Stone decision. 

The federal counterpart to APTRA, the Administrative Procedure Act, 5 U.S.C. 

sections 551-576 define a “party” as: 

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Honorable James E. Nugent - Page Four (~~-335) 

. . . a person or agency named or admitted as a party, or 

properly seeking and entitled as of right to be admitted as a 

party, in an agency proceeding, and a person or agency admitted 

by an agency as a party for limited purposes. (Emphasis addedX 

Section 551(3). Unfortunately, the Administrative Procedure Act also falls to shed any 

light on the meaning of the phrase “named or admitted as a party.” Federal case law 

does indicate that federal courts have expanded the class of persons who may 

intervene as parties in administrative proceedings and have allowed agencies broad 

discretion in determining whom they will admit as interveners, see Office of 

Communication of United Church of Christ v. P.C.C., 359 F. 2d 994 (Dx. m 

appeal after remand, 425 F. 2d 543 (D. C. Cir. 1969), but the cases do not indicate 

whether formal designation by an agency is an absolute prerequisite to becoming an 

intervenor party. 

In its brief, counsel for Entex asserts that: 

[Tl he requirement that parties be expressly named or 

expressly admitted in pleadings (is] important and obvious. 

Otherwise, others in the proceeding would be unable to 

determine from the record who their adversaries are or whether 

the adversaries are in fact entitled to intervene. Indeed, if 

named parties are unable to determine who the proposed 

lntervenors are, then the named parties would be unable to even 

object to the admission of interveners. Further, the tribunal 

itself may be unable to determine the identity of the parties; a 

test based upon the degree of participation in a given instance 

would lead to situations, such as this one, in which there is a 

serious fact issue of whether a person is a party. 

Brief for Entex, at page 12. Counsel also correctly pointed out that both the Railroad 

Commission and the Public Utility Commission require formalized pleadings in their 

administrative hearings See 4 West’s Texas Forms Administrative Practice and 

Procedure S36.52 (1977); 5 West’s Texas Forms Administrative Practice and Procedure 

B7 . 95 (m77). On the other hand, the hearing examiner in this case, while he did not 

agree that the degree of participation in a proceeding should necessarily determine 

whether a person has been admitted as a party, did observe that the degree of 

participation by Ms. Green’s attorney was such that Entex could not claim surprise and 

concluded that equity dictated a jurisdictional finding in her favor. It is important to 

note, however, that the hearing examiner also stated that normally “it is incumbent 

upon a participant desiring party status to do all things necessary to insure a 

determination of that status, particularly when all that is required is a simple oral or 

written motion.” Railroad Commission Jurisdictional Ruling, Docket No. 1907, at 5-6, 

January 3, 1980. 

After reviewing the available authorities and considering the briefs submitted in 

this case, we conclude that the legislature, ln employing the phrase “named or 

admitted as a party,” most likely intended that an individual not originally named as a 

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Honorable James E. Nugent - Page Five (m-335) 

party to a rate proceeding before a municipal governing body may be “admitted” as a 

party only if he requests party status and is then designated as a party by the 

governing body. Mere participation in the proceeding, in other words, is insufficient to 

confer party status upon an individual such as the ratepayer in this case. One desiring 

party status must request the governing body to confer such status upon him, and that 

body may then accept or reject such request in accordance with its own rules. 

This interpretation fathers the legislature’s intent as we perceive it. If a 

ratepayer could qualify as a party merely by participating in rate hearings before 

municipl governing bodies, the express requirements of article 1446c, section 26(b), 

V.T.C.S., would, in an instance such as this, be abrogated. There would be no reason 

for a ratepayer to attempt to comply with the petition requirements of section 26(b) if 

he could accomplish the same result by appearing at council meetings and thereafter 

filing an “appeal on behalf of residential consumers.” Additionally, if “degree of 

participation” is to be the applicable standard in determining whether an individual has 

attained party status, each case would ultimately require a decision after the fact as 

to whether enough participation had occurred. Finally, allowing an individual to 

become a party through active participation would mean that the governing body would 

have little control over who could intervene as a party. We therefore answer your 

third question in the negative. 

The remaining question is whether an appeal under article 1446c, section 26(a), 

V.T.C.S., is further dependent upon a showing of special injury not common to other 

ratepayers. 

Prior to the enactment of the PURA, courts held that ratepayers had no standing 

to challenge in the courts utility rates set by a governing bcdy when the ratepayer 

could not show any damage peculiar to himself. Tuck v. Texas Power and Light Co., 

Inc., supra; Schenker v. City of San Antonio, supra; Hazelwood v. City of Cooper, 87 

S.W. 2d 7767Tex. Civ. App. - Texarkana 1935, writ rePd). These holdings were based 

on the principle that the complaining party must have a justiciable interest in the 

controversy distinguishable from the public in generaL It has abo been held in motor 

carrier cases that a right to appeal presupposes standing to appeaL Lake Transport, 

Inc. v. Railroad Commission of Texas, 505 S.W. 2d 781 (Tex. 1974); Permian Basin 

Coaches, Inc. v. Railroad Commission of Texas, 531 S.W. 2d 374’! (Tex. Civ. App. - 

Austin 1975, no writ). 

These cases, however, involved attempts to obtain judicial review of final agency 

action, rather than agency review of action taken by a munlctpal governing body. We 

have found no authority for the proposition that an individual must demonstrate 

specialized injury in order to have standing to appeal in the latter instance. On the 

contrary, language in a recent court of civil appeals decision bolsters the view that the 

opposite is true. In Hooks v. Texas Department of Water Resources, 602 SW. 2d 389, 

391-92 (Tex. Civ. App - Austin 19801, rev’d on other grounds, 611 S.W. 2d 417 (Tex. 19811, 

the court stated that: 

There is a distinction between the right to participate ln an 

administrative proceeding and the right to a judicial review of 

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Honorable James E. Nugent - Page Six (Mu-335) 

final agency action. Stone v. Texas Liquor Control Board, 417 

S.W. 2d 385 (Tex. 1967). The necessity of a justiciable interest 

has loig been recognized in obtaining judicial review of 

administrative action. 

The Texas Supreme Court haa, moreover, recently cast some doubt on the 

question of whether a party must even demonstrate special injury in order to be 

entitled to judicial review of agency action under the PURA. In City of Houston v. 

610 S.W. 2d 732 (Tex. 1980), which refused writ of error, 

f Houston v. Public Utilities Commission, 599 S.W. 2d 667 

, the Supreme Court stated that: 

In refusing the City’s application for writ of error, no reversible 

error, our action is not to be interpreted as approving or 

disapproving the holding of the court of civil appeals that a 

party must demonstrate “special injury” to be entitled to 

judicial review under the Public Utility Regulatory Act. 

We have observed that section 26(a) of the PURA states that “[al ny party to a 

rate proceeding before the governing body of a municipality may appeal the 

decision. . . to the commission or railroad commission.” Neither this section, the 

remaining sections of the PURA, nor the Administrative Procedure and Texas Register 

Act expressly limit the right of someone who has qualified as a party under section 

26(a) to appeal a municipal governing body’s decision to either commission. We decline 

to read into section 26(a) an additional requirement that in order to appeal to either 

commission, an individual must demonstrate some special injury, especially in light of 

the Supreme Court’s recent decisions in City -of Houston vi Public Utilities 

Commission, supra, and Hooks v. Texas Department of Water Resources, supra We 

therefore answer your second question in the negative. 

SUMMARY 

An individual citizen ratepayer may appeal from a municipal 

gas rate ordinance as a “party to a rate proceeding before the 

governing body of the municipellty” provided he was originally 

named 8s a party to the proceeding or was subsequently 

admitted as a party by the governing body. An individual may 

not attain party status merely by participating actively in the 

proceeding before the city council. Once an individual has been 

named or admitted as a party at the municipal level, his right to 

appeal under section 26(a) is not further dependent upon a 

showing of special injury not common to other ratepayers. 

MARK WHITE 

Attorney General of Texas 

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Honorable James E. Nugent - Page Seven (~~-335) 

JOHN W. FAINTER, JR. 

First Assistant Attorney General 

RICHARD E. GRAY III 

Executive Assistant Attorney General 

Prepared by Jon Bible 

Assistant Attorney General 

APPROVED: 

OPINION COMMlTTEE 

Susan L. Garrison, Chairman 

Jon Bible 

Rick Gilpin 

Bruce Youngblood 

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