Court Opinion

ID: 4130898
Source: CourtListenerOpinion
Date Created: 2017-02-18 01:09:40.561293+00
Date Added: 2024-06-11T12:43:24.535996
License: Public Domain

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                THE     ATTCBIRXEY          GENERAL
                           057 TEXAS

                            Octo~ber 28,   1986

     Ms. Peggy Rosson                      Opinion No. JM-571
     Chairman
     Public Utility Commission             Re: Whether a municipality is re-
        of Texas                           quired by section 16 of article
     7800 Shoal Creek Blvd.                1446c, the Public Utility Regula-
     Suite 400N                            tory Act, to file a ten-year fore-
     Austin, Texas 78757                   cast for assessments of land re-
                                           sources for its service area

     Dear Ms. Rosson:

         You ask the following questions:

                 1. Are muni:ipalities required by section
              16(c) of the Pub!.icUtility Regulatory Act to file
              a ten year forel:astfor assessments of load and
              resources for their service areas?

                 2.  If the answer to the first question is in
              the affirmative, ,what remedies are available for
              the failure of s,municipality to file such a ten
              year forecast?

          The Public Utility Regulatory Act (hereinafter PURA or the Act),
     article 1446~. V.T.C.S., establishes a comprehensive regulatory system
     over the rates, services, and operations of public utilities. city of
     Sherman V. Public Utility -Commission of Texas, 643 S.W.2d 681, 683
     (Tex. 1983). Prior to I&sage of the Act, Texas' municipalities
     played a ma-jar role in th'z regulation of public utilities. Id. In
     response to municipalities' concerns over state-wide regulation, the
     legislature retained munic:lpalregulation within municipal boundaries,
     see art. 1446c, $917, 21, :!I!,
                                   and exempted municipally-owned utilities
     from many of the Act's gen~!ralregulatory provisions. See art. 1446c,
     553(c),  17(e). Because of these exemptions and because of the
     complexity of the Act, delzerminingwhich provisions of the Act apply
     to municipalities can be d:lfficult.

          The section of the A#:t about which you inquire, section 16(c),
     provides, in part:

                                      p. 2542
Ms. Peggy Rosson - Page 2   (JM-571)

            Every 8enerati.ngelectric utility in the state
         shall prepare anT transmit to the commission by
         December 31, 198:;,and every two years thereafter
         a report specifying at least a lo-year forecast
         for assessments of load and resources for its
         service area. Tke report shall include a list of
         facilities whict. will be required to supply
         electric power during the forecast periods. The
         report shall be in a form prescribed by the
         commission. (Emphasis added).

V.T.C.S. art. 1446, 916(c)   Your request requires a determination of
whether "generating electric utility" includes municipal utilities.

     Although no inflexible rule governs the construction of statutes,
the dominant principle lo to give effect to the intent of the
legislature. City of Sherzm V. Public Utility Commission of Texas,
643 S.W.2d at 684. The language of the statute is the primary
guideline in determining legislative intent. Id. When the language
of a statute is ambiguous, however, the courts consider the history of
the subject matter, the purposes to be accomplished, the problems to
be remedied, and the results to be obtained. -Id.

     By .its terms, section 16(c) applies to all "generating electric
utilities." The Act, in section 3(c), defines the terms "public
utility" and "utility" to exclude municipal utilities:

             The term 'public utility' or 'utility,' when
          used in this Act, includes any person, corpora-
          tion, river autharity, cooperative corporation, or
          any combination thereof, other than a municipal
          corporation or 6. water supply or sewer service
          corporation. . . . (Emphasis added).

If section 16(c) is depensient on this section for meaning, section
16(c) cannot apply to muxlcipally-owned utilities. The scope and
purpose of section 16(c), however, prevent such a superficial analysis
of the question at hand. Eecause section 16(c) refers specifically to
a "generating electric utility" rather than simply to a "public
utiilty" or "utility." zhe section is ambiguous.          Accordingly,
analysis of section 16(c) cannot rest on its language alone.

     Arguably, if the legislature intended section 16(c) to apply to
municipally-owned utilitie~~,it would have expressly included munici-
palities. See, e.g., art. :L446c.527(f). Several Texas courts, how-
ever. have held that municioalities are covered bv orovisions of the
Act which do not refer expressly to municipalities.' See, e.g., City
of Coahoma V. Public Utility Commission of Texas, 626 S.W.2d 488 (Tex.
1981); San Antonio Independent School District V. City of San Antonio,

                                p. 2543
Ms. Peggy Rosson - Page 3   (m-571)

614 S.W.2d 917 (Tex. Civ. App. - Eastland 1981, writ ref'd n.r.e.),
cert. denied, 106 S. Ct. 347; City of Lubbock V. South Plains Electric
Cooperative, Inc., 593 S.k'.2d 138 (Tex. Civ. App. - Amarillo 1979,
writ ref'd n.r.e.); --Southwestern Public Service Company V. Public
Utility Commission of Texai:,578 S.W.2d 507 (Tex. Civ. App. - Austin
1979, writ                  see also Attorney General Opinion JM-353
(1985). In these cases, the courts refused a blind application of the
exclusionary definition in section 3(c). For example, in San Antonio
Independent School District V. City of San Antonio, the court
addressed the scope of section 48 of the Act, a section which deals
with "payments made in lieu of taxes by a public utility to a
municipality by which it is 'owned.. . ." (Emphasis added). A strict
application of the section ,3(c)definition of "public utility" would
render section 48 meaningless. The court held that section 48 does
not depend on section 3(c: for meaning and that section 48 clearly
applies to municipally-owned utilities. 614 S.W.2d at 919.

     The cases which discuss the applicability to municipalities of
the Act's provisions regarding certificates of public convenience and
necessity are of particular importance in determining the scope of
section 16(c). Section l(i(Ic)influences the factors considered in
section 54(c), regarding certification proceedings. See V.T.C.S. art.
1446~. 116(f). It is now well-established that muniFipalities must
comply with section 50(2) of the Act, a section which requires "retail
public utilities" to obta:.n certificates of public convenience and
necessity orior to extend::ng service to an area served by another
retail &biic utility. City of Lubbock V. South Plains- Electric
e      itive, Inc., 593 S.,t?!d at 141-42; Southwestern Public Service
   P Y v. Public Utility Commission of Texas, 578 S.W.2d at 510-11;
see also Public Utility Co~&ssion of Texas V. South Plains Electric
Cooperative. Inc.. 635 S.W:Zd 954, 95;6-57 (Tex. App. - Austin 1982,
writ ref'd n.r.e.); City --of Brownsville V. Public Utility Commission
of Texas, 616 S.W.2d 402 (Tex. Civ. App. - Texarkana 1981. writ ref'd
n.r.e.).

     In City of Lubbock V. South Plains Electric Cooperative, Inc.,
the court noted that sect&      49 of the Act carves out a separate
definition for "retail public utility" which expressly includes
municipalities. Section 5(1(2)refers to retail public utilities but
fails to expressly include aunicipalities. Application of the section
3(c) definition to section 50(2) would result in the exclusion of
municipalitie5. The court .applied the section 49 definition rather
than the section 3(c) def:tuition and held that municipalities must
comply with section 50(2). 593 S.W.2d at 141-42. Section 16(c) is
similar to section 50(2) in that section 16(c) applies to a specific
category of utilities -- "8enerating electric utilitie5." Although
this phrase is not define?, separately in the Act, as is the phrase
"retail public utilities," a similar construction should apply. - See
Attorney General Opinion JM-,353(1985).

                            p. 2544
Ms..Peggy Rosson - Page 4    (JM-571)

     In determining whether section 50(2) applies to municipalities,
the City of Lubbock court also focused on whether the certification
process impinged upon the powers granted to municipalities under the
Act. -See art. 1446~. 0$17(s), 21, 22. The court emphasized that

          [t]he authority to grant or deny certificates of
          public convenience and necessity is a separate,
          distinct and dif:Eerent jurisdictional power than
          the authority granted the City by the Act.
593 S.W.2d at 141. Similarly, in Southwestern Public Service Company
V. Public Utility Commissionsof Texas, 578 S.W.2d at 511, the court
emphasized that the original jurisdiction granted to municipalities
under section 17(a) is "[slubject to the limitations imposed in this
Act." 578 S.W.2d at 511; cf. City of Sherman V. Public Utility
Commission of Texas, supra, at 684-85 (section 17(e) should not be
construed to negate sectio:i 17(a)). Imulicit in these two court of
appeals decisions is the conclusion 'that section 3(c) excludes
municipalitie5 only in rec,ognition of, and only to the extent of,
municipal powers granted elsewhere in the Act. It must be remembered
that section 3(c) is a definitional provision - an aid to statutory
construction -- not a grant of power. Cf. Hardin Water Supply
Corporation V. City of Hardin. 671 S.W.Zd 505(Tex. 1984) (construed
section 3(c) as a limit olisection 17(a) iurisdiction over a water
company because sections 3:~). 3(c)(4),-ana 3(u) remove water supply
corporations from definition of utilities).

     In City of Coahoma v. Public Utility Commission of Texas, 626
S.W.2d 488 (Tex. 1981), th; Texas Supreme Court relied primarily on
legislative intent in refusing to appiy section 3(c) to section 53 of
the Act. Section 53 is th? "grandfather clause" for certificates of
convenience and necessity. By its terms, section 53 applies only to
"public utilities." Becaur,emunicipalities must comply with section
50(2), however, it would 'xb intrinsically unfair to deny them the
protection of section 53. In light of the overall purpose of the
certificate provisions of the Act, the court concluded that the
legislature could not hare intended to deprive "cities of the
protection from encroachmeut afforded to public utilities under the
Act." 626 S.W.2d at 491.

       These decisions focus on two things: (1) whether the legislature
intended the provision in question to apply to municipalities and
(2) how application of the particular provision would affect the
limited regulatory powers granted to municipalities by the Act.
Applying these standards tc section 16(c) compels the conclusion that
the Texas courts would hold that section 16(c) applies to municipal-
ities.    As indicated, section 16(c) is vital to certification proceed-
ings. See art. 1446~. §16(,f);see also 9554(d), 54(e). It would be
exceedinxy difficult to develop a long-term statewide electrical

                              p. 2545
Ms. Peggy Rosson - Page 5 (JM-571)

energy forecast, as requirei by section 16(b) of the Act, without the
inclusion of all electric service areas in the state. Moreover,
application of section 16(1::1to municipalities in no way interferes
with the powers granted to municipalities under the Act.

     You also ask what remedies are available to the Public      Utility
Commission to enforce section 16(c). Article XI (sections 71     through
77). of the Act contains thl?Act's enforcement provisions, In    City of
Lubbock v. South Plains Ele~~:ricCooperative, Inc., 593 S.W.2d   at 142,
the court held that

         [t]hese sections are applicable only to 'a public
         utility or any other person or corporation.' As
         such terms are de::inedwithin the Act, the City of
         Lubbock is not a public utility,
         corporation. [Citations omitted.]a p~'c'c"o"r"din"giy~
         the trial court correctly found that under the
         Act, South Plains has no administrative remedy or
         action at law. (:Zmphasisadded).

Unlike section 16(c), these sections do not create a separate category
of entities affected. Nevertheless, the court noted that injunctive
relief is available "to Isrotect the integrity of certificates of
public convenience and necessity issued by a regulatory commission
acting under legislative authority." 593 S.W.2d at 142. Accordingly,
the commission could seek i,njunctiverelief to enforce section 16(c).
The ccmaission may not, however. impose administrative sanctious under
sections 71 through 77 o:i the Act without legislative action to
include municipalities within those sections.

                             SUMMARY

             Section 16(c) of article 1446~. the Public
          Utility Regulatory Act, applies to municipalities.
          The Public Utility Commission, however, lacks the
          authority to impose administrative sanctions to
          enforce section 16(c). The commission may seek
          injunctive relief :Eromthe courts.

                                                 MATTOX
                                         Attorney General of Texas

JACK HIGRTOWER
First Assistant Attorney Gen.sral

                               p. 2546
Ms. Peggy Rosson - Page 6     (JM-571)

MARY KP.LLER
Executive Assistant Attorney General

RICK GILPIN
Chairman, Opinion Committee

Prepared by Jennifer Riggs
Assistant Attorney General

                              p. 2547
Ms. Peggy Rosson - Page 7   (.JM-571)

RQ-807

JH-

INDEX READINGS -- J.R. DRAFP

ADMINISTRATIVE LAW
CITIES AND TOWNS
ENERGY
POLITICAL SUBDIVISIONS
PUBLIC UTILITIES
RRNFdDIES
STATE BOARDS, COMMISSIONS, E'PC.
   PUBLIC UTILITY COMMISSION
STATUTORY CONSTRUCTION
UTILITIES

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