Court Opinion

ID: 5088488
Source: CourtListenerOpinion
Date Created: 2021-10-01 14:42:35.410656+00
Date Added: 2024-06-11T14:22:14.197646
License: Public Domain

I disagree with the majority's holdings that allow utilities to unjustly charge consumers for "phantom taxes." For the reasons stated in Justice Gonzalez's concurring and dissenting opinion, I would adhere to this Court's opinion in PublicUtility Commission v. Houston Lighting Power Co., 748 S.W.2d 439
(Tex. 1987), as well as the other decisions the majority today overturns: City of Somerville v. PublicUtility Commission, 865 S.W.2d 557 (Tex.App. — Austin 1993, no writ) and Southern Union Gas Co. v.Railroad Commission, 701 S.W.2d 277 (Tex.App. — Austin 1985, writ ref'd n.r.e.). I would thus hold that the Public Utility Commission erred by failing to account for (1) GTE's pro-rata share of the savings resulting from its parent's filing a consolidated tax return; and (2) the income tax deductions taken for expenses that were disallowed from inclusion in rate base. *Page 420 
I also differ with the majority's curtailment of the Commission's authority to set the effective date of its ratemaking order. This Court has squarely held that the Commission has considerable discretion in this regard:
 The courts of this state have provided that in order to compensate for 'regulatory lag,' the Commission in its discretion may make the new rates effective at any date prior to the issuance of the order but following the attachment of the agency's discretion.
Railroad Comm'n v. Lone Star Gas Co., 656 S.W.2d 421, 426 (1983). I do not believe this writing is "distinguishable," as the majority declares, supra at 408. The Lone Star opinion addresses the present issue fully, discussing authority from other jurisdictions as well as Texas, and unambiguously concludes that the Commission has discretion to make its new rates effective at a date prior to the issuance of its final order. 656 S.W.2d at 425-26.
The majority's holding is also inconsistent with the Court's more recent writing in this area. In State v. PublicUtility Commission, 883 S.W.2d 190, 195-96 (Tex. 1994), this Court held that the Commission has broad discretion to provide remedies for regulatory lag other than those provided in section 43, because that section is simply "a component of the overall scheme provided by PURA for regulating utilities and assuring that rates are just and reasonable." Today, however — when the Commission's exercise of its discretion benefits consumers rather than utilities — the majority holds that the Commission has no such discretion at all, because section 43 already "provides a detailed procedure to avoid regulatory lag." Supra at 408.
While I disagreed with much of the Court's writing inState v. PUC, I recognize that it is now the law. Thus, under both Lone Star and State v. PUC,
I would hold that the Commission acted within its discretion when it provided consumers some relief from regulatory lag "in order to do equity in light of [GTE's] dilatory tactics . . . in this case." By overturning this exercise of discretion, the majority allows GTE to retain a windfall of some $140 million in overcharges.1
I would affirm the judgment of the court of appeals in all respects except with regard to the effective date of the Commission's order. Accordingly, I dissent.
1 As explained in the court of appeals' opinion, 833 S.W.2d at 170, this windfall resulted after the Texas Legislature excluded telecommunication services from the gross-receipts tax and included them within the scope of the sales tax. GTE thereupon levied a "surcharge" on consumers to collect the sales tax; but it failed to reduce its rates to adjust for the exemption from the gross receipts tax. Thus, consumers continued to pay GTE for the gross-receipts tax, even though GTE was no longer paying the tax.