City of Allen v. Public Utility Com'n, 03-04-00282-CV.

• Decision Date: 17 March 2005
• Docket Number: No. 03-04-00282-CV.,03-04-00282-CV.
• Citation: 161 S.W.3d 195
• Parties: CITY OF ALLEN and Coalition of Cities, Appellant, v. PUBLIC UTILITY COMMISSION OF TEXAS; Oncor Electric Delivery Company; and Centerpoint Energy, Inc., Appellees.
• Court: Texas Supreme Court

161 S.W.3d 195

CITY OF ALLEN and Coalition of Cities, Appellant, v. PUBLIC UTILITY COMMISSION OF TEXAS; Oncor Electric Delivery Company; and Centerpoint Energy, Inc., Appellees.

No. 03-04-00282-CV.

Court of Appeals of Texas, Austin.

March 17, 2005.

Clarence A. West, Austin, for appellants.

Robert J. Hearon Jr., Ron Moss, Graves, Dougherty, Hearon & Moody, PC, Scott E. Rozzell and DeAnn T. Walker, Austin, for Centerpoint Energy, Inc.

Elizabeth R.B. Sterling, Asst. Atty. Gen., Austin, for Public Utility Commission of Texas.

David C. Duggins, Clark, Thomas & Winters, PC, Austin, Robert M. Fillmore and Howard V. Fisher, Hunton & Williams, Dallas, for Oncor Electric Delivery Company.

Before Chief Justice LAW, Justices PATTERSON and PURYEAR.

OPINION

JAN P. PATTERSON, Justice.

In this appeal, we must decide whether the Public Utility Commission has jurisdiction under the Public Utilities Regulatory Act (PURA) to review certain ordinances that a city claims to have enacted based on its police power. The City of Allen and a coalition of cities¹ appeal from a district court judgment partially dismissing the Cities' appeal and partially affirming the Commission's summary decision that invalidated four municipal ordinances because of their conflict with Oncor Electric Delivery Company's² tariffs, PURA, and the Commission's rules. For the reasons discussed below, we affirm the district court's order.

BACKGROUND

In 1999, the legislature began dismantling Texas's electric utility regulation.³ The legislature revised PURA to allow determination of retail electric rates by competition. See City of Corpus Christi v. Public Util. Comm'n, 51 S.W.3d 231, 235 (Tex.2001). Oncor is a transmission and distribution company created as part of TXU Electric Company's unbundling⁴ during the electricity deregulation process. Because electric transmission and distribution has not phased into the competitive market, the Commission continues to govern Oncor, including analysis and approval of Oncor's tariff. See Tex. Util.Code Ann. § 39.201 (West Supp.2004-05); 16 Tex. Admin. Code § 25.214(c) (2004) (Public Util. Comm'n, Terms and Conditions of Retail Delivery Service Provided by Investor Owned Transmission and Distribution Utilities). Oncor is certificated to distribute electric service in Allen, Texas.

Allen is a home rule city under the Texas Constitution's home rule amendment. Tex. Const. art. XI, § 5 (amended 1912). The home rule amendment altered the longstanding practice of having special charters individually granted and amended by the legislature for the State's larger cities. City of San Antonio v. City of Boerne, 111 S.W.3d 22, 26 & n. 5 (Tex.2003). Cities adopting a home rule charter have the full power of self government and look to the legislature only for limitations on their power. Id. Beginning in 2000, Allen enacted "zoning development standards" in its land development code that required utilities to: (1) place certain electric distribution⁵ lines underground, (2) screen electric meters and other electric distribution facilities from view, and (3) substitute metal or concrete distribution line poles for wooden poles—all at the utility's expense.⁶ After enacting these ordinances, Allen denied two of Oncor's construction permits for failure to comply with the electrical undergrounding specifications.

Oncor challenged the ordinances in an appeal to the Commission. The Commission's preliminary order stated that the Commission had jurisdiction to consider Oncor's appeal, and that Allen exceeded its authority when it passed the ordinances in question. The Commission referred the matter to the State Office of Administrative Hearings (SOAH),⁷ to analyze the applicability of an analogous decision concerning the Commission's jurisdiction to review municipal ordinances that required undergrounding utility lines and screening facilities. See Tex. Pub. Util. Comm'n, Application of Texas Utilities Electric Company to Obtain a CCN for the Trophy Club-Coppell-Euless 138 kV Transmission Line; Appeals of Brazos Electric Power Cooperative, Inc., Tri-County Electric Cooperative, Inc. and Texas Utilities Electric Company of an Ordinance of the Town of Westlake, Texas; Appeals of Texas Utilities Electric Company and Brazos Electric Power Cooperative, Inc. of an Ordinance of the Town of Trophy Club, Texas, Docket Nos. 6117, 6170-72; 1986 WL 383404, at *1-2, 1986 Tex. P.U.C. LEXIS 292, at *5.

While the case was before SOAH, the Commission's staff moved for summary decision, arguing that there were not any issues of material fact to be resolved at the evidentiary hearing. In her proposal for decision, the administrative law judge recommended that the Commission issue a summary decision for Oncor and invalidate the ordinances as a matter of law, because the ordinances violated PURA and impaired the public interest by requiring that Oncor install non-standard facilities at its own expense.

After the administrative law judge released the proposal for decision—but before the Commission issued its order—Allen repealed the portions of the ordinances that required undergrounding lines and wooden pole replacement.⁸ Applying exceptions to the mootness doctrine,⁹ the Commission invalidated the sections of Allen's ordinances that required under-grounding, wooden pole replacement, and screening of facilities, to the extent that they imposed the expense of installing non-standard electric distribution facilities on Oncor, in violation of its tariff, PURA, and Commission rules.

On administrative appeal, the district court ruled that it lacked jurisdiction to consider the Cities' moot challenge to the Commission order invalidating the undergrounding and pole replacement provisions of the ordinances. The court partially dismissed the Cities' appeal and ruled that the remainder of the Cities' challenges lacked merit.¹⁰

In a single point of error, the Cities challenge the Commission's appellate jurisdiction over the ordinances in Allen's land development code. They contend that Allen's ordinances were not promulgated to regulate Oncor, but to protect the health, safety, and welfare of Allen's citizens, that is, as an exercise of police power. The Cities ask this Court to "vacate the Commission order and reverse the district court's order as to its finding of Commission jurisdiction."

ANALYSIS

Motion to Dismiss

The Utilities and the Commission moved to dismiss this appeal, asserting that we cannot reach the question of the Commission's jurisdiction over the undergrounding and pole replacement provisions in the ordinances without addressing the district court's refusal to rule on them, and that the Cities waived this point of error due to inadequate briefing.

However, the question of jurisdiction is fundamental and can be raised at any time in the trial of a case or on appeal. Public Util. Comm'n v. J.M. Huber Corp., 650 S.W.2d 951, 955 (Tex.App.-Austin 1983, writ ref'd n.r.e.). Administrative agencies may exercise only those powers the law confers upon them in clear and express statutory language and those reasonably necessary to fulfill a function or perform a duty that the legislature has expressly placed with the agency. In re Entergy Corp., 142 S.W.3d 316, 322 (Tex.2004).

We liberally construe the points of error in order to obtain a just, fair and equitable adjudication of the rights of the litigants. Holley v. Watts, 629 S.W.2d 694, 696 (Tex.1982). We look not only at the wording of the points of error, but also at the argument under each point to best determine the intent of the party. Id. Read fairly, the Cities' brief complains about the district court's failure to vacate¹¹ the Commission's order—after the court determined that the Cities' challenges to the repealed provisions were moot—because it allowed the Commission's ruling, which invalidated parts of the ordinances, to stand. The Cities also ask that "the district court's order be reversed as to its finding of Commission jurisdiction" over the screening portions of the ordinances. The district court's judgment did not alter the effect of the Commission's order and the Cities have not waived the issue of whether the Commission lacked jurisdiction to review Allen's four ordinances. Accordingly, we deny the motion to dismiss.

Scope and Standard of Review

The district court affirmed the Commission's order concerning the non-repealed screening requirements (". . . in all other respects [the court] renders judgment that the Commission's order in Docket No. 25429 is affirmed, and that plaintiffs take nothing"). The court did not rule on whether the Commission had appellate jurisdiction over the repealed provisions in Allen's ordinances; it dismissed that part of the Cities' appeal as moot ("Accordingly it is ORDERED, ADJUDGED, and DECREED that the Cities' appeal is dismissed as to those portions of the Commission's Order in Docket No. 25429 concerning the ordinances repealed by City of Allen ordinance No. 2137-1-03...."). The court's refusal to rule on the repealed provisions of the ordinances (undergrounding and pole replacement) does not constitute a finding that the Commission lacked jurisdiction to review these provisions. Accordingly, we will address the issue of the Commission's appellate jurisdiction over the repealed and non-repealed portions of the municipal ordinances. The Commission's appellate jurisdiction over Allen's ordinances is a question of law that we review de novo. See Public Util. Comm'n v. City Pub. Serv. Bd., 109 S.W.3d 130, 135 (Tex.App.-Austin 2003, no pet.).

Allen's Ordinances

Oncor sought construction permits for two new projects designed to meet peak energy demands during the summer of 2002. The proposed projects called for installation of an overhead distribution line located within Oncor-owned easements, Allen's rights-of-way, and state rights-of-way. Oncor's projects were not associated with any particular development project. Allen denied Oncor's...