City of Brownsville v. Public Utility Commission of Texas

• Decision Date: 30 April 1981
• Docket Number: No. 8818,8818
• Parties: CITY OF BROWNSVILLE, Texas and The Public Utilities Board of the City of Brownsville, Texas, Appellants, v. PUBLIC UTILITY COMMISSION OF TEXAS, Appellee.
• Court: Texas Court of Appeals

Page 402

616 S.W.2d 402

CITY OF BROWNSVILLE, Texas and The Public Utilities Board of

the City of Brownsville, Texas, Appellants, v. PUBLIC UTILITY COMMISSION OF TEXAS, Appellee.

No. 8818.

Court of Civil Appeals of Texas, Texarkana.

April 30, 1981.

Rehearing Denied April 30, 1981.

John W. Davidson, Russell S. Johnson, San Antonio, for appellants.

Mark White, Atty. Gen. of Texas, Martha Terry, Asst. Atty. Gen., Austin, for appellee.

B. D. St. Clair, McGinnis, Lochridge & Kilgore, Austin, O. C. Hamilton, Jr., Ewers, Toothaker, Ewers, Abbot, Talbot, Hamilton & Jarvis, McAllen, for intervenor Magic Valley.

W. N. Woolsey, Joe N. Pratt, Dyer & Redford, Austin, amicus curiae for Central Power & Light.

CORNELIUS, Chief Justice.

This is an appeal from a judgment of the 126th District Court of Travis County which affirmed in all respects a final order of the Texas Public Utilities Commission. The controversy concerns which utility, the Public Utilities Board of Brownsville (PUB) or Magic Valley Electric Cooperative (MVEC), is authorized to serve seven subdivisions and an elementary school in Cameron County in and around Brownsville. Three utilities, PUB, MVEC and Central Power and Light (C P & L), were certificated in a fifteen county South Texas area by order of the Commission in Docket No. 29 issued on October 14, 1976. Forming the basis for that order was an agreement signed by the utilities whereby their respective areas of service were established, with some areas being designated for service by more than one. The subdivisions and school in controversy were all slightly certificated to MVEC. They are El Tulipan, La Coma, La Villita # 4, La Villita # 5, La Villita # 6, Esperanza Estates and Luna Vista Subdivisions, and the Reynaldo Garza Elementary School. At the time of the certifications, El Tulipan and approximately one-third of La Coma were within the city limits of Brownsville; El Tulipan and La Villita # 4 were being completely served by PUB; and it was also serving 75% to 80% of La Coma. These three subdivisions and La Villita # 5 were the only subdivisions requiring electric service at the time the controversy arose. The school was under construction and was receiving power from MVEC. All subdivisions and the school are within the Brownsville city limits or within its extra-territorial jurisdiction. In January of 1977, PUB began extending its lines into La Villita # 5 even though it had no certificate of convenience and necessity from the Commission. PUB contends that it was obligated to furnish service to that subdivision, as well as La Villita # 6, pursuant to contracts entered into with the developers of those subdivisions. The contracts were entered into after the effective date of the Public Utility Regulatory Act, but before the order of the Commission in Docket No. 29 was issued.

MVEC filed an application with the Commission on June 30, 1977, for a cease and desist order, alleging that PUB had extended its lines and service into the service area singly certificated to MVEC by the Commission's order in Docket 29. PUB then filed an application for dual certification of the seven subdivisions and the school. MVEC's complaint was docketed as Docket No. 533 and PUB's application for dual certification was docketed as No. 670. The two dockets were consolidated by order issued at a pre-hearing conference on September 15, 1977.

MVEC did not object to PUB being singly certificated to provide electrical service to the three subdivisions where PUB already had lines and was providing electrical power. They were El Tulipan, La Coma and La Villita # 4.

The hearing before the Commission began on October 3, 1977. The hearing examiner filed his findings of fact on January 24, 1978, and they were adopted by the Commission in its order issued February 23, 1978. The order provided that PUB cease extending service to La Villita # 5 and transfer its facilities there to MVEC at actual cost; that MVEC be decertificated and PUB be singly certificated in El Tulipan, La Coma and La Villita # 4; and that PUB's application for additional certification in La Villita # 6, Esperanza Estates, Luna Vista and Garza Elementary School be denied. The City of Brownsville and PUB appealed to the district court, and after a full trial the district court found that the order of the Commission was supported by substantial evidence and affirmed it in all respects. PUB's appeal raises eleven points of error which contend that the order of the Commission and the judgment of the trial court affirming the order are erroneous and that the judgment must be reversed.

The first two points raise the questions whether PUB was required to obtain a certificate of convenience and necessity before furnishing electrical power to customers in the area singly certificated to MVEC, and whether MVEC was "lawfully furnishing service" to the territory in question within the meaning of the Public Utility Regulatory Act by virtue of the fact that it was certificated in that territory and was willing and able to provide electric power, even though it was not actually then providing power to a consuming facility located in that area.

Section 50(2) of the Public Utility Regulatory Act provides as follows:

"(2) Except as otherwise provided in this article no retail public utility may furnish, make available, render, or extend retail public utility service to any area to which retail utility service is being lawfully furnished by another retail public utility on or after the effective date of this Act, without first having obtained a certificate of public convenience and necessity that includes the area in which the consuming facility is located."

Section 50(2) is a part of Article VII, which is the only article of the Act which expressly applies to public utilities or public utility boards owned or operated by a municipality. For the purposes of Article VII, the term "retail public utility" is defined as including any municipality operating, maintaining or controlling facilities in Texas for providing retail utility service. Thus, by the express provisions of Article VII and particularly Section 49, which defines retail public utility, and Section 50(2) PUB is required to secure a certificate of public convenience and necessity from the Commission before it extends its retail utility service into an area being lawfully served by another retail public utility. The main thrust of PUB's argument involves the interpretation of the phrase "furnishing service." It interprets the phrase to mean that at least one consuming facility in the area must be actually receiving electricity; otherwise, the area is open to the invading utility, even though certificated to another retail public utility. The Commission and the district court both concluded that MVEC was lawfully furnishing utility service to the territory in question, even though no customers had requested service and even though MVEC's lines were not physically connected to any retail consuming facility. It is undisputed that MVEC had installed all of the facilities and equipment necessary to serve the potential customers in the areas in question, and that at all pertinent times it was ready, willing and able to provide electric power to any customer within those areas.

We conclude that MVEC, a retail public utility singly certificated for service to the areas in question, being required by law to serve all the customers in that area, and which now has its facilities and equipment installed and ready to serve all customers who wish service, is "lawfully furnishing service to that area" as meant by Section 50(2), even though no customer was actually using electric power at the time in question. To hold otherwise would, in our judgment, defeat the manifest purpose of the Utility Regulatory Act, which was to establish a comprehensive regulatory system of public utilities. PUB's interpretation of Section 50(2) would frustrate the purposes of the certification process prescribed by the Act by rendering certification largely ineffective. It would promote a race by utilities to connect customers, resulting in wasteful duplication of facilities and available service. New service connections would not necessarily go to the certificated utility, but to the utility which was the quickest to extend its lines and facilities and persuade customers to accept its service. The phrase "being lawfully furnished" need not mean only that electric power or some other utility product is being actually used. In the larger sense, "furnished" means to provide or make available, implying some degree of active effort to accomplish a desired end. Black's Law Dictionary (4th ed. 1951). The definition of "service" contained in the Act is also helpful in determining its intention. The Act provides that,

"... 'Service' is used in this Act in its broadest and most inclusive sense, and includes any and all acts done, rendered, or performed and any and all things furnished or supplied, and any and all facilities used, furnished, or supplied by public utilities in the performance of their duties under this Act ...". (Emphasis added.)

Thus, service is defined in terms of acts, things and facilities, not merely in terms of electric power or other utility products.

PUB argues that Section 50(2), by referring to a consuming facility located in an area, intended to require that there be at least one facility receiving electric power before certification of an invading municipal utility would be required. We cannot give the Act that interpretation. The existence of a consuming facility is not the trigger of the Act's provisions. Consuming facility, as used in Section 50(2), refers to the facility sought to be served by the invading utility, not a facility being served by the certificated utility. Stated another way, the Act means that a utility cannot serve a facility in an area where service is being lawfully furnished by another utility...