Entergy Texas, Inc.// Office of Public Utility Counsel and Public Utility Commission of Texas v. Public Utility Commission of Texas and Texas Industrial Energy Consumers// Office of Public Utility Counsel and Entergy Texas, Inc.
03-14-00735-CV
| Tex. App. | Apr 30, 2015Background
- Entergy Texas, Inc. (ETI) sought reconciliation of fuel revenues and actual fuel costs for July 1, 2009–June 30, 2011; fuel factors in effect during that period used Commission‑approved 1997 line‑loss factors.
- Cities intervenor argued ETI should reallocate incurred fuel costs using a 2010 line‑loss study (newer study), shifting ~$3.98 million of retail allocation to wholesale.
- The ALJs recommended using the loss factors that were approved and used when customers were billed (1997 study); the Commission instead ordered use of the 2010 study for reconciliation.
- ETI obtained district court review; the district court reversed the Commission on the fuel allocation issue, finding the Commission violated its own rules requiring use of the same Commission‑approved loss factors for billing and reconciliation.
- Separately, Office of Public Utility Counsel (OPUC) contested ETI’s recovery of storm restoration costs (notably $13 million from a 1997 ice storm). The ALJs and the Commission found ETI made a prima facie case of prudence and denied OPUC’s proposed disallowances; the district court affirmed the Commission on storm costs.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether reconciliation must use the same Commission‑approved line‑loss factors that were in effect when fuel factors were billed | ETI: Commission rules (25.236(e)(3) and 25.237) require symmetry — use the same approved loss factors for billing and reconciliation | Commission (and Attorney General/Cities): Commission can consider issues within reconciliation scope and use a contemporaneous (2010) study to reallocate costs | Court (district court) held for ETI: Commission erred; reconciliation must use the same Commission‑approved loss factors used during the billing period (reversal of PUCT on fuel allocation) |
| Whether the Commission can, in reconciliation, reallocate historical fuel costs among classes based on a newer line‑loss study | ETI: No — rules mandate using the loss factors that were approved and applied during the reconciliation period; agency has no discretion to contradict its rules | Commission: The reconciliation rule scope and fuel factor provisions allow adjustments and reconsideration using updated studies | Held: Agency must apply its rules consistently; the Commission’s contrary interpretation was rejected |
| Whether ETI’s 1997 ice storm restoration costs were prudently incurred and chargeable to the storm reserve | ETI: Presented testimony, procedures, granular storm‑cost data and rebuttal showing unpredictability of storm costs; made prima facie case of prudence | OPUC: Prior Commission service‑quality findings (Docket No. 18249) and passage of time justify disallowance; ETI failed to meet burden on specific charges | Held: Commission’s prudence finding for storm costs was supported by substantial evidence; district court affirmed (ETI prevailed on storm costs) |
| Admissibility of ETI’s 420‑page storm‑cost spreadsheet (optional completeness) | ETI: Entire spreadsheet should have been admitted under rule of optional completeness after portions were offered by OPUC | ALJs/Commission: Refused admission because ETI didn’t “reserve” right when excerpts were admitted | Held (as a conditional cross‑point): Commission erred in excluding the spreadsheet; rule of optional completeness does not require earlier reservation (ETI preserved error if court deems record insufficient) |
Key Cases Cited
- Atmos Energy Corp. v. Cities of Allen, 353 S.W.3d 156 (Tex. 2011) (statutory and rule interpretation should avoid absurd results)
- TGS‑NOPEC Geophysical Co. v. Combs, 340 S.W.3d 432 (Tex. 2011) (agency rule interpretation follows statutory construction principles; no deference to unreasonable agency reading)
- Entergy Gulf States, Inc. v. Public Util. Comm’n of Tex., 173 S.W.3d 199 (Tex. App. — Austin 2005) (describing fuel‑factor reconciliation framework and Commission practice)
- Central Power & Light Co. v. Public Util. Comm’n of Tex., 36 S.W.3d 547 (Tex. App. — Austin 2000) (agency is fact‑finder; courts do not reweigh evidence)
- El Paso Elec. Co. v. Public Util. Comm’n of Tex., 917 S.W.2d 846 (Tex. App. — Austin 1995) (collateral estoppel requires facts to have been fully and fairly litigated and essential to the prior judgment)
- Texas Indus. Energy Consumers v. CenterPoint Energy Houston Elec., LLC, 324 S.W.3d 95 (Tex. 2010) (specific provisions control over general when rules conflict)
- Railroad Comm’n of Tex. v. High Plains Natural Gas Co., 628 S.W.2d 753 (Tex. 1981) (agency must implement system permitting recovery of prudently incurred fuel expenses)