Oncor Electric Delivery Company LLC v. City of Richardson, Texas ( 2018 )

IN THE SUPREME COURT OF TEXAS
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NO. 15-1008
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CITY OF RICHARDSON, TEXAS, PETITIONER,
v.
ONCOR ELECTRIC DELIVERY COMPANY LLC, RESPONDENT
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ON PETITION FOR REVIEW FROM THE
COURT OF APPEALS FOR THE FIFTH DISTRICT OF TEXAS
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Argued September 12, 2017
JUSTICE GREEN delivered the opinion of the Court.
JUSTICE BLACKLOCK did not participate in the decision.
This case involves a dispute between a city and a utility over who must pay relocation costs
to accommodate changes to public rights-of-way. The City of Richardson negotiated a franchise
agreement with Oncor Electric Delivery Company LLC, requiring Oncor to bear the costs of
relocating its equipment and facilities to accommodate changes to public rights-of-way. Richardson
later approved the widening of thirty-two public alleys. Oncor refused to pay for the relocation of
its equipment and facilities to accomodate these changes. While the relocation dispute was pending,
Oncor filed an unrelated case with the Public Utility Commission (PUC), seeking to alter its rates.
That case was resolved by settlement, and the resulting rate change was filed as a tariff with the
PUC. Richardson enacted an ordinance consistent with the tariff, which included the following pro-
forma provision: “Retail Customer, or the entity requesting such removal or relocation, shall pay to
Company the total cost of removing such Delivery System Facilities.” Oncor relied on this language
to support its refusal to pay relocation costs.
We must decide whether a pro-forma provision in a tariff, which sets the rates and terms for
a utility’s relationship with its retail customers, trumps a prior franchise agreement, which reflects
the common law rule requiring utilities to pay public right-of-way relocation costs. We conclude
that the provision at issue does not conflict with either the prior franchise agreement or the common
law and that the franchise agreement controls as to the relocation costs at issue. Accordingly, we
reverse the judgment of the court of appeals and reinstate the trial court’s judgment in favor of
Richardson.
I. Background
In 2002, the Public Utility Regulation Act (PURA), which established a comprehensive
regulatory system for public utilities, was amended to implement a competitive retail market for
electricity in Texas. Public Utility Regulation Act, 76th Leg., R.S., ch. 405, § 39, 1999 Tex. Gen.
Laws 2543, 2558 (current version at TEX. UTIL. CODE. tit. 2); Oncor Elec. Delivery Co. LLC v. Pub.
Util. Comm’n of Tex., 507 S.W.3d 706, 708 (Tex. 2017). PURA requires each electricity utility to
separate its business activities into three units: (1) a power generation company,1 (2) a retail electric
1
“‘Power generation company’ means a person . . . that (A) generates electricity that is intended to be sold at
wholesale . . . ; (B) does not own a transmission or distribution facility in this state . . . ; and (C) does not have a certified
service area . . . .” TEX. UTIL. CODE §31.002(10).
2
provider,2 and (3) a transmission and distribution utility (TDU).3 TEX. UTIL. CODE §39.051(b).
Under PURA, TDUs continue to be regulated by the PUC following deregulation. Id. § 33.001
(establishing the PUC’s jurisdiction over an electric utility); id. § 31.002(6) (defining “electric
utility” to include TDUs, but expressly excluding power generation companies and retail electric
providers); Oncor, 507 S.W.3d at 709. Oncor is a TDU created as part of TXU Electric Company’s
unbundling. Oncor, 507 S.W.3d at 709–10.
As a home-rule city, Richardson has “exclusive original jurisdiction over the rates,
operations, and services of an electric utility in areas in the municipality,” which is in Dallas and
Collin Counties, as well as “exclusive control over and under the public highways, streets, and alleys
of the municipality.” TEX. UTIL. CODE § 33.001; see TEX. TRANSP. CODE § 311.001. This exclusive
jurisdiction over electric utilities and public rights-of-way gives home-rule cities authority to grant
franchises to utilities for the transmission and distribution of electricity, by which a utility obtains
use of a city’s streets, alleys, highways, and public grounds. TEX. UTIL. CODE §§ 14.008, 33.001;
TEX. TRANSP. CODE § 311.071. A utility’s use of these public rights-of-way is “subject to the
direction of the governing body of the municipality.” TEX. UTIL. CODE §181.043.
In 2006, pursuant to this statutory authority, the Richardson City Council approved
Ordinance No. 3559 (the “Franchise Ordinance”), granting TXU Electric Delivery Company,
predecessor to Oncor, a franchise to use Richardson’s public rights-of-way for the transmission and
2
“‘Retail electric provider’ means a person that sells electric energy to retail customers in this state. A retail
electric provider may not own or operate generation assets.” TEX. UTIL. CODE §31.002(17).
3
“‘Transmission and distribution utility’ means a person . . . that owns or operates for compensation in this state
equipment or facilities to transmit or distribute electricity . . . .” TEX. UTIL. CODE §31.002(19).
3
distribution of electric power. As required to make the franchise effective, TXU formally accepted
the Franchise Ordinance in writing; therefore, the Franchise Ordinance, along with TXU’s written
acceptance, became the Franchise Contract.4
By nature, a franchise agreement represents the unique conditions a city requires of a utility
in exchange for the utility’s right to operate within the city. Here, the Franchise Contract
incorporated a conventional right-of-way ordinance (the “ROW Ordinance”) requiring the utility,
upon written notice from Richardson, to remove or relocate “at its own expense” any facilities
placed in public rights-of-way. In pertinent part, the Franchise Contract reads:
Chapter 20, Article V of the City Code of Ordinances [ROW Ordinance], as now
existing or as the same may be adopted, supplemented, amended or revised
(“Construction in the Public Rights-of-Way Ordinance”), is incorporated by
reference. The Electric Delivery Utility shall comply with all ordinances, rules and
regulations of the City to the extent that such City ordinances, rules and regulations
do not conflict with the provisions of this Franchise. This Franchise agreement shall
in no way impair the rights, obligations or remedies of the parties under [PURA], or
other state or federal law. . . .
....
The City reserves the right for any reason whatsoever to use, to change the
grade of, construct, install, repair, alter, maintain, relocate, modify, close, reduce, or
widen (collectively “to change”) any Public Right-of-Way, within the present or
future limits of the City. At the City’s request the Electric Delivery Utility shall
4
Texas courts construe franchise agreements established by ordinance as contracts. See, e.g., City of Houston
v. Williams, 353 S.W.3d 128, 136–37 (Tex. 2011) (recognizing that municipalities often contract with third parties
through ordinance, and that when such an ordinance evidences a contract, it should be construed as one); S. Union Co.
v. City of Edinburg, 129 S.W.3d 74, 76, 84–85 (Tex. 2003) (holding that a franchise agreement between a municipality
and a gas company was “embodied” in a city ordinance, and construing that ordinance as a contract). This interpretation
is not limited to this jurisdiction. E.g., City of Wichita, Kan. v. Sw. Bell Tel., 24 F.3d 1282, 1286–88 (10th Cir. 1994)
(holding that the defendant had effectively created an enforceable contract between itself and the city by agreeing to
operate its system under the terms of the ordinance).
4
relocate or remove Facilities in order to accommodate such change of any Public
Right-of-Way.5
The incorporated ROW Ordinance reads, “If the city gives written notice, a person shall, at its own
expense, temporarily or permanently remove, relocate, change, or alter the position of person’s
facilities that are in the public rights-of-way within 120 days . . . .”
The ROW Ordinance, and its incorporation into the Franchise Contract, is not unique.
Rather, it reflects a longstanding common law principle that “a utility forced to relocate from a
public right-of-way must do so at its own expense.” Sw. Bell Tel., L.P. v. Harris Cty. Toll Rd., 282
S.W.3d 59, 62 (Tex. 2009); see also State v. City of Austin, 331 S.W.2d 737, 741 (Tex. 1960) (“In
the absence of assumption by the state of part of the expense, it is clear that [utilities] could be
required to remove at their own expense any installations owned by them and located in public rights
of way whenever such relocation is made necessary by highway improvements.”).
The Legislature adopted this principle in the Texas Utilities Code. Section 37.101(c) of
PURA provides that “[t]he governing body of a municipality may require an electric utility to
relocate the utility’s facility at the utility’s expense to permit the widening or straightening of a
street.” TEX. UTIL. CODE § 37.101(c). Section 181.047(c) of the Utilities Code contains almost
identical language: “The governing body of the municipality may require the electric utility to
5
Section 2 of the Franchise Ordinance defines key terms:
“Public Rights-of-Way” shall mean streets, alleys, utility easements (other than private easements
obtained by the Electric Delivery Utility) and rights-of-ways of the City and above and beneath the
surface thereof as they may now or hereafter may exist, and other municipal property to the extent an
electric utility is authorized by Texas Utilities Code, Sec. 181.042 to use such municipal property.
“Facilities” shall mean electric power lines, with all necessary or desirable appurtenances
(including underground conduits, poles, towers, wires, transmission lines and other structures, and
telephone and communication lines for its own use), for the purpose of supplying electricity to the
City, the inhabitants thereof, and persons, firms and corporations beyond the corporate limits thereof.
5
relocate a pole or line, at the utility’s own expense, to allow the widening or straightening of a
street.” Id. § 181.047(c).
Between 2006 and 2010, Oncor complied with this provision of the Franchise Contract.
Richardson points to thirty-four instances in which Richardson asked Oncor to accommodate
changes to public rights-of-way and Oncor did so at its own expense.
In 2010, Richardson approved the widening of thirty-two public alleys, requiring the
relocation of approximately 150 electric utility poles and facilities (the “Alley-Relocation Project”).
This time, Oncor refused to pay for the relocation, claiming it had no obligation to do so. While the
cost allocation of this relocation was still in dispute, Oncor filed an unrelated case with the PUC,
seeking to alter its rates, operations, and services. Tex. Pub. Util. Comm’n, Application of Oncor
Elec. Delivery Co., LLC for Authority to Change Rates, Docket No. 38929 (Aug. 26, 2011). That
case was resolved by a settlement negotiated between Oncor and the Steering Committee of Cities
Served by Oncor (the “Steering Committee”).6 The PUC approved the settlement, and Richardson
enacted Ordinance No. 3823, adopting Oncor’s tariff (the “Tariff”) as modified by the settlement.
“Tariff” is defined as “the schedule of a utility . . . containing all rates and charges stated
separately by type of service, the rules and regulations of the utility, and any contracts that affect
rates, charges, terms or conditions of service.” 16 TEX. ADMIN. CODE § 25.5(131). A tariff filed
with the PUC governs a utility’s relationship with its customers, and it is given the force and effect
of law until suspended or set aside. Sw. Elec. Power Co. v. Grant, 73 S.W.3d 211, 217, 222 (Tex.
2002) (holding that a filed tariff approved by the PUC is more than a “mere contract”; rather, such
6
The Steering Committee is a coalition of 156 municipalities, each served by Oncor. The Steering Committee
intervenes and participates in PUC proceedings that affect electric rates and services within its municipalities. It was
an active participant in Oncor’s rate case with the PUC.
6
a tariff “acquires the force and effect of law”). Thus, “a utility’s obligations to its customers cannot
exceed its duties under a filed tariff.” Id. PURA requires electric utilities to file a tariff with the
PUC, as well as with each municipality that has retained original jurisdiction over the utility. TEX.
UTIL. CODE § 32.101. In keeping with this requirement, Oncor already had a tariff on file in 2006
when it negotiated the Franchise Contract with Richardson.7
Each tariff filed with the PUC contains certain provisions that are specific to the filing utility.
However, the PUC’s rules also contain a “pro-forma tariff,” the provisions of which must be
incorporated exactly as written into each utility’s tariff.8 16 TEX. ADMIN. CODE § 25.214(b)–(d).
In other words, every TDU in the state has the same pro-forma tariff provisions in their filed tariff.
The following provision is at issue in this case:
5.7.8 REMOVAL AND RELOCATION OF COMPANY’S FACILITIES AND
METERS
Company may remove or relocate Company facilities and the Meter at Retail
Customer’s request unless doing so would create a safety hazard or would be
incompatible with providing safe and reliable Delivery Service. Retail Customer,
or the entity requesting such removal or relocation, shall pay to Company the total
cost of removing or relocating such Delivery System facilities in accordance with
Chapter 6 [which describes specific rates and charges].
Id. Oncor relied on section 5.7.8 of the Tariff to argue that it had been relieved of its duty to pay
for relocation costs under the Franchise Contract. Notably, however, because of the PUC’s pro-
forma tariff requirement, identical language was already on file in 2006 when the parties entered
into the Franchise Contract. In fact, in Oncor’s response to Richardson’s first requests for
7
Oncor serves 402 cities in Texas. It has one tariff filed with the PUC, which is adopted by each city it serves.
8
Under the PUC’s rules, TDUs can modify Chapters 2 and 6 of the pro-forma tariff through rulemaking, but
Chapters 1, 3, 4, and 5 must be used exactly as written. 16 TEX. ADMIN. CODE § 25.214(c). The language at issue
appears in Chapter 5 of the pro-forma tariff. See id. § 25.214(d).
7
admission, Oncor admitted that its January 2011 Statement of Intent to change rates did not propose
any revisions to the wording or application of section 5.7.8 of Oncor’s tariff. Nor were any
revisions proposed concerning relocations or the party to bear costs for relocations. When asked
during oral argument why it paid for previous relocations under the earlier tariff, Oncor claimed
that those payments were made by mistake.
Richardson sued Oncor for breach of contract, arguing that Oncor’s refusal to pay relocation
costs violated the Franchise Contract as well as established common law principles and Texas
statutory law requiring a utility to pay for relocations from a public right-of-way. See generally
TEX. UTIL. CODE §§ 37.101(c), 181.047(c); Harris Cty. Toll Rd., 282 S.W.3d at 62 (“[U]nder the
‘long-established common law principle . . . a utility forced to relocate from a public right-of-way
must do so at its own expense.’”). Oncor filed a counterclaim, also alleging breach of contract.
It argued that the Tariff controls in the event of a conflict between its terms and those in any other
ordinance or agreement, such as the Franchise Contract. Both parties filed motions for summary
judgment. The trial court granted Richardson’s motion and denied Oncor’s motion.
The court of appeals reversed and rendered judgment in favor of Oncor, concluding that
Richardson was party to the Tariff “because it agreed to be bound by it when it enacted Ordinance
No. 3823, which adopted the Tariff,” ___ S.W.3d ___, ___ (Tex. App.—Dallas 2015, pet. granted),
and that “section 5.7.8 of the Tariff is a law, which the ‘Franchise [Contract] shall in no way affect
or impair.’” Id. at ___. We granted Richardson’s petition for review. 60 Tex. Sup. Ct. J. 650 (Apr.
3, 2017).
8
II. Standard of Review
9
We review the trial court’s summary judgment de novo. Provident Life & Accident Ins. Co.
v. Knott, 128 S.W.3d 211, 215 (Tex. 2003). A traditional motion for summary judgment requires
the moving party to show that no genuine issue of material fact exists and that it is entitled to
judgment as a matter of law. TEX. R. CIV. P. 166a(c); Provident Life, 128 S.W.3d at 215–16.
On cross-motions for summary judgment, each party bears the burden of establishing that
it is entitled to judgment as a matter of law. City of Garland v. Dallas Morning News, 22 S.W.3d
351, 356 (Tex. 2000). When the trial court grants one motion and denies the other, the reviewing
court must determine all questions presented and render the judgment that the trial court should
have rendered. Id.
III. Analysis
As noted by the court of appeals, “[b]oth parties agree the narrow legal issue of this appeal
is whether Oncor or [Richardson] is responsible for the costs of relocating Oncor’s electric utility
poles, wires, and related equipment in [Richardson’s] public alleys so [Richardson] can widen the
alleys.” ___ S.W.3d at ___. In other words, we must decide whether the Tariff changed the status
quo and relieved Oncor of its obligation to pay relocation costs.
Before the Alley-Relocation Project, Richardson and Oncor both operated in compliance
with the Franchise Contract’s requirement that Oncor bear the costs of right-of-way relocations.
Now the parties rely on different sentences of the Franchise Contract, as well as contrasting
interpretations of common law and PURA, each arguing that the other has to pay for the relocation.
We conclude that the Tariff does not apply to the public right-of-way relocation costs at issue, and
thus is not in conflict with the common law rule, statutory law governing relocations, or the
10
Franchise Contract. Therefore, with respect to the Alley-Relocation Project, the Tariff did not alter
the parties’ responsibilities for relocation costs, and thus the Franchise Contract controls.
A. The Traditional Rule
The Franchise Contract is consistent with both well-established common law and PURA
in requiring Oncor to pay for right-of-way relocation costs. Traditionally, a utility forced to
relocate facilities from a public right-of-way is required to do so at its own expense. Harris Cty.
Toll Rd., 282 S.W.3d at 62. This principle—embodied in the common law, e.g., id., and echoed
in the Utilities Code, TEX. UTIL. CODE §§ 37.101(c), 181.047(c)—is reflected in the language of
the Franchise Contract, which incorporates the ROW Ordinance.
1. Common Law
Under the common law, a utility’s right to use a city’s public rights-of-way is permissive
and is subordinate to the public use of such rights-of-way. Harris Cty. Toll Rd., 282 S.W.3d at
62–63. This Court has traced this principle back at least as far as 1913, when we held that the
effect of limiting language in a grant to telephone companies was “to declare the right of the public
to be superior to the rights granted to the corporation.” Id. at 63 (citing Brownwood v. Brown Tel.
& Tel. Co., 157 S.W. 1163, 1165 (Tex. 1913)). “The main purposes of roads and streets are for
travel and transportation, and while public utilities may use such roads and streets for the laying
of their telegraph, telephone and water lines, and for other purposes, such uses are subservient to
the main uses and purposes of such roads and streets.” Id. (quoting City of San Antonio v. Bexar
Metro. Water Dist., 309 S.W.2d 491, 492 (Tex. Civ. App.—San Antonio 1958, writ ref’d)).
Based on this principle, Texas has adopted the common law rule that “a utility forced to
relocate from a public right-of-way must do so at its own expense.” Id. at 62 (quoting Norfolk
11
Redevelopment & Hous. Auth. v. Chesapeake & Potomac Tel. Co., 464 U.S. 30, 34 (1983)). This
rule is neither new, nor is it unique to Texas. See Norfolk, 464 U.S. at 35 (“Under the traditional
common law rule, utilities have been required to bear the entire cost of relocating from a public
right-of-way whenever requested to do so by state or local authorities.”); City of Austin, 331 S.W.2d
at 741 (“[I]t is clear that [utilities] could be required to remove at their own expense any
installations owned by them and located in public rights of way whenever such relocation is made
necessary by highway improvements.”). This Court has also cited favorably to a local government
treatise, which provides:
Under the traditional common law rule, and in the absence of an agreement or statute
to the contrary, whenever state or local authorities make reasonable requests of a
public utility to relocate, remove or alter its structures or facilities, the utility must
bear the cost of doing so, even though the public utility may be operating pursuant
to franchise from the local government.
Harris Cty. Toll Rd., 282 S.W.3d at 62 (quoting 2 SANDRA M. STEVENSON, ANTIEAU ON LOCAL
GOVERNMENT LAW, § 28.09[3] (2d ed. 2008)). Indeed, that treatise also states that “[l]ocal
government franchises are accepted by utilities on the implied condition that they will relocate their
facilities at their own expense when necessary to make way for needed governmental
improvements.” STEVENSON, supra § 28.02 (emphasis added).
2. Statutory Law
The Utilities Code recognizes electric utilities’ right to “construct, maintain, and operate
lines” in public rights-of-way, subject to the “consent of and subject to the direction of the governing
body of the municipality.” TEX. UTIL. CODE §§ 181.042, 181.043(a). Thus, as at common law,
under Texas statutory law a city retains the right to set the terms of use of its public rights-of-way,
including the right to require the utility to bear relocation costs.
12
PURA echoes the common law rule that utilities bear the costs of right-of-way relocation.
In pertinent part, PURA provides that “[t]he governing body of a municipality may require an
electric utility to relocate the utility’s facility at the utility’s expense to permit the widening or
straightening of a street.” Id. § 37.101(c). Similarly, section 181.047(c) of the Utilities Code
provides that “[t]he governing body of the municipality may require the electric utility to relocate
a pole or line, at the utility’s own expense, to allow the widening or straightening of a street.” Id.
§ 181.047(c).
Oncor argues that the Legislature’s use of “street” and not “alley” is significant and
precludes these statutes from applying to alleys. Specifically, Oncor points out that section
37.101(b) grants electric utilities the right to use “roads, streets, highways, alleys, and public
property,” while section 37.101(c) only requires an electric utility to relocate at its own expense to
permit the widening of a “street.” Id. § 37.101(b), (c). Oncor argues that the rules of statutory
construction require us to read this exclusion in section 37.101(c) as intentional. “It is a rule of
statutory construction that every word of a statute must be presumed to have been used for a
purpose. Likewise, we believe every word excluded from a statute must also be presumed to have
been excluded for a purpose.” Cameron v. Terrell & Garrett, Inc., 618 S.W.2d 535, 540 (Tex. 1981)
(citation omitted). It follows, then, that “[w]hen the Legislature employs a term in one section of
a statute and excludes it in another section, the term should not be implied where excluded.”
Laidlaw Waste Sys. (Dallas), Inc. v. City of Wilmer, 904 S.W.2d 656, 659 (Tex. 1995).
In response, Richardson contends that “‘street’ is a general term” that encompasses alleys
and other transportation thoroughfares. Kalteyer v. Sullivan, 46 S.W. 288, 290 (Tex. Civ.
App.—San Antonio 1898, writ ref’d n.r.e.) (“A way over land set apart for public travel in a town
13
or city is a street, no matter what it may be called. . . . ‘Street’ is a general term, and includes all
urban ways which can be and are generally used for the ordinary purposes of travel.”).9 Richardson
points to other Texas statutes to support this interpretation, albeit circuitously. By Richardson’s
logic, “highway” includes an “alley,” TEX. TRANS. CODE § 312.001(1), and “street” includes a
“highway,” TEX. LOCAL GOV’T CODE § 214.131(1); therefore, “street” must necessarily include
“alley.”
A statute’s unambiguous language controls. Paxton v. City of Dallas, 509 S.W.3d 247, 257
(Tex. 2017). “When a statute is clear and unambiguous . . . we do not resort to extrinsic interpretive
aids, such as legislative history, ‘because the statute’s plain language is the surest guide to the
Legislature’s intent.’” Id. (quoting Sullivan v. Abraham, 488 S.W.3d 294, 299 (Tex. 2016)).
Furthermore, words not statutorily defined bear their common, ordinary meaning unless a more
precise definition is apparent from the statutory context or the plain meaning yields an absurd result.
Id. at 256.
A statute is ambiguous if “its words are susceptible to two or more reasonable interpretations
and we ‘cannot discern legislative intent in the language of the statute itself.’” Tex. State Bd. of
Exam’rs of Marriage & Family Therapists v. Tex. Med. Ass’n, 511 S.W.3d 28, 41 (Tex. 2017)
(quoting Tex. Lottery Comm’n v. First State Bank of DeQueen, 325 S.W.3d 628, 639 (Tex. 2010)).
Here, the parties disagree about whether “streets” includes “alleys” in common parlance. Oncor
points to the Legislature’s use of the words separately to argue that the two are entirely different,
while Richardson points to a number of instances in which the terms are used interchangeably or are
defined to include each other.
9
Kalteyer describes an alley as “[a] narrow way, less in size than a street,” and “if the alley is a public one, it
is a highway, and, in general, is governed by the rules applicable to streets.” 46 S.W. at 290.
14
“To determine a statutory term’s common, ordinary meaning, we typically look first to [its]
dictionary definitions . . . .” Id. at 35. One of the many dictionary definitions of “alley” is “a narrow
street.” See Alley, WEBSTER’S THIRD NEW INTERNATIONAL DICTIONARY (1986); see also Alley,
AMERICAN HERITAGE DICTIONARY OF ENGLISH LANGUAGE (5th ed. 2016). This, of course, is far
from conclusive. Other dictionaries do not define “alley” as a type of street, e.g., Alley, NEW
OXFORD AMERICAN DICTIONARY (3rd ed. 2010), and Black’s Law Dictionary does not define
“alley” at all. See BLACK’S LAW DICTIONARY (10th ed. 2014). We have held that when an
undefined statutory term has multiple common meanings, “it is not necessarily ambiguous; rather,
we will apply the definition most consistent with the context of the statutory scheme.” Sw.
Royalties, Inc. v. Hegar, 500 S.W.3d 400, 405 (Tex. 2016).
Looking to the statutory scheme, we find particularly relevant the Legislature’s recognition
of the broad authority afforded to home-rule cities. As a home-rule city, Richardson has “exclusive
original jurisdiction over the rates, operations, and services of an electric utility in areas in the
municipality,” TEX. UTIL. CODE § 33.001, as well as “exclusive control over public highways,
streets, and alleys of the municipality.” TEX. TRANSP. CODE § 311.001(a). The Legislature
explicitly recognizes home-rule cities’ power to grant a franchise “to use or occupy a public street
or alley of the municipality.” Id. § 311.071. The Utility Code makes it clear that an electric utility’s
right to use “a state highway, a county road, a municipal street or alley, or other public property in
a municipality” is subject to the consent and direction of the city. TEX. UTIL. CODE §§
181.042–.043.
Furthermore, we have held that in the context of home-rule cities, the recognition of a
specific power does not imply that the other powers are forbidden: “Home-rule cities possess the
15
full power of self government and look to the Legislature not for grants of power, but only for
limitations on their power.” Dallas Merch.’s & Concessionaire’s Ass’n v. City of Dallas, 852
S.W.2d 489, 490–91 (Tex. 1993); see also BCCA Appeal Grp., Inc. v. City of Houston, 496 S.W.3d
1, 13 (Tex. 2016) (noting that because a city’s powers are “otherwise vested by law,” the Legislature
“does not grant authority to home-rule cities but only limits home-rule cities’ authority”). Such a
limitation exists “only when a statute speaks with ‘unmistakable clarity,’” which is certainly not the
case here. City of Galveston v. State, 217 S.W.3d 466, 469 (Tex. 2007). This is reinforced in PURA
itself: “This title does not restrict the rights and powers of a municipality to grant or refuse a
franchise to use the streets and alleys in the municipality.” TEX. UTIL. CODE § 14.008.
Given this context, we cannot conclude that the Legislature intended to strip municipalities
of their common law right to require utilities to bear relocation costs in all manner of public rights-
of-way, including roads, streets, alleys, and highways. Absent greater clarity from the Legislature
to abrogate this right, the Legislature’s express recognition of a municipality’s right to have the
utility pay for the relocation on a street does not forbid a municipality from also requiring the utility
to pay for a relocation along an alley, highway, or other transportation thoroughfare. Cf. Sw.
Royalties, Inc., 500 S.W.3d at 406 (holding that a statute was not ambiguous within the context of
the statutory scheme, even though certain terms, in isolation, were subject to multiple common
meanings).
3. The Franchise Contract
Consistent with both the common law rule and PURA, the Franchise Contract negotiated
between Richardson and Oncor’s predecessor dictates in no uncertain terms that Oncor must pay the
16
costs of relocation in public rights-of-way. Specifically, the Franchise Contract incorporates the
ROW Ordinance (Chapter 20, Article V of the City Code of Ordinances): “If the city gives written
notice, a person shall, at its own expense, temporarily or permanently, remove, relocate, change, or
alter the position of person’s facilities that are in the public rights-of-way within 120 days . . . .” The
Franchise Contract also explicitly defines “Public Rights-of-Way” to include streets and alleys.
However, the Franchise Contract continues: “This franchise agreement shall in no way affect
or impair the rights, obligations or remedies of the parties under [PURA], or other state or federal
law.” Thus, the Franchise Contract should not be read as inconsistent with PURA’s relocation
provisions. And if any law requires Richardson to pay relocation costs, that law would trump the
Franchise Contract’s inclusion of the ROW Ordinance.
Oncor argues that both PURA section 37.101(c) and the Tariff are laws requiring Richardson
to pay relocation costs, and thus, either controls over the Franchise Contract and the ROW
Ordinance. We disagree. As discussed above, Richardson, a home-rule city, has the full power of
self-government and exclusive control over its public rights-of-way. This power includes the
common law right to require utilities to pay right-of-way relocation fees to accommodate changes
to public rights-of-way. This power may be limited “only when a statute speaks with ‘unmistakable
clarity.’” City of Galveston, 217 S.W.3d at 469. Neither section 37.101 of the Utilities Code nor
the Tariff unmistakably requires Richardson to bear the cost of the relocation.
B. The Tariff
Oncor argues that the Tariff controls over the Franchise Contract because it carries the
weight of a state law, which the Franchise Contract “shall in no way impair.” In addition, Oncor
argues that the Tariff controls because it is a freely negotiated agreement that reflects Richardson’s
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consent to pay relocation expenses and discharges Oncor’s relocation expense obligations under the
Franchise Contract.
Under the “filed-rate doctrine,” a tariff filed with and approved by an administrative agency
under a statutory scheme is more than a “mere contract.” Grant, 73 S.W.3d at 216–17, 222. Such
a tariff “acquires the force and effect of law and governs [a utility]’s relationship with its
customers,” id. at 222, and it is presumed reasonable unless a litigant proves otherwise. Id. at 216.
It follows that the Tariff might indeed trump the Franchise Contract, by virtue of the “shall in no
way impair” language, if the Tariff conflicts with the Franchise Contract.
In addition, the Tariff states that “all ordinances of [Richardson] in conflict with the
provisions of this ordinance be, and the same are hereby, repealed.” Thus, assuming that the Tariff
does represent an agreement between the parties, as Oncor contends, the Franchise Contract would
be abrogated by the Tariff to the extent that the two contracts do in fact conflict. Therefore, the
critical inquiry under either of Oncor’s arguments is whether the Tariff conflicts with the Franchise
Contract as to the parties’ obligations to pay relocation expenses. We hold that it does not.
“[A] general law and a city ordinance will not be held repugnant to each other if any other
reasonable construction leaving both in effect can be reached.” BCCA Appeal Grp., Inc., 496
S.W.3d at 7. We look first, then, for a reasonable construction that harmonizes the Franchise
Contract and the Tariff. In this case, a conflict between the two would limit Richardson’s home-rule
power to control the use of its public rights-of-way, as well as its power to widen or change those
rights-of-way to accommodate public travel and transportation. We have already held that such
power may be limited “only when a statute speaks with ‘unmistakable clarity.’” City of Galveston,
217 S.W.3d at 469. Therefore, even if the Tariff carries the force and effect of law, the language
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of the Tariff will control only if it expresses with “unmistakable clarity” the intent that Richardson
pay relocation costs associated with the Alley-Relocation Project. Id.; BCCA Appeal Grp., Inc., 496
S.W.3d at 7–8.
The language in Tariff section 5.7.8 does not unmistakably address the relocation costs at
issue in this case. Both the plain language and the context of the section indicate that the provision
applies to “Retail Customers.” Section 5.7.8, which is found in chapter 5 (titled “Service Rules and
Regulations Relating to the Provision of Delivery Service to Retail Customers”), requires that
“Retail Customer, or the entity requesting such removal or relocation, shall pay to Company the total
cost of removing or relocating such Delivery System facilities.” Chapter 1 of the Tariff defines
“Retail Customer” as “an end-use customer who purchases Electric Power and Energy and
ultimately consumes it.” Richardson argues that it does not meet the definition of “Retail Customer”
and therefore cannot be required to pay relocation expenses under the Tariff.
Certainly a governmental entity might be a “Retail Customer” in other contexts, and the
Tariff’s definition of “Retail Customer” is broad enough to cover those contexts.10 It is not difficult
to imagine a situation in which a city requesting relocation or removal of facilities would be subject
to Tariff section 5.7.8 without conflicting with the Franchise Contract or the common law rule
regarding right-of-way relocations. For example, a city might request the relocation or removal of
utility facilities on the grounds of a city courthouse undergoing expansion. In that instance, the city
would be the “end-use customer” and would have to bear the cost of such a relocation.
10
The Tariff specifies that in the context of construction services, “Retail Customer” includes “property owners,
builders, developers, contractors, governmental entities, or any other . . . entity . . . making a request for such services
to the Company.” (Emphasis added).
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Oncor argues that “entity requesting such removal” is broad enough to include Richardson
in all situations in which Richardson requests a relocation. However, the word “such” in this
provision influences our interpretation.11 “Such” indicates that this clause necessarily references the
first sentence of the provision: “Company may remove or relocate Company facilities and the Meter
at Retail Customer’s request . . . .” (Emphasis added). Because this provision relates to requests
by “Retail Customers,” properly defined as “end-use customers,” it limits the payment obligation
to the end-use customer requesting relocation to facilitate the expansion of its facilities. In a case
such as this, in which a city requests a relocation of facilities to accommodate changes to its public
rights-of-way in the promotion of public travel and transportation, the city is not acting as an “end-
use customer.” Cf. Harris Cty. Toll Rd., 282 S.W.3d at 62–63 (holding that “the main purposes of
roads and streets are for travel and transportation” and when a utility installs its facilities pursuant
to a statutory grant, it does so on the “implied condition that the structures shall not interfere . . .
with any other public use”). Of course, we do not read “entity requesting such removal or
relocation” as without meaning. Rather, this language addresses a situation in which a third party,
such as a general contractor, requests the relocation rather than the Retail Customer itself.
In sum, we hold that the Tariff does not express with “unmistakable clarity” an intent that
Richardson pay for the sort of right-of-way relocation costs at issue in this case.12 Instead, we
11
Tariff section 5.7.8 provides, “Company may remove or relocate Company facilities and the Meter at Retail
Customer’s request . . . . Retail Customer, or the entity requesting such removal or relocation, shall pay to Company
the total cost of removing or relocating such Delivery System facilities in accordance with Chapter 6 [which describes
specific rates and charges].” (Emphasis added).
12
Oncor argues that such a holding is inconsistent with City of Allen v. Public Utility Commission of Texas, 161
S.W.3d 195 (Tex. App.—Austin 2005, no pet.). In City of Allen, Oncor sought permits for projects that called for
overhead line distribution within Allen’s rights-of-way, which Allen denied based on city ordinances that required Oncor
to place the distribution lines underground at its own expense. Id. at 200–02. The court of appeals held that Allen had
exceeded its authority in adopting ordinances that were contrary to Chapter 5 of Oncor’s pro-forma tariff. Id. at 208–11.
Richardson argues that City of Allen is distinguishable from this case because it did not address a conflict between a tariff
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construe the Franchise Contract and the Tariff in harmony with one another. The Franchise Contract
controls when, as in this case, Richardson requests a relocation to accommodate changes to public
rights-of-way for transportation purposes. See City of Austin, 331 S.W.2d at 741 (holding that
utilities could be required to pay relocation costs from public rights-of-way “whenever such
relocation is made necessary by highway improvements”). Under such facts, Richardson is not
acting as an “end-use customer.” This is consistent both with common law and Texas statutory law.
The Tariff, on the other hand, controls when Richardson, acting as an end-use customer, requests
a relocation for the purposes of the city’s own facilities. Under the court of appeals’ contrary
holding, the PUC’s rules, in establishing tariff provisions that are required for utility tariffs,
effectively abolish home-rule cities’ authority over public rights-of-way and give utilities
unchallengeable power to demand relocation costs merely by obtaining approval of their rates.
Because this language appears in every TDU’s tariff, such a holding would abrogate the common
law rule, adopted in PURA, under which utilities bear relocation costs when a city makes changes
to public rights-of-way to promote public travel and transportation. This would allow an agency’s
policy-making determination to override the Legislature’s policy pronouncements as well as the
public policy reflected in our longstanding common law. It defies reason that the PUC’s rules,
promulgated to implement PURA, could abolish the Legislative recognition of a home-rule city’s
authority to require a utility to pay right-of-way relocation costs. See R.R. Comm’n of Tex. v. Tex.
Citizens for a Safe Future & Clean Water, 336 S.W.3d 619, 625 (Tex. 2011) (recognizing that we
and a mutually negotiated franchise contract; instead, the ordinances in City of Allen were unilaterally adopted by Allen.
Also, Richardson argues that City of Allen dealt with non-standard undergrounding construction costs, for which there
is no established common law or statutory rule, rather than standard relocation costs, for which the common law is well-
settled. The issues raised in City of Allen have not been brought before this Court, and we do not decide them here.
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give some deference to an agency’s interpretation of an ambiguous statute so long as the agency’s
construction is reasonable).
IV. Conclusion
We hold that section 5.7.8 of the Tariff does not conflict with the Franchise Contract’s
requirement that Oncor pay the right-of-way relocation costs at issue here. As a home-rule city,
Richardson has exclusive control over its public rights-of-way and has authority to manage the terms
of use of those rights-of-way. Richardson did so in the Franchise Contract, which is consistent both
with well-established common law and with the Utilities Code in requiring a utility forced to
relocate facilities from a public right-of-way to do so at its own expense. The Tariff, on the other
hand, governs Oncor’s relationship with its Retail Customers, and does not address Richardson’s
relocations to accommodate the Alley-Relocation Project. For the reasons expressed above, we
reverse the judgment of the court of appeals and reinstate the judgment of the trial court.
Paul W. Green
Justice
Opinion delivered: February 2, 2018
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