CPS Energy, Time Warner Cable Texas LLC, and Southwestern Bell Telephone Company D/B/A AT&T// Public Utility Commission of Texas v. Public Utility Commission of Texas// Cross-Appellee, CPS Energy, Time Warner Cable Texas LLC and Southwestern Bell Telephone Company D/B/A AT&T ( 2015 )

ACCEPTED
03-14-00340-CV
5116335
THIRD COURT OF APPEALS
AUSTIN, TEXAS
5/1/2015 11:36:48 AM
JEFFREY D. KYLE
CLERK
No. 03-14-00340-CV
IN THE THIRD COURT OF APPEALS FILED IN
3rd COURT OF APPEALS
AUSTIN, TEXAS AUSTIN, TEXAS
5/1/2015 11:36:48 AM
APPELLANTS, CPS ENERGY, TIME WARNER CABLEJEFFREY
TEXASD.LLC,
KYLE
Clerk
AND SOUTHWESTERN BELL TELEPHONE COMPANY D/B/A AT&T//
CROSS-APPELLANT, PUBLIC UTILITY COMMISSION OF TEXAS
V.
APPELLEE, PUBLIC UTILITY COMMISSION OF TEXAS// CROSS-
APPELLEE, CPS ENERGY, TIME WARNER CABLE TEXAS LLC AND
SOUTHWESTERN BELL TELEPHONE COMPANY D/B/A AT&T
On appeal from D-1-GN-13-001238 (Consolidated)
in the 250th Judicial District Court, Travis County, Texas
CPS ENERGY'S BENCH NOTEBOOK
CPS ENERGY HERRERA & BOYLE, PLLC
Curt D. Brockmann Alfred R. Herrera
cdbrockmann@cpsenergy.com State Bar No. 09529600
aherrera@herreraboylelaw.com
145 Navarro 816 Congress Avenue, Suite 1250
P.O. Box 1771 Austin, Texas 78701
San Antonio, Texas 78296 (512) 474-1492 (Voice)
(210) 353-5689 (Voice) (512) 474-2507 (Facsimile)
(210) 353-6832 (Facsimile)
April 22, 2015
TAB 1
V.T.C.A., Transportation Code § 311.001
§ 311.001. General Authority of Home-Rule Municipality
Effective: June 19, 2009
(a) A home-rule municipality has exclusive control over and under the
public highways, streets, and alleys of the municipality.
(b) The municipality may:
(1) control, regulate, or remove an encroachment or obstruction on a public
street or alley of the municipality;
(2) open or change a public street or alley of the municipality; or
(3) improve a public highway, street, or alley of the municipality.
(c) Notwithstanding Subsection (a) or (b) or Section 311.007, before a
municipality with a population of 1.9 million or more may install traffic
calming measures within the municipality, the governing body of the
municipality must:
(1) publish standards and criteria, which must include sufficient notice to
allow the governing body to receive and consider public comments from
residents within one-half mile of the proposed traffic calming measure;
(2) on request of affected residents, schedule and hold a public meeting
before implementation of the measure; and
(3) if the measure involves the closure of a street to motor vehicular traffic,
before the closure:
(A) hold a public hearing on the issue of the closure; and
(B) approve the closure by a majority vote.
Court of Appeals No. 03-14-00340-CV CPS Energy's Bench Notebook
April 22, 2015
TAB 2
V.T.C.A., Government Code § 1502.001
§ 1502.001. Definitions
In this chapter:
(1) “Combined system” means any combination of one or more of the
following:
(A) an electric system;
(B) a water system;
(C) a sewer system;
(D) a solid waste disposal system;
(E) a drainage utility system; and
(F) a natural gas system.
(2) “Public security” has the meaning assigned by Section 1201.002.
(3) “Utility system” means an electric, water, sewer, solid waste disposal,
drainage utility, or natural gas system. The term includes one or more
combined systems.
Court of Appeals No. 03-14-00340-CV CPS Energy's Bench Notebook
April 22, 2015
TAB 3
V.T.C.A., Government Code § 1502.070
§ 1502.070. Management and Control of Utility System
Effective: May 18, 2013
(a) Management and control of a utility system may be vested in:
(1) the municipality’s governing body; or
(2) a board of trustees named in the proceedings adopted by the
municipality and consisting of not more than:
(A) five members, one of whom must be the mayor of the municipality;
(B) seven members, one of whom must be the mayor of the municipality,
if the municipality is located in a county:
(i) with a population of at least 800,000; and
(ii) that is located on an international border; or
(C) seven members, one of whom must be the mayor of the municipality,
if the municipality is located in a county:
(i) with a population of at least 375,000;
(ii) that is located on an international border; and
(iii) that borders the Gulf of Mexico.
(b) The compensation of the trustees shall be specified by the proceedings.
The compensation may not exceed five percent of the gross receipts of the
utility system in any year.
(c) The proceedings of the municipality may specify the terms of office of
the board of trustees, their powers and duties, the manner of exercising those
powers and duties, the election of successor trustees, and any matter relating
to the organization and duties of the board. On any matter not covered by the
proceedings, the board of trustees is governed by the laws and rules
governing the municipality’s governing body, to the extent applicable.
Court of Appeals No. 03-14-00340-CV CPS Energy's Bench Notebook
April 22, 2015
TAB 4
CITY OF SAN ANTONIO
City Council Controls Rights of
Way (ROWs)
ROW ROW
Agreements Agreements
TEX. GOV’T CODE
§ 1502.070
Pole Attachment Pole Attachment
Agreement Agreement
Governed by Independent Board of
Trustees
Enter into Pole Attachment
Agreements
Court of Appeals No. 03-14-00340-CV CPS Energy's Bench Notebook
April 22, 2015
TAB 5
,EXHIBIT
·. Jt~G-f.,Z.
'
Court of Appeals No. 03-14-00340-CV CPS Energy's Bench Notebook 34
April 22, 2015
TAB 5 ,
'Dda ....., ..,, •and 1Dto *-• zp
Til day or .Caerr. 19~ .,, ...d
bftW• * cn7 ot 1111 AlltoD:Lo, tau, IOt1111 'llraulb tile Cl PUblic:_" &enloe
BDI!ilrll or Ilia Jatala!D, 1 -loi.Pil board at said City, Jlere:lut'Mr called
•L:la.iiDr• lllld. loB..• C.bl••rnaa or texaa, Illc. b...1111ner called •uc:aaee .•
VITIISS!TR:
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ad...._. I!Cfll,.., ua• ill aoaa.Uaa · vs.t~a tile oper•tian ot Lle•se•••
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.rout U.•, ta .._ UAMaMr Mil or lr.....ttr llld1 aUIId taut
prf.Y.Iltip or 8ttuldft1 fiGilltiu t:o u.o.aor• • PDl••·
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alltala, •lid • • ... _ . llball auta.it:. to U..o••r, nldae•.
at:Utaot.i-7 :t:o L:lo._., or • traaald.R or Rllr eutllori&r autbar1Z118
ue.a... to .,.., •ad •mula tar tbe parpuea .., out la Seotb• 2
berad', ita taasuuu vltbiD t1aa publlo atre.u, b!P•r•. aUep,
ut:U:I.t:r .._ta, o~ 'borousllhr••· aad oa prbate propuot;r
diua'-1 1D Llo•IIDI"!a Mntee arM, 8114 ot ..., oth.. DeMss..r c:oaant
35
Court of Appeals No. 03-14-00340-CV CPS Energy's Bench Notebook
April 22, 2015
TAB 6
Attachmenfl
Joint Use Pole Contact Agreement
.EXHIBIT
I Tt&C-,{,g3
Court of Appeals No. 03-14-00340-CV CPS Energy's Bench Notebook
April 22, 2015
TAB 6
B. LESSOR, Joiat U.aers and OTHER LESSEES reserve the right to utilize and/or
maintain LESSOR"'S poles and ·· to operate their facilities thereon in such
manner 8#J will best enable them to fulfill their se~vic:e requirements.
UTict.i VI - Jl.Ic,;IJTS OF WAY P'Oll LESSEE'S ATlAQIMUTS
While the LESSOR aDd. tbe LES.SBE. will cooperate as far as .DU9' he practicable
in obtaiD.iqg rights of way for both parti.e& on joint poles, no .guarantee is gi.veo.
l!f the LBSSOB. &f perllission fro,.a property onera, IIIUnicipalities or others for
the use of iu poles by the LESSEE, and :l:f objection is ude thereto and the
LESSEE 1~ unable satisfactorily to adjust the matter within a reasonable time,
the LESSOR may :at any ti•e upon sizty (60) -days li.Otice ·i n wridng to the l,!SSU,
require the LESSEE to r..o~e its attachments f,roa the poies -!nirolved; .and the
LESSEE ·shall, within iix months aft~ r·ece:lpt of said notic.e, r .- .ve its
attac:hmenu from--~ch pol.es .at it.s .s.o le ez:pea.se.
AJXL~ VII - INta~BB&NeB
.ndle it is no.t foreseen, ·•·h euld tb-e - ~SSEE·'"'S a:peradou in ay way
inter.fere with l.ESSOB."'S ~erational functions or needs or if ·LB.SSEE"'S activities
constitute dis.r uption or interference, LESSOR shall have the rj,gbt to :l1111ediately
terminate ·the Agreeilent -and LESSEE will be -r equired to r~ve all equipment
within a Teasoaabl.e per:lod of t!•e at :tts sole eost.
``I~ VUI ... !V.UUNANC$ 01 POUS .ANll 4TT4c:aMUrS
The LESSOR thall maintain its joint poles in a safe and serviceable
~on:dit:l.on and in accordance with the spec:ificatiou mentioned in Article III and
shall repl~c:e said poles as tl:tey become defective. LESSIE'"'S rights 11nd.er ;his
5
Court of Appeals No. 03-14-00340-CV 53
CPS Energy's Bench Notebook
April 22, 2015
TAB 7 - SECTIONS OF UTILITIES CODE SHOWING DISTINCTION
BETWEEN DUTY TO “CHARGE” AND TO “COLLECT” A RATE
Sec. 17.002. DEFINITIONS. Sec. 33.008. FRANCHISE CHARGES.
In this chapter: (b) If a municipality collected a charge or fee
for a franchise to use a municipal street, alley, or public
(7) "Service provider" means any entity that offers a
way from an electric utility, a municipally owned utility,
product or service to a customer and that directly or
or an electric cooperative … is entitled to collect from
indirectly charges to or collects from a customer's bill an
each electric utility, transmission and distribution utility,
amount for the product or service on a customer's bill
municipally owned utility, or electric cooperative that
received from a billing utility.
uses the municipality's streets, alleys, or public ways to
Sec. 31.002. DEFINITIONS. provide distribution service a charge based on each
In this subtitle: … kilowatt hour of electricity delivered by the utility to
each retail customer whose consuming facility's point of
(15) "Rate" includes a compensation, tariff, charge, fare,delivery is located within the municipality's boundaries.
toll, rental, or classification that is directly or indirectly
demanded, observed, charged, or collected by an electric
utility for a service, product, or commodity described in the Sec. 36.403. STANDARDS AND PROCEDURES
definition of electric utility in this section and a rule, GOVERNING SECURITIZATION AND
practice, or contract affecting the compensation, tariff, RECOVERY OF SYSTEM RESTORATION
charge, fare, toll, rental, or classification that must be COSTS.
approved by a regulatory authority.
(f) For purposes of this subchapter,
"transition charges," … includes nonbypassable
amounts to be charged for the use of electric services,
Sec. 39.302. DEFINITIONS.
approved by the commission under a financing order
In this subchapter: to recover system restoration costs, that shall be
(7) "Transition charges" means nonbypassable collected by an electric utility, its successors, an
amounts to be charged for the use or availability of electric assignee, or other collection agents as provided for in
services, approved by the commission under a financing the financing order. …
order to recover qualified costs, that shall be collected by
an electric utility, its successors, an assignee, or other
collection agents as provided for in the financing order. Sec. 55.176. CHARGE FOR 800-TYPE CALLS.
(g) The commission may not impose on a local
Sec. 41.002. DEFINITIONS.
exchange company the duty or obligation to: …
In this chapter:
(2) bill or collect for the use of the pay
(2) "Rate" includes any compensation, tariff, telephone; …
charge, fare, toll, rental, or classification that is directly or
indirectly demanded, observed, charged, or collected by an (V.A.C.S. Art. 1446c-0, Sec. 3.2625(d).)
electric cooperative for any service, product, or commodity
and any rule, practice, or contract affecting the
compensation, tariff, charge, fare, toll, rental, or
classification
Sec. 64.002. DEFINITIONS.
In this chapter:
(5) "Service provider" means any entity that offers a
product or service to a customer and that directly or
indirectly charges to or collects from a customer's bill an
amount for the product or service on a customer's bill
received from a billing utility.
Court of Appeals No. 03-14-00340-CV CPS Energy's Bench Notebook
April 22, 2015
TAB 8 - Substantial Evidence In Record Supporting PUCT’s Finding That
Actual Data Supports Average Number of Attaching Entities of Three
1. “Unless attachers such as TWC have been making unauthorized attachments to
CPS Energy poles, there is no sound basis to the position that billing data presents
an inaccurate picture of the number of attachments.” - A. R. Part II of III, Binder
15, CPS Energy Ex. 18A, Rebuttal Testimony of Ricardo Lopez at 20:11-16.
2. “In this worst-case, hypothetical and unrealistic scenario, I took the smallest
possible number of poles with CPS Energy and at least one attaching entity. … I
then divided all billed attachments, plus all known COSA attachments, by
this smallest number of possible joint use poles.” - A. R. Part II of III, Binder
16, CPS Energy Ex. 19B, Supplemental Rebuttal Testimony of Ricardo Lopez
(Confidential) at 16:8-14. [Emphasis added.]
3. “The result of this worst-case calculation was 3.12 average attaching entities. Of
this amount, COSA attachments represent 0.02 out of the 3.12 average number of
attaching entities. This demonstrates that my original statement that there is
virtually no impact to including COSA attachments is accurate, even in the
worst-case scenario.” - A. R. Part II of III, Binder 16, CPS Energy Ex. 19B,
Supplemental Rebuttal Testimony of Ricardo Lopez (Confidential) at 17:5-10.
[Emphasis added.]
4. “[A]ccording to CPS Energy GIS data, there are only 1,616 CPS Energy fiber
attachments to distribution poles. Inclusion of CPS Energy fiber would only
increase the worst-case theoretical maximum by 0.01 up to 3.13 average number
of attaching entities.” - A. R. Part II of III, Binder 16, CPS Energy Ex. 19B,
Supplemental Rebuttal Testimony of Ricardo Lopez (Confidential) at 17:19-18:2.
5. “COSA has approximately 1,240 street intersections with traffic signals within the
city limit… Assuming four attachments to CPS Energy poles at each of these
intersections produces 2,000 as the total number of COSA attachments for traffic
cables.” - A.R. Binder Part II of III, Binder 15, CPS Energy Ex. 18B, Rebuttal
Testimony of Ricardo Lopez (Confidential) at 21:10-18.
6. “Also COSA has installed approximately 500 cameras and 700 wi-fi antennas
throughout the city limit … This increases COSA’s worst case total number of
attachments on CPS Energy poles to approximately 3,200.” - A.R. Binder Part II
of III, Binder 15, CPS Energy Ex. 18B, Rebuttal Testimony of Ricardo Lopez
(Confidential) at 21:19-22:1.
7. “Adding the 3,200 attachments to the calculation for average number of attachers
would change the number for the year 2007 from 2.23 to 2.24. … As
demonstrated by this exercise, there is virtually no impact to including the
COSA attachments.” - A. R. Part II of III, Binder 15, CPS Energy Ex. 18B,
Rebuttal Testimony of Ricardo Lopez (Confidential) at 22:1-8. [Emphasis added.]
Court of Appeals No. 03-14-00340-CV 1 of 3 CPS Energy's Bench Notebook
April 22, 2015
TAB 8 - Substantial Evidence In Record Supporting PUCT’s Finding That
Actual Data Supports Average Number of Attaching Entities of Three
8. “[T]he total number of attachments for an entity such as AT&T or TWC does not
change significantly from year to year.” - A.R. Part II of III, Binder 15, CPS
Energy Ex. 18B, Rebuttal Testimony of Ricardo Lopez (Confidential) at 27:15-16.
9. “The most current calculation of pole attachments was performed in 2009 …The
validity of the original count [from 2000] is not in question because it is based on
a statistically valid survey, and, moreover, the original count is constant for the
most part. This establishes that the AT&T pole count is reasonably accurate and
not a ‘guess.’” - A. R. Part II of III, Binder 15, CPS Energy Ex. 18B, Rebuttal
Testimony of Ricardo Lopez (Confidential) at 27:18-24.
10. “The only attachments with the greatest difference between billing data and field
survey results, thus, are the AT&T attachments. The difference is due to the fact
that they are based on a statistical sampling from 2000, but the difference is not
significant.” - A.R. Part II of III, Binder 15, CPS Energy Ex. 18A, Rebuttal
Testimony of Ricardo Lopez at 20:6-8.
11. “Considering the magnitude of AT&T’s original pole count from the 2000
sampling, and the fact that the only significant change to the pole count is the
addition of new attachments, the most current calculated number of AT&T pole
contacts is a reasonably accurate number. - A.R. Part II of III, Binder 15, CPS
Energy Ex. 18A, Rebuttal Testimony of Ricardo Lopez at 20:11-14.
12. “More importantly, CPS Energy’s average number of attaching entities is based
on its actual data, and its actual data is further supported by a statistically valid
survey. By contrast no party in this proceeding that is challenging CPS Energy’s
average number of attaching entities has come forward with any data to support a
number different than what CPS Energy’s actual data show.” - A. R. Part II of III,
Binder 16, CPS Energy Ex. 19B, Supplemental Rebuttal Testimony of Ricardo
Lopez (Confidential) at 20:12-20.
13. “In Exhibit SSPAE-1, I provide the calculation for CPS Energy’s maximum
allowable pole attachment rates for test years 2004 through 2009 (billing years
2005 through 2010) using the prior Telecom Formula.” A. R. Part II of III,
Binder 16, CPS Energy Ex. 20A, Second Supplemental Rebuttal Testimony of
Paul A. Escamilla (Redacted) at 8:21-23.
14. At Exhibit SSPAE-1: See tables (attached) showing year-by-year data used to
calculate maximum allowable pole attachment rate. A. R. Part II of III, Binder
16, CPS Energy Ex. 20B, Second Supplemental Rebuttal Testimony of Paul A.
Escamilla (Confidential) at Exhibit SSPAE-1.
15. “Information is received from the Overhead Engineering Department which
details the quantities of pole contacts and the rate to be charged per contact to
each entity that is attached to CPS Energy’s poles. Staff within Current Asset
Court of Appeals No. 03-14-00340-CV 2 of 3 CPS Energy's Bench Notebook
April 22, 2015
TAB 8 - Substantial Evidence In Record Supporting PUCT’s Finding That
Actual Data Supports Average Number of Attaching Entities of Three
Management then prepares the invoices and records the billings in CPS Energy’s
SAP accounting system. The invoices are then printed out and mailed to the
customers. The invoices for pole contacts are prepared on an annual basis.” A. R.
Part II of III, Binder 14, CPS Energy Ex. 4, Direct Testimony of David J. Ramirez
at 5:11-16.
16. “Please see the attached spreadsheet [“Exhibit - Pole Contacts Summary”] which
details the quantities of contacts, the rates and the amounts billed to each pole
contact customer for the calendar years 2005 through 2009 inclusive.” A. R. Part
II of III, Binder 14, CPS Energy Ex. 4, Direct Testimony of David J. Ramirez at
6:3-5.
17. See attached, “Exhibit - Pole Contacts Summary” A. R. Part II of III, Binder 14,
CPS Energy Ex. 4, Direct Testimony of David J. Ramirez at 8-14.
Court of Appeals No. 03-14-00340-CV 3 of 3 CPS Energy's Bench Notebook
April 22, 2015