DocketNumber: No. 15-1008
Citation Numbers: 539 S.W.3d 252
Judges: Green
Filed Date: 2/2/2018
Status: Precedential
Modified Date: 10/19/2024
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 accommodate 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 *255public 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,
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 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.
*256By 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 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. ,
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 relocate a pole or line, at the utility's own expense, to allow the widening or straightening of a street."
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").
"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 ,
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 *258as written into each utility's 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].
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. ,
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,"
II. Standard of Review
We review the trial court's summary judgment de novo. Provident Life & Accident Ins. Co. v. Knott ,
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 ,
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."
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 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. ,
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. ,
Based on this principle, Texas has adopted the common law rule that "a utility *260forced to relocate from a public right-of-way must do so at its own expense." Id. at 62 (quoting Norfolk Redevelopment & Hous. Auth. v. Chesapeake & Potomac Tel. Co. ,
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. ,
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.
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. ,
In response, Richardson contends that " 'street' is a general term" that encompasses alleys and other transportation thoroughfares. Kalteyer v. Sullivan ,
A statute's unambiguous language controls. Paxton v. City of Dallas ,
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 ,
"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 ,
Looking to the statutory scheme, we find particularly relevant the Legislature's recognition of the broad authority afforded *262to 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."
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 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 ,
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. ,
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 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 *263law 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 ,
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 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 ,
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. ,
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 *264and 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.
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.
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.
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.
Justice Blacklock did not participate in the decision.
" '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).
" '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).
" '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).
Texas courts construe franchise agreements established by ordinance as contracts. See, e.g. , City of Houston v. Williams ,
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.
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.
Oncor serves 402 cities in Texas. It has one tariff filed with the PUC, which is adopted by each city it serves.
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.
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."
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).
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).
Oncor argues that such a holding is inconsistent with City of Allen v. Public Utility Commission of Texas ,