IN THE SUPREME COURT OF
Texas Municipal Power Agency,
Public Utility Commission of
- consolidated with -
Texas Municipal Power Agency,
Public Utility Commission of
On Petition for Review from the
Court of Appeals for the Third District of
Argued October 18, 2005
Justice Brister, joined by Justice Willett, dissenting.
The Public Utility Commission “has jurisdiction over municipally owned utilities . . . to regulate wholesale transmission rates.” Yet the Court holds it cannot regulate those rates when the parties have a private contract, even if that contract itself recognizes that it is subject to governmental rates and regulations. Requiring the Commission to act but denying it the power to act is, as James Madison wrote more than two centuries ago, contrary to both law and reason:
No axiom is more clearly established in law, or in reason, than that wherever the end is required, the means are authorized; wherever a general power to do a thing is given, every particular power necessary for doing it is included.
Because the Legislature has ordered the Commission to set these rates but the Court holds it cannot, I respectfully dissent.
We answered the precise question here in our 2001 opinion Public Utility Commission of Texas v. City Public Service Board of San Antonio. There, we held the Commission could not set transmission rates by rule, but “[o]nce confronted with a dispute between utilities, the Commission can arrive at a reasonable rate to resolve that dispute.” This was just such a case, confronting the Commission with a dispute between utilities about whether one was being overcharged for transmission.
The Court decides the Commission did not have jurisdiction here (despite what we said in 2001) because Chapter 35 of the Texas Utilities Code applies only when the Commission orders new transmission service after a provider has refused it. Nothing in Chapter 35 says so. To the contrary, section 35.004 requires the Commission to ensure that transmission rates are reasonable and nondiscriminatory, whether the Commission has ordered service or not. Yet the Court holds the Commission can do no such thing.
the Commission ordered only two things, both of which fall well within the
powers the Legislature has granted to it. First, the Commission authorized
the Commission’s order changed TMPA’s transmission
charges alone — not its charges for generation, administration, or all charges
when added together. The Court incorrectly says the Commission ordered more,
requiring TMPA to reduce (1) transmission charges, and (2) the parties’
contractual uniform sales rate.
The first is fact, the second is fiction. The Commission’s last legal
conclusion was that “
35 authorizes the Commission to oversee transmission service by or for
municipal utilities like TMPA and Bryan, and to determine whether the terms of
that service are reasonable.
One of the most important of those terms, of course, is price. Here, the
Commission found that
says this order effectively requires it to unbundle
its services. But at most, the Commission’s orders require it to unbundle its bills, not its business. TMPA knows perfectly
well what the transmission charges are for each city, as electricity for
on this ambiguity about unbundling, TMPA argues the Commission has abrogated
the parties’ contract. But while the Commission ordered that transmission rates
had to be lower for
Accordingly, we need not decide today whether chapter 40 (effective September 1, 1999) applies retroactively. Even if it does, it still allows the Commission to regulate TMPA’s transmission rates, which is all the Commission purports to do. While it expressly prohibits the Commission from ordering municipally owned utilities to unbundle services, for the reasons noted above that is not what the Commission’s orders require.
dispute concerns electricity rates charged ten years ago. Those rates have yet to
be recalculated based on our 2001 decision in
All this serves as a reminder why courts should think long and hard before getting involved in administrative rate-setting proceedings. In my view, it is past time to let the Commission get about its business. I would affirm the judgments of the courts below and remand these proceedings to the Commission.
OPINION DELIVERED: December 14, 2007
 Tex. Util. Code § 40.004(1).
 The parties’ contract provided:
Section 28: Governmental Rates, Regulations and Laws. The Contract shall be subject to all valid rules,
regulations and laws applicable thereto, as promulgated by the
 The Federalist No. 44, at 74 (James Madison) (J. and A. M'Lean ed. 1788).
 53 S.W.3d 310 (
 See Tex. Util. Code § 35.004(b) (“The commission shall ensure that an electric utility or transmission and distribution utility provides nondiscriminatory access to wholesale transmission service . . . .”); id. § 35.004(c) (“When an electric utility . . . provides wholesale transmission service within ERCOT at the request of a third party, the commission shall ensure that the utility recovers the utility’s reasonable costs . . . so that the utility’s other customers do not bear the costs of the service.”).
 See, e.g., Tex. Util. Code § 35.004(d) (“The commission shall price wholesale transmission services within ERCOT based on the postage stamp method of pricing under which a transmission-owning utility’s rate is based on the ERCOT utilities’ combined annual costs of transmission divided by the total demand placed on the combined transmission systems of all such transmission-owning utilities within a power region.”); id. § 35.007(a) (“Except as provided by Subsection (b), an electric utility that owns or operates a transmission facility shall file a tariff in compliance with commission rules adopted under Section 35.006.”); id. § 40.004(7) (granting Commission jurisdiction “to require reports of municipally owned utility operations only to the extent necessary to: (A) enable the commission to determine the aggregate load and energy requirements of the state and the resources available to serve that load”).
 State v. Pub. Util. Comm'n of
 __ S.W.3d at ___.
 Tex. Util. Code § 35.005(a) (“The commission may require an electric utility to provide transmission service at wholesale to another electric utility . . . and may determine whether terms for the transmission service are reasonable.”); id. § 35.001 (“In this subchapter, ‘electric utility’ includes a municipally owned utility . . . .”).
 Tex. Util. Code § 40.004(1) (“Except as specifically otherwise provided in this chapter, the commission has jurisdiction over municipally owned utilities only for the following purposes: (1) to regulate wholesale transmission rates and service, including terms of access, to the extent provided by Subchapter A, Chapter 35 . . . .”).
 See Pub. Util. Comm'n of