Cities of Austin, Dallas, Ft. Worth, and Hereford v. Southwestern Bell Telephone Co.

Summary

The Supreme Court of Texas held that the Public Utility Commission exceeded its statutory authority by adjusting rate-group boundaries instead of allowing Southwestern Bell Telephone Company to reclassify exchanges based on access-line growth. The court concluded that Texas Utilities Code Chapter 58 mandated qualifying reclassification and prohibited an inquiry into the reasonableness of an electing company's rates. The court affirmed the court of appeals' judgment and remanded for further proceedings.

Holdings

1. The PUC exceeded its statutory powers by adjusting rate-group boundaries to prevent an otherwise appropriate rate-group reclassification resulting from access-line growth.
2. Sections 58.055 and 58.059 permit the PUC to reject or modify a reclassification request when the applicant has not proven access-line growth or has calculated it improperly, but they do not authorize boundary adjustments designed to avoid a qualifying reclassification.
3. The phrase 'Notwithstanding Subchapter B' does not exempt section 58.025's prohibition on rate-reasonableness inquiries and does not empower the PUC to adjust rate-group boundaries.
4. Texas Utilities Code sections 53.003 and 55.005 do not authorize the PUC to adjust rate-group boundaries when doing so would require the prohibited rate-reasonableness inquiry under section 58.025.

Questions Presented

1. Whether Texas Utilities Code section 58.058 required the PUC to allow an eligible rate-group reclassification resulting from access-line growth.
2. Whether the PUC could adjust rate-group boundaries in a section 58.058 proceeding to prevent the requested reclassification.
3. Whether sections 58.055, 58.059, 53.003, or 55.005 authorized the PUC to conduct a reasonableness or equitable-rate inquiry inconsistent with Chapter 58.

Disposition

affirmed