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Power Resource Group, Inc. v. Public Utility Commission of Texas

Public Utility Commission Rule 23.66 is not pre-empted by federal law, and the commission was within its authority to determine that a legally enforceable obligation does not exist unless the qualifying facility is capable of providing energy within 90 days of notifying the utility of its qualifying facility status.

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In this appeal, we must determine whether the Public Utility Commission of Texas erred in interpreting its substantive rule 23.66, governing the obligation of electric utilities to purchase energy and capacity from qualifying facilities. *fn1 Power Resource Group, Inc., challenges the Commission’s refusal to find a requirement in the rule imposing upon utilities an obligation to enter into contracts offered by qualifying facilities incapable of providing energy or capacity within ninety days of such offer.

In Texas, the primary enforcer of the Public Utility Regulatory Policies Act of 1978 (“PURPA”), a federal statute enacted in part to encourage development of cogeneration facilities as an alternative source of energy, is the Commission. The Commission is authorized to enact rules imposing an obligation upon a utility to purchase power from a QF. See Tex. Util. Code Ann. � 11.002(c) (West Supp. 2002). As contemplated by PURPA, the Commission enacted rule 23.66(d)(1)(C) to regulate the relationship between utilities and QFs. In implementing and interpreting its rule, then, the Commission determined that it could best serve the purposes of PURPA by imposing an obligation upon a utility to purchase energy-but not contract for it-within ninety days of notification of the availability of such energy from a QF. In so doing, the Commission struck a balance between insuring a market for QFs by encouraging the development of energy and requiring utilities to purchase that energy.

The question on appeal, then, is whether the Commission misinterpreted the rule or it is otherwise invalid. In six points of error, Power Resource contests the district court’s judgment (i) affirming the Commission’s interpretation of rule 23.66 and (ii) granting appellees’ *fn2 motions for summary judgment. Holding the Commission’s interpretation of rule 23.66 was reasonable and Power Resource’s claims to be without merit, we affirm the district court’s judgment.

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