Texas Supreme Court
AUSTIN - Spectrum Gulf Coast’s breach of contract claim against the City of San Antonio can continue, thanks to an opinion issued by the Texas Supreme Court on Friday.
CPS Energy, a public utility owned by the city, owns poles that hold lines to distribute electric power to customers. Telephone and cable companies attach equipment to CPS’s pre-existing power poles to provide services in the same area to the same customers.
The Texas Legislature has imposed various statutory limitations on how much public utilities may charge telecommunications providers that wish to attach equipment. The question before the high court was whether the contract between Spectrum and CPS allows them to enforce those statutory requirements.
The Supreme Court held that it does, finding that the contract’s express language also confirms that relevant legal developments would be brought within and made enforceable under the contract.
Court records show the agreement initially required an annual payment of $3.75 for every pole used. An agreed-upon escalator clause authorized potential annual rate increases.
And while AT&T had entered into a similar agreement, Spectrum continued to pay an increasing poleattachment rate, while AT&T continued to pay the $3.75 per pole, as its contract did not have an escalator clause.
In 2008, Spectrum sued CPS for alleged breach of contract and violations of pricing requirements in the Public Utility Regulatory Act.
In response, CPS filed a plea in abatement asserting that the Public Utility Commission had primary jurisdiction. The trial court sustained the plea, and PUC ordered CPS to comply with the Texas Utility Code.
The trial court affirmed the order but an appellate court reversed, court records show.
“The record demonstrates that CPS charged Spectrum and AT&T the same rate but collected the higher rate only from Spectrum… this constitutes discrimination,” the opinion states. “Spectrum therefore may proceed with its breach-of-contract claim based on CPS’s alleged violation of its obligation to comply with the relevant laws in effect.
“To that end, we reverse the judgment of the court of appeals and remand the case to the trial court for further proceedings.”
Case No. 24-0794
