The Honorable Ron Glower             Opinion No. H-919
Chairman
Consumer Affairs Sub-Committee       Re: Effective date of
State Senate                         section 24 of the Public
State Capitol Building               Utility Regulatory Act,
Austin, Texas 78711                  article 1446c, V.T.C.S.,
                                     authorizing municipalities
                                     to hire rate consultants
                                     and be reimbursed by
                                     utilities.

Dear Senator Clower:

     You have requested our opinion concerning the effective
date of section 24 of the Public Utility Regulatory Act,
article 1446c, V.T.C.S.  This section provides:

             The governing body of any municipality
          shall have the right to select and engage
          rate consultants, accountants, auditors,
          attorneys, engineers, or any combination
          thereof, to conduct investigations, present
          evidence, advise and represent the governing
          body r and assist with litigation on public
          utility ratemaking proceedings; and the
          public utility engaged in such proceedings
          shall be required to reimburse the governing
          body for the reasonable costs of such services.

     The effective date of the Act was September 1, 1975,
as provided in section 88. This is the applicable date unless
section 87 was intended to delay the exercise of the section
24 power by municipalities.  Section 87 provides:




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The Honorable Ron Clower - page 2   (S-919)



              (a) The regulatory authority shall
          assume jurisdiction and all powers and
          duties of regulation under this Act on
          January 1, 1976, except as provided in
          Subsection (b) of this section.

              (b) The regulatory authority shall assume
          jurisdiction over rates and service of public
          utilities on September 1, 1976.

     The definitions section of the Act provides in section
2(g) ,that:

             The term 'regulatory authority,'
          when used in this Act, means, in
          accordance with the context where it is
          found, either the commission, the rail-
          road commission, or the governing,body of
          any municipality.

     It is clear that regulatory authority as used in section
87 means the Public Utility Commission, and we so applied
it in Attorney General Opinion H-752 (1975). It is not so
clear that the term was also intended to include municipalities
so as to limit the exercise of the power given in section 24.

     The general plan of the Act is that municipalities were
to continue to regulate utilities within their boundaries
while the commission was being organized and phased in to
assume portions of that jurisdiction. -See sections 2, 5, 22,
87, 88, 90.

     Section 24 is an unequivocal grant of authori.ty to
municipalities.   It is not dependent upon a concurrent
assumption of new jurisdiction.   Section 24 is a power which
could be exercised in conjunction with the jurisdiction which
the municipalities already had, and which the Act required
that they continue to exercise during the transition period.
Sec. 22.

     It is obvious that section 24 was intended to change
the law concerning the expenses of rate proceedings from
the ruling of the-court in the case of Southwestern Bell
Telephone Co. v. City of Port Arthur, 491 S.W.2d 187-x.
Civ. ADD. -- Beaumont 1973. writ ref'd n.r.e.). That case
held tgt a city's attempt.to charge such expenses to the


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    The Honorable Ron Clower - page 3   (H-919)



    utility in addition to charges provided in a franchise
    agreement was void.

         The legislative intent to change the law on this point
    is clear. Section 21 provides:

              If a municipality performs regulatory
              functions under this Act, it may make such
              other charges as may be provided, in the
              applicable franchise agreement, together
              with any other charges permitted by this
              Act.

         We believe that "under this Act" in this section refers
    to a municipality's performance of regulatory functions as
    authorized or required by the Act, which includes the continued
    exercise of their pre-existing jurisdiction and authority
    between September 1, 1975 and September 1, 1976, the transi-
    tion period during which the commission was being established
    and phased in.

         We do not believe that the Legislature intended section
    87 to delay or limit the exercise of the section 24 authority
    by municipalities, and thus the general effective date of
    September 1, 1975, is the applicable one for section 24. This
    interpretation is in accord with the general plan of the Act,
    the purpose stated in section 2 "to establish a comprehensive
    regulatory system which is adequate to the task of regulating
    public utilities . . ." and with the requirement of section
    89 that the Act be liberally construed "to promote the effec-
    tiveness and efficiency of regulation of public utilities."

         You also ask whether a municipality must enact an
    enabling ordinance or take any other action in order to
    exercise its authority under section 24. The Legislature
    may give municipalities such powers as it sees fit. Blessing
    v. City of Galveston, 42 Tex. 641 (Tex. Sup. 1875). The
    exercise of the Power given under section 24 is not conditioned
    upon any action by the-municipality, and thus none is necessary.




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       The Honorable Ron Clower - page 4      (H-919)



                              SUMMARY

                   The effective date of section 24 of the
                   Public Utility Regulatory Act, giving
                   municipalities authority to require
                   regulated utilities to reimburse the
                   reasonable costs of rate consultants
                   and other experts in ratemaking pro-
                   ceedings, is September 1, 1975.

                                              truly yours,




                                        Attorney General of Texas

       APPROVED:
qcsb



       DAVID M. KENDALL, First Assistant



        (-I!&&JA&mR
       C. ROBERT HEATH, Chalrman
       Opinion Committee




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