                                                                                          ACCEPTED
                                                                                      03-14-00340-CV
                                                                                              5116335
                                                                           THIRD COURT OF APPEALS
                                                                                      AUSTIN, TEXAS
                                                                                 5/1/2015 11:36:48 AM
                                                                                    JEFFREY D. KYLE
                                                                                               CLERK
                             No. 03-14-00340-CV

                    IN THE THIRD COURT OF APPEALS       FILED IN
                                                  3rd COURT OF APPEALS
                             AUSTIN, TEXAS            AUSTIN, TEXAS
                                                            5/1/2015 11:36:48 AM
  APPELLANTS, CPS ENERGY, TIME WARNER CABLEJEFFREY
                                            TEXASD.LLC,
                                                      KYLE
                                                Clerk
 AND SOUTHWESTERN BELL TELEPHONE COMPANY D/B/A AT&T//
  CROSS-APPELLANT, PUBLIC UTILITY COMMISSION OF TEXAS

                                      V.

  APPELLEE, PUBLIC UTILITY COMMISSION OF TEXAS// CROSS-
 APPELLEE, CPS ENERGY, TIME WARNER CABLE TEXAS LLC AND
   SOUTHWESTERN BELL TELEPHONE COMPANY D/B/A AT&T

               On appeal from D-1-GN-13-001238 (Consolidated)
           in the 250th Judicial District Court, Travis County, Texas




                     CPS ENERGY'S BENCH NOTEBOOK




CPS ENERGY                              HERRERA & BOYLE, PLLC

Curt D. Brockmann                       Alfred R. Herrera
cdbrockmann@cpsenergy.com               State Bar No. 09529600
                                        aherrera@herreraboylelaw.com
145 Navarro                             816 Congress Avenue, Suite 1250
P.O. Box 1771                           Austin, Texas 78701
San Antonio, Texas 78296                (512) 474-1492 (Voice)
(210) 353-5689 (Voice)                  (512) 474-2507 (Facsimile)
(210) 353-6832 (Facsimile)




                                April 22, 2015
TAB 1



                V.T.C.A., Transportation Code § 311.001
        § 311.001. General Authority of Home-Rule Municipality
                        Effective: June 19, 2009



(a) A home-rule municipality has exclusive control over and under the
public highways, streets, and alleys of the municipality.

(b) The municipality may:

 (1) control, regulate, or remove an encroachment or obstruction on a public
 street or alley of the municipality;

 (2) open or change a public street or alley of the municipality; or

 (3) improve a public highway, street, or alley of the municipality.

(c) Notwithstanding Subsection (a) or (b) or Section 311.007, before a
municipality with a population of 1.9 million or more may install traffic
calming measures within the municipality, the governing body of the
municipality must:

 (1) publish standards and criteria, which must include sufficient notice to
 allow the governing body to receive and consider public comments from
 residents within one-half mile of the proposed traffic calming measure;

 (2) on request of affected residents, schedule and hold a public meeting
 before implementation of the measure; and

 (3) if the measure involves the closure of a street to motor vehicular traffic,
 before the closure:

   (A) hold a public hearing on the issue of the closure; and

   (B) approve the closure by a majority vote.



Court of Appeals No. 03-14-00340-CV                CPS Energy's Bench Notebook
                                                                 April 22, 2015
TAB 2




                   V.T.C.A., Government Code § 1502.001
                          § 1502.001. Definitions


In this chapter:

 (1) “Combined system” means any combination of one or more of the
 following:

   (A) an electric system;

   (B) a water system;

   (C) a sewer system;

   (D) a solid waste disposal system;

   (E) a drainage utility system; and

   (F) a natural gas system.

 (2) “Public security” has the meaning assigned by Section 1201.002.

 (3) “Utility system” means an electric, water, sewer, solid waste disposal,
 drainage utility, or natural gas system. The term includes one or more
 combined systems.




Court of Appeals No. 03-14-00340-CV              CPS Energy's Bench Notebook
                                                               April 22, 2015
TAB 3

                V.T.C.A., Government Code § 1502.070
        § 1502.070. Management and Control of Utility System
                       Effective: May 18, 2013


(a) Management and control of a utility system may be vested in:

 (1) the municipality’s governing body; or

 (2) a board of trustees named in the proceedings adopted by the
 municipality and consisting of not more than:

   (A) five members, one of whom must be the mayor of the municipality;

   (B) seven members, one of whom must be the mayor of the municipality,
   if the municipality is located in a county:

     (i) with a population of at least 800,000; and

     (ii) that is located on an international border; or

   (C) seven members, one of whom must be the mayor of the municipality,
   if the municipality is located in a county:

     (i) with a population of at least 375,000;

     (ii) that is located on an international border; and

     (iii) that borders the Gulf of Mexico.

(b) The compensation of the trustees shall be specified by the proceedings.
The compensation may not exceed five percent of the gross receipts of the
utility system in any year.

(c) The proceedings of the municipality may specify the terms of office of
the board of trustees, their powers and duties, the manner of exercising those
powers and duties, the election of successor trustees, and any matter relating
to the organization and duties of the board. On any matter not covered by the
proceedings, the board of trustees is governed by the laws and rules
governing the municipality’s governing body, to the extent applicable.
Court of Appeals No. 03-14-00340-CV                   CPS Energy's Bench Notebook
                                                                    April 22, 2015
      TAB 4


                                        CITY OF SAN ANTONIO




                                      City Council Controls Rights of
                                              Way (ROWs)

                                              ROW                           ROW
                                            Agreements                    Agreements




TEX. GOV’T CODE
   § 1502.070




                                             Pole Attachment               Pole Attachment
                                               Agreement                     Agreement




                                      Governed by Independent Board of
                                                  Trustees

                                             Enter into Pole Attachment
                                                     Agreements




      Court of Appeals No. 03-14-00340-CV                        CPS Energy's Bench Notebook
                                                                               April 22, 2015
         TAB 5




          ,EXHIBIT
·. Jt~G-f.,Z.
'
    Court of Appeals No. 03-14-00340-CV   CPS Energy's Bench Notebook 34
                                                         April 22, 2015
TAB 5                                                            ,




          'Dda ....., ..,, •and 1Dto *-•           zp
                                                   Til day or    .Caerr.    19~ .,, ...d
 bftW•     *      cn7 ot 1111 AlltoD:Lo, tau, IOt1111 'llraulb tile Cl PUblic:_" &enloe
 BDI!ilrll or Ilia Jatala!D, 1 -loi.Pil board at said City, Jlere:lut'Mr called
 •L:la.iiDr• lllld. loB..• C.bl••rnaa or texaa, Illc. b...1111ner called •uc:aaee .•
                                      VITIISS!TR:
         %a ....,dentloa or tlaa •tuel
 ~aQ:llled, tilt    ,..uu
                                             -*••••· terw• uri aaalitioaa blrei.D
                                               .n•Ur oowa1at ad -.n• u tollo•:
                                 t&ereto do._..,

                                            ~InD..

      1. u·u·• ill tbf.s .-.• .-:
            IILieeaMr'• pale.. ••• eleotrto diarllnii:.J.oa snt. utUltr JDbl
            ....... -    Lla-.rr.
            •u.aa. . •a h0i11ti.U1 . . _ ,     J.t••••'• ables, wl.ra, aupporUJI&
            1tr11111. ....._., dNi wtna, taparia • 111111 .-pllft.... JIDIIITI" •upp11U
            ad...._.    I!Cfll,.., ua• ill aoaa.Uaa · vs.t~a tile oper•tian ot Lle•se•••
            ..-tqo--.. Weria:teD qn..
           •Joiat:      u..,• - .
                            nJ' pDlio aatil:l.tJ', pvw-Ul w.r. or otber

           •ttilo.._,
           •"'" '*lab . . .         Jel••
                                  to lild.ala Llo•_. is •t•.s Jcdal use
                    privil.,... ad co ...._ Uo•.er •• atencfed jabt • •
           •"·~··               r~ Uaa.-r'•
                          Jri,u....                     palu.        · ·.            .
           1 cabW  Ucl. . . . . - - IIIJ eatit:r, otiiR' Ulla Lt._lft ber-e.t.a or a
           .rout U.•, ta .._ UAMaMr Mil or lr.....ttr llld1 aUIId taut
           prf.Y.Iltip or 8ttuldft1 fiGilltiu t:o u.o.aor• • PDl••·

                                            YCUSE
           L.la-.,. ..,.... 1io .,..., t:o ua. . . . . 11o , . . atm s.t: .,. lavf\lllr da •
     2.
           • IDd    ...,._to
           rewaailbb,
                                ua. bra •d aoacllt:.icJJiil or 'ldl _ _ . . , ,
                        -•alu.&,. 11-••          to'''-~~ JOrUDD• a1     u._,.. ,,
           RdllU•• ao Ue•.-r'a pdu, ......._ ......11111~ ual~ llld .....,.•
          . . - - 11111 M !Dt.rr.e ad.tb U.caa_.'• •.....Soe requ!J'a•u or ~bl
           UM at tu tuWtua IIJ' ot~ter•. Tid• uc.... l• fer tile J~NYidon or
           1
             s..-... •1 e-...s.t7 • ...._ Hlnlld.an Hr\'ioe V1\lalll
          ot u.     U.O•iiDr'•                                           'liD•
                               IJIII"Wia• .... ,. llldall , .. u ..........._
                                                                                plirliou
           fraab:lHif ltf ...,pn.te autbaritill. Uo•ae berebJ' ....... ta be
                                                   .
          laotad br lllae ._.. ud ooadit.tAtu ber"eat
                                                   .
                                                          •

                             A1Tidalllr NDl1"i     !.!R 8%1UIG
    3.    Prier to      •Jd.._
                            -~ attaalll•\ appUeatiDU b.......... U.oeu• Uall
          alltala, •lid • • ... _ . llball auta.it:. to U..o••r, nldae•.
          at:Utaot.i-7 :t:o L:lo._., or • traaald.R or Rllr eutllori&r autbar1Z118
          ue.a... to .,.., •ad •mula tar tbe parpuea .., out la Seotb• 2
          berad', ita taasuuu vltbiD t1aa publlo atre.u, b!P•r•. aUep,
          ut:U:I.t:r .._ta, o~ 'borousllhr••· aad oa prbate propuot;r
          diua'-1 1D Llo•IIDI"!a Mntee arM, 8114 ot ..., oth.. DeMss..r c:oaant



                                                                                                35
Court of Appeals No. 03-14-00340-CV                                    CPS Energy's Bench Notebook
                                                                                      April 22, 2015
  TAB 6



                                      Attachmenfl

                       Joint Use Pole Contact Agreement




                                          .EXHIBIT

                                       I Tt&C-,{,g3
Court of Appeals No. 03-14-00340-CV                   CPS Energy's Bench Notebook
                                                                     April 22, 2015
TAB 6



B.     LESSOR, Joiat U.aers and OTHER LESSEES reserve the right to utilize and/or

       maintain LESSOR"'S poles and ·· to operate their facilities thereon in such

      manner 8#J will best enable them to fulfill their             se~vic:e   requirements.



UTict.i VI - Jl.Ic,;IJTS OF WAY P'Oll LESSEE'S ATlAQIMUTS

      While the LESSOR aDd. tbe LES.SBE. will cooperate as far as .DU9' he practicable

in obtaiD.iqg rights of way for both parti.e& on joint poles, no .guarantee is gi.veo.

l!f the   LBSSOB. &f perllission fro,.a property onera, IIIUnicipalities or others for

the use of iu poles by the LESSEE, and :l:f objection is ude thereto and the

LESSEE 1~ unable satisfactorily to adjust the matter within a reasonable time,

the LESSOR may :at any ti•e upon sizty (60) -days li.Otice ·i n wridng to the l,!SSU,

require the LESSEE to r..o~e its attachments f,roa the poies -!nirolved; .and the

LESSEE ·shall, within iix months aft~ r·ece:lpt of said notic.e, r .- .ve its

attac:hmenu from--~ch pol.es .at it.s .s.o le ez:pea.se.



AJXL~     VII -    INta~BB&NeB

      .ndle it is no.t foreseen, ·•·h euld   tb-e - ~SSEE·'"'S   a:peradou in ay way

inter.fere with l.ESSOB."'S ~erational functions or needs or if ·LB.SSEE"'S activities

constitute dis.r uption or interference, LESSOR shall have the rj,gbt to :l1111ediately

terminate ·the Agreeilent -and LESSEE will be -r equired to          r~ve      all equipment

within a Teasoaabl.e per:lod of t!•e at :tts sole eost.



~~I~ VUI ...       !V.UUNANC$ 01 POUS .ANll 4TT4c:aMUrS
      The LESSOR thall maintain its joint poles in a safe and serviceable

~on:dit:l.on   and in accordance with the spec:ificatiou mentioned in Article III and

shall repl~c:e said poles as tl:tey become defective.             LESSIE'"'S rights 11nd.er ;his

                                              5




 Court of Appeals No. 03-14-00340-CV                                                               53
                                                                          CPS Energy's Bench Notebook
                                                                                        April 22, 2015
       TAB 7 - SECTIONS OF UTILITIES CODE SHOWING DISTINCTION
               BETWEEN DUTY TO “CHARGE” AND TO “COLLECT” A RATE
Sec. 17.002. DEFINITIONS.                                        Sec. 33.008. FRANCHISE CHARGES.
   In this chapter:                                              (b)          If a municipality collected a charge or fee
                                                                 for a franchise to use a municipal street, alley, or public
       (7) "Service provider" means any entity that offers a
                                                                 way from an electric utility, a municipally owned utility,
   product or service to a customer and that directly or
                                                                 or an electric cooperative … is entitled to collect from
   indirectly charges to or collects from a customer's bill an
                                                                 each electric utility, transmission and distribution utility,
   amount for the product or service on a customer's bill
                                                                 municipally owned utility, or electric cooperative that
   received from a billing utility.
                                                                 uses the municipality's streets, alleys, or public ways to
Sec. 31.002. DEFINITIONS.                                        provide distribution service a charge based on each
   In this subtitle: …                                           kilowatt hour of electricity delivered by the utility to
                                                                 each retail customer whose consuming facility's point of
       (15) "Rate" includes a compensation, tariff, charge, fare,delivery is located within the municipality's boundaries.
   toll, rental, or classification that is directly or indirectly
   demanded, observed, charged, or collected by an electric
   utility for a service, product, or commodity described in the Sec. 36.403. STANDARDS AND PROCEDURES
   definition of electric utility in this section and a rule,         GOVERNING SECURITIZATION AND
   practice, or contract affecting the compensation, tariff,          RECOVERY OF SYSTEM RESTORATION
   charge, fare, toll, rental, or classification that must be         COSTS.
   approved by a regulatory authority.
                                                                  (f)        For purposes of this subchapter,
                                                                  "transition charges," … includes nonbypassable
                                                                  amounts to be charged for the use of electric services,
Sec. 39.302. DEFINITIONS.
                                                                  approved by the commission under a financing order
   In this subchapter:                                            to recover system restoration costs, that shall be
       (7) "Transition charges" means nonbypassable collected by an electric utility, its successors, an
   amounts to be charged for the use or availability of electric assignee, or other collection agents as provided for in
   services, approved by the commission under a financing the financing order. …
   order to recover qualified costs, that shall be collected by
   an electric utility, its successors, an assignee, or other
   collection agents as provided for in the financing order.         Sec. 55.176. CHARGE FOR 800-TYPE CALLS.
                                                                        (g) The commission may not impose on a local
Sec. 41.002. DEFINITIONS.
                                                                     exchange company the duty or obligation to: …
   In this chapter:
                                                                            (2) bill or collect for the use of the pay
       (2) "Rate" includes any compensation, tariff,                    telephone; …
   charge, fare, toll, rental, or classification that is directly or
   indirectly demanded, observed, charged, or collected by an (V.A.C.S. Art. 1446c-0, Sec. 3.2625(d).)
   electric cooperative for any service, product, or commodity
   and any rule, practice, or contract affecting the
   compensation, tariff, charge, fare, toll, rental, or
   classification
Sec. 64.002. DEFINITIONS.
   In this chapter:
      (5) "Service provider" means any entity that offers a
   product or service to a customer and that directly or
   indirectly charges to or collects from a customer's bill an
   amount for the product or service on a customer's bill
   received from a billing utility.



        Court of Appeals No. 03-14-00340-CV                                       CPS Energy's Bench Notebook
                                                                                                April 22, 2015
TAB 8 -     Substantial Evidence In Record Supporting PUCT’s Finding That
            Actual Data Supports Average Number of Attaching Entities of Three

1.    “Unless attachers such as TWC have been making unauthorized attachments to
      CPS Energy poles, there is no sound basis to the position that billing data presents
      an inaccurate picture of the number of attachments.” - A. R. Part II of III, Binder
      15, CPS Energy Ex. 18A, Rebuttal Testimony of Ricardo Lopez at 20:11-16.

2.    “In this worst-case, hypothetical and unrealistic scenario, I took the smallest
      possible number of poles with CPS Energy and at least one attaching entity. … I
      then divided all billed attachments, plus all known COSA attachments, by
      this smallest number of possible joint use poles.” - A. R. Part II of III, Binder
      16, CPS Energy Ex. 19B, Supplemental Rebuttal Testimony of Ricardo Lopez
      (Confidential) at 16:8-14. [Emphasis added.]

3.    “The result of this worst-case calculation was 3.12 average attaching entities. Of
      this amount, COSA attachments represent 0.02 out of the 3.12 average number of
      attaching entities. This demonstrates that my original statement that there is
      virtually no impact to including COSA attachments is accurate, even in the
      worst-case scenario.” - A. R. Part II of III, Binder 16, CPS Energy Ex. 19B,
      Supplemental Rebuttal Testimony of Ricardo Lopez (Confidential) at 17:5-10.
      [Emphasis added.]

4.    “[A]ccording to CPS Energy GIS data, there are only 1,616 CPS Energy fiber
      attachments to distribution poles. Inclusion of CPS Energy fiber would only
      increase the worst-case theoretical maximum by 0.01 up to 3.13 average number
      of attaching entities.” - A. R. Part II of III, Binder 16, CPS Energy Ex. 19B,
      Supplemental Rebuttal Testimony of Ricardo Lopez (Confidential) at 17:19-18:2.

5.    “COSA has approximately 1,240 street intersections with traffic signals within the
      city limit… Assuming four attachments to CPS Energy poles at each of these
      intersections produces 2,000 as the total number of COSA attachments for traffic
      cables.” - A.R. Binder Part II of III, Binder 15, CPS Energy Ex. 18B, Rebuttal
      Testimony of Ricardo Lopez (Confidential) at 21:10-18.

6.    “Also COSA has installed approximately 500 cameras and 700 wi-fi antennas
      throughout the city limit … This increases COSA’s worst case total number of
      attachments on CPS Energy poles to approximately 3,200.” - A.R. Binder Part II
      of III, Binder 15, CPS Energy Ex. 18B, Rebuttal Testimony of Ricardo Lopez
      (Confidential) at 21:19-22:1.

7.    “Adding the 3,200 attachments to the calculation for average number of attachers
      would change the number for the year 2007 from 2.23 to 2.24. … As
      demonstrated by this exercise, there is virtually no impact to including the
      COSA attachments.” - A. R. Part II of III, Binder 15, CPS Energy Ex. 18B,
      Rebuttal Testimony of Ricardo Lopez (Confidential) at 22:1-8. [Emphasis added.]




 Court of Appeals No. 03-14-00340-CV       1 of 3          CPS Energy's Bench Notebook
                                                                         April 22, 2015
TAB 8 -     Substantial Evidence In Record Supporting PUCT’s Finding That
            Actual Data Supports Average Number of Attaching Entities of Three

8.    “[T]he total number of attachments for an entity such as AT&T or TWC does not
      change significantly from year to year.” - A.R. Part II of III, Binder 15, CPS
      Energy Ex. 18B, Rebuttal Testimony of Ricardo Lopez (Confidential) at 27:15-16.

9.    “The most current calculation of pole attachments was performed in 2009 …The
      validity of the original count [from 2000] is not in question because it is based on
      a statistically valid survey, and, moreover, the original count is constant for the
      most part. This establishes that the AT&T pole count is reasonably accurate and
      not a ‘guess.’” - A. R. Part II of III, Binder 15, CPS Energy Ex. 18B, Rebuttal
      Testimony of Ricardo Lopez (Confidential) at 27:18-24.

10.   “The only attachments with the greatest difference between billing data and field
      survey results, thus, are the AT&T attachments. The difference is due to the fact
      that they are based on a statistical sampling from 2000, but the difference is not
      significant.” - A.R. Part II of III, Binder 15, CPS Energy Ex. 18A, Rebuttal
      Testimony of Ricardo Lopez at 20:6-8.

11.   “Considering the magnitude of AT&T’s original pole count from the 2000
      sampling, and the fact that the only significant change to the pole count is the
      addition of new attachments, the most current calculated number of AT&T pole
      contacts is a reasonably accurate number. - A.R. Part II of III, Binder 15, CPS
      Energy Ex. 18A, Rebuttal Testimony of Ricardo Lopez at 20:11-14.

12.   “More importantly, CPS Energy’s average number of attaching entities is based
      on its actual data, and its actual data is further supported by a statistically valid
      survey. By contrast no party in this proceeding that is challenging CPS Energy’s
      average number of attaching entities has come forward with any data to support a
      number different than what CPS Energy’s actual data show.” - A. R. Part II of III,
      Binder 16, CPS Energy Ex. 19B, Supplemental Rebuttal Testimony of Ricardo
      Lopez (Confidential) at 20:12-20.

13.   “In Exhibit SSPAE-1, I provide the calculation for CPS Energy’s maximum
      allowable pole attachment rates for test years 2004 through 2009 (billing years
      2005 through 2010) using the prior Telecom Formula.” A. R. Part II of III,
      Binder 16, CPS Energy Ex. 20A, Second Supplemental Rebuttal Testimony of
      Paul A. Escamilla (Redacted) at 8:21-23.

14.   At Exhibit SSPAE-1: See tables (attached) showing year-by-year data used to
      calculate maximum allowable pole attachment rate. A. R. Part II of III, Binder
      16, CPS Energy Ex. 20B, Second Supplemental Rebuttal Testimony of Paul A.
      Escamilla (Confidential) at Exhibit SSPAE-1.

15.   “Information is received from the Overhead Engineering Department which
      details the quantities of pole contacts and the rate to be charged per contact to
      each entity that is attached to CPS Energy’s poles. Staff within Current Asset

 Court of Appeals No. 03-14-00340-CV        2 of 3         CPS Energy's Bench Notebook
                                                                         April 22, 2015
TAB 8 -     Substantial Evidence In Record Supporting PUCT’s Finding That
            Actual Data Supports Average Number of Attaching Entities of Three

      Management then prepares the invoices and records the billings in CPS Energy’s
      SAP accounting system. The invoices are then printed out and mailed to the
      customers. The invoices for pole contacts are prepared on an annual basis.” A. R.
      Part II of III, Binder 14, CPS Energy Ex. 4, Direct Testimony of David J. Ramirez
      at 5:11-16.

16.   “Please see the attached spreadsheet [“Exhibit - Pole Contacts Summary”] which
      details the quantities of contacts, the rates and the amounts billed to each pole
      contact customer for the calendar years 2005 through 2009 inclusive.” A. R. Part
      II of III, Binder 14, CPS Energy Ex. 4, Direct Testimony of David J. Ramirez at
      6:3-5.

17.   See attached, “Exhibit - Pole Contacts Summary” A. R. Part II of III, Binder 14,
      CPS Energy Ex. 4, Direct Testimony of David J. Ramirez at 8-14.




 Court of Appeals No. 03-14-00340-CV      3 of 3         CPS Energy's Bench Notebook
                                                                       April 22, 2015
