                                                                         April 22, 2015

                                   No. 03-14-00340-CV

                        IN THE THIRD COURT OF APPEALS
                                    AUSTIN, TEXAS

       APPELLANTS, CPS ENERGY, TIME WARNER CABLE TEXAS LLC,
     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-l-GN-13-001238 (Consolidated)
               inthe 250th Judicial District Court, Travis County, Texas



                         CPS ENERGY'S BENCH NOTEBOOK




I
    CPS ENERGY                              HERRERA & BOYLE, PLLC

    Curt D. Brockmann                       Alfred R. Herrera
    cdbrockmann(5),cpsenergv.com            State Bar No. 09529600
                                            aherrera@herrerabovlelaw.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
                              No. 03-14-00340-CV


                    IN THE THIRD COURT OF APPEALS
                               AUSTIN, TEXAS

  APPELLANTS, CPS ENERGY, TIME WARNER CABLE TEXAS LLC,
 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-l-GN-13-001238 (Consolidated)
                     kth
           in the 250m   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@herrerabovlelaw.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
w\



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II




1
      TAB1




                     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.
Tip


      (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
c     municipality must:

[      (1) publish standards and criteria, which must include sufficient notice to
       allow the governing body to receive and consider public comments from
P      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

[Ml
         (B) approve the closure by a majority vote.



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




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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
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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
 •I I




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            TAB 4



                                             City of San Antonio




                                           City Council Controls Rights of
$^
                                                   Way (ROWs)

                                                   ROW                              ROW
                                                 Agreements                      Agreements


|p)


      Tex. Gov't Code
p        § 1502.070                                                      f§> TIME WARNER
                                                                             CABLE
i



                                                  Pole Attachment                  Pole Attachment
                                                    Agreement                         Agreement

Fl




(j^
                                                              ENERGY




                                           Governed by Independent Board of j
                                                              Trustees


                                                  Enter into Pole Attachment
                                                         Agreements




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

r
111


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           TAB 5




                                            EXHIBIT A




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            EXHIBIT

         7Zsc~GL\
                                                                                  34

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



$f>




                                          POLE UCBBE mgHOff


                  TUB Asruomt entered late tela ZJ97* day ofPtOUBBtef, 1«6f» by *ad
          between the City of Ban antealo, Texas* sating through the City Public £ervloe
r         Beard of au Jataale, a aaaloipal board of said City, hereinafter called
          "Ueaaaor" eod. sogers Cablesystau of Texas, lac. hereinafter called "Ueeasee."
                                          VXTIBSSETH:

                  Za eaaalderetien of tha BStual eevenaats. tent* sad rmnrittlona bam la
          contained, tbt parties hereto da hereby asteally eevcniat aad agree as follows I
                                          *




               1.    aauaod la tfala

                     "Uceaaar'a poles" eases eleetrle dlatribuUoa systaa utility pales
                           Of

                     •Uncasce's faciliUai" Beaaa Ueenaae's cables, wires, aupportung
                     atraad. brackets, erap ulm. tapoffa, llaa aapliflara. paver supplies
                     aad ether eatiipaeat used la eeaneetloa with tee apsratloa of Ueessee'a
i.                   "•——'ty aateaae talevialea ayatea.
m                    "feiat bear* ansae aay pabllo utility, geveroaestal body, or other
                     entity uhlan owe poles to Balsa Ueeaaar is extended Joint use
                     ettaeaaeat privilege* aad to whoa Ueeaaar faaa esteaded Joint use
                     •rtecbnaot privileges of Uecaaer'e poles'.
                    "Other Licensee* naaaa aay eatity, ether than licensee berela or a
                    Joint User, to uboa Ueeaaar hee or hereafter shall extead the
                    privilege of attsenlag facilities to Ueeeaor's poles.


              2.    Ueeaaar agrees to great to Lioeesea. to tbe extent it aay lawfully da •
                    so ead aubjeot to the tarns aad condltiona of tUa Asrecacnt.
IF*                 revocable, aoaanelualve lleenooe to attach pertteaa of UeoBeec'a
                    feclXltleB to Ueeaaar'e poles, where reasonably available sad where
                    each) aaa will sat iaterfare with Ueeoeor's aervlee reejuiraMBta or tha
                    aso of lta facilities by othera.   Tula Ucenee la for tha provision of
                    Ucanacofa eeaaaaltr aateBaa taleeiaioa aarrlee attain these pertleaa
                    af the Ua*assr*s serviea area in ublefa the Ueesaee bss beea
                    fraanhtsed by appropriate aotboritlaa. Ueeasee hereby agrees to ha
                    bound by the teres aad cnndltfnmi hereof.

                                   ATOCBHBIIT PZMII8 Agg BHIgS

             3.     Prior to aafclBg aay attaebaaat appUeatlaas hereaader, Ueeasee shall
                    obtaia. aad open reeuaat eball anbalt to Ueeaser, evidence,
m                   aatiefectcry to Ueeaaar, of e freaehlse or other eatboriey authsrixiss
                    Licensee to ereet aad ajaiataia for the purposes sat eat la Seotlea 2
                    hereof, lta faculties within the public streets, highways, allays.
                    utility eaaaeeata, ether thoroughfares, aad ea private property
                    situated la Ueeasar?a serviea area, aad of say other necessary eoaaeat




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



                                      Attachment 2

                       Joint Use Pole Contact Agreement




                                                                               48


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




        B.    LESSOR, Joint Users and OTHER LESSEES reserve the right to utilize and/or
              maintain LESSOR'S poles and -to operate their facilities thereon in such
              manner as sill best enable then to fulfill their service requirements.



       ARTICLE VI - RIGHTS OF WAT FOR LESSEE'S ATTACHMEhTS

             Hhile the LESSOR and.the LESSEE.sill cooperate as far as nay be practicable
       in obtaining rights of way for both parties on Joint poles, ao guarantee la given
        by the LESSOR of permission from property owners, municipalities or others for

       the use of its poles by the LESSEE, aad if objection is nade thereto and the

       LESSEE is ana hie satisfactorily to adjust the matter within a reasonable tine,
       the LESSOR may at aay time -upon sixty (60) days notice in writing to the LESSEE,

       require the LESSEE to remove its attachments from the poles -involved; And the

       LESSEE shall, within six months after receipt of said notice, remove lta

       attachments from -such poles at its sole expense.



       ARTICLE VII -   IMTBRgSBgHSB

             While it Is not foreseen, should the-LESSEE'S operations in any way

       interfere with LESSOR'S operational functions or needs or if LESSEE'S activities

       constitute disruption or interference, LESSOR shall have the right to immediately

       terminate 'the Agreement and LESSEE will be required to remove all equipment

       within a reasonable period of time at lta sole coat.



       ARTieLB Till - HAIBTEMASCB OF POLES AHD AITACHMEHTS
r            The LESSOR shall maintain its Joint poles in a safe and serviceable

       condition and in accordance with the specifications mentioned in Article III and
r      shall replace said poles as they become defective.     LESSEE'S rights under this

                                                5




                                                                                               53
7$)




      Court of Appeals No. 03-14-00340-CV                            CPS Energy's Bench Notebook
p>                                                                                     April 22,2015
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             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.
                                                                       (0           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
                                                                            Sec. 55.176. CHARGE FOR 800-TYPE CALLS.
        collection agents as provided for in the financing order.
                                                                               (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.


W)

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



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«a   TAB 8 - Substantial Evidence In Record Supporting PUCT's Finding That
[                Actual Data Supports Average Number ofAttaching Entities ofThree

     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. I8A, Rebuttal Testimony ofRicardo 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
m          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.    "[According 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 11 of III, Binder 16, CPS Energy Ex. 19B,
           Supplemental Rebuttal Testimony ofRicardo 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 ofRicardo 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 ofRicardo 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
r                 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 ofRicardo 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 ofRicardo 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 ofRicardo 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 TestimonyofRicardo Lopez at 20:11-14.
r    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 ofIII,
           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
&m
           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

r
FR     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.
m            Part II ofIII, Binder 14, CPS Energy Ex. 4, Direct Testimony ofDavid 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
p"           // 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 ofDavid J. Ramirez at 8-14.




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