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PUBLIC UTILITY COMMISSION OF TEXAS

PUBLIC UTILITY COMMISSION OF TEXAS. The Public Utility Commission of Texas, established by the Public Utility Regulatory Act in 1975, represents and protects the public interest in regard to public utility rates, operations, and services. Texas was the last state to enact such a law. Between 1905 and 1973 Texas lawmakers had attempted to regulate public utility companies-telephone, electric, water, and sewer-but with little success. They increased the power of local authorities in 1905, 1907, 1913, and 1937, yet these early efforts gave only limited powers to the city officials. Some legislators proposed measures to place utilities under the authority of already existent agencies such as the Railroad Commission, but this regulation was extended only to the gas utilities, under the 1921 Gas Utilities Law. Several legislators and a governor urged the creation of a state board to oversee utilities. In 1913 Representative Dwight L. Lewelling (Democrat from Dallas) offered one such measure, and in 1929 Governor Dan Moody also called for a state commission. In 1946 Senator Gus Strauss (D-Hallettsville) proposed legislation to establish a board; and in 1957 two freshmen representatives, William W. Kilgarlin (D-Houston) and Clyde Miller (D-Houston) suggested a state regulatory body. In 1969 and 1973 Senator Charles Wilson (D-Lufkin) worked for utility reforms-proposing regulatory legislation, holding legislative hearings, and conducting public meetings. Though the legislation was not passed, Wilson helped raise public interest and support for some type of utility reform.

In the early 1970s soaring utility bills, along with a telephone company scandal, provoked public outrage. Before the 1975 legislative session, consumer and student groups agitated for some kind of utility reform; these groups included the Texas Coalition for Utility Reform; the Texas Public Interest Research Group; Concerned Cities for Utility Regulation; and People Against Continental Telephone. In the spring of 1975 Texas lawmakers finally passed a measure in the waning hours of the session to establish a state public utility commission. The new board would wield power over intrastate telephone rates and services as well as all utilities in unincorporated areas, except natural gas utilities. Incorporated cities could relinquish control over utilities after two more years of local control. The act fixed the terms of commissioners-two, four, and six years for the first three commissioners, and thereafter staggered six-year terms for each commissioner. It also fixed the salary of commissioners: $40,500 in 1975 and $41,300 in 1976 (about the salary that railroad commissioners received).

By August 1975 Governor Dolph Briscoe had appointed the three men who would be the first commissioners of the Public Utility Commission of Texas. On September 2, 1975, Garrett Morris (of Fort Worth), George Cowden (of Dallas), and Alan Erwin (of Baytown) were sworn in. Over the ensuing months they obtained office space and supplies, hired employees, wrote rules, registered utility companies, and prepared for September 1, 1977, when actual regulation of the utility companies would begin. In the fall of 1977 the Public Utility Commission of Texas held its first rate case; it was for Southwestern Bell Telephone Company. After weeks of hearings, the commissioners granted Bell a rate increase of $57.8 million instead of the $298.3 million the company had requested. By January 1978 the majority of the legislators and public were satisfied with, even pleased by, the work of the PUC.

The history of the PUC since early 1978 has been chaotic. In the spring of that year, the commissioners differed over the Texas Power and Light rate case. Subsequent conflict within the commission led to the resignation of several employees and a change in chairmanship from Morris to Cowden. Erwin resigned early in 1979, and in 1981 Governor Bill Clements refused to reappoint Morris. As commissioner, Morris had dissented in a number of major PUC decisions concerning rate increases for telephone and electric utilities; he was outvoted two to one in December 1981, when the commission awarded a record $243.7 million rate increase to Southwestern Bell. Morris argued the award was $108 million too high. In some electric rate cases, Morris also thought the commission was too generous in allowing utilities to pass along to ratepayers the cost of construction work in progress on power plants, such as the South Texas Nuclear Project (later known as the South Texas Project).

In 1983 all three PUC commissioners resigned when Governor Mark White took office. White persuaded Erwin to assume the chairmanship. That same year, as a consequence of the Texas Sunset Advisory Commission's 1982 review of the PUC, the legislature increased the commission's responsibilities. In addition to its original responsibilities, the PUC was also to conduct management audits at least every ten years of each utility under its jurisdiction; to encourage alternative energy resources; to conduct hearings on fuel cost increases that resulted from emergencies; to develop a long-range statewide electrical energy forecast to be sent to the governor every two years and to be used in certification proceedings for new generation plants; to require builders of new generating facilities to file a notice of intent and obtain commission approval; and to evaluate utility construction plans and expenditures and take timely corrective action when necessary. Also, through the actions of the PUC Energy Efficiency Division, the commission was to administer energy conservation programs funded by the federal government. In 1987 the work of the Energy Efficiency Division was transferred to the governor's office, while the legislature gave the PUC more responsibility to determine the existence, impact, and scope of competition in the telecommunications industry.

In the early 1990s the Public Utility Commission had five administrative divisions: the Electric, Telephone, and Operations Review divisions (which provided the technical expertise necessary for rate-case and management-audit analyses and for utility policy development) and the Administration and Information Systems and Services divisions (which provided agency support services). By the early 1990s there were 177 certified electric utilities and sixty telephone utilities in Texas; the PUC had ratemaking authority over all of these except for the seventy-two municipal electric systems. At that time the PUC did not have direct authority over city-owned electric, water, or gas utilities, which were instead regulated by each city. In addition, at that time water and sewer utilities were regulated by the Texas Water Commission, and natural gas utilities, by the Texas Railroad Commission. In 1991 the PUC had about 242 staff members.

BIBLIOGRAPHY: 

Tracy Lynn Anders Greenlee, The Texas Public Utility Commission: A Creation of the Public's Will (M.A. thesis, Texas Christian University, 1987). Jack Hopper, The Consumer's Guide to Utility Regulation (Austin: Southwest Utility Associates, 1976). Jack Hopper, "A Legislative History of the Public Utility Regulatory Act of 1975," Baylor Law Review 28 (Fall 1976). Rick Piltz, The Public Utility Commission (Special Legislature Report No. 80, Austin: House Study Group, 1982).

Tracy Anders Greenlee

Citation

The following, adapted from the Chicago Manual of Style, 15th edition, is the preferred citation for this article.

Tracy Anders Greenlee, "PUBLIC UTILITY COMMISSION OF TEXAS," Handbook of Texas Online (http://www.tshaonline.org/handbook/online/articles/mdp09), accessed September 01, 2014. Uploaded on June 15, 2010. Published by the Texas State Historical Association.