The Texas Supreme Court has reversed a Corpus Christi Court of Appeals decision holding that 2005 changes to the Public Utility Regulatory Act did not apply to a 1984 agreement between a telecomm provider and San Antonio’s electric utility governing pole-attachment fees.
Spectrum Gulf Coast, LLC v. City of San Antonio, acting by and through City Public Service Board (No. 24-0794; April 10, 2026) arose from a 1984 agreement between CPS Energy, the City of San Antonio’s public utility, and the predecessor in interest of Spectrum. This agreement allowed Spectrum to attach telecomm equipment to CPS’s poles in exchange for an annual payment of $3.75 per pole with an escalator clause. The agreement further required the parties to “observe and comply with … all laws, ordinances, and regulations which in any manner affect the rights and obligations of the parties …, so long as such laws, ordinances or regulations remain in effect.” In 1987 CPS cut a similar deal with AT&T but without the escalator clause. As the years went on, Spectrum’s rate rose while AT&T’s stayed the same. In 2008, Spectrum sued CPS alleging breach of contract and violations of non-discriminatory pricing requirements of the 2005 amendments to PURA. The trial court kicked the case over to the PUC, where CPS filed a petition asking the commission to order AT&T and Spectrum to pay overdue and future pole-attachment fees and find that CPS’s charges were reasonable and consistent with PURA.
The commission, instead, ordered CPS to comply with PURA’s non-discrimination rule going forward. SCOTX eventually upheld the PUC’s determination that CPS violated PURA “based on CPS’s lack of a ‘seriouis or meaningful effort’ to collect the higher rates from AT&T while collecting far more from Spectrum.” Now back in the trial court, Spectrum amended its petition to allege that CPS failed to comply with existing law, thus breaching the parties’ agreement and unjustly enriching CPS. CPS moved for partial summary judgment, alleging that Spectrum breached the agreement by not paying invoiced amounts between 2009 and 2016. The trial court granted CPS’s motion and dismissed Spectrum’s statutory and unjust-enrichment claims. It did, however, grant Spectrum’s MSJ on its breach-of-contract claims. On appeal, the Corpus Christi Court of Appeals reversed the trial court’s judgment, holding “that the 1984 agreement did not ‘renew[]’ each year and thus did not incorporate new statutes into its terms.” Spectrum sought review, which SCOTX granted.
In an opinion by Justice Young, SCOTX reversed again. First, the Court held that PURA applied to the agreement. PURA provides that “a municipality or municipally owned utility may not discriminate in favor or againt a certificated telecommunications provider” for pole-attachment rates. § 51.003(4), Utilities Code. Other statutory provisions likewise require municipally owned utilities to treat certificated telecommunications providers the same and to charge uniform rates “regardless of the nature of the services provided.” § 54.204(c). No question that CPS charged AT&T less for the same thing than it did Spectrum, “thus causing provable economic harm.” Spectrum’s agreement with CPS required the parties to comply with the law all the time everywhere. And when Spectrum moved from providing simply “community antenna television services” to telecomm services, CPS charged it more for the “new service,” which PURA barred it from doing.
Moving to the issue of whether the 2005 PURA amendments applied to a 1984 agreement, the Court sensibly held that the “all laws” provision incorporates any statutory changes that occurred after 1984. Because CPS has a monopoly in its service area, its “agreements are premised on an anticipated relationship enduring for decades. One way to help such a relationship endure without discord is to bring new legal obligations within the contract rather than require its termination or continual renegotiation whenever such obligations arise.” The “all laws” provision, which obliged the parties to comply with laws “so long … as they remain in effect” could only signify “that previously operative laws that no longer have force are to be disregarded, while whatever law takes their place is to be followed.” CPS’s discriminatory rate violated the law. The Court remanded to the trial court so that Spectrum could proceed with its breach-of-contract claim.
