Opinion by Justice Moseley.
After Nawaid Isa's electric bill for his outdoor cricket fields increased dramatically as a result of additional charges related to his high energy usage (demand charges), Isa refused to pay the demand charges and eventually filed a formal complaint with the Public Utility Commission of Texas (the PUC) against Ambit Energy, LLC (Ambit), and CenterPoint Energy Houston Electric, LLC (CenterPoint), requesting a refund of the demand charges, and a refund of construction charges paid to CenterPoint and asserting claims for mental suffering and litigation costs. In a series of orders, the Administrative Law Judge (ALJ) assigned to hear the case dismissed Isa's other claims and ultimately dismissed the matter with prejudice (the ALJ's dismissal order) after Ambit credited all of the demand charges to Isa's account. After his appeal of the ALJ's dismissal order was denied by the PUC by operation of law, Isa appealed to the 201st Judicial District Court of Travis County.
In this appeal, Isa does not dispute that he failed to file a motion for rehearing after his appeal of the ALJ's dismissal order was denied. Rather, he asserts that the trial court erred in granting the pleas to the jurisdiction because (1) his appeal of the ALJ's dismissal order should be construed as a motion for rehearing, (2) filing a motion for rehearing after the PUC denied his appeal would have been futile, (3) the ALJ's dismissal order was not compliant with the requirements of the PUC's rules and the Texas Government Code, and (4) the PUC's rules prevent filing a motion for rehearing instead of an appeal from the ALJ's dismissal order.
In 2013, Isa constructed a lighted cricket field in Wallis, Texas. He installed sixty-foot-tall, concrete poles with high-efficiency flood lights and other facilities for use at the cricket field. Isa worked with CenterPoint, the designated transmission and distribution utility (TDU), to connect his lighting system to CenterPoint's existing electric delivery system. As a result, CenterPoint installed a utility pole with transformers at a cost to Isa of $3,341.00. Afterward, Isa selected Ambit, a retail electric provider (REP), to provide his electric service and began receiving electric service on August 30, 2013. At the time, the cricket field was classified a "Commercial Under 10 KVA" customer by CenterPoint.
In October 2013, the cricket field's electricity consumption exceeded 10 KVA, which triggered a new service classification under CenterPoint's approved tariff. As a result, CenterPoint charged Ambit additional charges triggered by the cricket field's high energy usage. These demand charges were then billed to Isa by Ambit beginning in October 2013.
On December 10, 2013, Isa filed an informal complaint with the PUC's Consumer Protection Division, and alleged that Ambit and CenterPoint failed to inform him about the demand charges that his cricket club began to incur on its electric bill. After his informal complaint was denied, Isa filed a formal complaint with the PUC against Ambit and CenterPoint, disputing the demand charges. On February 14, 2014, the PUC referred the complaint to the State Office of Administrative Hearings (SOAH).
In three orders, the ALJ granted summary decisions in favor of Ambit and CenterPoint on all of Isa's claims, except his claims regarding the demand charges. The ALJ also determined that the only remedy for Isa if he prevailed on his claims would be a refund of or credit of some or all of the demand charges. See TEX. UTIL. CODE ANN. § 17.157(b)(3) (West 2016). During the pendency of the complaint, Ambit placed a hold on collection activities regarding Isa's unpaid bill. After one year, Ambit credited Isa's account in the amount of $2,184.56 to satisfy the balance owed on the account and notified Isa of that credit on January 27, 2015. Ambit and CenterPoint then filed a joint motion to dismiss, arguing that since Ambit had not tried to collect the disputed demand charges and had credited Isa's account with more than the amount in dispute, his claims were moot.
On June 4, 2015, the ALJ granted the joint motion to dismiss and dismissed Isa's complaint with prejudice. In its order of dismissal, the ALJ noted,
In support of their motion, Ambit and CenterPoint provided evidence that:
(Footnote omitted).
The ALJ then held that "the ALJ agrees that Ambit has already effectively made [Isa] whole ... and that no additional relief could be awarded even if [Isa] prevailed at the hearing on the merits" and dismissed the matter with prejudice pursuant to PUC rule 22.181. See 16 TEX. ADMIN. CODE § 22.181 (2016) (Pub. Util. Comm'n of Tex., Dismissal of a Proceeding),
A plea to the jurisdiction is a dilatory plea asserting that a trial court lacks subject-matter jurisdiction. See Tex. Dep't of Parks & Wildlife v. Miranda, 133 S.W.3d 217, 225-26 (Tex. 2004). Whether a trial court has subject-matter jurisdiction is a question of law that is reviewed de novo. Id. at 226. A plea to the jurisdiction may challenge whether the plaintiff's pleadings affirmatively allege facts showing the court's jurisdiction and may also challenge the existence of jurisdictional facts to support the pleadings. Mission Consol. Indep. Sch. Dist. v. Garcia, 372 S.W.3d 629, 635 (Tex. 2012).
The plaintiff has the initial burden to demonstrate the trial court's jurisdiction. Heckman v. Williamson Cty., 369 S.W.3d 137, 150 (Tex. 2012); see Miranda, 133 S.W.3d at 226. The pleadings are construed liberally in favor of the plaintiff, looking to the plaintiff's intent. Miranda, 133 S.W.3d at 226. "If the pleadings do not contain sufficient facts to affirmatively demonstrate the trial courts [sic] jurisdiction but do not affirmatively demonstrate incurable defects in jurisdiction, the issue is one of pleading sufficiency and the plaintiffs should be afforded the opportunity to amend." Id. at 226-27 (citing Cty. of Cameron v. Brown, 80 S.W.3d 549, 555 (Tex. 2002)). Conversely, "[i]f the pleadings affirmatively negate the existence of jurisdiction, then a plea to the jurisdiction may be granted without allowing the plaintiffs an opportunity to amend." Miranda, 133 S.W.3d at 227 (citing Brown, 80 S.W.3d at 555).
Proceedings of the PUC are governed by the Public Utility Regulatory Act,
Isa does not contest (and his pleadings in the district court confirm) that the only pleading he filed after the ALJ's dismissal order was his appeal of the order pursuant to PUC rule 22.123. However, he argues in his first point of error that this pleading should be construed to be a motion for rehearing since (1) the order of the ALJ was a final order and (2) an appeal under PUC rule 22.123 serves the same purpose as a motion for rehearing under PUC rule 22.264. We disagree.
Former rule 22.181 provides two paths to arrive at the same destination, i.e., an order of the PUC that is subject to becoming a final order. The rule provides that if the presiding officer
The second path under rule 22.181 provides that the presiding officer may issue the dismissal order. In that circumstance, the rule provides an opportunity for review by the PUC through an appeal pursuant to PUC rule 22.123. 16 TEX. ADMIN. CODE § 22.181(a)(4) (2016) (Pub. Util. Comm'n of Tex., Dismissal of a Proceeding). Under rule 22.123, the Commissioners are sent separate ballots to determine whether they will consider the appeal at an open meeting. 16 TEX. ADMIN. CODE § 22.123(a)(6)
Thus, the appeal of the dismissal order serves a two-fold purpose. First, it provides an opportunity for the PUC to review the dismissal order. Second, it provides a mechanism by which the party aggrieved by the order can secure an order of the PUC that is subject to becoming a final order. Thus, the appeal of the dismissal order comes before the PUC order is secured. It is only after the aggrieved party has secured an order of the PUC that is subject to becoming a final order that a motion for rehearing under rule 22.264 becomes relevant.
As applicable to Isa's proceeding, the APA provides that an order in a contested case becomes final:
TEX. GOV'T CODE ANN. § 2001.144(a)(1), (2). Further, as applicable to Isa's proceeding, only an order that becomes final as a result of the overruling of a timely filed motion for rehearing is appealable to the district court. TEX. GOV'T CODE ANN. § 2001.145(b); City of Port Arthur, 13 S.W.3d at 844; see Suburban Util. Corp., 652 S.W.2d at 364.
Thus, while the appeal of the ALJ's dismissal order under rule 22.123 serves the critical procedural purpose of securing a PUC order subject to becoming final, a motion for rehearing under rule 22.264 is necessarily filed after the PUC order is secured, and serves the purpose of preserving the party's right to appeal to district court. While it is true that the procedure at the PUC to determine whether to accept an appeal pursuant to rule 22.123 is similar to the procedure used to determine whether to accept a motion for rehearing pursuant to 22.264,
In addition, as noted above, the purpose of a motion for rehearing "is to provide notice to the agency that the moving party is dissatisfied with its final order and that an appeal will be prosecuted if the ruling is not changed." Suburban Util. Corp., 652 S.W.2d at 364. Further, since a motion for rehearing must state any claimed error with specificity and state the factual and legal basis of the claimed error, the agency is advised of the specific issues that will be appealed. TEX. GOV'T CODE ANN. § 2001.146(g); 16 TEX. ADMIN. CODE § 22.264(b) (2016) (Pub. Util. Comm'n of Tex., Rehearing). This gives the agency the opportunity to correct any error in its decision, or to prepare to defend it. Suburban Util. Corp., 652 S.W.2d
For these reasons, we find that Isa's appeal of the ALJ's dismissal order may not be construed as a motion for rehearing, and we overrule his first point of error.
In his second point of error, Isa asserts that a motion for rehearing would have been futile. He argues that since the PUC had already reviewed the ALJ's dismissal order and upheld it, it would have been pointless to file a motion for rehearing and reassert the same arguments.
Futility is an exception to the requirement that a party seeking judicial review must exhaust his administrative remedies. Ogletree v. Glen Rose Indep. Sch. Dist., 314 S.W.3d 450, 454 (Tex. App.-Waco 2010, pet. denied). However, to prevail under this exception, Isa had the burden to demonstrate that the motion for rehearing would be denied. Id.; see Castillo v. Tex. Bd. of Prof'l Eng'rs, No. 03-11-00797-CV, 2014 WL 858644, at *2 (Tex. App.-Austin Feb. 28, 2014, no pet.) (mem. op.) (party's unsubstantiated allegations that motion for rehearing would have been futile because of agency's bias toward him provides no basis for reversal of dismissal of suit for judicial review based on party's failure to file motion for rehearing). Further, Isa may not avoid exhausting his administrative remedies simply because he believes a motion for rehearing will not be successful. Apollo Enters., Inc. v. ScripNet, Inc., 301 S.W.3d 848, 867 (Tex. App.-Austin 2009, no pet.) (citing In re Liberty Mut. Fire Ins. Co., 295 S.W.3d 327, 328-29 (Tex. 2009)) (per curiam) (orig. proceeding).
Isa offers no evidence that a motion for rehearing would have been unsuccessful. Contrary to Isa's argument that a motion for rehearing would simply be changing the title of his appeal, as seen above, the appeal and the motion for rehearing serve different purposes. Although the PUC denied his appeal, a motion for rehearing would have alerted the PUC that an appeal was likely and given it the opportunity to examine the dismissal order and correct any errors. Isa may not deny the PUC this opportunity simply because he believes a motion for rehearing would be fruitless, or redundant of his appeal. We overrule Isa's second point of error.
Next, Isa asserts that since the ALJ's dismissal order did not contain separately stated findings of fact and conclusions of law, it was not compliant with the APA and PUC rules and, therefore, was not subject to a motion for rehearing. See TEX. GOV'T CODE ANN. § 2001.141(b) ("A decision or order that may become final under Section 2001.144 must include findings of fact and conclusions of law, separately stated."); 16 TEX. ADMIN. CODE § 22.263(a)(2) (2016) (Pub. Util. Comm'n of Tex., Final Orders) ("A final order shall include findings of fact and conclusions of law separately stated and may incorporate findings of fact and conclusions of law proposed within a proposal for decision."). Although Isa is correct that a final order of the PUC must include findings of fact, the lack of findings of fact will not prevent it from becoming a final order subject to a motion for rehearing. See BFI Waste Sys. of N. Am., Inc. v. Martinez Env't Grp., 93 S.W.3d 570, 578-79 (Tex. App.-Austin 2002, pet. denied).
The Austin Court of Appeals held that since MEG did not complain in its motion for rehearing about the Commission's failure to make findings of fact and conclusions of law on the permit's lifetime duration, this issue was not preserved for review. Id. at 578. After noting the purpose of a motion for rehearing, the court explained that in order to preserve an error for judicial review, the motion for rehearing "must set forth: (1) the particular finding of fact, conclusion of law, ruling, or other action by the agency which the complaining party asserts was error; and (2) the legal basis upon which the claim of error rests." Id. (citing Burke v. Cent. Educ. Agency, 725 S.W.2d 393, 397 (Tex. App.-Austin 1987, writ ref'd n.r.e.)). The court pointed out that although MEG complained about the lack of findings of fact and conclusions of law in its exceptions to the ALJs' proposal for decision, it did not make that complaint in its motion for rehearing. Id. at 578-79. Since the complaint was not included in the motion for rehearing, "the Commission was entitled to conclude that MEG had abandoned this complaint." Id. at 579 (citing Ross v. Tex. Catastrophe Prop. Ins. Ass'n, 770 S.W.2d 641, 643-44 (Tex. App.-Austin 1989, no writ)). Since the motion for rehearing did not complain of the Commission's failure to include findings of fact and conclusions of law, the error was not preserved for review.
Thus, the lack of findings of fact and conclusions of law on the duration issue did not render the Commission's order on the duration of the permit not subject to a motion for rehearing. Rather, the aggrieved party was required to point out this defect in its motion for rehearing in order to afford the Commission an opportunity to correct the error. Similarly, in this case, even assuming the ALJ's dismissal order lacked findings of fact, Isa was required to point out this deficiency in a motion for rehearing. Since he failed to do so, he has failed to preserve any error regarding the lack of findings of fact. We overrule Isa's third point of error.
Finally, Isa asserts that rule 22.123(b)(1) prevents the filing of a motion for rehearing after appealing an ALJ's
By its plain language, section (b) of rule 22.123 applies only to interim orders issued by the PUC. 16 TEX. ADMIN. CODE § 22.123(b) (2016) (Pub. Util. Comm'n of Tex., Appeal of an Interim Order & Motions for Reconsideration of Interim Order Issued by the Comm'n) (titled "Motion for reconsideration of interim order issued by the [PUC].") Section (b)(1), upon which Isa relies, states:
16 TEX. ADMIN. CODE § 22.123(b)(1) (2016) (Pub. Util. Comm'n of Tex., Appeal of an Interim Order & Motions for Reconsideration of Interim Order Issued by the Comm'n) (emphasis added). Again, by its plain language, section (b)(1) only applies to interim orders issued by the PUC, including the provision that the PUC's interim orders "shall not be subject to.... motions for rehearing prior to the issuance of a final order." Id.
By contrast, section (a) of rule 22.123 applies to appeals from an interim order of a presiding officer, as well as appeals of a presiding officer's dismissal order. 16 TEX. ADMIN. CODE § 22.123(a) (2016) (Pub. Util. Comm'n of Tex., Appeal of an Interim Order & Motions for Reconsideration of Interim Order Issued by the Comm'n), § 22.181(a)(4) (2016) (Pub. Util. Comm'n of Tex., Dismissal of a Proceeding). Under section (a), at any time prior to a decision by the PUC on the appeal, the presiding officer may treat the appeal as a motion for reconsideration. 16 TEX. ADMIN. CODE § 22.123(a)(8) (2016) (Pub. Util. Comm'n of Tex., Appeal of an Interim Order & Motions for Reconsideration of Interim Order Issued by the Comm'n). Unlike section (b), there is no provision in section (a) that provides that an appeal from an ALJ order that is treated as a motion for reconsideration by the ALJ is not subject to a motion for rehearing. Further, as seen above and as happened in this case, if the appeal has been overruled by the PUC, it becomes an order of the PUC that is subject to becoming final and subject to a motion for rehearing.
We overrule Isa's fourth point of error.
Since Isa was required to exhaust his administrative remedies by filing a motion for rehearing and failed to do so, the trial court lacked subject-matter jurisdiction. See Subaru of Am., Inc., 84 S.W.3d at 221. Therefore, we affirm the trial court's judgment granting the pleas to the jurisdiction and dismissing Isa's appeal from the PUC.
Oncor Elec. Delivery Co. LLC v. Pub. Util. Comm'n of Tex., 507 S.W.3d 706, 711-12 (Tex. 2017) (citations omitted).
