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Oncor Elec. Delivery Co. LLC v. Chaparral Energy, LLC

Supreme Court of Texas

February 7, 2018, Argued; April 27, 2018, Opinion Delivered

No. 16-0301

Opinion

 [*136]  The question in this case is whether the Texas Public Utility Regulatory Act grants the Texas Public Utility Commission (the PUC) exclusive jurisdiction to resolve issues underlying a customer's claim that a PUC-regulated utility breached a contract by failing to timely provide electricity services. We hold that it does, so we reverse the court of appeals' judgment and render judgment dismissing this case without prejudice.

Background

In 2007, Chaparral Energy, LLC, requested that Oncor Electric Delivery Co. provide electricity to two wells Chaparral had recently drilled in Loving County. Oncor agreed, although it would have to construct new facilities to deliver electricity from its existing facilities to a "tiein" point from which Chaparral could construct facilities to transmit the electricity to the wells. Oncor allegedly represented that it could complete its work within about ninety days, possibly even sooner. In late September 2007, Oncor delivered a proposed written agreement (the Service Agreement) to Chaparral. [**2]  The Service Agreement required Chaparral to pay $22,327 as its share of Oncor's costs to construct the new facilities. The agreement provided that "the start date of this project will be no earlier than two weeks preceding the execution of this agreement" and that Oncor would provide a "more definitive installation schedule" upon Chaparral's delivery of the executed agreement and required payment. Chaparral delivered the signed Service Agreement and  [*137]  the $22,327 payment to Oncor by the end of November.

Oncor never provided Chaparral a "more definitive installation schedule." Several weeks later, when Chaparral inquired about the project's status, Oncor explained that it was having difficulty obtaining easements it needed to construct the new facilities across privately owned land. Chaparral alleges that these representations were false and that Oncor did not even attempt to obtain all of the necessary easements until several months later. In any event, Oncor did not obtain the easements until December 2008. According to Chaparral, Oncor then finished constructing the new facilities in two days. Meanwhile, Chaparral allegedly spent over $300,000 to rent generators and purchase diesel [**3]  fuel to provide the necessary power to the wells.

Chaparral sued Oncor in district court for breach of contract, seeking actual damages, additional damages, interest, attorney's fees, expenses, taxable costs, "and any further legal or equitable relief to which Chaparral may be entitled." Chaparral alleged that "Oncor did not cooperate in good faith to fulfill its duties and obligations" under the Service Agreement, that "Oncor did not use reasonable diligence, nor did Oncor act in a manner consistent with good business practices, reliability, safety, and expedition," and that Oncor "engaged in intentional misconduct" and was grossly negligent.1 It also specifically pleaded that all "conditions precedent to the causes of action asserted and the relief requested by Chaparral herein have occurred, have been performed or have been waived."

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546 S.W.3d 133 *; 2018 Tex. LEXIS 345 **; 61 Tex. Sup. J. 930; 2018 WL 1974336

ONCOR ELECTRIC DELIVERY COMPANY LLC, PETITIONER, v. CHAPARRAL ENERGY, LLC, RESPONDENT

Prior History:  [**1] ON PETITION FOR REVIEW FROM THE COURT OF APPEALS FOR THE EIGHTH DISTRICT OF TEXAS.

Oncor Elec. Delivery Co. LLC v. Chaparral Energy, L.L.C., 511 S.W.3d 750, 2016 Tex. App. LEXIS 327 (Tex. App. El Paso, Jan. 13, 2016)

CORE TERMS

exclusive jurisdiction, tariff, disputes, electricity, damages, rates, regulatory scheme, argues, administrative remedy, court of appeals, jury trial, facilities, exhaust, courts, breach-of-contract, delivery, electric utility, district court, billing, parties, exclusive original jurisdiction, retail customer, regulations, construct, customer, constitutional right, irreparable harm, public utility, substantial-evidence, expertise

Administrative Law, Judicial Review, Reviewability, Exhaustion of Remedies, Separation of Powers, Primary Jurisdiction, Standards of Review, De Novo Standard of Review, Governments, Courts, Authority to Adjudicate, Energy & Utilities Law, Regulators, Public Utility Commissions, Authorities & Powers, Ratemaking Procedures, Administrative Proceedings, Jurisdiction, Business & Corporate Compliance, Energy & Utilities Law, Electric Power Industry, State Regulation, Reviewability, Substantial Evidence, Constitutional Law, Fundamental Rights, Procedural Due Process, Scope of Protection, Civil Procedure, Trials, Jury Trials, Right to Jury Trial