Electric Power Lines: To Bury, or Not to Bury. That is the Question
A common issue that Texas cities face when dealing with electric utility companies centers around whether they can require a company to place their electric utilities underground. One would think that the City simply needs to adopt an ordinance that requires electrical undergrounding. However, as many Texas cities are discovering, it is not that simple.
One notable Public Utility Commission of Texas (PUC) case centered around an appeal to the PUC by CenterPoint Energy Houston Electric, LLC from an ordinance adopted by League City, Texas. In this case, CenterPoint Energy claimed that a City cannot require a developer to request underground distribution lines through their subdivision ordinance because it violated their PUC approved tariff. The Texas Municipal League (TML) got involved and argued that requiring a developer to pay for the costs of undergrounding does not violate CenterPoint’s tariff as the company claimed.
The case eventually made its way from the State Office of Administrative Hearings (SOAH) to the PUC where it was determined that CenterPoint’s tariff permits a municipality to require developers or property owners to request nonstandard facilities (e.g. undergrounding) if the developers or property owners pay for any nonstandard facilities that are approved by the utility company. The operative word in that case is “approved.”
What this decision is ultimately telling us is that a City may adopt an ordinance that requires developers and property owners to request that electrical utilities be placed underground, but the ultimate decision must be left to the utility company to approve or deny such a request. This does not mean that the utility company can make denials for any reason. As CenterPoint’s tariff states on page 75, “If the entity requesting construction service desires delivery service utilizing nonstandard delivery system facilities…Company shall construct such facilities unless, in the reasonable judgment of Company, such construction would impair the Company’s facilities or facilities with which Company is interconnected, impair the proper operations of such facilities, impair service to retail customers, or there are other appropriate concerns that the entity requesting service is unable or unwilling to correct. The entity requesting construction service shall pay to Company the estimated cost of all nonstandard facilities, offset by an applicable allowance…” The tariff goes on to say on page 275 that, “Retail customer requesting special nonstandard underground service arrangements must reimburse the company for the difference in the cost between standard construction… and the requested special nonstandard service arrangements. The retail customer must install the concrete encased ducts, manholes, switchrooms, transformer vaults, and pads for transformers, switches, and protective devices in accordance with Company specifications. The Company may elect to install any ducts or manholes required in street rights-of-way at retail customer expense.” As you can see from the language above, their tariff does give them the right to approve or deny the request for undergrounding, and they can require the developer or property owner to pay all costs associated with undergrounding their electrical facilities.
In summary, what all Texas cities need to be aware of is that they can adopt a valid ordinance requiring electrical facilities to be placed underground, but the ordinance itself must be written in such a way that it does not conflict with the a utility company’s tariff. Meaning that the ordinance can require the customer to request that the electrical facilities be placed underground, but the ultimate decision must be left to the utility company, who must have a valid reason for such a denial and the customer has to reimburse the utility company for the costs associated with placing the facilities underground.
Please do not rely on this article as legal advice. We can tell you what the law is, but until we know the facts of your given situation, we cannot provide legal guidance. This website is for informational purposes and not for the purposes of providing legal advice. Information about our municipal law practice can be found here.
Carl attended the University of North Texas from 2008 to 2011, where he earned his Bachelor’s degree in History (both majoring and minoring in History). Upon graduating, he worked for TRCA, Inc. in Denton, Texas as a Sr. Account Executive, where he was personally mentored by the company’s CEO. It was in this capacity that...