In 1984, Spectrum Gulf Coast, LLC's predecessor entered a pole-attachment agreement with CPS Energy, the municipally owned electric utility of the City of San Antonio, allowing it to attach telecommunications equipment to CPS's poles. The agreement set an initial rate of $3.75 per pole with an escalator clause permitting future increases, gave either party the right to terminate on six months' notice, and required the parties to "at all times" comply with "all laws, ordinances, and regulations which in any manner affect the rights and obligations of the parties," so long as those laws remained in effect. In 1987, CPS entered a similar (but escalator-free) agreement with AT&T. Over time Spectrum's invoiced rate rose while AT&T continued paying the original $3.75 rate; by 2007 CPS was invoicing both companies at a higher rate but made no serious effort to actually collect it from AT&T.
Spectrum sued CPS in 2008 for breach of contract and for violating the Public Utility Regulatory Act's (PURA) 2005 anti-discrimination amendments (Tex. Util. Code § 54.204). After a detour through the Public Utility Commission and an earlier trip to this Court — which held in Time Warner Cable Texas LLC v. CPS Energy, 593 S.W.3d 291 (Tex. 2019), that CPS's failure to make a "serious or meaningful effort" to collect the higher rate from AT&T was unlawful discrimination — the case returned to the trial court. Spectrum re-alleged that CPS's discriminatory rates breached the parties' agreement; the trial court granted Spectrum summary judgment on breach of contract (dismissing its separate statutory and unjust-enrichment claims) and certified a permissive appeal on whether CPS breached the agreement by imposing discriminatory rates, reserving damages for later. The Thirteenth Court of Appeals reversed, holding the 1984 agreement did not "renew" from year to year and therefore never incorporated PURA's later amendments. This Court granted review, heard argument February 11, 2026, and issued its opinion April 10, 2026. This week's order denies the parties' motions for rehearing but reflects a revised opinion (the version summarized here).
Petitioner (Spectrum Gulf Coast, LLC): The agreement is an "evergreen" contract — one that renews term to term — and evergreen contracts become subject to newly enacted laws at each renewal; the court of appeals wrongly fixated on the agreement's use of "continue" rather than "renew" instead of looking to the agreement's actual elements. Allowing CPS to use the contract's specific wording to immunize itself from PURA liability this Court has already found meritorious (in Time Warner) would let a monopoly utility contract its way out of statutory regulation, disrupt the Legislature's integrated state/federal pole-attachment scheme, and create a split between state and federal regulatory treatment of materially identical contract language.
Respondent (City of San Antonio, acting through CPS Energy): PURA does not apply to this agreement in the first place — an argument CPS had not preserved when the case was last before this Court but pressed on remand. In any event, the 1984 agreement is a single, non-renewing contract, so it never incorporated the PURA amendments enacted decades after its execution, and the court of appeals correctly held CPS could not have breached an agreement that predates the statutory requirements Spectrum invokes.
Yes. The petition argued the case presented a straightforward but recurring question — whether a regulated monopoly utility can use technical contract wording to immunize itself from conduct this Court already held unlawful — and that the court of appeals' "evergreen contract" analysis rested on a misunderstanding of general contract-law principles important to the state's jurisprudence generally (Tex. Gov't Code § 22.001(a)), with the added consequence of disrupting the Legislature's coordinated state/federal system of pole-attachment regulation.
contracts, electricity, administrative-law
Petition for Review; argued February 11, 2026; decided by full opinion issued April 10, 2026, revised on rehearing (rehearing denied this week, per the revised opinion now on file).
PURA applies to this pole-attachment agreement between a municipally owned utility and a telecommunications/cable provider. Separately, and regardless of whether the agreement is characterized as renewing annually, its "all laws" clause incorporates legal changes enacted after 1984 that affect the parties' rights and obligations — including PURA's later rate-discrimination and rate-ceiling provisions. CPS's practice of invoicing Spectrum and AT&T identically while collecting only from Spectrum constitutes discrimination prohibited by § 54.204(b).
The opinion does not recite a separate standard-of-review section; the case turns on interpreting the parties' contract and applying PURA's text, questions the Court resolved without deferring to either lower court's construction.
The Court found it unnecessary to resolve whether the agreement is a true "evergreen" contract, because even assuming CPS's view that only a single 1984 agreement exists, that agreement's own "all laws" and "at all times" language reaches whatever laws apply at any point during its life, not just those in force in 1984. The Court explained that utilities occupy a different position than ordinary private contracting parties: because normal market competition doesn't discipline a monopoly utility, the Legislature has built a pervasive regulatory framework around it, and a monopoly utility's contract should not be read to let it evade that framework. The agreement's own choice to let either party terminate on six months' notice, rather than requiring renegotiation whenever the law changed, confirmed that the parties chose incorporation of future law as their mechanism for handling legal change. On the separate question of PURA's reach, the Court held that § 54.204(b)'s discrimination ban applies without regard to Spectrum's specific regulatory classification because CPS's favoritism toward AT&T necessarily harmed Spectrum's competitive position, and that § 54.204(c)'s federal rate ceiling by its own terms applies to "any entity, regardless of the nature of the services provided."
Reversed the court of appeals' judgment and remanded the case to the trial court for further proceedings, including the previously reserved damages question.
Justice Young delivered the opinion of the Court. Justices Bland and Sullivan did not participate in the decision. No separate concurrence or dissent was filed.
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