Oncor Electric Delivery Co. v. Chaparral Energy, L.L.C.

511 S.W.3d 750, 2016 WL 156054, 2016 Tex. App. LEXIS 327
CourtCourt of Appeals of Texas
DecidedJanuary 13, 2016
DocketNo. 08-13-00159-CV
StatusPublished
Cited by1 cases

This text of 511 S.W.3d 750 (Oncor Electric Delivery Co. v. Chaparral Energy, L.L.C.) is published on Counsel Stack Legal Research, covering Court of Appeals of Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Oncor Electric Delivery Co. v. Chaparral Energy, L.L.C., 511 S.W.3d 750, 2016 WL 156054, 2016 Tex. App. LEXIS 327 (Tex. Ct. App. 2016).

Opinion

OPINION

ANN CRAWFORD McCLURE, Chief Justice

Oncor Electric Delivery Company LLC appeals a judgment entered against it following a jury trial on a breach of contract claim. For the reasons that follow, we affirm.

[753]*753FACTUAL SUMMARY

This lawsuit arises from an agreement between Oncor and Chaparral Energy LLC for the construction of equipment necessary to provide electricity to two oil wells situated in Loving County. Oncor is a transmission-and-distribution electric utility regulated by the Public Utility Commission of Texas (PUC). Chaparral is an independent oil and gas production company which operates the two wells. Chaparral requested Oncor to supply electricity to the wells. This required the construction of electrical infrastructure. Chaparral hired a third party to construct electrical facilities from the wells to a tie-in point, and Oncor was responsible for extending its own electrical infrastructure to that point. Before Oncor could begin its work, it needed to obtain two easements from third-parties who owned the land between Oncor’s existing infrastructure and the tie-in-point. There were significant delays in obtaining these easements, however, resulting in the project not being completed until January of 2009—more than thirteen months after Oncor and Chaparral entered into their agreement. During the interim, Chaparral was—at substantial expense— using generators to power its wells. After the easements were obtained and the electrical project was finally completed, Chaparral sued Oncor for breach of contract, seeking to recover the additional costs it had incurred by relying on generators. The jury found that Oncor failed to timely comply with its agreement to provide electricity to the oil wells and awarded Chaparral damages and attorneys’ fees.

THE DOCUMENTS AT ISSUE

There are two critical documents at issue: a letter agreement executed between the parties on November 6, 2007 (Agreement), and Oncor’s tariff (Tariff). Per Section 32.101 of the Public Utility Regulatory Act. (PURA), an electric utility -like Oncor must file a tariff with the PUC. Tex.Util.Code Ann. § 32.101(a). The PUC then approves the tariff, which governs the terms and conditions of the services that the utility provides to the public. Southwestern Bell Telephone Co. v. Metro-Link Telecom, Inc., 919 S.W.2d 687, 692 (Tex.App.—Houston [14th Dist.] 1996, writ denied).

The Agreement

By letter dated September 28, 2007, Israel Fuentes, a senior project designer for Oncor, solicited an agreement with Chaparral to “provide additional electric facilities sufficient to provide electric service” for the oil wells. The agreement then provided two requirements:

Pursuant to Company’s Tariff for Retail Delivery Service, Customer is responsible for $22,327.00 as payment for the Customer’s portion of the cost of installation of Company’s additional electric delivery facilities, such payment to be and remain the property of the Company, Customer’s payment in full is due at the time this agreement is returned to Company.
Please be aware that the start date of this project will be no earlier than two weeks preceding the execution of this agreement along with any payment that may be required to Company’s Tariff for Retail Delivery Service. A more definitive installation schedule will be provided upon your delivery of this agreement and payment to assist in your planning for this project. (Emphasis added).

Chaparral executed the agreement on November 6, 2007 and returned it with a check in full payment of the costs. Oncor received the payment no later than November 28, 2007. Chaparral fully complied with the agreement, but Oncor [754]*754wholly failed to provide “a more definitive installation schedule” as it was required to do.

The Tariff

Chapter 3 of the Tariff is entitled General Service Rules & Regulations.

3.1. Applicability

[[Image here]]
Company will use reasonable diligence to comply with the operational and transactional requirements and timelines for provision of Delivery Service as specified in this Tariff and to comply with the requirements set forth by Applicable Legal Authorities to effectuate the requirements of the tariff.
‡ ⅜ ⅜

3.12. Good-Faith Obligation

Company, Competitive Retailer, and Retail Customer will cooperate in good-faith to fulfill all duties, obligations, and rights set forth in this Tariff. Company, Competitive Retailer, and Retail Customer will negotiate in good-faith with each other concerning the details of carrying out their duties, obligations, and rights set forth in this Tariff.
[[Image here]]

Chapter 5 encompasses the service rules and regulations for retail customers.

5.7.3 Processing of Requests For Construction of Delivery System

Requests for new residential Delivery Service requiring Construction Service, such as line extensions, shall be completed within 90 days of execution of the Facility Extension Agreement, or within a time period agreed to by the entity requesting the Construction Service and Company, and after the entity requesting Construction Service has made satisfactory payment arrangements for Construction Service Charges. For all other extensions requiring construction, requests should be completed within the time estimated by Company. For the purposes of this section, facility placement that requires a permit for a road or railroad crossing will be considered a line extension. Unless mutually agreed to by Company and Retail Customer, within ten Business Days of Company’s receipt of a detailed request, Company shall give the entity requesting Construction Service an estimated completion date and an estimated cost for all charges to be assessed. (Emphasis added).

Clearly, the agreement between Oncor and Chaparral involved retail service rather than residential service such that the ninety day time frame does not apply. But that does not end the inquiry. Unless the parties agreed otherwise, Oncor was required by the Tariff to give Chaparral an estimated completion date. The Tariff does not require that Chaparral specifically request it, in writing or otherwise. Nor does the duly executed Agreement. Reading the Agreement and the Tariff together, once Oncor received a detailed request for services from Chaparral, Oncor was required to deliver an estimated completion date within ten days. Oncor’s arguments are premised on its position that it could not deliver an estimated completion date until the necessary easements were obtained. There was competing evidence on this issue of delay, which the jury resolved in Chaparral’s favor.

THE PLEADINGS

Chaparral filed suit for breach of contract. The first amended petition was the live pleading at trial:

Oncor and Chaparral were parties to the Service Agreement, which constituted a binding contract. Chaparral paid Oncor $22,327, as the Service Agreement required, via the November 2007 Check. [755]

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Oncor Elec. Delivery Co. v. Chaparral Energy, LLC
546 S.W.3d 133 (Texas Supreme Court, 2018)

Cite This Page — Counsel Stack

Bluebook (online)
511 S.W.3d 750, 2016 WL 156054, 2016 Tex. App. LEXIS 327, Counsel Stack Legal Research, https://law.counselstack.com/opinion/oncor-electric-delivery-co-v-chaparral-energy-llc-texapp-2016.