Houston Lighting & Power Co. v. Auchan USA, Inc

In Houston Lighting & Power Co. v. Auchan USA, Inc., 995 S.W.2d 668, 674 (Tex. 1999), the Court considered several factors the PUC has applied to conclude that a tariff can reasonably limit liability for economic damages. 995 S.W.2d at 673-75. The Court determined that a tariff's limitation on liability for economic damages is reasonable because a utility: (1) must provide nondiscriminatory service to all customers within its area; (2) must maintain uniform rates and reduce costs; (3) cannot accurately estimate its exposure to damages or efficiently insure against risks; (4) cannot increase rates for all customers based on losses one specific class of customers incurs; (5) must comply with PUC regulations. Auchan, 995 S.W.2d at 673-75. In Auchan, we observed that a tariff prevents a utility from refusing service to customers who have a greater potential for economic damages. See Auchan, 995 S.W.2d at 674. Furthermore, we noted that if a utility's customers suffer economic injuries, the utility cannot raise rates to compensate for the losses it incurs if it is found liable. Thus, we concluded a utility's liability exposure could have a direct detrimental effect on its finances. See Auchan, 995 S.W.2d at 674)