UNT disputes utility rate case with Denton

by Courtney Roberts of North Texas Daily

UNT plans to appeal its case in the ongoing litigation involving the city of Denton over the rate the university pays for electricity.

According to city officials, the university is defending its position that a discount is still in effect for electric rates from municipal electricity plants and has refused to pay the newer, higher rate to Denton Municipal Electric.

"It's our position that this is a matter of statutory interpretation," said Nancy Footer, vice chancellor and general counselor for the university, in a previously issued statement. "And with all due respect to the court, we disagree with the ruling, and we intend to appeal."

On Jan. 15, Denton County District Judge Jake Collier ruled in favor of the city that a state-mandated electric rate discount for public colleges and universities expired in September 2007.

"In 1995, the legislature enacted the Texas Utilities Code, which declared electric companies had to give the university a 20 percent discount on the base rate," said Michael Whitten, an attorney for the city. "The issue in this case is the interpretation of a statute passed in 1999."

On Sept. 1, 2007, a Senate bill deregulated the state's electric companies with Section 63 of that bill addressing the discount for higher education institutions.

According to the Texas Legislature Web site, the state enacted the bill in 1999 to amend the Utilities Code and deregulate the electricity generation market to allow for competition in the retail sale of electricity.

The case centers on the conflicting interpretations of whether Section 63 replaces the Texas Utilities Code or accompanies it. It also is unclear if Section 63 terminates the discount to public institutions of higher education in all or some instances.

The court of appeals in Austin has given an interpretation that favors the city, Whitten said.

"UNT is obviously withholding a significant amount of the revenue," Whitten said. "If they lost the appeal, they would owe $750,000, not including interest."

Other universities in the area are deciding how they will be affected by the outcome.

"If UNT wins the appeal, we would expect to work with the city of Denton to figure out what TWU would pay as well because right now, we are paying the higher or regular electric rate," said Brenda Floyd, Texas Woman's University vice president for finance and administration.

UNT is awaiting Collier's acceptance of the court judgment before being allowed to appeal within the allotted 30 days.

"This is just the first round," Whitten said. "The fight is not over."