The gas utility submitted, and the Railroad Commission approved, a rate schedule that included a clause allowing the utility to raise (or in theory lower) the rates over time, without the need for additional hearings each time. This clause, which they called a “cost of service adjustment” (COSA), required the utility to do similar calculations to what it might do when submitting proposed rates to a regulator, and then to show its work by making a public filing.

The challenge in the Texas Supreme Court was whether the Commission had the authority to approve such a clause. The court of appeals held that it did, and the Texas Supreme Court agreed.

Readers that are not deeply immersed in utility law might prefer to skip to the footnotes, particularly footnote 16 about agency deference. The footnote acknowledges that the Texas Supreme Court has previously talked about giving an agency’s view of a rule “serious consideration.”

Relying on these holdings, the court of appeals in this case decided to “defer” to the Commission’s construction [of its statute]. The parties and certain amici disagree whether such deference was appropriate in this case, and some urge that we use this case as an opportunity to add clarity to the so-called agency deference doctrine. Because we independently conclude that [the Commission had authority], we need not “defer to” the Commission’s construction or give it “serious consideration,” and we do not agree that this is an appropriate case to provide any clarity that may be needed.

This is hardly a warm embrace of “the so-called agency deference doctrine.” But any clarification of how agency deference squares with the form of textual analysis preferred by the Texas Supreme Court will wait for another case.