Charles GOEKE, et. al., Petitioners, v. HOUSTON LIGHTING & POWER COMPANY, Respondent, 797 S.W.2d 12

OPINION MAUZY, Justice. This is an administrative appeal involving the requirement for agency fact-findings as set forth in

section 16(

b) of the Administrative Procedure and Texas Register Act (APTRA). The trial court reversed a final order of the Public Utility Commission (Commission) on the ground that it had not met the requirements of

section 16(b). The trial court remanded the case to the agency. The court of appeals affirmed the trial court’s judgment. 761 S.W.2d 835. We reverse the judgment of the court of appeals and remand this cause to the trial court. In 1983, Houston Lighting & Power Company (HL &

P) filed with the Commission an application to amend its certificate of convenience and necessity in order to build a high-voltage transmission line and substation. The proposed amendment would allow the company to construct a high-voltage transmission line in an area 100 to 150 feet wide and 46 miles long, across the Texas counties of Harris, Waller, Austin and Washington. Charles Goeke and some 700 other residents in three of the counties (Waller, Austin, and Washington) intervened in the proceedings before the Commission to oppose certification of HL & P’s proposed line.

Petitioners, known in the proceedings as the Goeke Group, opposed certification of the proposed line on the grounds that it was unnecessary and that HL & P had failed to utilize the existing corridors and rights-of-way in the area. The Commission denied HL & P’s amended certificate and stated as follows in its order: 2. Houston Lighting and Power Company failed to meet its burden of proving that the need for the proposed Salem-Zenith line outweighs the detrimental impact of the proposed route on the factors set forth in

Section 54(

c) of the Public Utility Regulatory Act, Tex.Rev.Civ.Stat. Ann. art. 1446c (Vernon Supp.1986). Specifically, Houston Lighting and Power Company failed to present sufficient credible evidence to enable the Commission to weigh and make findings regarding the need for the line against the potential negative effects on the

Section 54(

c) criteria caused by the proposed route, especially in light of the concerns raised by the intervenors. 3. The Company failed to prove the sufficiency of the routing selection methodology which led to the selection of the proposed route in that it failed to convince the Commission that the methodology employed adequately considered alternative routes using existing rights-of-way and/or parallel lines. The district court reversed the Commission’s decision, holding that APTRA

section 16(

b) required the agency to supply findings of underlying fact. The trial court ordered a general remand to the Commission, stating: Because of the lack of findings required by law, the court cannot and has not reached any other issue raised by [HL & P], including whether the Commission applied a proper legal standard, whether the order is supported by substantial evidence, or whether the evidence compels granting the permit. The court of appeals affirmed the trial court’s judgment.

It held that paragraph two of the Commission’s order constituted a finding of fact on statutory criteria but that paragraph three of the or.der represented an attempted finding of underlying fact that was inadequate under

section 16(b). 761 S.W.2d at 843. We reverse the judgment of the court of appeals and hold that the Commission issued a valid final order that is subject to judicial review. The Public Utility Regulatory Act (PURA) sets forth the statutory criteria that the Commission must consider in deciding whether to grant a certificate of convenience and necessity. Tex.Rev.Civ. StatAnn. art. 1446c (Vernon Supp.1990).

Section 54(

b) of PURA provides that the Commission may grant a certificate if it finds that the certificate is “necessary for the service, accommodation, convenience, or safety of the public.”

Section 54(

c) further requires that, in making its decision, the Commission must consider the adequacy of existing service, the need for additional service, the effect of the granting of a certificate on the recipient of the certificate and on any public utility of the same kind already serving the proximate area, and on such factors as community values, environmental integrity, and the probable improvement of service or lowering of cost to consumers in such area resulting from the granting of such certificate. On its face, the Commission’s order makes clear that it was considering and addressing the statutory criteria.

Paragraph two addresses the need for the transmission line. Necessity is a statutory criteria, but it is not the only criteria. So, paragraph two refers to the other

section 54(

c) criteria and finds that HL & P failed to carry its burden of proving that the need outweighed the potential negative effects on these other criteria which include such considerations as community values and environmental integrity. Thus, the agency did what it was supposed to do in that it made a decision within its delegated authority based on the statutory criteria. The next question is whether the agency supported its statutory findings with a statement of the underlying facts as is required by

section 16(

b) of APTRA. There is no precise form for an agency’s articulation of underlying facts, and courts will not subject an agency’s order to some “hypertechnical standard of review.” State Banking Board v. Allied Bank Marble Falls, 748 S.W.2d 447, 449 (Tex.1988). What is important is that the findings serve the overall purpose evident in the requirement that they be made — i.e., they should inform the parties and the courts of the basis for the agency’s decision so that the parties may intelligently prepare an appeal and so that the courts may properly exercise their function of review.

See Texas Health Facilities Comm’n v. Charter Medical—Dallas, 665 S.W.2d 446, 451-452 (Tex.1984). We have also articulated the following more specific guidelines for underlying findings: (1) they must be more than mere recitals of testimony; (2) they should be stated as the agency’s findings; and (8) they should relate to the ultimate statutory findings. Charter Medical—Dallas, 665 S.W.2d at 452. These guidelines are reflective of the types of abuses with which the courts have been concerned.

In this case, paragraph three of the Commission’s order provides an articulation of underlying fact; it represents the Commission’s attempt to further explain why it found against HL & P when it balanced the statutory need versus burden criteria. What paragraph three finds is that HL & P failed to demonstrate that it had adequately considered “alternative routes using existing rights-of-way and/or parallel lines.” This finding obviously relates to the statutory criteria of need.

For example, if HL & P had shown that the use of existing rights-of-way was not feasible, then perhaps the Commission would have considered the line as routed in HL & P’s proposal to be more of a necessity. Thus, paragraph three articulates the Commission’s underlying finding as to why HL & P had failed to convince the Commission that the need for its proposed line was great enough to outweigh the negative effects on other statutory criteria.

Moreover, the Commission made the following additional underlying finding: With regard to community values in the area of the proposed transmission line, there is a general attitude supporting the preservation of the rural landscape and lifestyle and maintaining historic structures and features. This underlying finding relates to the possible detrimental impact on the

section 54(

c) criteria. Thus, the Commission articulated underlying findings that are addressed to both sides of the balance; these findings serve the purpose of showing us what the agency was thinking when it weighed that balance and decided that the need for HL & P’s proposed line did not outweigh the detrimental impact. They are not mere recitals of testimony, but instead show the basis for the agency’s decision. More is not required. The agency has made its decision and has provided findings sufficient to show its reasoning process and to allow for judicial review. We therefore hold that the Commission’s final order satisfied the requirements of

section 16(

b) of APTRA. We reverse the judgment of the court of appeals and remand this cause to the trial court for full judicial review in accordance with

section 19(

e) of APTRA. GONZALEZ, J., dissents with opinion. COOK, J., not sitting. . Initially, HL & P’s primary purpose of the proposed line was to import power from Austin and San Antonio to Houston, an area experiencing rapid growth in population at the time. HL & P allowed its contracts for electricity with the cities of Austin and San Antonio to expire at the end of 1987. HL & P has also stated that it intended to use the line as a connection to proposed power plants. HL & P has since canceled two of its three proposed projects.

During oral argument before this court, HL & P stated that it still intends to construct the line to provide a reserve to its existing circuits. . Commissioner Rossen concurred in the order of denial and in the reasons for denial; she dissented however from the adoption of findings that there was a need for additional power transfer capacity. Commissioner Campbell dissented from the order of denial itself on the ground that it was impermissible for the Commission to base a decision on the utility’s failure to consider alternative routes. .

This does not mean that HL & P was required to show that it considered alternative routes. See Frost v. Public Utility Commission, 672 S.W.2d 883 (Tex.App.—Austin 1984, writ ref'd n.r.e.) (recognizing that

section 54(

c) of PURA does not require evidence of alternative routes). However, although such evidence is not statutorily required, a utility may nevertheless need to present such evidence when it bears on other statutory factors such as community values, aesthetic values, and environmental integrity. See Sam Houston Elec. Co-op v. Public Utility Commission, 733 S.W.2d 905, 911 (Tex.App.—Austin 1987, writ denied).