R-2016-222 2016-12-12RESOLUTION NO. R2016-222
A Resolution of the City Council of the City of Pearland, Texas suspending
the effective date for ninety days in connection with the statement of intent
filed by CenterPoint Energy Resources Corp., d/b/a CenterPoint Energy
Entex and CenterPoint Energy Texas Gas on or about November 16, 2016;
authorizing participation in a coalition of similarly situated cities;
authorizing participation in related rate proceedings; authorizing the
retention of special counsel; requiring the reimbursement of municipal rate
case expenses; finding that the meeting complies with the open meetings
act; making other findings and provisions related to the subject; and
declaring an effective date.
WHEREAS, CenterPoint Energy Resources Corp., d/b/a CenterPoint Energy
Entex and CenterPoint Energy Texas Gas ("CenterPoint" or "Company") filed a
Statement of Intent with the City on or about November 16, 2016 to increase rates in the
Company's Houston and Texas Coast Divisions; and
WHEREAS, the City is a regulatory authority under the Gas Utility Regulatory Act
("LURA") and under § 103.001 et seq. of GURA has exclusive original jurisdiction over
CenterPoint's rates, operations and services within the municipality; and
WHEREAS, CenterPoint intends to consolidate its current Houston and Texas
Coast Divisions into a single Texas Gulf Division and implement the revised gas tariffs
on a division -wide basis for customers in the Texas Gulf Division effective December 21,
2016; and
WHEREAS, CenterPoint plans to increase non -gas base revenue by
approximately $31.0 million, representing an increase in non -gas base revenue of
approximately 10.7%; and
WHEREAS, the City of Pearland is located in the currently existing Texas Coast
Division; and
WHEREAS, on a customer -class basis, for Texas Coast Division customers, the
impact is as follows:
RESOLUTION NO. 2016-222
WHEREAS, CenterPoint proposes to increase its customer charges for Texas
Coast Division customers for "General Service — Residential" from $16.17 to $16.75;
increase the customer charge for "General Service — Small" from $17.20 to $18.25; and
increase the customer charge for "General Service — Large Volume" from $56.45 to
$70.00; and
WHEREAS, the Company seeks a Return on Equity (ROE) of 10.25%; a capital
structure weighted toward equity — 55.15% Equity; 44.85% Debt; and
WHEREAS, CenterPoint's rate request consists of a voluminous amount of
information including CenterPoint's rate -filing package, exhibits, schedules, and
workpapers; and
WHEREAS, in order to maximize the efficient use of resources and expertise in
reviewing, analyzing and investigating CenterPoint's rate request and its changes in
tariffs it is prudent to coordinate the City's efforts with a coalition of similarly situated
municipalities; and
WHEREAS, the City, in matters regarding applications by CenterPoint to change
rates, has in the past joined with other local regulatory authorities to form the Texas
Coast Utilities Coalition ("TCUC") and hereby continues its participation in TCUC; and
WHEREAS, CenterPoint proposed December 21, 2016 as the effective date for
its requested increase in rates; and
WHEREAS, it is not possible for the City to complete its review of CenterPoint's
filing by December 21, 2016; and
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Average Current
Monthly Bill,
including Gas
Cost
Average
Proposed
Monthly Bill,
including Gas
Cost
Proposed Monthly
Change
Percentage
Change with
Gas Cost /
without Gas
Cost
Residential
$36.22
$37.32
$1.10
3.0% / 5.0%
General Service-
Small
$102.41
$102.90
$0.49
0.5% / -0.9%
General Service
— Large Volume
$1,316.42
$1,317.74
$1.32
0.1% / -6.5%
WHEREAS, CenterPoint proposes to increase its customer charges for Texas
Coast Division customers for "General Service — Residential" from $16.17 to $16.75;
increase the customer charge for "General Service — Small" from $17.20 to $18.25; and
increase the customer charge for "General Service — Large Volume" from $56.45 to
$70.00; and
WHEREAS, the Company seeks a Return on Equity (ROE) of 10.25%; a capital
structure weighted toward equity — 55.15% Equity; 44.85% Debt; and
WHEREAS, CenterPoint's rate request consists of a voluminous amount of
information including CenterPoint's rate -filing package, exhibits, schedules, and
workpapers; and
WHEREAS, in order to maximize the efficient use of resources and expertise in
reviewing, analyzing and investigating CenterPoint's rate request and its changes in
tariffs it is prudent to coordinate the City's efforts with a coalition of similarly situated
municipalities; and
WHEREAS, the City, in matters regarding applications by CenterPoint to change
rates, has in the past joined with other local regulatory authorities to form the Texas
Coast Utilities Coalition ("TCUC") and hereby continues its participation in TCUC; and
WHEREAS, CenterPoint proposed December 21, 2016 as the effective date for
its requested increase in rates; and
WHEREAS, it is not possible for the City to complete its review of CenterPoint's
filing by December 21, 2016; and
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RESOLUTION NO. 2016-222
WHEREAS, the City will need an adequate amount of time to review and
evaluate CenterPoint's rate application to enable the City to make a final decision as a
local regulatory authority with regard to CenterPoint's requested rate increase; and
WHEREAS, the City will require the assistance of specialized legal counsel and
rate experts to review the merits of CenterPoint's application to increase rates; and
WHEREAS, CenterPoint simultaneously filed its statement of intent to increase
rates with the Railroad Commission of Texas, therefore the decision of the Railroad
Commission of Texas could have an impact on the rates paid by the City and its citizens
who are customers of CenterPoint, and in order for the City's participation to be
meaningful, it is important that the City promptly intervene in such proceeding at the
Railroad Commission of Texas; now therefore,
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF PEARLAND, TEXAS:
Section 1. The findings set out in the preamble are in all things approved and
incorporated herein as if fully set forth.
Section 2. CenterPoint's proposed effective date for its proposed increase in rates is
hereby SUSPENDED for ninety days beyond its proposed effective date.
Section 3. The statutory suspension period will be extended automatically day for
day should CenterPoint extend its proposed effective date, and may be further extended
if CenterPoint does not provide timely, meaningful, and proper public notice of its
request to increase rates, or if its rate -filing package is materially deficient.
Section 4. The City authorizes intervention in proceedings related to CenterPoint's
Statement of Intent before the Railroad Commission of Texas and related proceedings in
courts of law as part of the coalition of cities known as Texas Coast Utilities Coalition
(TCUC").
Section 5. The City hereby orders CenterPoint to reimburse the City's rate case
expenses as provided in the Gas Utility Regulatory Act and that CenterPoint shall do so
on a monthly basis and within 30 days after submission of the City's invoices for the
City's reasonable costs associated with the City's activities related to this rate review or
to related proceedings involving CenterPoint before the City, the Railroad Commission of
Texas, or any court of law.
RESOLUTION NO. 2016-222
Section 6. Subject to the right to terminate employment at any time, the City retains
and authorizes the law firm of Herrera & Boyle, PLLC to act as Special Counsel with
regard to rate proceedings involving CenterPoint before the City, the Railroad
Commission of Texas, or any court of law and to retain such experts as may be
reasonably necessary for review of CenterPoint's rate application subject to approval by
the City.
Section 7. The City, or its designee member city in the Texas Coast Utilities
Coalition of cities, shall review the invoices of the lawyers and rate experts for
reasonableness before submitting the invoices to CenterPoint for reimbursement.
Section 8. A copy of this resolution shall be sent to CenterPoint Energy, care of Mr.
Thomas Stevens. Director of Regulatory Affairs, CenterPoint Energy P.O. Box 2628.
Houston, Texas 77252-2628; and to Mr. Alfred R. Herrera, Herrera & Boyle, PLLC, 816
Congress Ave., Suite 1250, Austin, Texas 78701.
Section 9. The meeting at which this resolution was approved was in all things
conducted in strict compliance with the Texas Open Meetings Act, Texas Government
Code, Chapter 551.
Section 10. This resolution shall become effective from and after its passage.
PASSED, APPROVED and ADOPTED this the 121h day of December. A.D.,
2016.
ATTEST:
NG L
Y SECRETARY
APPROVED AS TO FORM:
DARRIN-IJ1. COKER
CITY ATTORNEY
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:
TOM REID
MAYOR