R2018-092 2018-05-14 •
RESOLUTION NO. R2018-92
A Resolution of the City Council of the City of Pearland, Texas ("City")
denying the Distribution Cost Recovery Factor rate decrease of Centerpoint
Energy Houston Electric, LLC filed on or about April 4, 2018; authorizing
participation in a coalition of similarly situated cities; authorizing
participation in related rate proceedings; requiring the reimbursement of
municipal rate case expenses; authorizing the retention of special counsel;
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, on about April 4, 2018, CenterPoint Energy Houston Electric, LLC
("CenterPoint") filed an application for authority to amend its Distribution Cost Recovery
Factor ("DCRF") and proposed an effective date of September 1, 2018; and
WHEREAS, the City as a regulatory authority under the Public Utility Regulatory
Act ("PURA") § 33.001 has exclusive original jurisdiction over CenterPoint's rates,
operations, and services within the municipality; and
WHEREAS, the U.S. Congress enacted the Tax Cut and Jobs Act of 2017, which
among other things, changed federal income-tax laws by reducing the corporate,
federal-income tax rate from 35% to 21%; and
WHEREAS, absent the change in federal tax law, CenterPoint's application
would seek an increase in its DCRF revenues of about $32 million per year; and
WHEREAS, the change in federal tax law has the effect of reducing
CenterPoint's revenue requirement, and results in a proposed decrease of about $7.1
million to its currently approved DCRF revenue requirement; and
WHEREAS, the jurisdictional deadline for the City to act in this rate matter is 60
days from the application date or June 3, 2018; 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, in order to maximize the efficient use of resources and expertise in
reviewing CenterPoint's rate request, it is prudent to coordinate the City's efforts with a
coalition of similarly situated municipalities; and
RESOLUTION NO. R2018-92
WHEREAS, the City, in matters regarding CenterPoint rates, has in the past
joined with other local regulatory authorities to form the Texas Coast Utilities Coalition
("TCUC") of cities and hereby continues its participation in TCUC; and
WHEREAS, CenterPoint simultaneously filed an application to amend its DCRF
with the Public Utility Commission of Texas, therefore the decision of the Public Utility
Commission of Texas will affect the rates paid by the City and its citizens who are
customers in CenterPoint's service territory and in order for the City's participation to be
meaningful it is important that the City promptly intervene in such proceeding at the
Public Utility Commission of Texas; and
WHEREAS, CenterPoint failed to show that its proposed rate change in rates is
reasonable and therefore the City has concluded that CenterPoint's proposed rate
change is unreasonable; and
WHEREAS, given state law and the procedures applicable to CenterPoint's
application, the most expeditious manner to effect CenterPoint's proposed rate change
in rates is to deny CenterPoint's request.
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. The City DENIES the rate change CenterPoint requested on or about
April 4, 2018.
Section 3. The City authorizes intervention in proceedings related to CenterPoint's
application to amend its DCRF before the Public Utility 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 4. The City hereby orders CenterPoint to reimburse the City's rate case
expenses as provided in the Public 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 Public Utility
Commission of Texas, or any court of law.
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RESOLUTION NO. R2018-92
Section 5. Subject to the right to terminate employment at any time, the City retains
and authorizes the law firm of Herrera Law & Associates, PLLC to act as Special
Counsel with regard to rate proceedings involving CenterPoint before the City, the Public
Utility 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 6. The City, through its participation in 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 7. A copy of this resolution shall be sent to CenterPoint Energy, care of Ms.
Denise Gaw, CenterPoint Energy Service Company, LLC, 1111 Louisiana Street,
Houston, Texas 77002; and to Mr. Alfred R. Herrera, Herrera Law & Associates, PLLC,
816 Congress Ave., Suite 950, Austin, Texas 78701.
Section 8. 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 9. This resolution shall become effective from and after its passage.
PASSED, APPROVED and ADOPTED this the 14th day of May, A.D., 2018.
jpi.,
TOM REID
MAYOR
ATTEST:
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APPROVED AS TO FORM:
61----
DARRIN M. COKER
CITY ATTORNEY
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