R2018-180 2018-09-24 RESOLUTION NO. R2018-180
A Resolution of the City Council of the City of Pearland, Texas
("City"), denying Texas-New Mexico Power Company's proposed
rate increase in connection with its statement of intent submitted on
about on May 30, 2018; finding that the meeting complies with the
Open Meetings Act; making other findings and provisions related to
the subject.
WHEREAS, Texas-New Mexico Power Company ("TNMP" or "Company") filed a
Statement of Intent with the City on or about May 30, 2018, to change its rate schedules
within the corporate limits of this municipality, specifically to increase its annual revenue
by approximately $33.3 million, which equates to an increase of approximately 10.9
percent; and
WHEREAS, in order to maximize the efficient use of resources and expertise in
reviewing, analyzing and investigating TNMP's rate request and its changes in tariffs it is
the City coordinated its efforts with a coalition of similarly situated municipalities; and
WHEREAS, TNMP asserts that the need for its increase in rates is driven
primarily by its capital investment and increases in its costs since its last rate case; and
WHEREAS, for a Residential customer using 1,000 kWh per month, if TNMP's
proposed increase is approved, the bill impact to that Residential customer would be an
increase to TNMP's portion of that customer's bill of approximately 30%; and
WHEREAS, TNMP seeks a Return on Equity (ROE) of 10.5%; and
WHEREAS, after evaluation of TNMP's proposed increase in rates, the City's
Special Counsel and consultants engaged to evaluate the merits of TNMP's proposed
increase in rates are of the opinion that TNMP failed to establish the reasonableness of
its request;
WHEREAS, if approved TNMP's proposed increase in rates would result in an
unreasonable return and in the recovery of unreasonable or unnecessary expenses; and
WHEREAS, TNMP failed to establish that its proposed increase in rates would
be just and reasonable; and
WHEREAS, the City is a regulatory authority under the Public Utility Regulatory
Act ("PURA") and under Chapter 33, §33.001 et seq. of PURA has exclusive original
jurisdiction over TNMP's rates, operations, and services within the municipality; and
RESOLUTION NO. R2018-180
WHEREAS, the City previously acted to suspend TNMP's proposed effective
date of July 5, 2018 by 90 days or until October 3, 2018; 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. The City hereby DENIES TNMP's request to increase rates and in
support thereof finds that:
a) The Statement of Intent fails to provide sufficient information to justify the
requested increase in revenue or to justify the changes set forth in the attached
tariffs; and
b) The Statement of Intent fails to provide sufficient information to justify the
adoption of the rate base, expenses, investment, return on equity, and other rate
issues.
Section 3. The City hereby directs TNMP to reimburse the City's expenses as part of
the Alliance of TNMP Municipalities ("ATM") in accordance with Public Utility Regulatory
Act §33.023.
Section 4. A copy of this resolution shall be sent to Mr. Alfred R. Herrera, Herrera
Law & Associates, PLLC, 816 Congress Ave., Suite 950, Austin, Texas 78701, and a
courtesy copy to TNMP's local representative.
Section 5. 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 6. The findings set out in the preamble are in all things hereby approved.
Section 7. This resolution shall become effective from and after its passage.
Section 8. This resolution supersedes all prior conflicting resolutions and ordinances
adopted by the City.
PASSED, APPROVED and ADOPTED this the 24th day of September, A.D.,
2018.
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RESOLUTION NO. R2018-180
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MAYOR
ATTEST:
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APPROVED AS TO FORM:
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DARRIN M. COKER
CITY ATTORNEY
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