HomeMy WebLinkAboutR2005-0093 05-23-05 RESOLUTION NO. R2005-93
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PEARLAND,
TEXAS, PERTAINING TO ELECTRIC UTILITY STRANDED COST AND
TRUE-UP PROCEEDINGS.
WHEREAS, the Public Utility Commission of Texas has conducted proceedings to
quantify CenterPoint Energy Houston Electric LLC's stranded costs and other true-up
balances; and
WHEREAS, the Public Utility Commission of Texas has also conducted separate
proceedings to recover the stranded cost and true-up amounts through securitization and
issuance of a transition charge and through a competition transition charge; and
WHEREAS, the City Council has determined that it is in the best interest of the City
and its residents to support a resolution of the stranded cost and true-up proceedings that
results in the best outcome for ratepayers; and
WHEREAS, the City Council has determined that it is in the best interest of the City
and its residents to support securitization of all stranded cost amounts appropriately
determined by the Commission and ultimately by the appellate courts; and
WHEREAS, the City Council has determined that it is not in the best interest of the
City and its residents to recover any stranded cost amounts through a competition
transition charge because such a recovery would result in a much higher cost to ratepayers
in the City, now, therefore;
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF PEARLAND, TEXAS:
Section 1. The City of Pearland supports resolution of the stranded cost and true-
up proceedings in a manner that results in the best outcome for ratepayers. Therefore, the
City of Pearland supports securitization of all stranded cost amount appropriately
determined by the Public Utility Commission of Texas and ultimately determined by the
appellate courts. The City of Pearland strenuously opposes inclusion of stranded cost
RESOLUTION NO. R2005-93
amounts in competition transaction charge, which would result in a significantly higher cost
to ratepayers in this City.
Section 2. The Resolution shall take effect immediately upon its passage and
approval in the manner required by the City Charter and Ordinances.
PASSED, APPROVED and ADOPTED this the 23r'd day of
A. D., 2005.
May
TOM REID
MAYOR
ATTEST:
,4TY S F,.G~'RETARY
APPROVED AS TO FORM:
DARRIN M. COKER
CITY ATTORNEY
OF HOUSTON
Finance and Administration
Dep@rtment
Bill White
Mayor
Judy Gray Johnson
Director
Finance and Administration
Department
P.O. Box 1562
Houston, Texas 77251-1562
May 3, 2005 T. 713.837.9630
F. 713,837.0631
TO: Houston Coalition of Citieswww'city°fh°ust°n'9°v
~(~ nt Director
FROM: Tina Paez, Assista , Regulatory Services Division
City of Houston Finance & Administration Department
RE:
ATTORNEY-CLIENT PRIVILEGED COMMUNICATION NOT FOR
DISTRIBUTION BEYOND COALITION MEMBERS
The information contained herein comes from Coalition counsel and, therefore, is an attorney-client privileged
communication that should not be shared with anyone outside the decision-making chain of command for your
city administration.
We met with several Coalition members on March 30, 2005 to discuss the status of the CenterPoint stranded
costs case, including our settlement position, and future appeals.
As stated previously, the Commission determined that the total amount (less interest) that CenterPoint can
recover from ratepayers for stranded cost and other true-up amounts is $2.3 billion, or approximately $2.6
billion with interest. The Commission entered an order permitting the Company to securitize this entire
amount (i.e., issue bonds for the entire amount). The bonds will be paid by revenue collected from ratepayers
over a 14-year period at an interest rate of 4.7%. The final proceeding to determine the structure of the
Company's recovery of these non-stranded cost amounts should be concluded by this summer, and the major
issue in that proceeding will be the interest rate at which the Company can recover these amounts. The interest
rate on the stranded cost amount (4.7%) could very well increase significantly in 2-3 years.
For these reasons, during the March 30th meeting, we discussed settlement of these proceedings with the
Coalition members present. The members unanimously agreed that it is in the best interest of the ratepayers to
support securitization of all stranded cost amounts, and it is not in the best interest of the ratepayers for the
company to recover its stranded costs through a competition transition charge because such a recovery would
result in a much higher cost to the ratepayers. Further, the members agreed that each member of the Coalition
would submit a resolution to its governing body, a fom~ of which is attached.
We encourage each city to take whatever action is necessary to support this effort on behalf of the ratepayers.
lfyou have any questions concerning the case, feel free to contact our legal counsel, Alton J. Hall, Jr., at (713)
750-3114.
CC;
Mayor Bill White
Judy Gray Johnson
Arturo G. Michel
Deborah McAbee
Melba Pourteau
Alton Hall
Council Members: Toni Lawrence Carol Minas Galloway Mark Goldberg Ada Edwards Addle Wiser'nan M.J, Kahn Pam Holm Adrian Garcia Carol Alvarado
Mark Ellis Gordon Quan Shelley Sekula-Gibbs, M.D. Ronald C. Green Michael Berry Controller: Annise D. Parker
Houston Coalition of Cities:
City of Bayou Vista
City of Baytown
City of Beach City
Brookside Village
Bunker Hill Village
City of Deer Park
City of Dickinson
City of Freeport
City of Galena Park
City of Hitchcock
City of Houston
City of Mont Belvieu
City of Nassau Bay
City of Oak Ridge North
City of Oyster Creek
City of Pasadena
City of Pattison
City of Pearland
City of Prairie View
City of Rosenberg
City of Santa Fe
City of Stafford
Taylor Lake Village
City of Texas City
Village of Bonney
City of Webster
City of West Columbia
City of West University Place
City of Wharton