R2019-194 2019-08-05 RESOLUTION NO. 2019-194
A Resolution of The City Council of the City of Pearland, Texas
("City") denying the application of the Centerpoint Energy Houston
Electric LLC for authority to increase rates submitted on or about
April 5, 2019; 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 Houston Electric ("CEHE" or "Company") filed a
Statement of Intent with the City on or about April 5, 2019, to change its rates within the
corporate limits of this municipality, specifically to increase its annual revenue for its
retail transmission and distribution services by approximately $154 million, which
equates to an increase of approximately 7.4 percent, and by about $6.8 million for its
wholesale transmission service, which equates to an increase of approximately 1.8
percent; 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 CEHE's rates, operations, and services within the municipality; and
WHEREAS, in order to maximize the efficient use of resources and expertise in
reviewing, analyzing and investigating CEHE's rate request and its changes in tariffs the
City coordinated its efforts with a coalition of similarly situated municipalities known as
Texas Coast Utilities'Coalition ("TCUC") of cities; and
WHEREAS, CEHE failed to establish that its overall revenue request resulted in
no more than an amount that will permit CEHE a reasonable opportunity to earn a
reasonable return on the utility's invested capital used and useful in providing service to
the public in excess of the utility's reasonable and necessary operating expenses; and
WHEREAS, CEHE failed to establish that its proposed rates were just and
reasonable; and
WHEREAS, the City has previously: (1) suspended CEHE's proposed rate
increase by 90 days; (2) authorized intervention in proceedings related to CEHE's
proposed rate increase as a member of the coalition of cities known as the Texas Coast
RESOLUTION NO. 2019-194
Utilities Coalition of cities; (3) directed CEHE to reimburse TCUC's rate case expenses;
and (4) retained the law firm of Herrera Law & Associates, PLLC with respect to rate
proceedings involving CEHE before the Public Utility Commission of Texas and courts of
law and to retain consultants to review CEHE's rate application subject to TCUC's
approval; now therefore,
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF PEARLAND, TEXAS:
Section 1. That the findings set out in the preamble are in all things approved and
incorporated herein as if fully set forth.
Section 2. That CEHE failed to show that its proposed rates are just and reasonable.
Section 3. That the City hereby DENIES CEHE's request to increase rates and in
support of DENIAL finds that:
a) CEHE failed in its burden of proof to establish that its requested increase in
revenue or the changes set forth in its tariffs attached to CEHE's Statement of
Intent to increase rates, results in just and reasonable rates;
b) CEHE failed in its burden of proof to establish that adoption of its proposed rate
base, expenses, investment, return on equity, and other rate issues as presented
in CEHE's Statement of Intent to increase rates, result in just and reasonable
rates.
Section 4. That the City hereby orders CEHE to reimburse the City's rate case
expenses as provided in the Public Utility Regulatory Act and that CEHE shall continue
to 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 CEHE before the City, the Public Utility Commission
of Texas, or any court of law.
Section 5. That the City, in coordination with the Steering Committee, delegates to
the City Manager and/or the City Attorney, or designee of such office, review of the
invoices of the lawyers and rate experts for reasonableness before submitting the
invoices to CEHE for reimbursement.
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RESOLUTION NO. 2019-194
Section 6. That 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 Mr. Patrick H. Peters, III, Assistant General Counsel and Director
of Regulatory Affairs, CenterPoint Energy, Inc., 1005 Congress Ave., Suite 650, Austin
Texas 78701.
• Section 7. That 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 8. That this resolution supersedes any prior inconsistent or conflicting
resolution or ordinance.
Section 9. That this resolution shall become effective from and after its passage.
PASSED, APPROVED and ADOPTED this the 5th day of August, A.D., 2019.
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' I= TOM REID
= MAYOR
ATTEST:
LAWA-4_, /cc Liter-76- __K
MARIA E. RODRIGUEZ
INTERIM CITY SECRETARY
APPROVED AS TO FORM:
ici
DARRIN M. COKE
CITY ATTORNEY
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