R2020-099 2020-05-18RESOLUTION NO. R2020-99
A Resolution of the City Council of the City of Pearland, Texas,
("City") denying the Distribution Cost Recovery Factor rate request
of Texas -New Mexico Power Company made on or about April 6,
2020; 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 6, 2020, Texas -New Mexico Power Company
("TNMP") filed an application for approval to amend its Distribution Cost Recovery Factor
("DCRF") with the City that will increase TNMP's rates effective September 1, 2020; 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
specifically over its requested amendment to its DCRF under Chapter 36, §36.210; and
WHEREAS, TNMP seeks to include in rates a profit related to its incremental
investment in distribution assets it has made from January 1, 2018 through December
31, 2019; and
WHEREAS, the inclusion of TNMP's profit on its investment in distribution assets
in rates, has the effect of increasing TNMP's revenue requirement by approximately
$14.7 million; and
WHEREAS, the jurisdictional deadline for the City to act in this rate matter is 60
days from the application date, or June 4, 2020; and
WHEREAS, the City will require the assistance of specialized legal counsel and
rate experts to review the merits of TNMP's application to increase rates; and
WHEREAS, in order to maximize the efficient use of resources and expertise in
reviewing, analyzing and investigating TNMP's rate request, 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 TNMP to change rates,
has in the past joined with other local regulatory authorities to form the Alliance of
Texas -New Mexico Power Municipalities Cities ("ATM") and hereby continues its
participation in AOC; and
RESOLUTION NO. R2020-99
WHEREAS, TNMP simultaneously filed an application for approval of a DCRF
with the Public Utility Commission of Texas, and therefore the decision of the Public
Utility Commission of Texas will have an impact on the rates paid by the City and its
citizens who are customers in TNMP'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, TNMP failed to show that its proposed rate change in rates is
reasonable and therefore the City has concluded that TNMP's proposed rate change is
unreasonable; now therefore,
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF PEARLAND, TEXAS
THAT:
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 TNMP requested on or about April 6,
2020.
Section 3. The City authorizes intervention in proceedings related to TNMP's
application for approval of 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 the
Alliance of Texas -New Mexico Power Municipalities ("ATM").
Section 4. The City hereby orders TNMP to reimburse the City's rate case expenses
as provided in the Public Utility Regulatory Act and that TNMP 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 TNMP before the City, the Public Utility Commission of Texas, or
any court of law.
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 TNMP 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 TNMP's rate application subject to approval by the
City.
2 of 3
RESOLUTION NO. R2020-99
Section 6. The City, through its participation in ATM, shall review the invoices of the
lawyers and rate experts for reasonableness before submitting the invoices to TNMP for
reimbursement.
Section 7. A copy of this resolution shall be sent to Texas -New Mexico Power
Company, care of Mr. Scott Seamster, Texas -New Mexico Company, 577 N. Garden
Ridge Blvd. Lewisville, Texas 75067; and to Mr. Alfred R. Herrera, Herrera Law &
Associates, PLLC, 4400 Medical Pkwy, Austin, Texas 78756.
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 supersedes any prior inconsistent or conflicting resolution
or ordinance.
Section 10. This resolution shall become effective from and after its passage.
PASSED, APPROVED and ADOPTED this the 18th day of May, A.D., 2020.
2�- s
TOM REID
MAYOR
ATT T:
CR STAL ROAN, TRMC, CMC
CITY SECRETARY
APPROVED AS TO FORM:
6e-,
9
DARRIN M. COKER
CITY ATTORNEY
3 of 3
,,•``''� PRL qj�''•,
Q O -,
U U) :
ii it 41 it