R2022-107 2022-05-09RESOLUTION NO. R2022-107
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 5,
2022; 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 5, 2022, 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, 2022; 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, 2021 through December
31, 2021; 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 $9.7
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, 2022; 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 ATM; and
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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:
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 the City DENIES the rate change TNMP requested on or
about April 5, 2022.
Section 3. That 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. That 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. That subject to the right to terminate engagement 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.
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Section 6. That 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. That 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 Parkway, Austin, Texas 78756.
Section 8. 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 9. That this resolution supersedes any prior inconsistent or conflicting
resolution or ordinance.
Section 10. That this resolution shall become effective from and after its passage.
PASSED and APPROVED on this the 9th day of May, A.D., 2022.
_____________________________
J.KEVIN COLE
MAYOR
ATTEST:
_____________________________
LESLIE CRITTENDEN
CITY SECRETARY
APPROVED AS TO FORM:
________________________________
DARRIN M. COKER
CITY ATTORNEY
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