R2023-107 2023-05-08RESOLUTION NO. R2023-107
A Resolution of the City Council of the City of Pearland, Texas
(“City”) denying the Distribution Cost Recovery Factor Rate request
of CenterPoint Energy Houston Electric, LLC, and its increase in
rates under its “Rider TEEEF” application made on or about April 5,
2023; 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, 2023, CenterPoint Energy Houston Electric, LLC
(“CEHE”) filed an application for approval to amend its Distribution Cost Recovery Factor
(“DCRF”) with the City that will increase CEHE’s rates effective September 1, 2023, by
about $84.6 million; and
WHEREAS, on about April 5, 2023, CEHE filed an application for approval to
amend its mobile-generation rates (“Rider TEEEF”) with the City that will increase
CEHE’s rates by about $187.9 million annually; 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, including
over its requested amendment to its DCRF under Chapter 36, §36.210; and
WHEREAS, CEHE seeks to include in rates a profit related to its incremental
investment in distribution assets it has made from January 1, 2019 through December
31, 2022, and more specifically, in its application of April 5, 2023, recovery of profit for
incremental investment in distribution assets made from January 1, 2022 through
December 31, 2022; and
WHEREAS, the inclusion of CEHE’s profit on its investment in distribution assets
in rates, has the effect of increasing CEHE’s revenue requirement by approximately
$84.6 million related to investments made from January 1, 2022 through December 31,
2022; and
WHEREAS, the jurisdictional deadline for the City to act in this rate matter is 60
days from the application date, or June 4, 2023; and
DocuSign Envelope ID: 6F704F1B-E404-40D7-BE92-58353B87BDF9
RESOLUTION NO. R2023-107
2
WHEREAS, the City will require the assistance of specialized legal counsel and
rate experts to review the merits of CEHE’s application to increase rates; and
WHEREAS, in order to maximize the efficient use of resources and expertise in
reviewing, analyzing and investigating CEHE’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 CEHE to change rates,
has in the past joined with other local regulatory authorities to form the Texas Coast
Utilities Coalition of Cities (“TCUC”) and hereby continues its participation in TCUC; and
WHEREAS, CEHE 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 CEHE’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, CEHE failed to show that its proposed rate change in its DCRF rates
is reasonable and therefore the City has concluded that CEHE’s proposed rate change
is unreasonable; and
WHEREAS, CEHE also filed an application to amend its rates to recover its
recent acquisition of mobile generation via a tariff CEHE refers to as its “Rider TEEEF,”
which if approved as filed, would increase CEHE’s revenue requirement by about an
additional $187.9 million related to CEHE’s acquisition of mobile-generation facilities;
and
WHEREAS, CEHE failed to show that its proposed rate change in its “Rider
TEEEF” rates is reasonable and therefore the City has concluded that CEHE’s proposed
rate change is unreasonable; and
WHEREAS, pursuant to the Public Utility Regulatory Act (PURA) § 33.025, the
City has standing to participate in ratemaking proceedings at the Public Utility
Commission of Texas; and
WHEREAS, pursuant to the Public Utility Regulatory Act (PURA) § 33.023,
CEHE’s applications are ratemaking proceedings; and
DocuSign Envelope ID: 6F704F1B-E404-40D7-BE92-58353B87BDF9
RESOLUTION NO. R2023-107
3
WHEREAS, it is crucial for the City, as part of the Texas Coast Utilities Coalition
of Cities to intervene in proceedings at the Public Utility Commission of Texas to
exercise its due diligence both as an affected ratepayer, and on behalf its citizens.
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 increases CEHE requested on or about
April 5, 2022, in CEHE’s DCRF and “Rider TEEEF” ratemaking applications.
Section 3. The City authorizes intervention in proceedings related to CEHE’s
application for approval of its DCRF and its “Rider TEEEF” before the Public Utility
Commission of Texas and related proceedings in courts of law as part of the coalition of
cities known as the Texas Coast Utilities Coalition of Cities (“TCUC”).
Section 4. 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 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. 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 CEHE 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 CEHE’s rate application subject to approval by the
City.
Section 6. The City, through its participation in TCUC, shall review the
invoices of the lawyers and rate experts for reasonableness before submitting the
invoices to CEHE for reimbursement.
Section 7. A courtesy copy of this resolution shall be sent to CenterPoint
Energy Houston Electric, LLC, care of Ms. Denise Gaw, 1111 Louisiana Street, Houston,
Texas 77002; and to Mr. Alfred R. Herrera, Herrera Law & Associates, PLLC, 4400
Medical Parkway, Austin, Texas 78756.
DocuSign Envelope ID: 6F704F1B-E404-40D7-BE92-58353B87BDF9
RESOLUTION NO. R2023-107
4
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 8th day of May, A.D., 2023.
_____________________________
J.KEVIN COLE
MAYOR
ATTEST:
_____________________________
FRANCES AGUILAR, TRMC, MCC
CITY SECRETARY
APPROVED AS TO FORM:
________________________________
DARRIN M. COKER
CITY ATTORNEY
DocuSign Envelope ID: 6F704F1B-E404-40D7-BE92-58353B87BDF9