HomeMy WebLinkAboutR2025-216 20251215RESOLUTION NO. R2025-216
A Resolution of the City Council of the City of Pearland, Texas
(“CITY”), denying Texas-New Mexico Power Company’s proposed
rate increase in connection with its statement of intent submitted on
about on November 14, 2025; requiring the reimbursement of
municipal rate case expenses; authorizing participation in the
coalition of similarly situated cities; authorizing intervention and
participation in related rate proceedings; 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, Texas-New Mexico Power Company (“TNMP” or “Company”) filed a
Statement of Intent with the City on or about November 14, 2025, to change its rate
schedules within the corporate limits of this municipality, specifically to increase its
annual revenue by approximately $34.0 million, which equates to an increase of
approximately 6.0 percent in retail rates; and
WHEREAS, in order to maximize the efficient use of resources and expertise in
reviewing, analyzing and investigating TNMP’s rate request and its changes in tariffs the
City coordinated its efforts with a coalition of similarly situated municipalities; and
WHEREAS, TNMP asserts that the need for its increase in rates is driven
primarily by its capital investment and increases in its costs since its last rate case; and
WHEREAS, for a Residential customer using 1,000 kWh per month, if TNMP’s
proposed increase is approved, the bill impact to that Residential customer would be an
increase to TNMP’s portion of that customer’s bill of approximately $5.50; and
WHEREAS, TNMP seeks a Return on Equity (ROE) of 10.4%; and
WHEREAS, after evaluation of TNMP’s proposed increase in rates, the City’s
Special Counsel and consultants engaged to evaluate the merits of TNMP’s proposed
increase in rates are of the opinion that TNMP failed to establish the reasonableness of
its request;
WHEREAS, if approved TNMP’s proposed increase in rates would result in an
unreasonable return and in the recovery of unreasonable or unnecessary expenses; and
WHEREAS, TNMP failed to establish that its proposed increase in rates would
be just and reasonable; and
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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
WHEREAS, TNMP’s rate request consists of a voluminous amount of information
including TNMP’s rate-filing package, exhibits, schedules, and workpapers; 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, to the extent TNMP seeks review at the Public Utility Commission of
Texas of the City’s final decision regarding TNMP’s statement of intent to change rates,
or because TNMP has submitted a statement of intent to the Public Utility Commission
of Texas to increase rates in the environs of the City on the same date it submitted its
request to the City, 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 of TNMP, 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; 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. The City hereby DENIES TNMP’s request to increase rates and in
support thereof finds that:
a) The Statement of Intent fails to provide sufficient information to justify the
requested increase in revenue or to justify the changes set forth in the attached
tariffs;
b) The Statement of Intent fails to provide sufficient information to justify a return on
equity of 10.40%; and
c) The Statement of Intent fails to provide sufficient information to justify the
adoption of the rate base, expenses, investment, return on equity, and other rate
issues.
Section 3. The City authorizes intervention in proceedings related to TNMP’s
Statement of Intent before the Public Utility Commission of Texas and related
proceedings in courts of law and participation in the coalition of cities known as the
Alliance of Texas New Mexico Company Municipalities (ATM).
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Section 4. The City joins and continues its participation with other cities in a
coalition of cities known as the Alliance of Texas New Mexico Company Municipalities
with the understanding that the Steering Committee of ATM is to provide direction and
guidance to Special Counsel representing said cities.
Section 5. The City hereby directs TNMP to reimburse the City’s expenses as part
of the Alliance of TNMP Municipalities Company Municipalities (“ATM”) in accordance
with Public Utility Regulatory Act §33.023.
Section 6. 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.
Section 7. The City, in coordination with the Steering Committee, shall review the
invoices of the lawyers and rate experts for reasonableness before submitting the
invoices to TNMP for reimbursement.
Section 8. A copy of this resolution shall be sent to Mr. Alfred R. Herrera, Herrera
Law & Associates, PLLC, P.O. Box 302799, Austin, Texas 78703, and a courtesy copy
to TNMP’s local representative.
Section 9. 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 10. The findings set out in the preamble are in all things hereby approved.
Section 11. This resolution shall become effective from and after its passage.
Section 12. This resolution supersedes all prior conflicting resolutions and
ordinances adopted by the City.
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PASSED, APPROVED and ADOPTED this the 15th day of December, A.D., 2025.
________________________________
J.KEVIN COLE
MAYOR
ATTEST:
________________________________
FRANCES AGUILAR, TRMC, MMC
CITY SECRETARY
APPROVED AS TO FORM:
________________________________
DARRIN M. COKER
CITY ATTORNEY
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