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R2008-046 2008-03-24RESOLUTION NO. R2008-46 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PEARLAND, TEXAS, SUSPENDING THE APRIL 10, 2008, EFFECTIVE DATE OF CENTERPOINT ENERGY RESOURCES CORP., D/B/A CENTERPOINT ENERGY ENTEX AND CENTERPOINT ENERGY TEXAS GAS (CENTERPOINT) REQUESTED RATE CHANGE TO PERMIT THE CITY TIME TO STUDY THE REQUEST AND TO ESTABLISH REASONABLE RATES. WHEREAS, on or about March 6, 2008, CenterPoint Energy Resources Corp., d/b/a CenterPoint Energy Entex and CenterPoint Energy Texas Gas ("CenterPoint" or "Company"), pursuant to Gas Utility Regulatory Act § 104.102 filed with the City of Pearland a Statement of Intent to change gas rates in all municipalities exercising original jurisdiction within its Texas Coast Division service area effective April 10, 2008; and WHEREAS, the Gas Utility Regulatory Act § 104.107 grants local regulatory authorities the right to suspend the effective date of proposed rate changes for ninety (90) days; and WHEREAS, on or about March 6, 2008 simultaneous with the filing with the City, CenterPoint filed a Statement of Intent to change gas rates for the Texas Coast environs with the Railroad Commission of Texas referred to as Gas Utility Docket ("GUD") No. 9791. BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF PEARLAND, TEXAS: Section 1. That the April 10, 2008, effective date of the rate request submitted by CenterPoint on or about Mach 6, 2008, be suspended for the maximum period RESOLUTION NO. R2008-46 allowed by law to permit adequate time to review the proposed changes and to establish reasonable rates.. Section 2. That it is hereby officially found and determined that the meeting at which this Resolution is passed is open to the public as required by law and the public notice of the time, place, and purpose of said meeting was given as required. Section 3. A copy of this Resolution shall be sent to CenterPoint, care of Denise Hardcastle, Director of Regulatory Activities and Compliance, CenterPoint Energy, P.O. Box 2628, Houston, Texas 77252-2528 and to Thomas Brocato, at Lloyd Gosselink, P.C., 816 Congress, Avenue, Suite 1900, Austin, Texas 78701. PASSED, APPROVED and ADOPTED this the 24th day of Mar ., 2008. TOM REID MAYOR APPROVED AS TO FORM: ~ • ~ . ~. DARRIN M. COKER CITY ATTORNEY 2 Lloyd i3 Congress:Avenue;Suite 1900, Austin,Tqxit•78701 Gosselink TUlephone:(512)42-5E300 Fiesiruile:-(5 12)472:054 . =41 ATTORNEYS A T W www.Igliwfirm.com attic*. pirea,Liriat (512.)322-5857- $tept MEMORANDUM TO: Cities Served by'CenterPOintEnergy Entex,--.:Texas Coast Division FROM: Geoffrey Gay FebttiarY.29, 200-8 RE: UpeothingCeriterPoint Energy Entex's Rate Increase Request The purpose of this-Memorandum is to.notify client cities that next week CenterPoint . . • Energy Will. filing an application to increase natural gas Service rates throughout its Texas Coast Division Barring direction to do otherwise,we will quickly review the.filing and prepare a rsummary memorandum and procedural guide for your Use. We will distribute that material to you next week, along with.a model suppensionresolUtion. According to information we have Obtained from.the, Company, they intend to file statements of intent to increase rates on March..6,11NA With the Railroad Commission arid the 47 cities with original jurisdiction in the Texas Coast Division. The proposed rates- will reflect uniform, division-wide.rates, charges and terms and conditions of Service for the cities. and environs of the Texas Coast Division. At this time; the Company has not indicated the amount of theintrease.stinght or iniPadt.on customers'. CenterPoint has made much of the Tact-that it,has net increased its rates in a number of years-. However,in most of the cities that it serves, CenterPerint has had automatic adjustment clauses in place that have allowed Tate inereases,without having to file,a full rate case with the. eities. Thus,"its rates have'increased, but the Cities have not had the Opportunity, until now, to determine whether changes in the cost of money, eXpenses, investment and:revenues justify higherates. You may recall that in the past, the Company has attempted to. negotiate a:favorable. result with the least amount of opposition and then,attempt to force that result on all other parties Who have jurisdiction and justiciable interest In particular, three years ago-in the Houston Division, CenterVpiot prepared.a system-wide cost of'service case and then filed it only in the City of Houaton. After reaching a settlement agreement with the city of Houston,'tenterPaint filed the Settlement Agreement reached with the City of Houston with the rest of the cities in Harris,.Fort Bend and Montgomery Counties and simultaneously filed it with the Railroad Commission to implement the Same rates in the environs areas. As a result of the efforts of the Montgomery County client cities and several client cities in Fort Bend and Harris COnnties, we Were able to secure a settlement requiring future rate cases to be simultaneously filed in all cities, . on a system-wide basis. Lloyd Gosselink Bipvins FtOctielie &Townsend, P.C. Page 2 February 29,2008 Similarly, in the South and East Regions, CenterPoint prepared .system-wide cost of service cases but filed only at the Railroad CommisSion. for increased rates in unincorporated areas, knowing that it would have little to no opposition. The Commission Staff typically relies, upon intervenor cities to do the Majority of the discovery.and develop most of the contested isstieS. CenterPoint skated through the Commission process with little challenge and a three hour hearing and got most of its request blessed, It then'filed in*cities with original jurisdiction and tried to impose the environsrates of cities, Given this, past history, we belieVe, it is particularly important .for the. Gulf Coast Coalition of Cities to be involved in the ratemalcing nrocess., Towards that objective, once the filing is made, we will obtain a copy and conduct a preliminary assessment Afterwards, we will prepare a mernorandurn.surrimarizing our review and proposing a course of action, . • Assuming the Company makes its filing on March 6, the proposed rate increase will be effective under the law on April JP,:2908, unless the effective date is. suspended by action Of your city.coUndil. Suspending the effective date is-A right provided to cities pursuant to the Gas Utility Regulatory Act.; .Essentially, suspension provides cities additional time (125 days from the date of the original filing or 90 days from the effective date) to evaluate the proposed rate increase request. If no action is taken by the city council to suspend the rate increase request before the effective date or to enact a rate ordinance by the end of the suspension period, the rate increase automatically becomes effective. Consequently, we will be recommending that your city council suspend the effective date at its first available meeting following the filing of the casein order to-investigate the Company's request. For.your convenience, we will prepare and distribute next week a model resolution suspending the effe,CtiVe datel of the rate intrease, .Because this is a ratemaking proceeding,cities are entitled to recovery of their reasonable expenses associated with participation in this matter, Accordingly, if your city decides to Investigate the Company's request, there should be no cost to'the city for the hiring of legal counsel and consultants. If you would like additional information, please feel free to contact Geoffrey Gay or Thomas Brodato (5.12)322-5857. • 2208\mm 080229 Lloy(i Gpsselink Blpyjns. Roctlpilp &Townsend, Lloyd 816 Congress Avenue,Suite 1900 Austin,Texas'h370 I k„ Goss elinic (512)122-5800 Facsimile:(512)417i-0532. Ma"' ATTORNEYS AT LAW www.Iglawfirm.com NFL Gay's Difect :(512)32.25875 Email:"ggay@Iglakidirni.doin March.11,2008 City of Friendswood 910 South Friendswood Drive Friendswood,'Texas 77546 Re Professional,Services Agreement for work on CenterPoint Energy Gas 2008 Texas Coast Division Rate case; Billing File Xurnber:2208-1 'Dear_ • We want to express our appreciation for a further opportunity to work With the Gulf Coast Coalition of Cities ("qccc- or "Coalition") As part of our routine in opening new Platters, we provide clients with an engagement letter. The purpose of this letter is to set forth our understanding of the legal services to be performed by us for this engagement and the baSiS upon which we.Will be paid for.thoSe_services. Terms of Engagement This letter confirms that Lloyd GOSselink ("Firm") will represent-gccc with respect to • the filing by CenterPoint Energy Resources Corp. d/b/a CeriterPOint Energy Entex and CenterPoint Energy Texas Gas ("CenterPoint") to increase rates in its Texas Coast Division (the "Matten. It is understood .and agreed that this engagement is limited to the Matter, and our acceptance of this engagement does not imply any undertaking to provide legal services other than those set-forth in this letter.. Personnel Who Will Be Working on the Matter I will be the senior attorney in charge of our representation and I will be working on the Matter, but my work on specific issues will be limited Thomas Brocato will be the billing Attorney and in charge of coordinating resources needed for representation of GCCC. You may call, write, or e-mail either Thomas or me whenever you have any questions about the Matter. Other'Firm personnel, including Firm lawyers and paralegals, will participate in the Matter if, in our judgment,their participation is necessary or appropriate. This representation includes advice and preparation of documents needed for members of the Coalition to fulfill their responsibilities as regulators and to protect the- interests of Coalition members and their citizens before the Railroad Commission and in courts on appeal regarding the gas rate filing made on or about. March 6, 2008: The Firm's services in this Matter will be extended to all cities:served by CenterPoint in the Texas Coast Division that pass resolutions authorizing participation with OCCa Lloyd Gosselink Blevins Rochelle &Townsend, P.C. March I I,2008 Page Legal Fees and Other Charges. Our fees in the Matter will be based on the time spent by Firm personnel,primarily Firm lawyers or paralegals, who participate in the hit&ter. We will charge for all time spent by such personnel in the Matter in Increments of tenths.of an hour. We charge for time spent in activities including but not limited to the following telephone and office conferences with clients, representatives of clients, opposing counsel, consultants, And others, conferences among our attorneys and paralegals; factual investigation, if needed; legal research; file management, respending to requests from you that we provide information to you or your auditors; drafting letters,memoranda,pleadings, and other documents, and travel, if heeded. Legal fees and costs are difficult to estimate and in rate cases, vary with the number of intervenors, cooperation of the utility in responding to discovery, and orders .of the Railroad CoMrnission. Accordingly, we have made no commitment concerning the fees and charges that will be necessary to resolve or complete the Matter, although we will Make every effort to manage fees and costs by working efficiently and cost-effectively, It is understood that reasonable rate.case expenses of cities are to be reinibursed by the regulated utility And that the Firm is to fully document and justify its fees and expenses'and to submit them for scrutiny by citiés,CenterPoint:andthe Railroad Cominission. Other lawyers, paralegals and personnel may be assigned as necessary to achieve proper staffing. We utilize briefing clerks,paralegals,file clerks and other support personnel to perform those tasks not requiring the time of an attorney. Their time is billed at an amount determined by the experience of;the individual. Rates May be adjusted annually and, if so, will be noted on Your bill. We will submit all out-Of-pocket expenses incurred for reimbursement with no mark- up. A listing of hourly charges for the individuals I regard as having any likelihood of billing for services to GCCC on this matter in 2008 and a listing of standard office charges is attached as Exhibit 1. We,endeavor to have a statement of services rendered and expenses incurred by the 15th of thefollowing month. It is understood that the City of Friendswood will function as treasurer/billing agent for this matter and that legal and consultant invoices will be tent to the City of Friendswood,for review and submission to centerPoint for reimbursement, The Coalition may require that copies of invoices by delivered to Coalition members .other than Friendswood. The City of Friendswood assumes no liability or indenunfication because Of its services to GCCC and/or acting as its agent. Conflicts of Interest Before accepting the Matter, we have undertaken reasonable and customary efforts to determine whether there are any potential conflicts of interest that would bar our firm from representing you in the Matter. We Make reasonable efforts to comply with the requirements of Chapter 1 76 of the Texas Local Government Code and House Bill 1491, enacted by the 80th Texas Legislature in 2007. We have performed an internal Conflict of interest inquiry. Based On the information available to us, We are not aware of any potential disqualificatidn. We reviewed that issue in accordance with the rules of professional responsibility adopted in.Texas. Lloyd Gosselink Blevins Rochelle &Townsend, P.C. March.11,2008 Page-3 Document Retention Upon completion of our work on this matter, it is our firm'a- policy that original documents belonging to any Coalition member and other client property be returned within reasonable period of time. Our own files, including lawyer Work product pertaining to the Matter, will be retained by the Firm, These Finn-files include Firm administrative records,time and expense-reports, billing and accounting're-Cords, and internal work product.. Internal work product includes drafts, notes, internal communications (in both paper and electronic mediums), and legal and factual research prepared for the internal use of our firm's lawyers,: All documents retained by the Firm will be transferred to the person.responsible for administering our records retention program. For various reasons,: including the minimization of Unnecessary ‘storage expenses, we reserve the.right to destroy or otherwise dispose of any such documents or other materials retained by us after the completion of our work. • Communication.and Confidentiality In keeping with technological advancements and the corresponding demands of clients,it is the practice of the Firm to use electronic (email) correspondence from time to time to communicate and to transmit doeuments. The Firm employs several security measures to prevent the interception of electronic transmissions and preserve Confidentiality. Still, the possibility exists that electronic transmissions could be intercepted or otherwise received hy third parties and lose their privileged nature if the method of communication is ruled to lack suffiCient. confidentiality As with any correspondence regarding legal representation, regardless of the Manner of'transmission, we urge the Coalition to use caution in its dissemination in order to protect its confidentiality. By signing below, the:Coalition agrees that we May use email and a client-Specifia'Web page in the scope-ofour representation of the Coalition, Periodically, the Firm is asked to provide a "Representative Client List" to prospective Clients and in various legal directories(e.g.,Martiticlalt4Inbbell and the Texas Legal DireetorY). We would like confirmation that we May continue to disclose to third parties the.fact that the Firm represents the 'OCCc. We ,are not requesting.authorization to disclose any privileged information obtained during its representation By signing below the Coalition agrees that we may reveal the fact that We represent the Co alitiont6 third parties.. The cope of the Representation:and'Termination The scope Of employment under this agreement includes maintaining contact with member cities through various means of communication including memoranda,,attendance at meetings of members, conference calls and presentations when necessary to individual city councils; monitoring and participating in proceedings related to the Matter at the.Railroad Commission and the courts; advocating Coalition position:s. before administrative agencies, he courts and the Legislature; strategic and legal guidance: to the Coalition; negotiations with CenterPoint related to settlement;and other matters as may be mutually agreed. All activities are subject to the discretion of the Coalition. The Coalition may demand an immediate halt to any and all services at any point. Services under this Agreement may be terminated by either party at any point by providing 48 hours written notice. 'Lloyd Go8elink Blevins Rochelle Townsend, . , . . March 11,-2008 .Fav 4 Cofichthion This letter constitutes the entire terms of:the engagement of Lloyd dosselink in the Matter. Unless expressly stated in these terms of engagement,no obligation or undertaking shall be implied.on the part of either Ott C.or Lloyd GesSelinli. If there are any questions. about these terms of engagement, or if theSe-: terms are ,.. unacceptable in any way,please Jet me know inanediatoly. If acceptable, we would appreciate you signing and returning, on behalf of the Coalition,'the enclosed duplicate ,original of this document. - . Sincerely, 4172 'r--7 g ,,,,, Geoff - M. Gay Tr) . :0; . .. Enclosure APPROVED: GULF COAST COALITION OF CITIES. . . Signature. • • Printed Name Date 220810 11410803 11 • Lloyd Gossellnk Blevins Rochelle &Townsend, P.C. • Exhibit I Schedule Of Fees for 2008 Geoffrey Gay $350 Thomas Brocato $255 Kristen Doyle $255 Georgia Crump $275 Chris Brewster $1175 Jessica Luparello $170 Paralegal $100 Of Counsel/Sr. Contract Attorney $270 • Schedule of Charges for 2008 Photocopies $.20/page Telefax(sending only) $20/page Messenger/ Clerical Delivery $10/hour Scanning $ 15/page. CD Burning or Duplication $5/CD Lloyd Gosselink.BlevIns Rochelle & Townsend, P.C.