Ord. 1387 2009-09-28ORDINANCE NO. 1387
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF
PEARLAND, TEXAS, REVIEWING THE REQUESTED RATE INCREASE
REQUEST OF CENTERPOINT ENERGY ENTEX ("CENTERPOINT");
SETTING AND ESTABLISHING RATES AND TARIFFS; ORDERING
THE REFUND OF BASE RATE INCREASES IMPLEMENTED ON
AUGUST 1, 2009; ESTABLISHING AN EFFECTIVE DATE FOR THIS
ORDINANCE AND THE IMPLEMENTATION OF NEW RATES;
PROVIDING FOR FINES FOR NON-COMPLIANCE WITH THIS
ORDINANCE NOT TO EXCEED $500 PER VIOLATION; PROVIDING
FOR A SEVERABILITY CLAUSE; FINDING THAT THE MEETING
COMPLIED WITH THE OPEN MEETINGS ACT; DECLARING AN
EMERGENCY; MAKING SUCH OTHER FINDINGS AND PROVISIONS
RELATED TO THE TOPICS SET FORTH IN THIS CAPTION.
WHEREAS, On May 1, 2009 CenterPoint filed a request to increase rates within
the Texas Coast Division by approximately $2 million; and
WHEREAS, the Chair of the Texas Coast Utilities Coalition of Cities ("TCUC"),
Ignacio Ramirez, City Attorney for the City of Baytown, notified CenterPoint on July 13,
2009 that each of the TCUC Cities would suspend the effective date for 90 days as set
forth in Attachment A which is appended hereto and incorporated herein by reference,
and
WHEREAS, the City as a member of TCUC suspended CenterPoint's requested
implementation date of August 1, 2009 for 90 days or until October 30, 2009, as
provided in Attachment B appended hereto and incorporated herein by reference ;and
WHEREAS, CenterPoint's filing purports to be in compliance with a "Cost of
Service Adjustment" ("COSA") tariff approved by the Railroad Commission of Texas;
and
WHEREAS, the COSA tariff approved by the Railroad Commission of Texas
provides that "The provisions of this Cost of Service Adjustment are to be implemented
in harmony with the Gas Utility Regulatory Act (Texas Utilities Code, Chapters 101-
ORDINANCE NO. 1387
105). The Company's annual rate adjustment will be made in accordance with all
applicable laws," and
WHEREAS, CenterPoint refused to respond to three sets of requests for
information, thus, adding to the difficulty of TCUC's consultant, Diversified Utility
Consultants, Inc., completing its report and recommendation to the TCUC Cities; and
WHEREAS, the suspensions of the effective date were undertaken pursuant to
Section 104.107 of the Texas Utilities Code; and
WHEREAS, in spite of the suspension, on August 1, 2009 CenterPoint increased
its rates by approximately $1.7 million or 55 cents per month for a typical residential
customer; and
WHEREAS, the TCUC Cities, through its Chair, notified CenterPoint of the
unlawfulness of its conduct as set forth on Attachment C as appended hereto and
incorporated herein by reference; and
WHEREAS, the report of Diversified Utility Consultants, Inc. indicates that the
rates requested by CenterPoint were excessive as set forth in Attachment D which is
appended hereto and incorporated herein by reference; and
WHEREAS, refunds are owed to ratepayers located within the TCUC Cities for
higher base rates implemented on August 1, 2009; now, therefore,
BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF PEARLAND, TEXAS:
Section 1. That the facts contained in the preamble of this Ordinance are
determined to be true and correct and are hereby adopted as part of this Ordinance.
Section 2. That the base rate increase put into effect by CenterPoint on
August 1, 2009 within the City is unlawful.
Section 3. That CenterPoint shall refund any base rate increase put into effect
between July 31, 2009 and October 29, 2009 with interest at the rate being earned on
customer deposits no later than December 31, 2009.
2of5
ORDINANCE NO. 1387
Section 4. That CenterPoint shall file a report on November 16, 2009 with the
Chair of the TCUC Cities, Ignacio Ramirez, City Attorney for the City of Baytown, Texas,
detailing, on a customer-class basis, the amount refunded as ordered by this
Ordinance, and shall provide in its report the consumption data upon which refund is
based.
Section 5. The report by Diversified Utility Consultants, Inc. to the TCUC Cities
calls for substantial reductions in the rate request, over and above the rates set by the
Railroad Commission for the environs areas but assuming CenterPoint will refund the
base rate increase of August 1, 2009 until the effective date of this Ordinance the City
shall forego such additional adjustments to the rate request as detailed by Diversified in
its report.
Section 6. The City adopts the tariffs appended hereto and incorporated
herein as Attachment E by reference so long as they do not go into effect prior to
October 29, 2009.
Section 7. The effective date for this Ordinance is October 29, 2009.
Section 8. The City adopts the attached tariffs with the understanding that
such tariffs, or any other principle underlying such tariffs, shall not constitute precedent
in any other proceeding.
Section 9. If there is an appeal of this Ordinance, then, the City reserves the
right to assert additional adjustments to the revenue requirement, cost allocation and
rate design which were not contained in the report by Diversified Utility Consultants,
Inc., in addition to those in the report.
Section 10. All conditions precedent to the adoption of each of the foregoing
sections herein have been complied with under law.
Section 11. CenterPoint shall reimburse the reasonable rate case expenses of
the TCUC city coalition.
3 of 5
ORDINANCE NO. 1387
Section 12. TCUC shall submit its rate case expenses to CenterPoint by
September 1, 2009.
Section 13. CenterPoint shall reimburse TCUC for its reasonable rate case
expenses through the City of Baytown no later than November 3, 2009.
Section 14. Penalty upon failure to comply. Any person violating or failing to
comply with any provision or requirement of this Ordinance may be fined up to $500.00
pursuant to the Local Government Code, Section 54.001. Notwithstanding the
foregoing, any violation of any provision of this Ordinance that constitutes an immediate
danger or threat to the health, safety and welfare of the public may be enjoined in a suit
brought by the city for such purpose. Allegation and evidence of a culpable mental state
is not required for the proof of an offense defined by this ordinance.
Section 15. The City Council officially finds, determines, recites and declares
that a sufficient written notice of the date, hour, place and subject of this meeting of the
City Council was posted at a place convenient to the public at the City Hall of the City
for the time required by law preceding this meeting, as required by the Open Meetings
Law, Chapter 551, Texas Government Code; and that this meeting has been open to
the public as required by law at all times during which this Ordinance and the subject
matter thereof has been discussed, considered and formally acted upon. The City
Council further ratifies, approves and confirms such written notice and the contents and
posting thereof.
Section 16. Severability. If any section or part of any section, paragraph, or
clause of this Ordinance is declared invalid or unconstitutional for any reason, such
declaration shall not be held to invalidate or impair the validity, force, or effect of any
other section or sections, part of section, paragraph, or clause of this Ordinance.
4of5
ORDINANCE NO. 1387
Section 17. The City Secretary is hereby directed to send a true and copy of
this Ordinance to Richard A. Zapalac, Vice President for Gas Operations-Texas,
CenterPoint Energy, Suite 2120, 1111 Louisiana Street, Houston, Texas 77002 and to
Jim Boyle, Herrera & Boyle, PLLC, Suite 1250, 816 Congress, Austin, Texas 78701.
PASSED and APPROVED on First and Only Reading this the 28th day of
September, A. D., 2009.
~w
TOM REID
MAYOR
ATTEST:
:>;~~;.
M^i
YO G f C ~'`~
CI SE ETAR '~`''''
APPROVED AS TO FORM:
f
DARRIN M. COKER
CITY ATTORNEY
5 of 5