Ord. 1426 2010-08-09ORDINANCE NO. '1426
AN �ORDIM,4NCE QF T�iE GITY CC3l�NCIL OF TH� CITY OF
PEARLANQ, TEXAS, REVIEWING THE RATE INCREA5E REQUEST
C}F CENTERPC)►I�JT ENERGY ENTEX; �ENYI�JG THE �iEQUEST�p
INCREA�E 'IN RATES; ORD�RING T�IAT NO CHANGE IN RATES
C3CCUR; ESTABLISHING AN �FFECT`IV� aATE FOR THIS
t?RDlN,�fdCE; Me4KlI�C SUGH OTHER FINDINCS AND PRQVISEOl�S
RELATED HERETO; COfVTAINING A SAVIfVCS CLAUSE, AND
PRt3VFDl'NG FOR THE EFFEGTIVE DATE THEREQF.
WHEREAS, on April 30, 201a CenterPoint Energy �ntex ("CenterPoint'") filed a
request ta increa�e rates with9n the Texas Coas# Division by approximately �3.6 rnillion;
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WHEREAS, CenferPai�t's filing purports to be in compliance with �"Go�t nf
Service Adjustment'° ("CC1SA°} tariff approv�ed by the Railroad Commission of Texas;
ac�d
WHEREAS, th� �aSA t�riff approved by the Raslraad C�mm�ssian of Texas
provides that `°[t]h�e provis�ons of this Gast �of Senrice Adjustrnent are to be implemer�ted
in harmany vrrith the Cas Utility Regulatory Act (Texas Utilati�s Gode, Chapters 10ti-
105}" and that th� "Company's a�nual rate adjustment will be made in acc�rdance +.vi#h
all applicable laws;" �nd
WH�REAS, the Railroad Corrimission of Texas in Gas Utility Docket No. 991 {�,
concluded that a municip�lity may not su�penc� tl�e effective d�te that CenterPoint
praposes ir� its request ta change rates under a CQSA application, a conclusion with
which the City disagrees; �nd
WHEREAS, CenterPaint pro�osed an effective d�te of August 'k, 2410, w'hich in
conjun�tian with the Railraad Cornmission of Texas' conclusion that the Ci#y m�y not
suspend C�nterPoin�t's proposed effective date, precludes the City f�om conducting a
meaningfui reuiew of CenterPoint's request to �aise ra�es, thereby denying the City's
(7RDINAIVCE N�. 142fi
counsel and consultants the ability ta provide a fu{I review ar�d recorromendation ta the
TCUC Cifies; and
WHEF�EAS, CenterPoint failed to carry its burden of proof and m��;t the
requirements af the Gas Utility �egulato�y Act tc� warrant a change in r�tes, in several
areas of ats rate request, including, but not limited to the following areas:
a. Cente�P�int's ex�enses related to its Affiliate Transactians;
b. CenterPoint's proposed cost of capitai, including its Ret�rn on Equity, its
Cost of Debt, its Capi4al Structure, and its �verall Rate af Return;
c. CenterPoint's pro�osed Rate C►esign;
d. CenterPoin�'s praposed treatrraent af Accumulated Deferred Income Tax;
e. CenterPoint'� proposed calculation of its Cash Working Capi��l;
f. CenterPoinf's proposed calculatian of its Pension Expense; �nd
WHERE�,S, the 345 J�diciaV District Court of T�avis County, Texas in Cause
f�o. D-1-�N-09-OOQ982, Texas Coast Utilities Coalrtron vs. The Railraad Cc+mmission of
T�xas, Judge Step�hen Yefeno�ky presiding, issued a Judgment concl�ding that the
Railroad Commissior� did not have the authority tc� impase �he COSA tarifF an the City
�nd did not have the authority to apprr�v� � CC7SA t�r�ff in thos� areas wher� the
Railraad Camrr7issiarr had original jurisdiction; now therefore,
BE IT ORDAINED BY THE C�TY COUNC�L OF TFiE CITY OF PEARLAI�D, T`EXAS�
Secti�n 1. That the facts ce�ntaFned in the preamble of this ordinance are
determ�r�ed to be true an� correct and are i�ereby adopted as part of this ordinance.
Section 2. That the base rate increase propased by CenterPoint is denoed.
Secti�n 3. That to the extent CenterPaint implements any ch�nge in rates in
cantradic#ion of t�is ��dinance, in additFOn to any penaltie� that may apply, Cent�rPoi�t
sha91 refund any base rate i�erease with i�terest at the rate being earn�d on customer
depQSits..
Section 4. The effective da�e for this ordinance is July 31, 2010..
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�RDINANGE MO. 1426
Sectian 5. Vf there is an appeal of this ordin�r�ce, then, the City reserves all
rights to assert adjustments to the re�enue requirement, cost allocation and rate c�esign
proposed �ay Cer�terPoint a�d ta fully participate in such ap�eal, including
reimbursement of its reasonable rate case expenses.
Section 6. All conditions precedent ta the ado�tion of each of the foregoing
sections herein have been complied with under law.
Section 7. Center�oint shall reimbuese the reasonable rate case expenses of
the TCUC eify eoalition upon presentment of invoices received by the City.
Section 8. If any section or part of any section, paragraph, or clause of this
ardinance is declared invalid ar unconstitu#ional lfor any reason, such declarathon shal�l
nat '�be held to invalidate ar ir�pair the validity, force, or effect afi any at�er section or
sections, part of sectior�, paragraph, c�r clause of this ordinance.
Secfion 9. The City Counc�l officially finds, determines, recites and declares
that a s�fficient written notice of the date, hour, place and subject af this meeting of the
City Cauncil was pasted at a plac�; convenient ta th� public at the City Hall of the City
for �he time required by law preceding this meeting, as required by the C�pen fVleetings
Lauv, Chapter 551, Texas Gavernment Coc�e; and that thts meeting has been op�n fo
the public as requirec� by law at all tirr�es during which this Ordinance and the subj�ct
rreatter thereof has been discuss�d, considered and formally acted upon. The Cvty
Co�ncil further ratifies, approves and confirms s�ch written notice and the contents and
pc�sting thereo�.
Sec#ian 10. The City Secr�tary is hereby directed fo send a true �nd capy of this
C?rdinan�ce to Scott E. Cloyle, Regional Vice President Gas Operataans, Ce�tterPoint
Energy, 3111 Louisiana S#reet, Houstan, Texas 770Q2 and to Alfred R. Herrera, Herrera
& Boyle, PLLC, Suite 12�0, 816 Congress„ Austin, Texas 78701.
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ORDINANCE NO. 1426
PASSED and APPROVEQ O�I FVRST READING this the 26 day of July, A. D.„
201 {�.
ATTEST:
APPROVE�] AS TO F�RM:
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DARRIN IVI. COKER
CITY ATTQRNEY
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TOM REID
MAYQR
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PASSED and APPR�VED C�N SECOND AND FINAL READING this the 9 day
of August, A. D.„ 2010.
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T 9�EID
MAl'QR
ATTEST:
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ORGINANCE NU. 7426
APP�ROV�ED AS TO F�RM:
DARRIN M. COKER
CITY ATTOR�IEY