R2010-161 - 2010-12-13RESOLUTION NO. R2010 -161
A RESOLUTION BY THE CITY OF PEARLAND, TEXAS, "CITY
DENYING TNMP'S PROPOSED RATE INCREASE; FINDING THAT THE
EXISITING ELECTRIC DISTRIBUTION RATES OF TNMP ARE
UNREASONABLE AND SHOULD BE REDUCED; ORDERING TNMP
TO REDUCE ITS EXISITING RATES WITHIN THE CITY OF
PEARLAND; ORDERING TNMP TO SUBMIT TARIFFS CONSISTENT
WITH THE RECOMMENDATION OF THE ALLIANCE OF TEXAS -NEW
MEXICO POWER MUNICIPALITIES' "ATM CONSULTANTS
WORKING IN COORDINATION WITH OTHER CITIES IN PUBLIC
UTILITY COMMISSION DOCKET NO. 38480, ORDERING TNMP TO
REIMBURSE THE CITY FOR ITS REASONABLE COSTS INCURRED IN
THIS RATE CASE AND ANY RELATED RATEMKAING PROCEEDINGS
OR APPEALS OF SAID PROCEEDINGS; DETERMINING THAT THE
MEETING COMPLIED WITH THE TEXAS OPEN MEETINGS ACT;
MAKING SUCH OTHER FINDINGS AND PROVISIONS RELATED TO
THE SUBJECT; AND DECLARING AN EFFECTIVE DATE.
WHEREAS, the City of Pearland, Texas "City is a regulatory authority under
the Public Utility Regulatory Act "PURA and pursuant to 33.0001, the City has
exclusive original jurisdiction over the electric rates, operations, and services provided
within city limits; and
WHEREAS, the City has the authority under PURA 33.001 and 36.001, to
determine whether the existing rates of an electric utility are unreasonable or in any way
a violation of any provision of law; and
WHEREAS, on or about August 26, 2010, Texas New Mexico Power Company
"TNMP filed with the City an application for authority to change rates and to adopt
certain rate riders "the application which the City duly suspended for 90 days from
TNMP's proposed effective date, and
WHEREAS, the City previously authorized participation with the Alliance of
Texas -New Mexico Power Municipalities "ATM in hiring experts and legal counsel to
review TNMP's Statement of Intent; and
WHEREAS, ATM representatives obtained additional information from the
Company through written requests for information; and
RESOLUTION NO. R2010 -161
WHEREAS, the City's consultants and representatives through cooperative
efforts under the direction of ATM have reviewed the rate filing package and responses
to information regarding the rates to be charged by the Company; and
WHEREAS, based on the ATM's consultants' analyses in conjunction with
analyses by other consultants that reviewed TNMP's application for a rate increase, the
Company's existing rates are not reasonable, and
WHEREAS, based upon ATM "s consultants' findings in conjunction with
analyses by other consultants that reviewed TNMP's application, TNMP's existing rates
are not just and reasonable, for services within the City, now, therefore,
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF PEARLAND,
TEXAS:
Section 1 That the Company was given reasonable notice of and the
Company had a reasonable opportunity to show the City that its rates were just and
reasonable.
Section 2 That the Company failed to show that it's proposed or existing rates
are just and reasonable.
Section 3 That the adjustments to the Company's Statement of Intent
proposed by ATM's witnesses and the overall coordinated recommendation of the cities
submitted in Public Utility Commission of Texas "PUC Docket No. 38480 and
provided to the Company on November 8, 2010 are reasonable and that it is, therefore,
reasonable to reduce existing annual revenues by $8.8 million.
Section 4 That within ten days of the adoption of this Resolution, TNMP shall
file with the City rate tariffs consistent with the adjustments proposed by ATM's
witnesses and the other cities' experts who coordinated their analysis including
recommendations regarding cost allocation and rate design proposed in PUC Docket
No. 38480 and provided to the Company on November 8, 2010 that will result in a
reduction in current annual revenue of approximately $8.8 million and including denial of
the Company's Storm Hardening Rider.
Such tariffs shall constitute just and reasonable rates and establish the
Company's overall revenues at an amount that will permit the Company a reasonable
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RESOLUTION NO. R2010 -161
opportunity to earn a reasonable return on its invested capital used and useful in
providing services to the public in excess of the Company's reasonable and necessary
operating expenses, in compliance with the Public Utility Regulatory Act.
Section 5 That the Company shall, within thirty -one days from the effective
date of this Resolution, begin charging rates set forth in its tariffs that are consistent with
the recommendation of ATM and the witnesses it coordinated with in PUC Docket No.
Section 6 That the existing rates, services charges, and tariff language not
inconsistent with the recommendations of ATM and the witnesses it coordinated with in
PUC Docket No. 38480 shall remain in effect.
Section 7 That within ten days of the adoption of this Resolution, the
Company shall reimburse ATM for all ratemaking costs associated with ATM's activities
related to the rate proceeding and thereafter make prompt reimbursement on a monthly
basis to cover costs of appeals to the PUC or Courts, in accordance with PURA
33.023.
Section 8 That a copy of this Resolution shall be sent to the Company, care
of Scott Seamster, Corporate Counsel, Texas New Mexico Power Company, 225 E.
John Carpenter Fwy., Irving TX 75062 and the Alfred R. Herrera, at Herrera and Boyle,
PLLC, 816 Congress Avenue, Suite 1250, Austin, Texas 78701.
PASSED, APPROVED and ADOPTED this 13 day of December, A.D., 2010.
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TOM REID
MAYOR
ATTEST:
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RESOLUTION NO. R2010 -161
APPROVED AS TO FORM:
A a:f�,
DARRIN M. COKER
CITY ATTORNEY