R80-17 7-15-80 RESOLUTION R80-17
A RESOLUTION OF THE CITY OF PEARLAND, TEXAS,
SUSPENDING RATE CHANGES HERETOFORE FILED BY
HOUSTON LIGHTING AND POWER COMPANY; PURSUANT
TO SECTION 43 (d) OF THE PUBLIC UTILITIES
REGULATORY ACT, ARTICLE 1446C, TEXAS REVISED
CIVIL STATUTES.
WHEREAS, on June 30, 1980, the Houston Lighting & Power Company
(HL & P) filed a Statement of Intent to change its rates for electric
service within the City of Pearland and has requested that said changes
become effective on August 5, 1980; and
WHEREAS, HL & P has filed revised Tariff Schedules together with
statements specifying in detail each proposed change, a rate filing package,
and supporting testimony; and
WHEREAS, Section 17(a) of the Public Utility Regulatory Act,
Article 1446c, Texas Revised Civil Statutes, gives the governing body of
each municipality exclusive original jurisdiction over electric rates within
its municipal boundaries; and
WHEREAS, Section 43(d) of the Public Utility Regulatory Act
authorizes the governing body of any municipality acting as a Regulatory
Authority to suspend the operation of any proposed change in rates for a period
not to exceed 120 days beyond the date on which the scheduled rates would
otherwise go into effect, which period may be further extended for an additional
30 days; and
WHEREAS, HL & P's proposed rate changes and the detailed material
supporting those changes require comprehensive evaluation and study;
THEREFORE BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF
PEARLAND, TEXAS:
That the change in rates for electric service within the City of
Pearland proposed by the Houston Lighting & Power Company to become effective
on August 5, 1980, should be, and are, hereby suspended for a period of
120 days beyond said proposed effective date, until December 3, 1980, subject
to an additional suspension of up to 30 days beyond said date upon further
resolution of this Council.
INTRODUCED, READ, AND PASSED by the affirmative vote of the City
Council of the City of Pearland, Texas, on this the/~'~' /da~ of
, A. D. 1980.
~ayor, City of Pearland
ATTEST: JL _
City Secretary
APPROVED: ~_~~_~__~ , City Attorney
Received and filed
~ Houston Lighting & Power
. ~' ~' ~ Rate Filing Package
'The Light
~ ' ~ .June 30, 1980
Honorable Mayor Reid and Council
City of Pearland
P. O. Box 1157
Pearland,TX 77581
Gentlemen:
In July, 1979 Houston Lighting & Power Company filed an application
for a general increase in its rate schedules. At that time it was hoped
that the rate relief requested would be adequate to maintain the Company's
financial integrity through the end of 1981. However, the rates ultimately
approved by regulatory authorities and placed in effect by HL&P in December,
1979 were substantially less than our original request, and we therefore
once again find it necessary to make an application for a general increase
in our rates. The increase requested is designed to give us a reasonable
opportunity to continue to serve this area's immediate and future need for
reliable electric service.
Despite the rate relief made effective last December, our Company's
financial health has been deteriorating due to such factors as general in-
flation, increases in state and local taxes, the costs of environmental
protection, and simila~ items, none of which provide additional generating
capacity or efficiency for our system. The primary factor adversely affect-
ing our Company's financial position has been the high cost of new construct-
ion. In the past four years, 1976 through 1979, our generating capacity has
been increased by more than 17.7% by an expansion program that has to date
cost some $1.72 billion~ Nonetheless, the energy needs of this area's grow-
ing economy are exerting an even greater demand for reliable electric service
which must be met in the immediate future. In addition, we must continue
the transition from gas and oil fired generating plants to facilities that
utilize more abundant domestic energy resources such as coal, lignite and
nuclear fuel. Just looking forward to the next three years, 1980 through
1982, we are already committed to spend $2.64 billion to support our ongoing
plant expansion. The result is that within a seven year period, 1976 through
1982, the cost of plant expansions will almost triple our total investment
in plant and other facilities in 1975.
,~htin~ & Pov~r Company ~'~, ~
City of Pearland -2- June 30, 1980
Any expanding entity, whether it be a municipality or an electric
company~ must be kept in a healthy financial condition if it is to operate
successfully. So far HL&P has been able to do a better job of keeping its
mates down because its securities have carried a good rating among electric
utilities. Our Company's good credit rating has been of great benefit to
our customers since we have been able to finance our expansion pro-
gram on terms more favorable than many other utilities. This has allowed
us to keep pace with the area's growing electric needs at the lowest possible
cost to our customers.
We estimate that between 60 & 65% of the $2.64 billion required
to meet our 1980-1982 construction budget will have to be financed
through the public sale of securities. With such an expansion program
facing us, we must be able to offer securities of a quality con~nensurate
with the other available investment opportunities if we are to compete
effectively for the investors' dollars. This competition requires a record
of earnings that will make our securities attractive in today's highly com-
petitive money market.
We are including with this letter a Statement of Intent to change
rates for electric service along with the proposed revised rate schedules
for the Company's Tariff and the rate filing package with supporting testi-
mony which has been filed today with the Public Utility Commission of Texas.
We have requested that the new rates become effective on August 5, 1980,
and apply to all service taken by each customer on or after that date. A
simultaneous filing of statements of intent has been made with all of the
municipalities exercising original jurisdiction over the Company. The rate
increases sought in each municipality and in rural areas under the direct
original jurisdiction of the Public Utility Commission are uniform for
each class of customer throughout the Company's service area.
We regret that a rate increase is necessary, but we believe it
is in the best interests of the communities we serve and our customers of
today and in the future. It is a privilege to serve your City and it will
be our objective to keep our rates at the lowest possible level consistent
with providing reliable service.
Otto H. Schroeder
Brazoria District Manager
OHS/ca ~
attachments
Light
June 30, 1980
Honorable Mayor Reid and Council
City of Pearland
P. O. Box 1157
Pearland, TX 77581
Dear Mayor Reid and Council:
The proposed rates described in the black folder are proposed to
go into effect August 5, 1980, or 35 days from filing. These rates
will go into effect unless the city takes some action within 30 days
from the filing.
In order to maintain uniform rates within our service area, we
have attached a sample resolution which will suspend the operation of
any proposed change in rates for a period not to exceed 120 days be-
yond the date on which the scheduled rates would otherwise go into
effect. During this time the Public Utility Commission will conduct
investigations concerning our request and input from the city at these
hearings would be appropriate if deemed necessary. We request you
place this resolution on the next regular council meeting agenda for
action.
Should you have any questions regarding this, please let me know.
I will be happy to answer your questions.
Otto H. Schroeder
District Manager
OHS/ca
attachments
cc: City Attorney
RESOLUTION SUSPENDING RATE CHANGES
WHEREAS, on June 30, 1980, the Houston Lighting & Power Company
(HL&P) filed a Statement of Intent to change its rates for electric service
w~thin the City of Pearland and has requested that said changes
become effective on August 5, 1980; and
WHEREAS, HL&P has filed revised Tariff Schedules together with
statements specifying in detail each proposed change, a rate filing package,
and supporting testimony; and
WHEREAS, Section 17ia) of the Public Utility Regulatory Act,
Article 1446c, Texas Revised Civil Statutes, gives the governing body of
each municipality exclusive original jurisdiction over electric rates within
its municipal boundaries; and
WHEREAS, Section 43(d) of the Public Utility Regulatory Act authorizes
the governing body of any municipali.ty acting as a Regulatory Authority to
suspend the operation of any proposed change in rates for a period not to
exceed t20 days beyond the date on which the scheduled.rates would otherwise
go into effect, which period may be further extended for an additional 30
days; and
WHEREAS, HL&P's proposed rate changes and.the detailed material
supporting those changes require comprehensive evaluation and study;
IT IS THEREFORE RESOLVED by the City Council of the City of
Pearland , Texas: That the changes in rates for electric service
within the City of Pearland proposed by Houston Lighting & Power
Company to become effective on August 5, 1980, should be, and are, hereby
suspended for a period of 120 days beyond said proposed effective date,
until December 3, 1980, subject to an additional suspension of up to 30 days
beyond said date upon further resolution of this Council.
INTRODUCED, READ AND PASSED by the affirmative vote of the City
Council of the City of_ Pearland , Texas, on this the __~ay of
, 1980.
MAYOR
--~
ATTEST: ~;--~ .~
City Secretary
APPROVED:
City Attorney
WHERE83, the hereinafter named has unselfishly contributed time, talents and
r§ies to ser~e the people of the City of I.~earland; and
YqHERE/I~, such contribution has become a part of thc foundation upon which
~HERESB, the members of the <i~ Council of thl ;ity~bf~earl~d,. Brazoria
Harris Counties, fltate of Texas deem it
and contnbunon of
q .... ' ............. ' ' attest and
O~ THEREFORE, be4t resolved and s~amrev-hereuntoeaffixed
w~mess that the hereunder' Si~'id~'~hd"thi fieOull of thf~ eitv do ~ate