R-2015-063 2015-04-27 RESOLUTION NO. R2015-63
A Resolution of the City Council of the City of Pearland, Texas
suspending the effective date for ninety days in connection
with the statement of intent filed by CenterPoint Energy
Resources Corp., d/b/a CenterPoint Energy Entex and
CenterPoint Energy Texas Gas — Texas Coast Division on or
about March 27, 2015; authorizing participation in a coalition
of similarly situated cities; authorizing participation in related
rate proceedings; authorizing the retention of special counsel;
requiring the reimbursement of municipal rate case expenses;
finding that the meeting complies with the Open Meetings Act;
making other findings and provisions related to the subject;
and declaring an effective date.
WHEREAS, CenterPoint Energy Resources Corp., d/b/a CenterPoint
Entex and CenterPoint Energy Texas Gas ("CenterPoint" or "Company") filed a
Statement of Intent with the City on or about March 27, 2015 to increase rates in
the Company's Texas Coast Division; and
WHEREAS, the City is a regulatory authority under the Gas Utility
Regulatory Act ("GURA") and under § 103.001 et seq. of GURA has exclusive
original jurisdiction over CenterPoint's rates, operations and services within the
municipality; and
WHEREAS, CenterPoint intends to implement the revised gas tariffs on a
division-wide basis for customers in the Texas Coast Division effective May 1,
2015, and
WHEREAS, CenterPoint plans to increase base revenue on an overall
basis by approximately $6.8 million, representing an increase in base revenue of
approximately 11.3%; and
WHEREAS, on a customer-class basis, for COSA-3 customers, the
impact is as follows:
RESOLUTION NO. R2015-
Average Average Proposed Percentage
Current Proposed Monthly Change with
Monthly Bill, Monthly Bill, Change Gas Cost /
including Gas including Gas without Gas
Cost Cost Cost
Residential $38.17 $40.73 $2.56 6.7% / 16.2%
General $100.15 $105.03 $4.88 4.9% / 25.1%
Service-Small
General $1,842.15 $1,790.42 ($51.73) -2.8% / -
Service —
Large Volume 25.3%
and - -- ----
WHEREAS, CenterPoint proposes to increase its customer charges for
"General Service — Residential" current from $14.77 to $16.00; increasing the
customer charge for "General Service — Small" from $13.84 to $16.75; and
increasing the customer charge for "General Service — Large Volume" from
$14.40 to $47.75; and
WHEREAS, the Company seeks a Return on Equity (ROE) of 10.25%; a
capital structure weighted toward equity — 54.50% Equity; 45.50% Debt; and a
rate design intended to shift more revenues to a fixed customer charge rather
than through a commodity/volumetric charge; and
WHEREAS, CenterPoint's rate request consists of a voluminous amount
of information including CenterPoint's rate-filing package, exhibits, schedules,
and workpapers; and
WHEREAS, in order to maximize the efficient use of resources and
expertise in reviewing, analyzing and investigating CenterPoint's rate request
and its changes in tariffs it is prudent to coordinate the City's efforts with a
coalition of similarly situated municipalities; and
WHEREAS, the City, in matters regarding applications by CenterPoint to
change rates, has in the past joined with other local regulatory authorities to form
the Texas Coast Utilities Coalition ("TCUC") and hereby continues its
participation in TCUC; and
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RESOLUTION NO. R2015-
WHEREAS, CenterPoint proposed May 1, 2015 as the effective date for
its requested increase in rates; and
WHEREAS, it is not possible for the City to complete its review of
CenterPoint's filing by May 1, 2015; and
WHEREAS, the City will need an adequate amount of time to review and
evaluate CenterPoint's rate application to enable the City to make a final decision
as a local regulatory authority with regard to CenterPoint's requested rate
increase; and
WHEREAS, the City will require the assistance of specialized legal
counsel and rate experts to review the merits of CenterPoint's application to
increase rates; and
WHEREAS, CenterPoint simultaneously filed its statement of intent to
increase rates with the Railroad Commission of Texas, therefore the decision of
the Railroad Commission of Texas could have an impact on the rates paid by the
City and its citizens who are customers of CenterPoint and in order for the City's
participation to be meaningful it is important that the City promptly intervene in
such proceeding at the Railroad Commission of Texas, now therefore,
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF PEARLAND,
TEXAS:
Section 1. The findings set out in the preamble are in all things
approved and incorporated herein as if fully set forth.
Section 2. CenterPoint's proposed effective date for its proposed
increase in rates is hereby SUSPENDED for ninety days beyond its proposed
effective date.
Section 3. The statutory suspension period will be extended
automatically day for day should CenterPoint extend its proposed effective date,
and may be further extended if CenterPoint does not provide timely, meaningful,
and proper public notice of its request to increase rates, or if its rate-filing
package is materially deficient.
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RESOLUTION NO. R2015-
Section 4. The City authorizes intervention in proceedings related to
CenterPoint's Statement of Intent before the Railroad Commission of Texas and
related proceedings in courts of law as part of the coalition of cities known as
Texas Coast Utilities Coalition ("TCUC").
Section 5. The City hereby orders CenterPoint to reimburse the City's
rate case expenses as provided in the Gas Utility Regulatory Act and that
CenterPoint shall do so on a monthly basis and within 30 days after submission
of the City's invoices for the City's reasonable costs associated with the City's
activities related to this rate review or to related proceedings involving
CenterPoint before the City, the Railroad Commission of Texas, or any court of
law.
Section 6. Subject to the right to terminate employment at any time, the
City retains and authorizes the law firm of Herrera & Boyle, PLLC to act as
Special Counsel with regard to rate proceedings involving CenterPoint before the
City, the Railroad Commission of Texas, or any court of law and to retain such
experts as may be reasonably necessary for review of CenterPoint's rate
application subject to approval by the City.
Section 7. The City, or its designee member city in the Texas Coast
Utilities Coalition of cities, shall review the invoices of the lawyers and rate
experts for reasonableness before submitting the invoices to CenterPoint for
reimbursement.
Section 8. A copy of this resolution shall be sent to CenterPoint Energy,
care of Mr. Stephen Bezecny, Director of Regulatory Affairs, CenterPoint Energy
P.O. Box 2628, Houston, Texas 77252-2628; and to Mr. Alfred R. Herrera,
Herrera & Boyle, PLLC, 816 Congress Ave., Suite 1250, Austin, Texas 78701.
Section 9. The meeting at which this resolution was approved was in all
things conducted in strict compliance with the Texas Open Meetings Act, Texas
Government Code, Chapter 551.
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RESOLUTION NO. R2015-
Section 10. This resolution shall become effective from and after its
passage.
PASSED, APPROVED and ADOPTED this the 27th day of
April A.D., 2015.
- 1),/1/
TOM REID
MAYOR
ATTEST:
‘‘W..
DUNGL2' G, Tr eC / %\
Y SE,ETARY
APPROVED AS TO FORM:
DARRIN M. COKER
CITY ATTORNEY
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