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CC Resolution No. 2790 RESOLUTION NO. 2790 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF BAYTOWN, TEXAS ("CITY") AUTHORIZING SETTLEMENT OF CENTERPOINT ENERGY HOUSTON ELECTRIC, LLC'S REQUEST FOR AN AMENDMENT TO ITS DISTRIBUTION COST RECOVERY FACTOR SUBMITTED ON OR ABOUT APRIL 5, 2022; AUTHORIZING CONTINUED PARTICIPATION IN A COALITION OF SIMILARLY SITUATED CITIES AND PARTICIPATION IN RELATED RATE PROCEEDINGS; REQUIRING THE REIMBURSEMENT OF MUNICIPAL RATE CASE EXPENSES; FINDING THAT THE MEETING COMPLIES WITH THE OPEN MEETINGS ACT; MAKING OTHER FINDINGS AND PROVISIONS RELATED THERETO; AND PROVIDING FOR THE EFFECTIVE DATE THEREOF. ****************************************************************************** WHEREAS,on about April 5,2022,CenterPoint Energy Houston Electric,LLC("CEHE") filed an application for approval to amend its Distribution Cost Recovery Factor ("DCRF") with the City that will increase CEHE's rates effective September 1, 2022; and WHEREAS, the City is a regulatory authority under the Public Utility Regulatory Act ("PURA") and under Chapter 33, §33.001 et seq. of PURA has exclusive original jurisdiction over CEHE's rates,operations, and services within the municipality, and specifically over its requested amendment to its DCRF under Chapter 36, §36.210; and WHEREAS, CEHE seeks to include in rates a profit related to its incremental investment in distribution assets it has made from January 1, 2019, through December 31, 2021; and WHEREAS, the inclusion of CEHE's profit on its investment in distribution and mobile generation assets in rates, has the effect of increasing CEHE's revenue requirement by approximately$145.7 million,comprised of approximately$85.8 million related to CEHE's added distribution facilities and about $59.9 million related to mobile generation facilities; and WHEREAS,the jurisdictional deadline for the City to act in this rate matter is 60 days from the application date,or June 4, 2022; and WHEREAS, the City timely exercised its jurisdiction over CEHE's rates and denied CEHE's proposed increase in its DCRF rates; and WHEREAS, CEHE timely appealed the City's action denying CEHE's proposed increase in rates, thus establishing jurisdiction in the Public Utility Commission of Texas ("PUCT") for a final decision on CEHE's application to increase rates; and WHEREAS, the City, through its participation in the Texas Coast Utilities Coalition of Cities("TCUC"), intervened in the proceedings before the PUCT; and WHEREAS, after evaluation of CEHE's application, the parties in the PUCT proceeding reached a proposed settlement of CEHE's request with regard to recovery of its incremental investment in distribution facilities; and WHEREAS, the proposed settlement is limited to recovery of CEHE's investment in additional distribution facilities and its proposed increase of about $85.8 million, with the issues related to CEHE's investment in mobile generation to be addressed separately in related proceedings before the PUCT; and WHEREAS, under the settlement, CEHE's proposed increase related to its distribution facilities is reduced by$7.8 million; and WHEREAS, the City's Special Counsel and consultants in the proceedings before the PUCT recommend that the City accept the settlement reached by the parties in the proceeding before the PUCT; and WHEREAS, to avoid the uncertainty, time and expense of further litigation of this proceeding a settlement is in the better interest of the City and its citizens; and WHEREAS, the City, in matters regarding applications by CEHE to change rates, has in the past joined with other local regulatory authorities in the Texas Coast Utilities Coalition of Cities("TCUC")and hereby continues its participation in TCUC and in related proceedings before the PUCT, and in particular with regard to CEHE's request to recover revenue related to is mobile generation facilities; NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF BAYTOWN,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. The City authorizes a settlement of CYenterPoint Energy Houston Electric's ("CEHE") pending application to amend its Distribution Cost Recovery Factor ("DCRF") in a manner that reduces CEHE's requested $85.8 million increase by$7.8 million. Section 3. The City authorizes continued participation in proceedings related to CEHE's application for approval of its DCRF before the Public Utility Commission of Texas and related proceedings in courts of law, if any, as part of the coalition of cities known as the Texas Coast Utilities Coalition of Cities ("TCUC"). Section 4. The City hereby orders CEHE to reimburse the City's rate case expenses as provided in the Public Utility Regulatory Act and that CEHE 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 CEHE before the City, the Public Utility Commission of Texas, or any court of law. Section 5. A copy of this resolution shall be sent to CenterPoint Energy Houston Electric, LLC, care of Ms. Denise Gaw, I I I I Louisiana Street, Houston, Texas 77002; and to TCUC's Special Counsel,Mr.Alfred R. Herrera,Herrera Law&Associates, PLLC,4400 Medical Parkway, Austin, Texas 78756. 2 Section 6. 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. Section 7. This resolution supersedes any prior inconsistent or conflicting resolution or ordinance. Section 8. This resolution shall take effect immediately from and after its passage by the City Council of the City of Baytown, Texas. INTRODUCED, READ, and PASSED by the affirmative vote of the City Council of the City of Baytown this the 28"day of July, 2022. RANDON CAPETILLO, Nfiyor ATTEST: �pYTO Wfy O�°°C'0- ° ° ANGELA CKSO ,City r o , o APPROVED AS F RM: rrtj,X" SCOTT LEM ND,City Attorney RAKaren Anderson\RESOLUTIONSUTY COUNCILU02212022.07.28\Dkt53442-CEHE-DCRF-Resolution-Settlement Approval-Resolution-072222.docx(SL) 3