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.
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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.
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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-
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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)
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