CC Resolution No. 2333RESOLUTION NO. 2333
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF BAYTOWN,
TEXAS AUTHORIZING THE CITY'S PARTICIPATON IN A COALITION OF
SIMILARLY SITUATED CITIES IN PROCEEDINGS BEFORE THE
RAILROAD COMMISSION OF TEXAS AND THE TEXAS LEGISLATURE
RELATED TO THE CITY'S AUTHORITY TO EFFECTIVELY REVIEW AND
REGULATE UTILITY RATES; MAKING OTHER FINDINGS AND
PROVISIONS RELATED THERETO; AND PROVIDING FOR THE
EFFECTIVE DATE THEREOF
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WHEREAS, the City of Baytown, Texas, hereinafter referred to as "City," is a member
of the Texas Coast Utilities Coalition of Cities ( "TCUC "); and
WHEREAS, TCUC has participated in utility ratemaking proceedings before the
Railroad Commission of Texas; and
WHEREAS, TCUC has participated in legislative proceedings before the Texas
Legislature; and
WHEREAS, as recently as in the 83rd Regular Session of the Texas Legislature the
Legislature considered and rejected legislation that, if enacted, would have negatively affected
municipalities' original jurisdiction to regulate a utility's rates, services, and operations in the
City; and
WHEREAS, as recently as the 83rd Regular Session of the Texas Legislature in 2013, the
Legislature considered and rejected legislation that, if enacted, would have negatively affected
municipalities' ability to undertake a meaningful evaluation of a utility's request to increase gas
rates and effectively challenge unreasonable rate increases; and,
WHEREAS, the Railroad Commission of Texas has initiated proceedings to adopt new
rules whose effect would be similar to the restrictions that the Legislature rejected in its 83rd
Regular Session; and
WHEREAS, the rules the Railroad Commission of Texas proposed would diminish, if not
altogether eliminate, Texas cities' original ratemaking jurisdiction over gas utilities and cities'
ability to meaningfully review a gas utility's request to increase its rates; and
WHEREAS, the City supports TCUC's and other similarly situated coalitions of cities'
opposition to proposed rules or laws that would diminish and/or eliminate municipalities' ability
to effectively regulate gas utility rates or to meaningfully participate in contested proceedings
before the Railroad Commission of Texas; and
WHEREAS, as the Legislature noted in Section 101.002 of the Gas Utility Regulatory
Act, utilities are by definition monopolies in the areas they serve and as a result, the normal
forces of competition that regulate prices in a free enterprise society do not operate and therefore,
public agencies, including the City, regulate utility rates, operations, and services as a substitute
for competition; and
WHEREAS, gas utilities continue to be monopolies whose rates are not governed by the
normal forces of competition; and
WHEREAS, to provide fair, just, and reasonable rates and adequate and efficient
services, Section 103.001 of the Gas Utility Regulatory Act grants the City exclusive original
jurisdiction over the rates, operations, and services of a gas utility within the municipality; and
WHEREAS, under Section 103.001 of the Gas Utility Regulatory Act passed by the
Texas Legislature into law, a municipality regulating a gas utility has the right to require gas
utilities to submit information as necessary for the municipality to make a reasonable
determination of the utility's actual rate base, expenses, investment, and rate of return for
providing its services and to retain personnel necessary to make the determination of reasonable
rates; and
WHEREAS, under Section 103.022 of the Gas Utility Regulatory Act, a municipality
participating in or conducting a ratemaking proceeding may engage rate consultants,
accountants, auditors, attorneys, and engineers to fully evaluate a utility's request to change rates
and the gas utility in the ratemaking proceeding shall reimburse the municipality its reasonable
rate case expenses; and
WHEREAS, in order to ensure the reasonableness of gas utility rates and ensure the
adequacy of gas utility service by preserving cities' right to effectively investigate and challenge
utility - proposed rate increases both before the City and before any state agency that is authorized
to regulate gas utilities' rates; NOW, THEREFORE,
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF BAYTOWN,
TEXAS:
Section 1: That the findings set out in the preamble to this resolution are hereby in all
things approved and adopted.
Section 2: The City directs TCUC to oppose rules or legislation that would:
➢ Eliminate or reduce the ability of incorporated municipalities to exercise their
statutorily guaranteed original jurisdiction over gas utility rates;
➢ Allow the approval of increases in rates without a complete and thorough review of a
utility's capital expenditures or operating expenses by cities representing their
ratepayers' interests; and
➢ Eliminate, delay, or diminish the reimbursement of municipalities' reasonable costs
incurred while investigating and challenging utility rate proposals or that would
otherwise reduce municipalities' ability to participate in the rate - setting process.
Section 3: The City directs TCUC to support processes that:
➢ Uphold and enforce municipalities' original jurisdiction over gas utility ratemaking;
➢ Preserve municipalities' ability to fully investigate and challenge gas utilities'
proposed changes to their rates and tariffs; and
➢ Preserve municipalities' historical right to prompt reimbursement of reasonable costs
that the municipalities' incur while investigating and challenging gas utilities'
proposals to change their rates in all related proceedings, without any onerous
predicate requirements.
Section 4: The City authorizes the TCUC Steering Committee to hire and direct its
advocates in these efforts before the Railroad Commission of Texas and the Texas Legislature.
Section 5: That a copy of this resolution shall be sent to Mr. Alfred R. Herrera, Herrera
& Boyle, PLLC, 816 Congress Avenue, Suite 1250, Austin, Texas 78701, in his role as Special
Counsel to TCUC.
Section 6: This resolution shall take effect immediately from and after its passage by the
City Council of the City of Baytown. //
INTRODUCED, READ and PASSED by the affirmative vot A the City Council of the City of
Baytown this the 17°i day of November, 2014.
ZC--
TEPHEN H. DONCARLOS, Ma or
"LETICIABRYSCity Clerk
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APPROVED AS TO FORM: 0 s �_ o --A
GNACIO RAMIREZ, SR., Ci ttomey
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