CC Resolution No. 2351RESOLUTION NO. 2351
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF BAYTOWN, TEXAS,
SUSPENDING THE EFFECTIVE DATE FOR NINETY (90) 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; MAKING OTHER FINDINGS AND PROVISIONS
RELATED TO THE SUBJECT; AND PROVIDING FOR THE EFFECTIVE DATE
THEREOF.
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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
WIIEREAS, 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:
Aver-we Proposed Percenta(ye
Avera-C C111-rent
Nionthiv Bill. Proposed Monthly Change with Gas
Monthly Bill,
includin- Gas Cost I
Cost Gas Cost
Residential $38.17 $40.73 $2.56 6.7%/16.2%
General Service -
Small $100.15 $105.03 $4.88 4.9% / 25.1 °'o
General Service - I $1,842.15 I $1,790.42
Large Volume ($51.73) -2.8% / - 25.3 ° /0
; and
WHEREAS, CenterPoint proposes to increase its customer charges for "General Service -
Residential" current from $14.77 to $16.00, its customer charge for "General Service - Small" from
$13.84 to $16.75, and its 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
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 BAYTOWN, TEXAS:
Section 1: That the findings set out in the preamble are in all things approved and
incorporated herein as if fully set forth.
Section 2: That CenterPoint's proposed effective date for its proposed increase in rates is
hereby suspended for ninety (90) 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.
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
thirty (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 Acting City Manager and City Attorney or their designees shall review the
invoices of the lawyers and rate experts for reasonableness before submitting the invoices to CenterPoint
for reimbursement.
Section 8: The City Clerk is hereby directed to send a copy of this resolution 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: 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 to of the City Council of the City of
Baytown this the 23`d day of April, 2015. v
A'
BRYSCH, City Clerk
APPROVED AS TO FORM:
I ' q
to
NACIO RAMIREZ, SR., C' y ttorney
DONCARLOS, Mayor
Re,Karen\Files',City Council Resolutions\2015\April 23`- .GUD10432- CenterPoint - Suspension Resolution Rate Case 2015 -033115 (2).doc