CC Resolution No. 2453RESOLUTION NO. 2453
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., DB /A CENTERPOINT ENERGY ENTEX AND
CENTERPOINT ENERGY TEXAS GAS ON OR ABOUT NOVEMBER 16, 2016;
AUTHORIZING PARTICIPATION IN A COALITION OF SIMILARLY SITUATED
CITIES; AUTHORIZING PARTICIPATION IN RELATED RATE PROCEEDINGS;
AUTHORIZING THE RETENTION OF SPECIAL COUNSEL; REQUIRING TIIE
REIMBURSEMENT OF MUNICIPAL RATE CASE EXPENSES; MAKING OTHER
FINDINGS AND PROVISIONS RELATED TO THE SUBJECT; AND MAKING
OTHER PROVISIONS RELATED THERETO; AND PROVIDING FOR THE
EFFECTIVE DATE THEREOF.
WHEREAS, CenterPoint Energy Resources Corp., d/b /a CenterPoint Energy Entex and
CenterPoint Energy Texas Gas ( "CenterPoint" or "Company ") filed a Statement of Intent with the City on
or about November 16, 2016, to increase rates in the Company's Houston and Texas Coast Divisions; 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 consolidate its current Houston and Texas Coast Divisions
into a single Texas Gulf Division and implement the revised gas tariffs on a division -wide basis for
customers in the Texas Gulf Division effective December 21, 2016; and
WHEREAS, CenterPoint plans to increase non -gas base revenue by approximately $31.0 million,
representing an increase in non -gas base revenue of approximately 10.7 %; and
WHEREAS, the City of Baytown is located in the currently existing Texas Coast Division; and
WHEREAS, on a customer -class basis, for Texas Coast Division customers, the impact is as
follows:
Residential $36.22 1 $37.32 $1.10 3.0%/5.0%
General Service -Small $102.41 $102.90 $0.49 0.5%/-0.9%
General Service - Large Volume $1,316.42 $1,317.74 $1.32 0.1%/-6.5%
WHEREAS, CenterPoint proposes to increase its customer charges for Texas Coast Division
customers as follows:
➢ "General Service - Residential" from $16.17 to $16.75,
➢ "General Service - Small" from $17.20 to $18.25, and
➢ "General Service - Large Volume" from $56.45 to $70.00; and
WHEREAS, the Company seeks a Return on Equity (ROE) of 10.25 %; a capital structure
weighted toward equity — 55.15% Equity; 44.85% Debt; 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 December 21, 2016, 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
December 21, 2016; 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.
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: 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
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.
Thomas Stevens, 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
Baytown this 8h day of December, 2016.
ATTEST:
/
APPROVED AS TO FORM:
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