CC Resolution No. 2533RESOLUTION NO. 2533
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
BAYTOWN, TEXAS, APPROVING A REDUCTION IN RATES
CHARGED BY CENTERPOINT ENERGY RESOURCES
CORPORATION, D/B/A CENTERPOINT ENERGY ENTEX AND
CENTERPOINT ENERGY TEXAS GAS — TEXAS COAST DIVISION
RELATED TO THE REDUCTION IN THE FEDERAL CORPORATE
TAX RATE; FINDING THE REDUCTION IN CENTERPOINT' S
RATES TO BE JUST AND REASONABLE; DECLARING AN
EFFECTIVE DATE; REQUIRING DELIVERY OF THE RESOLUTION
TO THE COMPANY AND SPECIAL COUNSEL; AND PROVIDING
FOR THE EFFECTIVE DATE THEREOF.
WHEREAS, the City of Baytown, Texas, ("City") is a regulatory authority under the Gas
Utility Regulatory Act ("GURA') and under § 103.001 of GURA has exclusive original
jurisdiction over CenterPoint Energy Resources Corporation, d/b/a CenterPoint Energy Entex
and CenterPoint Energy Texas Gas — Texas Coast Division ("CenterPoint" or "Company") rates,
operations, and service of a gas utility within the municipality; and
WHEREAS, on or about May 23, 2017, the Railroad Commission of Texas in Gas Utility
Docket No. 10567 ("GUD No. 10567)," approved an increase in annual revenue for CenterPoint;
and
WHEREAS, the City participated in CenterPoint's general rate case at the Railroad
Commission of Texas in GUD No. 10567; and
WHEREAS, the corporate tax rate on federal income included in CenterPoint's current
rates and made part of the increase in revenue approved by the Railroad Commission of Texas,
was based on a federal -income-tax rate of 35%; and
WHEREAS, the corporate tax rate on federal income included in CenterPoint's current
rates and approved by the Railroad Commission of Texas in GUD No. 10567, was based on a
federal -income-tax rate of 35%; and
WHEREAS, effective January 1, 2018, the corporate tax rate on income is 21 %; and
WHEREAS, CenterPoint seeks administrative approval under Utilities Code § 104.111 to
reduce its annual revenue by approximately $2.3 million; and
WHEREAS, CenterPoint's proposed decrease in rates comprises a change in rates thus
invoking GURA § 103.022, which requires CenterPoint to reimburse the City's reasonable
expenses associated with reviewing CenterPoint's proposal to change rates; and
WHEREAS, the City's Special Counsel and consultants engaged to review CenterPoint's
calculation of the effect of the reduction in the corporate federal -income-tax rate from 35% to
21% has on CenterPoint's rates, have confirmed that CenterPoint's calculation of the reduction
in CenterPoint's revenue is mathematically accurate; and
WHEREAS, the reduction in CenterPoint's annual revenue is limited to the tax expense
related to the change in the corporate tax rate from 35% to 21%, and thus will need to be
adjusted further in a future proceeding to account for excess deferred income taxes resulting
from the Tax Cut and Jobs Act of 2017; and
WHEREAS, by approving the reduction in CenterPoint's rates, the City, in future
proceedings or in other jurisdictions, is under no obligation to take the same positions with
regard to the methodology resulting in a reduction in rates as the methodology underlying the
reduction proposed by CenterPoint, nor shall the City's approval of the reduction in
CenterPoint's rates be used against the City in any future proceeding with respect to different
positions the City may take with regard to setting CenterPoint's rates; NOW THEREFORE,
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF BAYTOWN,
TEXAS:
Section 1: The findings set forth in this Resolution are hereby in all things approved and
incorporated herein.
Section 2: CenterPoint shall submit to the City within fourteen (14) days from the
effective date of this Resolution, amended tariffs reflecting the reduction in revenue noted above.
Section 3: CenterPoint is directed to reimburse the City's expenses related to review of
CenterPoint's proposal to change rates within thirty (30) days from submission to CenterPoint of
the City's invoices related to such expenses.
Section 4: To the extent any resolution previously adopted by the City Council is
inconsistent with this resolution, it is hereby superseded.
Section 5: If any one or more sections or clauses of this Resolution is judged to be
unconstitutional or invalid, such judgment shall not affect, impair or invalidate the remaining
provisions of this Resolution and the remaining provisions of the Resolution shall be interpreted
as if the offending section or clause never existed.
Section 6: A copy of this Resolution shall be sent to CenterPoint, care of Perrin Wall,
Manager of Regulatory Affairs, CenterPoint Energy Corporation, 1111 Louisiana Street,
Houston, Texas 77002-5231, and to Mr. Alfred R. Herrera, Herrera Law & Associates, PLLC,
816 Congress Avenue, Suite 950, Austin, Texas 78701.
Section 7: This resolution shall take effect immediately from and after its passage by the
City Council of the City of Baytown; and rates approved by this resolution shall have an
effective date of September 1, 2018.
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INTRODUCED, READ and PASSED, by the affirmative vot f the City Council of the City of
Baytown this the 23'd day of August, 2018. / I
A ST:
U TICIA BRYSCH, City Jerk
APPROVED AS TO FORM:
A /.,,
ACIO RAMIREZ, SR., Ci ttorney
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