CC Resolution No. 2604RESOLUTION NO. 2604
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF BAYTOWN, TEXAS,
DENYING THE APPLICATION OF CENTERPOINT ENERGY HOUSTON
ELECTRIC LLC, FOR AUTHORITY TO INCREASE RATES SUBMITTED ON OR
ABOUT APRIL 5, 2019; REQUIRING THE REIMBURSEMENT OF MUNICIPAL
RATE CASE EXPENSES; MAKING OTHER FINDINGS AND PROVISIONS
RELATED THERETO; AND PROVIDING FOR THE EFFECTIVE DATE THEREOF.
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WHEREAS, CenterPoint Energy Houston Electric ("CEHE") filed a Statement of Intent with the
City on or about April 5, 2019, to change its rates within the corporate limits of this municipality,
specifically to increase its annual revenue for its retail transmission and distribution services by
approximately $154 million, which equates to an increase of approximately 7.4 percent, and by about
$6.8 million for its wholesale transmission service, which equates to an increase of approximately 1.8
percent; and
WfJEREAS, 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
WHEREAS, in order to maximize the efficient use of resources and expertise in reviewing,
analyzing and investigating CEHE's rate request and its changes in tariffs, the City coordinated its efforts
with a coalition of similarly situated municipalities known as Texas Coast Utilities Coalition ("TCUC") of
cities; and
WI IEREAS, CEHE failed to establish that its overall revenue request resulted in no more than an
amount that will permit CEHE a reasonable opportunity to earn a reasonable return on the utility's
invested capital used and useful in providing service to the public in excess of the utility's reasonable and
necessary operating expenses; and
WHEREAS, CEHE failed to establish that its proposed rates were just and reasonable; and
WHEREAS, the City has previously: (1) suspended CEHE's proposed rate increase by 90 days;
(2) authorized intervention in proceedings related to CEHE's proposed rate increase as a member of the
coalition of cities known as the Texas Coast Utilities Coalition of cities; (3) directed CEHE to reimburse
TCUC's rate case expenses; and (4) retained the law firm of Herrera Law & Associates, PLLC with
respect to rate proceedings involving CEHE before the Public Utility Commission of Texas and courts of
law and to retain consultants to review CEHE's rate application subject to TCUC's approval; 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 finds that CEHE failed to show that its proposed rates are just and
reasonable.
Section 3: The City hereby DENIES CEHE's request to increase rates, and in support of
DENIAL finds that:
a) CEHE failed in its burden of proof to establish that its requested increase in revenue or
the changes set forth in its tariffs attached to CEHE's Statement of Intent to increase rates
results in just and reasonable rates; and
b) CEHE failed in its burden of proof to establish that adoption of its proposed rate base,
expenses, investment, return on equity, and other rate issues as presented in CEHE's
Statement of Intent to increase rates, result in just and reasonable rates.
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 continue to 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 CEHE
before the City, the Public Utility Commission of Texas, or any court of law.
Section 5: The City, in coordination with the Steering Committee, delegates to the City
Manager and/or the City Attorney, or designee of such office, review of the invoices of the lawyers and
rate experts for reasonableness before submitting the invoices to CEHE for reimbursement.
Section 6: A copy of this resolution shall be sent to Mr. Alfred R. Herrera, Herrera Law &
Associates, PLLC, 816 Congress Ave., Suite 950, Austin, Texas 78701, and a courtesy copy to Mr.
Patrick H. Peters, III, Assistant General Counsel and Director of Regulatory Affairs, CenterPoint Energy,
Inc., 1005 Congress Ave., Suite 650, Austin, Texas 78701.
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.
INTRODUCED, READ and PASSED by the affirmative vote of the City Council of the City of
Baytown this the 8'h day of August, 2019.
APPROVED AS TO FORM:
NACIO RAMIREZ, SR., C' y Attorney
BEXN-DbN CAPETILLO, May
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