CC Resolution No. 2625RESOLUTION NO. 2625
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF BAYTOWN, TEXAS,
APPROVING AN AMENDED APPLICATION SUBMITTED BY CENTERPOINT
ENERGY RESOURCES CORP., D'BIA CENTERPOINT ENERGY ENTEX, ON OR
ABOUT OCTOBER 11, 2019, FOR AUTHORITY TO ISSUE A REFUND TO
CUSTOMERS; DIRECTING CENTERPOINT TO ISSUE A REFUND; DIRECTING
CENTERPOINT TO REIMBURSE THE CITY'S RATE CASE EXPENSES; MAKING
OTHER FINDINGS AND PROVISIONS RELATED THERETO; AND PROVIDING
FOR THE EFFECTIVE DATE THEREOF.
*************************************************************************************
WHEREAS, the United States Congress enacted the Tax Cuts and Jobs Act of 2017 ("TCJA")
with an effective date of January 1, 2018, which resulted in a major change in federal income-tax laws,
including a reduction in the corporate, federal income-tax rate from 350•0 to 2100'; and
WHEREAS, on August 1, 2019, CenterPoint Energy-Entex ("CenterPoint" or the "Company")
made a filing with the Commission pursuant to Section 104.111 of the Gas Utility Regulatory Act
("GURA") for customers in the Texas Coast Division and the Houston Division to reflect a net refund in
the amount of $14,373,998 related to certain deferred income taxes and Hurricane Harvey restoration
expenses; and
WHEREAS, the refund for certain deferred income taxes is necessary for CenterPoint to give
effect to the change in federal law resulting from the passage of the TCJA; and
WHEREAS, through GURA Section 104.111, a gas utility is allowed to reduce its rates without
the need to present a full cost of service study; and
WHEREAS, on August 16, 2019, CenterPoint made a supplemental filing ("August Supplemental
Filing") to amend its August I` net refund amount to include insurance proceeds it received related to its
Hurricane Harvey expenses, resulting in a proposed net refund of $16,556,357; and
WHEREAS, the order of the Railroad Commission of Texas ("Railroad Commission") in Gas
Utilities Docket ("GUD") No. 10695 directs gas utilities like CenterPoint to reduce rates to reflect the
benefits of the Tax Cut and Jobs Act of 2017 based on the difference between (i) the utility's most
recently approved cost of service study at the tax rates in effect prior to passage of the Tax Cut and Jobs
Act of 2017, and (ii) the tax rates in effect after passage of that Act; and
WHEREAS, an application made under Gas Utility Regulatory Act ("GURA") § 104.111 is
limited in scope to allow for expedited approval of a decrease in rates as found to be in the public interest
by the regulatory authority; and
WHEREAS, consistent with the Railroad Commission's Order in GUD No. 10695 and the limited
scope of a ratemaking proceeding under GURA § 104.111, on October 11, 2019, CenterPoint amended its
application by making a Second Supplemental Filing ("October Supplemental Filing") to remove from its
application expenses it claimed for restoration costs related to Hurricane Harvey; and
WHEREAS, the result of removing such costs from the filing increases the amount to be refunded
to customers in the Houston and Texas Coast Divisions from its initial filing of $14,373,998 to
$17,763,968 (the "Amended Refund"); and
WHEREAS, the Amended Refund will be effective on bills rendered on or after January 1, 2020
and amortized over three years; 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 hereby:
A. approves the rate tariff shown in Attachment "A," which is attached hereto and
incorporated herein for all intents and purposes;
B. approves the decrease in revenue per customer class shown in Attachment "A" and total
refund in the amount of approximately $17,763,968;
C. directs CenterPoint to issue a refund consistent with the rate tariff shown in
Attachment "A';
D. directs CenterPoint to reimburse the City's rate case expenses incurred as part of Texas
Coast Utilities Coalition within thirty (30) days from the date this Resolution is approved;
and
E. denies all other relief not expressly granted by this Resolution.
Section 3: The effective date for the rate tariff approved by this Resolution shall be
January 1, 2020.
Section 4: A copy of this resolution shall be sent to CenterPoint's local representative and to
Mr. Alfred R. Herrera, Herrera Law & Associates, PLLC, 4400 Medical Parkway, Austin, TX, 78756.
Section 5: 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 o he City of
Baytown this the 181h day of November, 2019. )
:a
BRANDON CAPETILLO, Ma r
A -I ST:
ff-El'ICIA BRYSCH, C lerk
APPROVED AS TO FORM:
c4wese.;)02t!!!n=
ACIO RAMIREZ, SR., City ttorney
R: Karen Files•City Council Resolutions\2019Wovember 18 CenterPoint(gas)-Resolution•Approval-2-RESOLUTION-TCUC-FINAL-103119.doc
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ATTACHMENT A
EXHIBIT A — 2ND SUPPLEMENTAL FILING
CENTERPOINT ENERGY RESOURCES CORP.
D/B/A CENTERPOINT ENERGY ENTEX
AND CENTERPOINT ENERGY TEXAS GAS
HOUSTON DIVISION AND TEXAS COAST DIVISION
RATE SHEET
TAX CUTS AND JOBS ACT REFUND
RATE SCHEDULE NO. TCJA-HOU/TXC
PURPOSE
The purpose of this rider is to provide customers with certain tax benefits associated with the Tax Cuts and Jobs Act
of 2017 (TCJA). The TCJA reduced the maximum corporate income tax rate from 35 percent to 21 percent beginning
January 1, 2018. Rider TCJA-HOU/TXC returns to customers the Unprotected Excess Deferred Income Tax (EDIT)
amounts not subject to the normalization provision of the Internal Revenue Code.
APPLICATION
This rider applies to all residential, general service -small and general service -large volume customers of the Houston
Division and Texas Coast Division.
The rates associated with this rider will be calculated in accordance with Appendix 1.
The unprotected EDIT will be amortized over three years and allocated to the customer classes based on the
standard sales service allocation factors and base rate revenue allocation factors approved in GUD No. 10567. The
allocated amounts by class shall be divided by the customer count billing determinants to calculate a monthly per
bill refund. The refund for year three includes the present value of the year four return component of the change in
the Company's rate base.
Monthly refunds shall appear as a line item on the bill titled, "Tax Refund".
TRUE -UP
Each subsequent Rider TCJA-HOU/TXC application will include a true -up of the actual amounts refunded to
customers.
If the Internal Revenue Service issues new guidance or the Company acquires new information requiring the
Company to revise the balances of Unprotected EDIT as a result of the TCJA or any other tax change, the Company
reserves the right to make additional filings to recognize such adjustments.
Upon completion of the three-year amortization period, the over- or under- refund amounts will be transferred to a
regulatory asset or regulatory liability until that over- or under- refund amount can be reconciled in a later proceeding.
FILING PROCEDURES
On or before August 1 for all test years, during the term of Rider TCJA-HOU/TXC, the Company shall file with the
Railroad Commission (RRC) and Cities the TCJA calculation as shown in Appendix 1 along with supporting
schedules and workpapers. Unless disputed by the RRC Staff or Cities, rates per Appendix 1 will become effective
for bills rendered on or after January 1. If the RRC Staff or Cities dispute the calculation, or any component thereof,
the RRC Staff or Cities shall notify the Company on or before October 1.
ATTACHMENT A
EXHIBIT A — 2No SUPPLEMENTAL FILING
CENTERPOINT ENERGY RESOURCES CORP.
D/B/A CENTERPOINT ENERGY ENTEX
AND CENTERPOINT ENERGY TEXAS GAS
HOUSTON DIVISION AND TEXAS COAST DIVISION
RATE SHEET
TAX CUTS AND JOBS ACT REFUND
RATE SCHEDULE NO. TCJA-HOU/TXC
CenterPoint Energy
Houston and Texas Coast Divisions
Rider TCJA-HOUfFXC
Effective January 1, 2020
(A)
(B)
Standard
Service
Line
Amounts
No. Description
Year 2020
1 Unprotected Excess Deferred Income Taxes (EDIT)
$ (6,994,963)
2 True -up for Previous Unprotected EDIT
3 Total Unprotected (EDIT) $ (6,994,963)
Base Rate Revenue Allocation Factors per GUD No 10567
4 Residential 901796%
5 General Service - Small 6 5762%
6 General Service - Large Volume 3 2442%
7 Total 100 0000%
Impact to Revenues Allocated to Customer Classes
8 Residential (Line 3' 4)
$ (6,308,031)
9 General Service - Small (Line 3 ` 5)
(460,003)
10 General Service - Large Volume (Line 36)
(226,931)
11 Total
$ (6,994,965)
Number of Bills (12 Months Ending June)
12 Residential
15 979 716
13 General Service - Small
783 588
14 General Service - Large Volume
21,334
15 Total
16.784,638
Refund
16 Residential (Line 8 " 12)
$ (0.39)
17 General Service - Small (Line 9 " 13)
$ (0.59)
18 General Service - Large Volume (Line 10 " 14)
$ (10.64)
APPENDIX 1