CC Resolution No. 1662 55
RESOLUTION NO. 1662
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF BAYTOWN, TEXAS,
AUTHORIZING THE CITY MANAGER TO FILE A LETTER SUPPORTING THE
CITY OF TYLER'S POSITION IN UTILITIES DOCKET NO. 9364; JOINT PETITION
OF CENTERPOINT ENERGY ENTEX AND THE CITY OF TYLER FOR REVIEW
OF CHARGES FOR GAS SALES, CONCERNING THE REIMBURSEMENT OF
MUNICIPALITIES' RATE CASE EXPENSES IN GAS COST REVIEW
PROCEEDINGS; AND PROVIDING FOR THE EFFECTIVE DATE THEREOF.
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WHEREAS, the City of Tyler ("Tyler") and CenterPoint Energy Entex ("Entex") are currently
involved in a gas rate case before the Texas Railroad Commission ("RRC") that could set a negative
precedent for municipalities; and
WHEREAS, at issue in the case is the "municipal reimbursement" provision in the Texas Gas
Utilities Regulatory Act, which requires a gas utility to reimburse a city for the costs of hiring rate
consultants, accountants, auditors, attorneys, and engineers to assist the city in a ratemaking proceeding
before the RRC or a court; and
WHEREAS, Tyler obtained information that Entex had overcharged its gas customers by tens of
millions of dollars; and
WHEREAS, when Tyler attempted to assert original jurisdiction over Entex's rates, Entex sought
an injunction against the city council to prevent the city council from meeting; and
WHEREAS, in order to move the case forward and avoid unnecessary litigation, Tyler adopted an
ordinance to implement an agreement between the parties to try the case before the RRC; and
WHEREAS, Entex argued that, due to procedural issues, the case should not be classified as a
"ratemaking"proceeding for which reimbursement is proper; and
WHEREAS, Tyler along with the Texas Municipal League have taken the position that that any
proceeding that involves the amount of money that a utility is entitled to charge its customers should be
deemed a ratemaking proceeding and that Tyler should not be penalized for agreeing in good faith to cede
jurisdiction to the RRC; and
WHEREAS, to deny reimbursement to Tyler in this case will make it difficult, if not impossible,
for the City of Baytown and other cities to pursue appropriate actions in the future;NOW THEREFORE
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF BAYTOWN,
TEXAS:
Section 1: That the City Council of the City of Baytown, Texas, hereby authorizes the City
Manager to file a letter supporting the City of Tyler's position in Utilities Docket No. 9364;Joint Petition
of CenterPoint Energy Entex and the City of Tyler for Review of Charges for Gas Sales, concerning the
reimbursement of municipalities' rate case expenses in gas cost review proceedings. In such letter,which
is attached hereto as Exhibit "A" and incorporated herein for all intents and purposes, the City of
Baytown concurs with the amicus brief filed by the Texas Municipal League.
56
Section 2: 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 8th day of July, 2004.
CALVIN MUNDINGER, Mayor
ATTEST•
GA Y VO. SMITH, City Clerk
APPROVED AS TO FORM:
t AssC4N�LHO y Attorney
\\Bdc2\litigation\Kamn\File\City Council\Resolutions\TylerGasRateCase.doc
July 9, 2004
Chairman Victor G. Carrillo
Commissioner Charles R. Matthews
Commissioner Michael L. Williams
Railroad Commission of Texas
1701 N. Congress Ave., 12th Floor
Austin, Texas 78701
Re: Gas Utilities Docket No. 9364;Joint Petition of CenterPoint Energy Entex and
the City of Tyler for Review of Charges for Gas Sales
Dear Commissioners:
I am authorized by the City Council of the City of Baytown, Texas, to issue this letter to
inform you that the City of Baytown agrees with and supports the reimbursement of the rate case
expenses of municipalities in gas cost review proceedings. The City of Baytown concurs with
the amicus brief filed by the Texas Municipal League. Reimbursement of rate case expenses is
critical if cities are to be able to actively participate in gas cost review proceedings and help
monitor gas costs flowed through by gas utilities without any prior review.
Please consider this to be an amicus brief in support of the City of Tyler's appeal to you
of the Examiners' ruling denying rate case expense reimbursement.
CITY OF BAYTOWN
GARY JACKSON, City Manager
cc: Ms. Ann M. Coffin Mr. John R. Hays, Jr.
Clark, Thomas & Winters Hays & Owens
300 West 61h Street, 15`h Floor 807 Brazos, Suite 700
Austin, Texas 78701 Austin, Texas 78701
Attorneys for CenterPoint Energy Attorneys for the City of Tyler
Entex