HomeMy Public PortalAboutOrdinance No. 833-98 02-10-1998
• ORDINANCE NO. 833-98
AN ORDINANCE APPROVING RETAIL BASE RATE
REDUCTIONS FOR TEXAS UTILITIES ELECTRIC COMPANY,
PROVIDING AN EFFECTIVE DATE THEREFOR, REJECTING
DEPRECIATION SHIFTING, APPROVING A MOST FAVORED
NATION PROVISION, FINDING AND DETERMINING THAT
THE MEETING AT WHICH THIS ORDINANCE IS PASSED IS
OPEN TO THE PUBLIC AS REQUIRED BY LAW; AND
PROVIDING A SEVERABILITY CLAUSE.
WHEREAS, on December 22, 1997 Texas Utilities Electric Company filed with
the Governing body of this municipality a Petition and Statement of Intent to
implement base rate reductions for its retail service customers within this
municipality, which base rate reductions are components of a settlement reached
among various parties set forth in the Stipulation and Joint Application for Approval
Thereof (Stipulation) filed with the Public Utility Commission of Texas (PUC) on
December 17, 1997.
WHEREAS, TUEC's rates should be reduced to reflect load growth, cost
reductions, debt refinancings, synergistic savings attributable to the merger with
Enserch, declining rate base and declining cost of capital, all of which have occurred
since base rates were last reviewed in PUC Docket No. 11735; and
• WHEREAS, the $263 million rate relief afforded by the Stipulation is less than
was justified by a recent analysis performed by the Staff of the PUC; and
WHEREAS, the Stipulation calls for depreciation shifting from transmission and
distribution assets to nuclear power assets, a concept which is inequitable,
anti-competitive and otherwise inconsistent with sound regulatory and public policy;
and
WHEREAS, the Legislature should oppose the use of depreciation shifting, which
would disproportionately shift the burden to residential and small commercial rate
payers for recovery of stranded investment; and
WHEREAS, the Stipulation contains provisions that freeze rates irrespective of
what overearnings may occur through TUEC's changed circumstances, endorses
TUEC's recovery of $836 million in previously written-off assets, and endorses the
application of an unrealistically high rate of return on equity should any party, in
good faith, attempt to review the reasonableness of TUEC's rates or challenge
TUEC's overearnings; and
WHEREAS, the City of Richland Hills should intervene in the PUC's proceeding
to review the Stipulation, PUC Docket No. 18490, to advocate even greater rate
relief and to oppose provisions that are contrary to sound public policy; and
WHEREAS, Cities should encourage the PUC to pursue a thorough review of
TUEC's rates including a comprehensive review of the TU/ENSERCH merger savings
• and TUEC's affiliate transactions with further and final rate relief beyond the
interim reductions based upon the Stipulation reconcilable to January 1, 1998; and
ORDINANCE NO. PAGE 1
• WHEREAS, the contents of this Ordinance have been summarized at two regular
meetings as required by the Richland Hills Home Rule Charter.
NOW, THEREFORE, BE TT ORDAINED BY THE CITY COUNCIL OF THE CITY
OF RICHLAND HILLS, TEXAS:
SECTION 1: The City of Richland Hills intervenes in PUC Docket No. 18490
and coordinates its efforts in that regard with other cities through the Steering
Committee of Cities Served by TUEC.
SECTION 2: The Legislature is hereby encouraged to reject depreciation
shifting as a means for recovering uneconomic investment in generation plant.
SECTION 3: The concept of depreciation shifting as called for in the
Stipulation is rejected.
SECTION 4: The retail base rate reduction tariffs filed by TUEC (Rider
RRD -Residential Rate Reduction, Rider GSRD -General Service Secondary Rate
Reduction, and Rider RD -Rate Reduction) are approved on an interim basis
effective January 1, 1998. With the expectation that appropriate regulatory
authorities will afford further rate reductions upon review of the Stipulation and
review of TUEC's cost of service, any further reductions associated with a final PUC
order are to be retroactive to January 1, 1998. Otherwise the referenced schedules
shall remain in effect until such time as they may be changed, modified, or amended
by the approval of the City Council. The filing of the rate schedules shall constitute
notice to the consumers of electricity, within this municipality, of the availability
• and application of such rate schedules.
SECTION 5: Nothing contained in this Ordinance shall be construed now or
hereafter as limiting or modifying in any manner the right and power of the
Governing Body of this municipality under the law to regulate the rates, operations,
and services of Texas Utilities Electric Company.
SECTION 6. Notwithstanding any other provision of this Ordinance, the
rates authorized for electric service in the City of Richland Hills shall not exceed
the lowest rates available to residents of any other municipality served by TUEC.
SECTION 7. It is hereby officially found and determined that the meeting at
which this Ordinance is passed is open to the public as required by law and that
public notice of the time, place and purpose of said meeting was given as required.
SECTION 8: A copy of this ordinance is to be provided promptly by the City
Secretary to the local TUEC representative and to Jay Doegey, City Attorney of the
City of Arlington, as Chairman of the Cities Steering Committee.
SECTION 9. Severability Clause. That it is hereby declared to be the
intention of the City Council that the sections, paragraphs, sentences, clauses and
phrases of this ordinance are severable, and if any phrase, clause, sentence,
paragraph or section of this ordinance shall be declared invalid or unconstitutional by
•
ORDINANCE NO. 833-98 PAGE 2
the valid judgment or decree of any court of competent jurisdiction, such invalidity
or unconstitutionality shall not affect any of the remaining phrases, clauses,
sentences, paragraphs and sections of this ordinance, since the same would have been
enacted by the City Council without the incorporation in this ordinance of any such
invalid or unconstitutional phrase, clause, sentence, paragraph or section.
PRESENTED, AND FIRST SUMMARIZED at a regular meeting of the Richland
Hills City Council on the 10th day of February, 1998, and finally summarized,
passed and approved at a regular meeting of the Richland Hills City Council on
the 24~ day of February , , „x,1998, by a vote of 4 ayes, 0 nays, and ~
abstentions. `
` ~ APPROVED:
1 ~ 1f
C. .Kelley, Mayor
ATTEST: yJ`
errs ~ s, City Secretary
•
OVED AS TO FORM AND LEGALITY:
aa~~ `
~ aul F. Wieneskie, City Attorney
rhlib348/022598
•
ORDINANCE NO. 833-98 PAGE 3