HomeMy WebLinkAboutOrdinance 2278
ORDINANCE NO. 2278
AN ORDINANCE APPROVING RETAIL BASE RATE REDUCTIONS FOR
TEXAS UTILITIES ELECTRIC COMPANY, PROVIDING AN EFFECTIVE DATE
THEREFORE, SUGGESTING REJECTION OF 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.
BE IT ORDAINED BY THE COUNCIL OF THE CITY OF NORTH RICHLAND HILLS,
TEXAS:
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 electric 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 Stipulation calls for shifting depreciation from transmission and
distribution assets to nuclear production assets; and
WHEREAS, the proposed rate relief is less than what current conditions would
warrant and depreciation shifting should be consistent 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, and calls for
signatories to endorse TUEC's recovery of $836 million in previously written-off assets,
and to endorse or not oppose the application of a 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 North 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;
BE IT ORDAINED BY THE COUNCIL OF THE CITY OF NORTH RICHLAND
HILLS, TEXAS:
SECTION 1: The City of North Richland Hills intervene in PUC Docket No.
18490 and coordinate 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
should be rejected by the PUC.
SECTION 4: The retail base rate reductions tariff's filed by TUEC (Rider RRD -
Residential Rate Reduction, Rider GSRD - General Service Secondary Rate
Reductions, 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 shall be applicable in
this city. 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 North Richland Hills shall not exceed the
lowest rates available to residents of any other municipality served by TUEC finally
resulting from TUEC's filing of the Stipulation and any appeals from City ordinances
connected therewith.
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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.
PASSED AND APPROVED at a Regular Meeting of the City Council of the City
of North Richland Hills, Texas on this 9th day of February, 1998.
APPROVED:
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Tommy Brow/,ayor
ATTEST:
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Patricia Hutson, City Secretary
S TO FORM AND LEGALITY:
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APPROVED AS TO CONTENT:
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Lar~ Director of Finance
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