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HomeMy WebLinkAboutORD 98-15 - Rate Reductions Tx UtilitiesORDINANCE NO. `�A AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF GEORGETOWN, TEXAS, 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 x�lil i19 01Q IATA WWAIIATA WHEREAS, on December 22, 1997, Texas Utilities Electric Company (TUEC) 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; and 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 is 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 over earnings may occur through TUEC's changed circumstances, and calls for signatories to endorse or not oppose TUEC's recover of $836 million in previously written -off assets, and to not oppose the application of high rate of return on equity should any parry, in good faith, attempt to review the reasonableness of TUEC's rates or challenge TUEC's over earnings; and TU Rate Ordinance No. Page 1 of 4 Pages WHEREAS, the City of Georgetown should intervene in the PUC's proceeding to review the Stipulation, PUC Docket No. 18490, to ask the PUC to determine whether the provisions of the Stipulation are consistent with regulatory and 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; NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL, OF THE CITY OF GEORGETOWN, TEXAS, THAT: SECTION 1 The facts and recitations contained in the preamble of this ordinance are hereby found and declared to be true and correct, and are incorporated by reference herein and expressly made a part hereof, as if copied verbatim. The City Council hereby finds that this ordinance implements the following policy or policies of the Century Plan - Policy Plan Element: 1. Utilities/Energy Policy End 14.0, which states: "Georgetown's utility systems provide safe and reliable service which meets the needs of all citizens and promotes the economic health of the community." WHEREAS, the City Council has found that this action is not inconsistent or in conflict with any other Century Plan Policies, as required by Section 2.03 of the Administrative Chapter of the Policy Plan; SECTION 2 The City of Georgetown intervenes in PUC Docket No. 18490 and coordinates its efforts in the regard with other cities through the Steering Committee of Cities Served by TUEC. SECTION 3 The City of Georgetown does not approve of depreciation shifting. The PUC is encouraged to review the shifting of depreciation from transmission and distribution assets to nuclear production assets, as called for in the Stipulation, and to determine whether the shifting of depreciation is consistent with sound regulatory and public policy. TU Rate ordinance No. lyf�/45 Page 2 of 4 Pages 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 effective January 1, 1998. Otherwise the referenced schedules shall remain in effect until such time as they may be changed, modified, or amended by 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 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 Georgetown 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 other appeals from City ordinance connected therewith. SECTION 7 All ordinances and resolutions, or parts of ordinances and resolutions, in conflict with this Ordinance are hereby repealed, and are no longer of any force and effect. SECTION 8 If any provision of this ordinance or application thereof to any person or circumstance, shall be held invalid, such invalidity shall not affect the other provisions, or application thereof, of this ordinance which can be given effect without the invalid provision or application, and to this end the provisions of this ordinance are hereby declared to be severable. SECTION 9 The Mayor is hereby authorized to sign this ordinance and the City Secretary to attest. This ordinance shall become effective and be in full force and effect in (10) ten days on and after publication in accordance with the provisions of the Charter of the City of Georgetown. PASSED AND APPROVED on First Reading on the 24th day of February, 1998. TU Rate Ordinance No. f `' Page 3 of 4 Pages PASSED AND APPROVED on Second Reading on the 24th day of March, 1998, THE CITY OF GEORGETOWN: A^ iF By: LEO WOOD Mayor Approved as to form: Marianne Lan City Attorney Fos . _s'4 TU Rate Ordinance No. $ Page 4 of 4 Pages Attest: .141 V .e -e . . Sandra D. Lee City Secretary