(6)(d)
CITY COMMISSION REGULAR MTG
- Meeting Date:
- 09/19/2018
- Title:
- Submitted For:
- Nick Finan
- Submitted By:
- Rhomari Jackson-Glover, City Secretary
- Department:
- Management Services
Information
ACTION REQUEST (Brief Summary)
Consider and take action on Resolution No. 18-098, denying Texas New Mexico Powers's original request for a rate increase by October 2nd. (Managemnet Services)
BACKGROUND
The City is a member of a coalition of cities known as Gulf Coast Coalition of Cities and for the rate case submitted as Cities Served by Texas-New Mexico Power Company (“TNMP Cities”).
On May 30, 2018, Texas-New Mexico Power Company (“TNMP” or “Company”) filed an application to change rates with cities retaining original jurisdiction. In the filing, the Company sought to increase system-wide transmission and distribution rates by $33.3 million, or approximately 16.6% over present revenues. This equated to a 23.4% increase in residential rates and a 11.8% increase in street lighting rates. If approved, monthly rates would increase by approximately $12.21 for an average residential customer. The City of Texas City took action to delay the implementation until the request could be reviewed.
In May, TNMP Cities engaged the services of two consultants, Mr. Lane Kollen and Mr. Richard Baudino, to review the Company’s filing. The consultants identified numerous unreasonable expenses and proposed significant reductions to the Company’s request. Through negotiations, a settlement has been reached verbally, however, there is not enough time to put it in print and get to the appropriate cities to ratify prior to the review period expiring. So, we must deny the original request. Accordingly, the TNMP Cities’ attorneys recommend that all members adopt the Resolution denying the rate change. Once the Resolution is adopted, TNMP will have 30 days to appeal the decision to the Public Utility Commission of Texas where the appeal will be consolidated with TNMP’s filing (i.e., PUC Docket No. 48401) currently pending at the Commission.
Under the pending settlement between parties (including TNMP Cities) and TNMP, the Company’s request is substantially reduced.
Under the proposed settlement, the Company would be permitted a $10 million increase, or approximately a 6.6% increase in its revenues. This would result in a 9.9% increase to residential rates and no increase to street lighting rates. However, that settlement remains in the process of being finalized. The requested Council action is therefore denial of TNMP’s original, $33.3 million proposed increase.
Under the law, cities with original jurisdiction over this matter have 125 days from the initial filing to take final action on the application. As such, all cities with original jurisdiction will need to adopt this resolution no later than October 2, 2018. The City of Texas City would not have enough time before our next meeting on Oct. 3 to approve.
The the resolution also explains, the Company will reimburse the TNMP Cities for their reasonable rate case expenses. Legal counsel and consultants approved by the TNMP Cities will submit monthly invoices that will be forwarded to TNMP for reimbursement.
On May 30, 2018, Texas-New Mexico Power Company (“TNMP” or “Company”) filed an application to change rates with cities retaining original jurisdiction. In the filing, the Company sought to increase system-wide transmission and distribution rates by $33.3 million, or approximately 16.6% over present revenues. This equated to a 23.4% increase in residential rates and a 11.8% increase in street lighting rates. If approved, monthly rates would increase by approximately $12.21 for an average residential customer. The City of Texas City took action to delay the implementation until the request could be reviewed.
In May, TNMP Cities engaged the services of two consultants, Mr. Lane Kollen and Mr. Richard Baudino, to review the Company’s filing. The consultants identified numerous unreasonable expenses and proposed significant reductions to the Company’s request. Through negotiations, a settlement has been reached verbally, however, there is not enough time to put it in print and get to the appropriate cities to ratify prior to the review period expiring. So, we must deny the original request. Accordingly, the TNMP Cities’ attorneys recommend that all members adopt the Resolution denying the rate change. Once the Resolution is adopted, TNMP will have 30 days to appeal the decision to the Public Utility Commission of Texas where the appeal will be consolidated with TNMP’s filing (i.e., PUC Docket No. 48401) currently pending at the Commission.
Under the pending settlement between parties (including TNMP Cities) and TNMP, the Company’s request is substantially reduced.
Under the proposed settlement, the Company would be permitted a $10 million increase, or approximately a 6.6% increase in its revenues. This would result in a 9.9% increase to residential rates and no increase to street lighting rates. However, that settlement remains in the process of being finalized. The requested Council action is therefore denial of TNMP’s original, $33.3 million proposed increase.
Under the law, cities with original jurisdiction over this matter have 125 days from the initial filing to take final action on the application. As such, all cities with original jurisdiction will need to adopt this resolution no later than October 2, 2018. The City of Texas City would not have enough time before our next meeting on Oct. 3 to approve.
The the resolution also explains, the Company will reimburse the TNMP Cities for their reasonable rate case expenses. Legal counsel and consultants approved by the TNMP Cities will submit monthly invoices that will be forwarded to TNMP for reimbursement.