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HomeMy WebLinkAboutOrdinance 9090i, i) y .n`. ~, e y ORDINANCE NO. Q Q AN ORDINANCE DENYING THE RATE INCREASE PROPOSED IN THE STATEMENT OF INTENT AND PETITION TO SET RATES FILED BY TEXAS UTILITIES ELECTRIC COMPANIES ON MARCH 9, 1984; PRO- VIDING THAT THE PRESENT RATES SHALL REMAIN IN EFFECT; PROVIDING A SEVERABILITY CLAUSE, AND PROVIDING AN EFFEC- TIVE DATE. WHEREAS, on March 9, 1984, the Texas Utilities Electric Compa- nies (TUEC) filed a Statement of Intent and Petition to Set Rates within the City of Fort Worth, those rates to go into effect April 13, 1984; and WHEREAS, the City Council of the City of Fort Worth and the Public Utility Commission (PUC) have conducted public hearings and received comments consistent with the obligation imposed by Article 1446c, V.A.C.S. (Public Utility Regulatory Act), to make a "reasonable determination of rate base, expense, investment and rate of return within the Municipal boundaries" of the City of Fort Worth; and WHEREAS, the City Council of the City of Fort Worth has con- cluded that Texas Utilities Electric Company has not met its requir- ed statutory burden of proof that the present rates are not adequate to yield sufficient revenues and an effective rate of return; and WHEREAS, the City Council of the City of Fort Worth has deter- mined that no increase of rates is justified at this time and that the Statement of Intent to Increase Rates should be denied; NOW THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF FORT WORTH, TEXAS SECTION I. That the proposed rate increase of the Texas Utilities Electric Company, as found in the Statement of Intent and Petition to Set Rates filed on March 9, 1984, with the City Secretary of the City of Fort Worth and suspended on April 10, 1984, by Ordinance No. 9070, for 90 days beyond April 13, 1984, (until June 14, 1984) is predi- Gated upon insufficient factual data because the last rate increase ,~ r -r was approved by the Public utility Commission on December 15, 1983 and the Company has only experienced three ( 3 ) months of the higher rates; that the Company has failed to demonstrate that current rates do not permit it to recover its operating expenses plus a reasonable return on its Invested Capital, and that the new rates would be just and reasonable; therefore, the rate request should be, and the same is hereby, DENIED. .•:~l -r: SECTION II. That the rates granted to Texas Electric Service Company (now a part of the Texas Utilities Electric Company) on December 15, 1983, by Final Order of the Public Utility Commission of Texas in Cause PUC-5200 shall remain in effect until the same may lawfully be changed under and in accordance with Article 1446c, V.A.C.S. (Public Utility Regulatory Act). SECTION III. Should any part, portion, section or part of a section of this ordinance be declared invalid or inoperative or void for any reason by a court of competent jurisdiction, such decision, opinion or judgment shall in no way affect the remaining portions, parts, sec- tions or parts of sections of this ordinance, which provisions shall be, remain and continue to be in full force and effect. SECTION IV. That this ordinance shat l take effect and be in ful l force and effect from and after the date of its passage, and it is so or- dained. APPROVED AS TO FORM D LEGALITY: City Attorney Date: ~ J3 ~ ~~ ADOPTED: ~- ~~ ~~ EFFECTIVE: It -2- j \fyln§TER FIL€a!1 ;~' ...~•~--=~y v ~~~ ~ ' JL ~l/9 ~ ~®u L~ ~~L~i~lu~.Y \\ y ~ , CITY fNlk~7flGC~?]1 `FfiANPP~pTATION~PUBLtt± WORI~Sa~ ~qyy ~ OATE 5(8/84 PusuG uTr,lne :r Background REFERENCE SUBJECT ~ PAGE NUMBER In the Matter of the Rate Reques ~*G- 5989 of Texas Utilities Electric Companies ~ >.or 2 On March 9, 1984, Texas Utilities Electric Companies filed its Request for Authority to increase its rates, effective thirty-five days after the filing, on April 13, 1984 The new proposed rates could have gone into effect auto- matically on that date in the City of Fort Worth, unless suspended by the City Council by April 13, 1984 The Company stated that it did not propose to place the rates into effect until authorized to do so by the Public Utility Commission (PUC) The proposed increase in the adjusted total operating revenue is $304 million (7 98% increase) By classes of rate customers, the increases vary from 7 to 15 percent Informal Report No 6927 (March 27, 1984) listed alternative courses of action available to the City Council ~ On April 10, 1,984, the City Council adopted Ordinance No 9070 ~ohich suspended the proposed rates for a ninety day period beyond the effective date of April 13, 1984 Consistent with the procedures followed in previous TESCO rate cases, the following steps have been taken 1) The City Attorney has filed the Petition for "Leave to Intervene" and requested that the City of Fort Worth be classed as a party to the proceedings before the PUC,, and, 2) The PUC has docketed the TESCO rate matter as Cause No PUC-5640, and the hearing on the merits will ,begin June 20, 1984 The first meeting of the TML-Cities Committee was held in Austin on March 15, 1984, to discuss joint intervention efforts It was agreed that a small assess- ment from all the cities probably will be necessary to defray initial costs such as court reporters.' fees A request for reimbursement of these costs by the utilities will be made later It is estimated that one cent per capita, based on a 1980 census will be adequate to get the fund started The consoli- dated TML-Cities Committee approach has been demonstated to have been quite successful in the past five cases in the eight years of the PUC's existence, and the cities consultants and other City staff witnesses have provided evidence to the 1'UC which resulted in final Orders in all cases which. produced lower rate-increases than the company had requested The consultants (Touche Ross & Company) and. chief counsel (Don Butler) selected by the TML Cities Steering Committee in the March meeting, indicate that at this point in their study and evaluation of the request that the Company has overstated both its rate of return (earnings)requirement and the gross dollar amount of the rate increase The studies further indicate that the rate filing may be premature, because two of the three companies involved have received increases in .rates in December, 1983 and January, 1984, which have been in effect for only three months, an insufficient length of time to determine the financial impact DATE REFERENCE SUBJECT In the Matter Of the Rate Request ~ PAGE NUMBER 5/8/84 ~*G-5989 of Texas Utilities Electric Companies 2 of 2 Based on these and other preliminary findings, it would appear that the company has not met the burden of proving of the need for the increase, and its request should be denied The rejection of the request will in all probability result in TESCO's appeal to the PUC, as was the case in the past five rate requests Recommendation It is recommended that 1) The City Council approve joining with the other TML-Cities in this case and approve the expenditure of the 1~ per capita (to be reimbursed in about six months) amounting to approximately $4,000 Funds are available for this purpose in Account No 12-10-00 This expenditure will be charged againat Index Code 207829 "Professional Services " 2) The attached Ordinance be adopted denying Texas Utilities Electric Company's application for increased rates because the Company has failed to demonstrate that (a) the current rates do not allow the Company to recover its operating expenses plus a reasonable return on its invested capital and (b) new rates to achieve the increased revenues requested would be just and reasonable, and, 3) The present rates of Texas Electric Service Company shall remain in effect WA j c Attachment ~ APi?ROVED BY CITY COUNCIL MA r $ 1984 ~~ ~~~ City S.eor®ta ~`~~'~° rX o. ilir3 G'itp of do=t 3!V,~#~ ,'~Oi SUBMITTED FOR THE CITY MANAGER'S / / DISPOSITION BY COUNCIL. PROCESSED BY OFFICE BY ~ ~~ APPROVED ORIGINATING Wade Adkins I.. OTHER (DESCRIBE) DEPARTMENT HEAD CITY SECRETARl' FOR ADDITIONAL INFORMATION coNTACT Richard Aughinbaugh Ext 67 9 Atlopted Ordinance No 8 DATE . ~~ ~~