HomeMy WebLinkAboutOrdinance 8888F
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ORDINANCE NO . ~ 8
AN ORDINANCE DENYING THE RATE INCREASE PROPOSED
IN THE STATEMENT OF INTENT AND PETITION TO SET
RATES FILED BY TEXAS ELECTRIC SERVICE COMPANY ON
JUNE 9, 1983; PROVIDING THAT THE PRESENT RATES
SHALL REMAIN IN EFFECT; PROVIDING A SEVERABILITY
CLAUSE; AND PROVIDING AN EFFECTIVE DATE.
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WHEREAS, on June 9, 1983, Texas Electric Service Company filed
a Statement of Intent and Petition to Set Rates with the City of
Fort Worth, those rates to go into effect on July 14, 1983; and
WHEREAS, on June 22, July 5 and July 12, 1983, the City Council
of the City of Fort Worth conducted public hearings and received
comments consistent with the obligation and duty it is charged with
under 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, on July 12, 1983, the City Council of the City of Fort
Worth adopted Ordinance No. 8864, which on that same date suspended
the proposed rate increase at least 120 days beyond July 14, 1983,
in order that the City Council might conduct an investigation and
hearing on the proposed rate increase; and
WHEREAS, the City Council of the City of Fort Worth has con -
eluded that Texas Electric Service Company has not met its required
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:
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SECTION I.
That the proposed rate increase of Texas Electric Service
Company as found in the Statement of Intent and Petition to Set
Rates filed on June 9, 1983, with the City Secretary of the City of
Fort Worth and suspended on July 12, 1983, by Ordinance No. 8864,
for 120 days beyond July 14, 1983, until November 14, 1983, is pred-
icated upon insufficient factual data; and the Company has failed to
demonstrate that current rates do not permit it to recover its oper-
ating 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 is hereby, DENIED.
SECTION II.
That the rates granted to Texas Electric Service Company on
October 3, 1980, by Final Order of the Texas Public Utility
Commission, by Cause PUC-3250 should and do hereby 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 shall take effect and be in full force and
effect from and after the date of its passage, and it is so or-
dained.
APPROVED AS TO FORM AND LEGALITY:
City Attorney
Date: ~ -~ ~ ~ _" g 3
ADOPTED: ~ ~~ - ~~
EFFECTIVE:
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I~i~~'El REFERENCE SUBJECT Statement of Intent to Change ~ PAGe
NUMBER
8/16/83 G-5705 Rates - Texas Electric Service for -2_
On June 9, 1983, Texas Electric Service Company (TESCO) filed a Statement of
Intent to change its rates effective July 14, 1983, 35 days after the filing
date.
The proposed increase in the adjusted total operating revenues amounts to
$195 million, a 16 1 percent increase, Informal Report No, 6854 (June 16, 1983)
provided detailed information on the request and suggested courses of appropriate
action
Three public hearings on the matter have been held, on June 22, July 5, and
July 12, 1983. The City Council on July 12, 1983, approved M&C G-5680 and
Ordinance No. 8864, suspending the implementation of the rate increase for
120 days, and joining with the other 78 TESCO-served TML cities in a joint
intervention action before the Public Utilities Commission of Texas (PUC)
The Department of Law/Public Utilities is a member of the Steering Committee of
the TML-Cities Intervenors group, and the consultants selected by this group
are preparing their testimony to present at the start of the hearing on
September 5, 1983 TESCO's allegations for the necessity of the proposed
increase in rates are based on the premise that its revenues are insufficient
to recover expenses and a reasonable return on invested capital, and that its
financial position is deteriorating
It has now been determined by the consultant and by staff by their preliminary
analysis of the company's proposal, that the gross dollar amount requested has
been overstated
A Rate of Return of 15 5% was authorized by the PUC in the last 1980 rate case
PUC-3250• the analysis indicates that the company has exceeded this level in its
1981 and 1982 fiscal years by Rates of Return exceeding. 16 percent. Based on
these and other preliminary findings, it would appear that the company has not
met the burden of proof of the need of 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, and a consolidation with the case now pending
before the PUC, as was the case in the past four rate requests
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•
DATE 4 REFERENCE SUBJECT' Statement Of Intent t0 Change PAGE
NUMBER
57Q5
Rates -Texas Electric Service
2__or- 2`
8/16/83 G- ComRany
____
Recommendation
1. Based on information gained from the public hearings, and staff's/consultants'
analysis of the request, it is recommended by the Department of Law and the
City Manager that TESCO's application for increased rates be rejected for
failure to demonstrate that (a) current rates do not allow the Utility
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,
2 It is further recommended by the Department of Law and the City Manager
that the attached ordinance be adopted denying the subject rate increase
proposed by Texas Electric Service Company, and providing that the present
rates shall remain in effect
RLH kc
pPPROVEDN
CIL
CITY COU
auc is 1983
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City S~ i the
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City
SUBMITTED FOR THE (~ ~
CITY MANAGER'S
OFFICE BY DISPOSITION BY COUNCIL:
^ APPROVED PROCESSED BY
ORIGINATING ^ OTHER (DESCRIBE)
DEPARTMENT HEAD: ~nJgde Adk1riS CITY SECRETARY
FOR ADDITIONAL INFORMATION PIED ORDINANCE NQ
CONTACT Richard Au hinbau h Ext .
698 ATE