HomeMy WebLinkAboutOrdinance 8131~;
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ORDINANCE NO ~ r ~'
AN ORDINANCE DENYING THE RATE INCREASE PROPOSED
IN THE STATEMENT OF INTENT AND PETITION TO SET
RATES FILED BY TEXAS ELECTRIC SERVICE COMPANY
ON MAY 15 1980 PROVIDING THAT THE PRESENT
RATES SHALL REMAIN IN EFFECT PROVIDING A
SEVERABILITY CLAUSE AND PROVIDING AN EFFECTIVE
DATE
WHEREAS on May 15 1980 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 June 19 1980 and
WHEREAS on June 17 1980 the City Council of the
City of Fort Worth adopted Ordinance No 8113 which on that
same date effected the suspension of the proposed rate increase
at least 120 days beyond June 19 1980 in order that the City
Council might conduct an investigation and hearing on the pro-
posed rate increase and
WHEREAS on June 12 1980 the City Council of the
City of Fort Worth conducted a public.hear.fn.g.anal~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 the City Council of the City of Fort Worth
has concluded that Texas Electric Service Company has had
insufficient experience with the present rates to yet determine
the adequacy thereof to yield sufficient revenues and an
effective rate of return and
WHEREAS the City Council of the City of Fort Worth
has determined that no change of rates is justified at this
time and that the Statement of Intent and Petition to Set Rates
should be denied NOW THEREFORE
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BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY
OF FORT WORTH TEXAS
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 May T5 1980 with the City
Secretary of the City of Fort Worth and suspended on June
17 1980 by Ordinance No 8113 for 120 days beyond June
19 1980 (i e until October 17 1980) is predicated upon
insufficient factual data is therefore unreasonable and
the same should be and is hereby DENIED
SECTION II
That the rates granted to Texas Electric Service
Company on October 16 1979 by Final Order of the Texas
Public Utility Commission should and do hereby remain in
effect until the same may lawfully be changed under and in
accordance with Article 1446c VAC S (Public Utility
Regulatory Act)
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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 sections 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 ordained
APPROVED AS TO FORM AND LEGALITY
ity Attorney
ADOPTED ~~; / %~~
EFFECTIVE
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Mayer and ~o~,cn~al ~~mrn.u~a,~,ccat~on,
DATE REFERENCE SUBJECT Statement of Intent to Change PAGE
NUMBER Rates - `Texas Electric Service 2
x/8/80 G-4617 lof
Comp any
On May 15 1980 Texas Electric Service Company (TESCO) filed a Statement
of Intent to change its rates effective June 19 1980
The proposed change would increase adfusted total operating revenues of
Texas Electri~~ Service Company by $123 million, an increase of revenues
of 17 7 per cent and increases in rate structures ranging from 20 1
per cent (residential) to 32 per cent (street lighting) The proposed
changes are based on a test year which ended March 31 1980 and which con-
taa~ns only four months of the new rates set by the Public Utility Commission
in the lash; rate case (PUC-2506) and eight months of the rates established
by the prior rate case (PUC-1903)
The staff is of the opinion that it is not an acceptable practice for
TESCO to file for a rate increase with only four months of actual
e~cperience with a new rate It has been demonstrated that a weather
pattern ehange can have a significant impact on earnings The uncer-
tainties of weather may produce adequate revenues for T'ESCO without a
rate increase This is especially true in view of the present record-
breaking sustained heatwave and the related kilowatt-hour energy sales
`3'~;.eLe record sales are all at the higher rates which became effective
in November 1979
TESCO's fustification for increased rates submitted to the Council at
the hearing held on June 12 1980 is predicated solely en the capital
expenditure necessary to purchase additional lignite and nuclear generating
capacity "
On June l7 1980 (M&C G-4593) the City Council in Ordinance No 8113
suspended the rates TESCO proposed to implement on June 19 1980
and approved ,Dining with other TESCO cities and the Texas Municipal
League to intervene in the "rural" case before the Public Utility
Comni~.~^s ~.o~l The Fublic Utilities Supervisor is a member of the
St~:ering Committee of that group and consultants have been engaged
for assistance Refection of the local rate request undoubtedly will
prec3.pitate TESCO's appeal to the PUC and a consolidation with the
pend.ing "rural" case as was done in the last three rate cases
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DATE CE SUBJECT Statement of Intent t0 Change PAGE
NUMBER
7A8A80 Rates - Texas Electric Service 2
f 2
G-4617 o
A transcript of the public hearing of June 12 1980 will be
presented to the Public Utility Commission at the rate hearing
together with staff testimony
Recommendations
~. Based on information from the public hearing it is recommended
by the Ilepartment of Yaw and the City Manager that TESCO's
application fair 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
2 The attached ordinance be adopted
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Attachment
APPROVED 8Y
CITY COUNCIL
,~~, 8 1980
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C~ eczetar of the
SUBMITTED FOR THE
CITY MANAGER'S OC FOLQ N4rth~
DISPOSITION BY CO N' L: Ca7[R4
PROCESSED BY
OFFICE BY ~~ ~ ^ APPROVED
ORIGINATING ~
DEPARTMENT HEAD: Paaal lsham A~! 7~~~~
116~~f" iii ^ OTHER (DESCRIBE)
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CITY SECRETARY
FOR ADDITIONA I~VF,gRMAa10
CONTACT ~1CL3arU Auxghinba~.gh Ext 6798
DATE