HomeMy WebLinkAboutResolution 480 RESOLUTION
WHEREAS, on June 29, 1977, Texas Electric Service
Company filed with the City of Fort Worth and with the
Public Utility Commission of Texas a Statement of intent
and Petition to Set Rates alleging that the proposed
changes would result in a 23.63% over-all increase in the
adjusted total operating revenues of Texas Electric Service
Company, not only in the City of Fort Worth but throughout
its system;and
WHEREAS, by such Petition or Application to Set Rates
the Texas Electric Service Company sought an increase in
its system-wide total operating revenues of $79,052,814; and
WHEREAS, despite the fact that Texas Electric Service
Company is required by Section 23 of the Public Utility
Regulatory Act (Art. 1446c, V.T.C.S.), to furnish,
"all necessary data to make reasonable
determination of rate base, expenses, investment,
and rate pf return within the municipal boundaries"
of the City of Fort Worth, Texas, Petitioner, Texas Electric
Service Company has wholly failed to furnish such necessary
data to the City Council of the City of Fort Worth; and
WHEREAS, the City Council requested Texas Electric
Service Company to provide a complete rate of return study
covering only the municipal boundaries of the City of Fort
Worth; and
WHEREAS, the Texas Electric Service Company has refused
to provide such rate of return study stating:
"The rate case pending before the City Council
provided data on a systemwide basis for the establish-
ment of systemwide rates. The Public Utility Regulatory
Act of Texas prescribes, for the first time, the com-
ponents of the rate base and cost of service for electric
utilities in Texas. Further, the Act prescribes the use
of a past test year with appropriate adjustments, but
does not include a basis for allocations or separated
studies. As a result, rate of return studies for in-
dividual citie6 have not been prepared, nor would they
be meaningful.
"The methodology and computer programs used in the
past for this purpose will no longer work based upon
the requirements of the new law. Changes such as using
a past test year with appropriate adjustments, the handling
of deferred federal income taxes, investment advances to
affiliates, customer deposits, reserve for injuries and
damages and provisions for working capital are significantly
changed. Further, the prescribed method of determining
cost of service is considerably different, especially
as to adjustments of revenue and expenses to year end
levels.
"Since the Company has no rate of return study
for the City of Fort Worth for the test year we cannot
state positively how the rate of return for the city
would compare to that of the system. However, under
the old methodology used in previous years, the rate
of return for Fort Worth was consistently lower than
the system. This was primarily due to the lower load
factor experienced in the Fort Worth area.
"The books and records of the Company are open
for inspection by the City of Fort Worth or its de-
signated representatives for obtaining additional in-
formation or inspection at any time;" and
WHEREAS, under the Texas Public Utility Regulatory Act
(Art. 1446c, V.T.C.S.), the City of Fort Worth is charged with
the duty of making a "reasonable determination of rate base,
expenses, investment, and rate of return within the municipal
boundaries" of the City of Fort Worth, and has no jurisdiction
whatsoever to set rates on a system-wide basis; and
WHEREAS, the utility rate experts retained by the City of
Fort Worth, to-wit, B. L. McMorries, et al, have made a thorough
examination of the Petition to Change Rates of Texas Electric
Service Company on a system-wide basis and have prepared and
filed testimony with the Public Utility Commission of Texas in
Docket No. 527, concluding that no rate increase is justified;
and
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE
CITY OF FORT WORTH, that the Petition of Texas Electric Service
Company to Set Rates heretofore filed on June 29, 1977, be and
the same is hereby denied;
BE IT FURTHER RESOLVED, that the proposed rate increase
intended to become effective be suspended as authorized by
Art. 1446c of the Public Utility Regulatory Act (Art. 1446c,
V.T.C.S.), for at least 120 days beyond the date on which the
schedule of proposed rates would go into effect and as the
same was suspended system-wide by the Texas Public Utility
Commission by order dated July 18, 1977.
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