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Home My WebLink AboutOrdinance 7921 ORDINANCE NO. 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 17, 1979; PROVIDING THAT THE PRESENT RATE WHICH WENT INTO EFFECT NOVEMBER 16, 1978 SHALL REMAIN IN EFFECT; PRO- VIDING A SEVERABILITY CLAUSE; AND PROVIDING FOR AN EFFECTIVE DATE. WHEREAS, on May 17, 1979 , 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 21, 1979; and WHEREAS, on May 29, 1979, the City Council of the City of Fort Worth adopted Ordinance No. 7911, which on that same date effected the suspension of the proposed rate in- crease at least 120 days beyond June 21, 1979, in order that the City Council might conduct an investigation and hearing on the proposed rate increase; and WHEREAS, on May 29, June 5, and June 12, 1979, the City Council of the City of Fort Worth conducted public hearings and received comments consistent with the obli- gation 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 present rate of return as approved in the Final Order of the Public Utility Commission of Texas (dated April 20, 1979) had only been in effect for less than one month when Texas Electric Service Company made its rate of return study in preparation for filing on May 17, 1979, its Statement of Intent and Petition to Set Rates with 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 rate to yet determine the adequacy thereof to yield 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, 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 17, 1979, with the City Secretary of the City of Fort Worth and suspended on May 29, 1979, by Ordinance No. 791.1 , for 120 days beyond June 21 , 1979, (i.e. ,until October 19, 1979) 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 , 1978, by Interim Order of October 16, 1978,and the Final. Order of the Texas Public Utility Commission dated April 20, 1979,effective November 16, 1978, 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) . -2- 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 FOR AND LEGALITY: City Attornpy ADOPTED: 44-f' ._ EFFECTIVE: -3- City ill" Fort Whrth, Thuis .Wayor and Council Coinmunication MBER DATE REFERENCE WOUT: ME" g R ee lTexas 6/12 7 G-"200 Company * PAGE On May 17, 1979, Texas EleCUK Service Company f iled a Statement of Intent Lo make changes in ita rates to become effective June 21, 197%, The proposed changes would increase adjusted LOW opegaring revenues of Texas Electric Service Company by $88 mIllion, or an t.tac of .'e enues, of 16-1 per cent, and Increases in rate SLXUCtures rangLng Jzom 20 percent (residentia) to 34 percent (warer pumping). The proposed changes are b.5ad Qn a test yeai anded March 31, 1979, which contains cnly four nxmtha of the new rates set by the Public UtilLty Commission in the lasc rate came (PUC-19C?) and eight months of the rates eSLabllshed by the prior rate case (1;UC-527) The staff is of the opinion that it as not an ameptable practice for TESCO to file for a rate increase with anly fout monchs c1 actual experience wick a ne"W rate. It has been demonstrated that a weather pattern cbange can have a signi- ficant impacc on earnIngs. Ile uncertainties .,t weather may produce adequate'e revenues for TESCU without a rate increase, TESCO 5 japtification to ir, raased rates which was submitted to the Counell or the besting held an June 5 is predicated solely on the capital expenditure nWERSaly cc purchaae aaditional lignite and uranimn generating capacity. ir is (,'Iea'r wnether rhis, additicteal capacity will be in the form of new plants or :3nveTsiDn of exiscing plants, On May 29, 1979 (MhC G-4187), City Council approved 3cining with other TESCO cities and the Texas Municipal League to Incervene it the "rural" case before the Public Utility Commission. The City Attorney is a iamber of the Steering Committee of that group and consultants have been engaged for ass ratan ce. Rejac- Kan of the local rate request will undoubtedly p:insliEate TEND peal cc, the PUC and, quite likely, a consolidation with too pending "rural" c6ee, as was done last year lecomawkww� 1. Based am information from public hearings, 5i .6 secannended by the DeparL- memo t of Law and the City Manager that TESCC a application for increased rates be rejected for failure to demanstrace that (a) cuirent rates do not allow the Utility to recover Its operating expensua Pius a reasonable return an its invested capttW and W now rates ta awnlo se. zhe increased revqnus:F� requested would be just and reasonable 2 1he attached ordinance be adopted ARP:plg Attachment S1J811TQQ4 THE CITY MANAGER'S WMET COUNCIL; PROCESSED BY OFFICE BY &Wy L W11YROVED ORIGINATING ji(DESCRIBE) r. DEPARTMENT HEAD: 1""Mfmr C!" SECRETARY Arthur_llg�LgjL gn-LDom , " --- FOR ADDITIONAL INFORMATION Ait".'il' Lu DATE'14-/'2' CONTACT: