HomeMy WebLinkAboutIR 6927 INFORMAL REPORT TO CITY COUNCIL MEMBERS No. 6927
'64 T`/, March 27, 1984
mot fORT�o To the Mayor and Members of the City Council
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»rExP`0 Subject: TEXAS UTILITIES ELECTRIC COMPANIES (TUEC)
'873 $304 MILLION RATE FILING MADE MARCH 9, 1984
On March 9, 1984, Texas Utilities Electric Companies (TUEC) filed a
request for authority to increase rates by $304 million. This re-
quest, if approved, will have an impact on more than 1.2 million
electric customers of the recenity merged TUEC, an operating division
of Texas Utilities. Texas Utilities is a holding company whose stock
is traded on the New York Stock Exchange.
The merger of the three operating companies, Texas Electric Service
Company (TESCO) , Texas Power and Light Company (TP&L) and Dallas Power
and Light Company (DP&L) , was approved by the Public Utility Commission
(PUC) in 1983, to become effective January 1, 1984. As a part of the
PUC's order approving the merger, the company was directed to move
toward a uniform rate structure for all three companies at the time
the first rate case was filed in 1984. Two of the three companies have
had rate increases in 1983; TESCO's became effective December 28, 1983,
and DP&L's in January, 1984. TP&L has had no rate action for almost
two years. Therefore, any amount of an increase authorized at the
conclusion of the TUEC case will have a greater impact on TP&L custo-
mers than it will on the customers of the two companies whose rates were
recently increased.
As a first intervention in the rate case, the Texas Municipal League
(TML) called a planning meeting in August on March 15 at which Fort
Worth was represented, together with 19 other representatives of cities
served by the three companies and two representatives from TML. A
steering committee was formed and the following officers elected:
Chairman Tom James, Dallas; Vice-Chairmen R. H. Aughinbaugh, Fort Worth
and Earl Bracken, Waco City Attorney. In other business, Don Butler
was engaged as lead counsel to direct legal efforts. He will be assisted
by legal department representatives from cities served by the three
companies. Touche, Ross & Company was engaged as the City's consultant
and authorized to engage economist, T. R. Livingston, to make a
"weatherization adjustment," if necessary.
It also was agreed at this time that a small assessment from all the cities
probably will be necessary to defray the 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. This
one-cent per capita will amount to $9,051 for Dallas, $3,850 for Fort
Worth and smaller amounts for the rest of the cities affected. A letter
describing the above participation and funding will be sent out to all
cities from the TML offices early next week.
ISSUED BY THE CITY MANAGER -- FORT WORTH, TEXAS
INFORMAL REPORT TO CITY COUNCIL MEMBERS No. 6927-p.2
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�OffORl� To the Mayor and Members of the City Council March 27, 1984
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J �TfxAy. Subject: TEXAS UTILITIES ELECTRIC COMPANIES (TUEC)
$304 MILLION RATE FILING MADE MARCH 9, 1984
Proposed Future Action
The first pre-hearing conference in this case will be held in Austin on
March 26 to determine the hearing and evidence submission schedule. By
custom, the PUC general counsel will suspend the rate's effective date
for 120 days beyond the scheduled effective date of April 13, 1984, to
August 12, 1984. The cities will have until April 23, 1984, to file
"Leave to Intervene" petitions. (The Fort Worth petition was filed
March 21, 1984.)
The cities have 90 days beyond April 13 to suspend the effective date
of the rates and must take some action on the request by July 12, 1984.
This action can be to grant all or part of the request or to reject the
request. It is common practice for company officials to request that
cities quickly deny the request, so that the appeal can be made to the
PUC in Austin and the battle fought there.
Within the next few weeks, it is anticipated that the Council will be
asked 1) to authorize Fort Worth's participation, with other TML cities,
in the rate case and approve funding of the cost of intervention, and
2) to suspend the rates for the 90-day period.
There are two views on the question of "denial-of-the-request;" some feel
that this tends to play into the utilities' hands and further abrogates
the cities ' control of electric utilities and paves the way in some
future legislative sessions of passing much or all control of utilities
to the PUC.
On the other hand, the longer the matter is delayed, if it is ultimately
to be denied and rejected, the higher the cost of regulation will be due
to the lengthy public hearings.
Council direction in this matter is requested by the City Attorney and
the Public Utilities Supervisor. The Council will be kept advised in a
timely fashion of all future developments.
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If additional information is desired, it will be furnished upon request.
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,,,Robert L. Herchert
City Manager
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ISSUED BY THE CITY MANAGER -- FORT WORTH, TEXAS