Ordinance 2014-22 - ORD 2014-22 ORDINANCE NO. 201422
AN ORDINANCE BY THE CITY OF HUNTSVILLE, TEXAS ("CITY") DENYING THE
RATE INCREASE REQUEST OF ENTERGY TEXAS, INC. FILED ON SEPTEMBER 25,
2013; SETTING JUST AND REASONABLE RATES FOR ENTERGY TEXAS, INC. FOR
SERVICE WITHIN THE MUNICIPAL LIMITS PURSUANT TO A SETTLEMENT WITH
ENTERGY TEXAS, INC.; REQUIRING ENTERGY TEXAS, INC. TO FILE UPDATED
TARIFFS IN COMPLIANCE WITH THE APPROVED RATES; FINDING THAT THE
MEETING COMPLIES WITH THE OPEN MEETINGS ACT; MAKING OTHER
FINDINGS AND PROVISIONS RELATED TO THE SUBJECT; AND DECLARING AN
EFFECTIVE DATE
WHEREAS, on or about September 25, 2013 Entergy Texas, Inc. ("Entergy") filed a Statement of
Intent with the City to increase electric base rates in the Entergy Service Area by $38.6 million per year,
to implement new riders charging customers $14.5 million per year, for a total requested annual increase
of$53.1 million; and
WHEREAS, the City of Huntsville suspended the effective date of Entergy's rates within its
jurisdictional limits until at least January 28, 2014 and hired the Lawton Law Firm, P.C. to review the
Company's rate change request and proposed tariffs;
WHEREAS, Entergy agreed to extend the January 28, 2014, jurisdictional deadline to March 15,
2014, and further agreed to extend the March 15, 2014 deadline to March 24, 2014 in order to
accommodate the passage of Ordinances adopting settlement rates;
WHEREAS, Entergy and parties to PUC Docket No. 41791, Entergy's base rate case currently
pending before the Public Utility Commission, have reached a settlement in principle of Entergy's base
rate increase request resulting in a$18.5 million increase to Entergy's current adjusted revenues;
WHEREAS, under the settlement Residential, Small General Service, and the Lighting Class
customers will all receive a base rate decrease. The base rate increase/(decrease) is allocated among the
customer classes as follows:
Table 1
Proposed Settlement Base Rate Increase/(Decrease} by Customer Class
Customer Class Entergy Initial Request Proposed Settlement
Residential $2,049,444 ($2,212,094)
Small General Service $169,710 ($280,630)
General Service $23,549,366 $15,937,075
Large General Service $3,753,620 $1,801,335
Large Industrial $9,255,883 $3,508,964
Lighting Service ($175,150) ($254,652)
Total Base Rate Increase: $38,602,873 $18,500,000
WHEREAS, the settlement rates and tariffs are a just and reasonable result and are well within the
range of reasonable outcomes of Entergy's base rate case had it been appealed to the Public Utility
Commission of Texas;
WHEREAS, the statutory deadline to act on Entergy's rate increase request is March 24, 2014;
NOW THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF
HUNTSVILLE, TEXAS, THAT:
Section 1. That the statement and findings set out in the preamble to this Ordinance are
hereby in all things approved and adopted.
Section 2. The City of Huntsville hereby denies the rate increase requested in Entergy's
Statement of Intent.
Section 3. The City finds that an annual base rate increase of $18.5 million is just and
reasonable in accordance with Texas Utility Code § 36.003 and consistent with a reasonable resolution of
the issues raised by Cities' expert consultants.
Section 4. The City finds that the annual base rate increase shall be billed to each customer
class in accordance with the class allocation of revenues and rate design as agreed by all parties in the
settlement of Docket No. 41791 and as shown above. The settled class allocation and rate design are
reasonable and consistent with the recommendation of City's experts retained to review Entergy's rate
increase request.
Section 5. The City finds that Entergy should be permitted to recover Entergy's rough
production cost equalization expenses through surcharge amortized over three years.
Section 6. The City finds that Entergy should be permitted to recover Entergy's reasonable
rate case expenses through surcharge amortized over three years.
Section 7. Entergy's proposed special circumstances request to recover historical capacity
charges of $22,942,706 from customers through reconcilable fuel rates should be and is hereby denied
consistent with the parties' settlement in PUC Docket No. 41791. Entergy is also ordered to reduce
Entergy's recommended retail fuel reconciliation balance by an additional $1.25 million consistent with the
parties' settlement in PUC Docket No. 41791.
Section 8. Except as modified by City's Ordinance setting rates and the settlement approved
in PUC Docket No. 41791, Entergy's statement of intent application on file with the City is approved.
Section 9. Entergy is hereby ordered to file a proof of revenues and Entergy's proposed
tariffs reflecting rates consistent with the City's revenue requirements and adjustments set out above. Such
rates and tariffs shall be effective for service rendered on and after April 1, 2014 in accordance with Texas
Utility Code § 36.111. In the event that the effective date of rates resulting from the settlement of PUC
Docket No. 41791 is delayed beyond the April 1, 2014 effective date, then effective date of Entergy's
rates within the City will be suspended and will coincide with the manner of implementation and effective
date of rates approved in PUC Docket No. 41791.
Section 10. The meeting at which this Ordinance was approved was in all things conducted in
strict compliance with the Texas Open Meetings Act, Texas Government Code, Chapter 551.
Section 11. This ordinance shall become effective from and after its passage.
PASSED AND APPROVED this day of MC-C 2014.
Mac Woodwar , M4-or
ATTEST: APPROVE AS TO FORM:
Le Woodward, City Setrefary o Schneider, City Attorney
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