ORD 1999-06 - Setting Rates Of Entergy Gulf State 02-09-1999ORDINANCE NO. 99-06
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF
HUNTSVILLE, TEXAS, APPROVING SETTLEMENT OF VARIOUS
CASES AND SETTING THE RATES OF ENTERGY GULF STATES,
INC., IN THE CITY OF HUNTSVILLE, TEXAS; PROVIDING FOR
CONDITIONS, SEVERABILITY, AND REPEAL OF CONFLICTING
ORDINANCES.
WHEREAS The City of Huntsville is a regulatory authority under the Public Utility Regulatory Act
(PURA) and has original jurisdiction over the rates of Entergy Gulf States, Inc. (EGS or
Company); and
WHEREAS EGS is required under the terms of the merger agreement in Docket 11292 before the Public
Utility Commission to file a rate proceeding to pass on to ratepayers benefits from such
merger and other cost reductions which have occurred; and
WHEREAS EGS on November 30, 1998, made a filing with the Public Utility Commission and with
cities exercising original jurisdiction; and
WHEREAS The schedule of rates proposed by EGS was suspended for a period ofninety (90) days from
the effective date stated in EGS' Statement of Intent for ftirther review and investigation;
and
WHEREAS Numerous other cases involving the rates of EGS within the City are now pending; and
WHEREAS A comprehensive settlement has been recommended by the Steering Committee of Cities
participating in such cases which will resolve or limit the impact of such cases; and
WHEREAS The City Council having considered EGS' request and the proposed settlement after
reasonable notice and public hearing, is of the opinion and finds that the settlement
recommended by the Cities' Steering Committee should be approved and rates set in
accordance therewith;
NOW, THEREFORE, be it ordained by the City Council of the City of Huntsville, Texas, that:
SECTION 1: The comprehensive settlement entitled "Settlement Agreement", SOAH Docket No. 473 -99-
0056 between EGS, Staff, Cities, OPC, TIEC, State of Texas, HLFC, IBEW" is hereby
approved.
SECTION 2: After approval of the settlement by the Public Utility Commission, the filing of tariffs and
schedules or rates with the Commission and Cities in accordance with such settlement and
the approval of same by such regulatory authorities, the rates established thereby shall be
those under which the Company shall be authorized to render electric service and to collect
charges from its customers for the sale of electric power and energy within the corporate
limits of the City until such time as said Rate Schedules may be changed, modified,
amended, or withdrawn by or with the approval of the City Council.
SECTION 3: The rates approved hereby fix the overall revenues of the Company at a level which will
permit EGS a reasonable opportunity to earn a reasonable return on its invested capital used
and useful in rendering service to the public over and above the Company's reasonable and
necessary operating expenses and are just and reasonable.
SECTION 4: The rates approved hereby shall be effective and in force for all consumption from and after
the effective date of the tariff required to be filed hereby and shall be charged and observed
thereafter until revised according to law.
SECTION 5: Notwithstanding any other provision herein contained, the rates of EGS within the City of
Huntsville shall not, in any case, exceed the rates of customers of EGS in unincorporated
areas whether such rates for unincorporated areas are set prior to or after the adoption of this
ordinance and it shall be unlawful for EGS, its agents, servants or employees to collect or
attempt to collect higher rates within the City of Huntsville than are collected by EGS
within unincorporated areas.
SECTION 6: That the action of the City Council of the City of Huntsville, enacting this Ordinance
constitutes, on the date of its final passage, a final determination of rates for EGS within the
City of Huntsville.
SECTION 7: Nothing contained in this Ordinance shall be construed now or hereafter as limiting or
modifying, in any manner, the right and power of the City under the law to regulate the rates
and charges of EGS.
SECTION 8: Should any part, sentence or phrase of this Ordinance be determined to be unlawful, void
or unenforceable, the validity of the remaining portions of this Ordinance shall not be
adversely effected. No portion of this Ordinance shall fail or become inoperative by reason
of the invalidity of any other part. All provisions of this Ordinance are severable.
SECTION 9: That all Ordinances, Resolution, or parts thereof, in conflict herewith are repealed to the
extent of such conflict.
Passed and approved this 9th day of February, 1999.
THE CITY OF HUIVTSVILLE
z 1A
William B. Green, Mayor
ATTEST:
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t Atditt �/I /9%1�1f n
Danna Welter, City Secretary
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Scott Bounds, City Attorney
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SOAR DOCKET NO. 473-99-0056
DOCKET NO. 20150
APPLICATION OF ENTERGY GULF § BEFORE THE STATE OFFICE
STATES, INC. FOR AUTHORITY TO § OF
CHANGE RATES § ADMINISTRATIVE HEARINGS
2 004/016
This Agreement is by and between Entergy Gulf States, Inc. ("BGSP' or "the Company "),
the General Counsel of the Public Utility Commission of Texas, the Steering Committee of the
participating Cities served by EGSII, the Office of Public Utility Counsel, the Texas Industrial
Energy Consumers, the State of Texas, the High Load Factor Commercial Customer Group, the
International Brotherhood of Electrical Workers, the Low - Income Intervenors, and any other party
who elects to sign this Agreement ("Signatories").
Q
A. Ban Rate Redo 'on. Effective with bills rendered on and after March 1, 1999, EGSI shall
implement an annual retail base rate reduction of S4.2 million. This reduction will be in
addition to the annual $69 million base rate reduction (net of accounting order deferrals)
ordered in Docket No. 16705, for a total of $73.2 million annual base rate reduction from
rate levels in effect prior to the final order in Docket No. 16705. In the event that the base
rates provided by this Agreement cannot be implemented on a permanent basis by the Public
Utility Commission of Texas ("Commission') and all necessary local regulatory authorities
by March 1, 1999, the Signatories'will request that the Commission and necessary local
IAs provided in Section MO. of this Agreement, execution of ibis Agreement by topresantstives or a municipality conetitulee a
eonmi m itto seek ootmcd approval oft m Agreemmnbu dLLILn x bind she municipality until this Agreement has boon approved by the airy council.
711 sealaums has been approved by the City Councils ofthe Cities of Betumon4 Part Arthur. Conroe and Groves. It is sehaduied for consideration
by others v permitted by notice and public hearing tequireruerrts. A list of local resulasory authorities approving tine seulentertt will be filed after
such actions have been taken.
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regulatory authorities approve such rates for implementation systemwide on an interim basis
effective with bills rendered on and after March 1, 1999. The accounting order deferral
surcharge ordered in Docket No. 16705 ("Schedule AOD") will expire contemporaneously
with implementation of any base rate reduction effected by this Agreement.
B. Allocation of Base Rate Reduction_ There will be no base rate increase to any customer
class from Current Net Base Rates as a result of this Agreement. For purposes of this
Agreement, "Current Net Base Rates' means the S69 million net base rate reduction ordered
in Docket No. 16705, consisting of the $111.5 million Texas retail base rate reduction
ordered in Docket No. 16705 net of the $42.5 million accounting order deferral surcharge
ordered in Docket No. 16705. The base rate reduction provided by this Agreement will be
allocated to customer classes based on an equal percentage reduction to the amounts
currently being collected to amortize accounting order deferrals, as set out in the tariffs and
workpapers attached as Appendix A Upon execution of this Agreement, the Company shall
seek approval of the tariffs attached as Appendix A from the Commission and any necessary
local regulatory authorities, to be approved contemporaneously with the entry of an order
consistent with this Agreement.
C. AeaountingOrder Deferrals_ For book purposes only, EGSI may amortize accounting order
deferrals that still exist on its books as of January 1, 1999 over three years on a straight -line
basis. This amortization may extend from January 1, 1999 to December 31, 2001. No Such
accounting order deferrals shall be recognized in any base rate case filed hereafter. EGSI
agrees that any amounts relating to these accounting order deferrals are not stranded costs,
and EGSI will neither seek nor accept further recovery of such accounting order deferrals
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in any fb=4 including but not limited to state, federal, or local regulatory bodies; state or
federal courts; or state or federal legislative bodies.
D. Base Pate Freeze_ The Signatories agree that EGSI's base rates, as reduced pursuant to this
Agreement, shall be frozen through June 1, 2000 ( "the Rate Freeze Period "), subject to any
applicable legislation affecting EGSI's base rates and to the statutory obligations of the
Signatories. The Signatories stipulate and agree that the results of this Agreement, including
the implementation of rates established by this Agreement are, and are expected to remain,
just and reasonable and will provide a reasonable return on invested capital, and are in the
public interest, for the duration of the Rate Freeze Period. Such stipulation regarding the
reasonableness of the rates during the Rate Freeze Period shall constitute a judicial
admission to such effect, subject to statutory obligations of the Signatories, which shall be
admissible in any applicable proceeding. The Signatories request that the Commission enter
an order finding that the rates proposed herein for the duration of the Rate Freeze Period are,
and are expected to remain, just and reasonable and will provide a reasonable opportunity
to earn a reasonable return on EGSI's invested capital.
E. N-ovcnibrx 2001 Base Rate Case_ EGSI will file a base rate case in November 2001, as
required by the merger settlement in Docket No. 11292_ The treatment of the thirty percent
share of River Bend acquired from Cajun Electric Power Cooperative shall be addressed in
the base rate case to be filed in November 2001, or in any earlier comprehensive base rate
case.
F. in-fuel Cost Recovery EGSI will not seek recovery of additional non -fuel costs or seek
to implement a purchased power cost recovery factor through December 31, 2001 or the
effective date of rates in EGSI's next base rate case, whichever is earlier. Non -fuel costs
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include but are not limited to new gas storage facilities, and construction or lease costs of
any generating facility or related cost. If a dispute arises, prior to the earlier of December
31, 2001 or EGSI's next base rate case, about whether a particular new item, type or
category of cost should be classified as a base rate expense or as a fuel expense, then the fuel
rule in effect on February 1, 1999 shall control.
M
PendWzAppeals
A. Dismiss Abatement Upon receipt of a final and appealable order by the Commission in
this proceeding, the Signatories agree to dismiss all pending appeals from Commission
dockets relating to EGSI and Gulf States Utilities Company except the appeal of Docket No.
17899. A list of such dockets is attached as Appendix B. EGSI agrees not to prosecute its
appeal of Docket No. 17899 before January 1, 2002.
B_ Recovery Cap, the event that EGSI is successful in its appeal of Docket No. 17899
following exhaustion of all appellate review, and only to the extent that the Commission
allows recovery of such additional River Bend investment in any remand of Docket No.
17899, EGSI agrees to limit its recovery as follows:
1. Recovery of River Bend investment in any remand of Docket No. 17899 is capped
at $115 million net plant in service as of January 1, 2002, less depreciation as
provided in Section H.B.2, below. The 5115 million cap includes all interest -and
cant' ing casts. The $115 million cap shall not be admissible in any court proceeding
related to Rocket No. 17899.
2. Any net plant recovery associated with a remand of Docket No. 17899, subject to the
$115 million cap set out in Section II.B.1. above, shall be depreciated beginning
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January 1, 2002 over the remaining life of the plant, and, to the extent that the
Commission allows recovery of such additional River Bend investment in any
remand of Docket No. 17899, shall be treated for ratemaking purposes in accordance
with applicable law, subject to this Agreement.
3. In no event will any recovery of amounts at issue in Docket No. 17899 be used to
increase EGSI's base rates above the level provided in Section I.A. of this
Agreement.
4. Recovery of any stranded costs shall not include River Bend amounts from Docket
No. 17899 except to the extent the Commission approves such River Bend costs for
inclusion in rates following the conclusion of the appeal of Docket No. 17899,
subject to the agreed cap. EGSI will neither seek nor accept stranded cost recovery
of additional River Bend amounts not approved by the Commission in any remand
of Docket No. 17899.
5. By entering into this Agreement, no Signatory agrees to the appropriate recovery of
River Bend amounts at issue, if any, related to Docket No. 17899, its appeal, or
successor dockets.
6. This Agreement does not prohibit any Signatory from taking the position in the
appeal of Docket No. 17899 or in any subsequent remand of the cause of action that
EGSI is not entitled to receive recovery of any River Bend amounts at issue.
C. This Agreement does not prohibit any Signatory from taking the position that EGSI should
not be allowed stranded cost recovery.
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Fed fuel Factor Fuel Reco =iii io and IRP
A. F-Yed Full Factor. Changes in EGSI's fixed fuel factor will be ,governed by the following
provisions:
1. EGSi's fixed fuel factor will be changed semi - annually (March and September)
beginning March 1, 1999 using the following methodology:
Fuel Factor per MWH = $21.097 + (5.3 5(X - $2.28))
Where: X = The unweighted 12 -month average NfYMEX gas settlement price per
MMBtu as reported in The Wall Street Journal for the first ten working days of
February (for the March fuel factor) and August (for the September fuel factor). For
the March fuel factor calculation, the twelve -month average will cover the period
March of that year through February of the succeeding year, and the September fuel
factor calculation will include the period September of that year through August of
the succeeding year. This methodology will remain in effect through the earlier of
December 31, 2001, or until otherwise ordered by the Commission. Any party may
petition to have this fuel factor methodology changed or abolished at any time.
2_ The fuel factor provisions of this Agreement shall be implemented in accordance with
the "Joint Application to Implement a Revised Fixed Fuel Factor and Methodology"
executed concurrently herewith.
B. Fuel Recon iL` -on_ EGSI shall file its next fuel reconciliation case by July 15, 1999. The
period to be reconciled is July 1, 1996 through February 28, 1999_
C. I.�t ,,P. EGSI shall file its IRP (Integrated Resource Planning) case by January 31, 2000-
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IV.
Other Provisions
A. It is intended and agreed that during the Rate Freeze Period, the terms and all benefits of any
settlement, with any entity, person, corporation, or municipality, of Docket No. 24150 or any
city or PUC rate inquiries, or other rate proceeding and any appeals therefrom or litigation
related thereto, shall be applied on a uniform, systemwide basis. EGSI represents that it has
disclosed all such settlements and will make full disclosure of any such settlement, without
prior request, to all Signatories, during the Rate Freeze Period.
B. If EGSI enters into other agreements, not previously disclosed to the Signatories prior to the
date of execution of this Agreement; with less than all of the Signatories or enters into other
agreements with entities who are not signatories to this Agreement for the purpose of (1)
settling and compromising this docket; (2) settling and compromising any pending appeals
of PUC proceedings; (3) resolving any other matter covered by this Agreement; or (4)
obtaining necessary regulatory approval to place the systemwide taxes provided for in this
Agreement into effect in those areas over which the Commission does not have original
jurisdiction, then each component of the consideration (on a per customer or consumption
basis) provided to that Signatory or that non - signatory shall be extended to each Signatory
(on a per customer or consumption basis), and each Signatory shall enjoy most favored
nations status regarding any benefit provided to any other Signatory or non - signatory:'
C_ In the absence of prior approval by all Signatories, EGSI will not seek to implement any new
or changed tariff offerings during the Rate Freeze Period except services which EGSI is
required by law or Commission order to implement (such as, but not limited to, interruptible
service and small general service time of day rates). During the Rate Freeze Period, in no
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event will any new or changed tariff force a customer to be moved to another rate class, and
in no event will any unrecovered costs or lost revenues be borne by EGSI customers. Such
new or changed tariff will not allow ECOM responsibility to be shifted or avoided.
Furthermore, each Signatory retains the right to oppose any new or changed tariff, rider or
term. If in any future base rate case EGSI requests recovery of any lost revenues or
unrecovered costs associated with any new or changed tariff proposed or approved during the
Rate Freeze Period, it shall, in a separate schedule, as part of its rate filing package in such
case, identify: 1) all costs associated with such tariff; 2) all lost revenues associated with such
tariff, and 3) EGSI's proposed recovery and allocation of any lost revenues or costs
associated with such tariff. The foregoing does not entitle EGSI to defer unrecovered costs
or lost revenues, or to seek to recover such costs or revenues retroactively.
D. All municipalities within EGSI's Texas retail service area shall enjoy a most favored nation
status so that they shall be entitled to the same terms, benefits, consideration, or payments
contained in or as consideration for any franchise, license, franchise extension, street rental,
permit, order or ordinance between EGSI and any other municipality on EGSI's Texas retail
system which shall be entered into or agreed to be entered into, enacted or otherwise effected
through November 1, 2001. It is the intent hereof that Cities shall have the right to any and
all of the foregoing that may be or may become available to any other municipality on
EGSI's Texas retail system. EGSI agrees to execute any and all instruments, including
franchises, franchise extensions, contracts, tariffs, and, without limitation by the foregoing
enumeration, otherwise as necessary now or hereafter to effect the terms hereof.
E. After extensive negotiations, the Signatories have reached a compromise and settlement
regarding each of the matters discussed herein. The Signatories agree that this Agreement
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02x'02199 16:29 FAX 512 474 7441 _ BUTLER, PORTER; GAY & DA 4 S BOUNDS 012l016
is in the public interest and urge the Commission to adopt a final order consistent with all the
terms hereof. Oral and written statements made during the course of the settlement
negotiations shall not be used as an admission or concession of any sort or as evidence in any
other proceeding. None of the Signatories agrees to the propriety of any ratemaking theory
or principle, including but not limited to cost allocation, rate design, or weather adjustment,
that may be said to underlie any of the issues resolved by this Agreement, Because this is a
stipulated agreement, the Signatories recognize that no Signatory is under any obligation to
take the same position as set out in this Agreement in any other docket, whether or not those
dockets present the same or similar circumstances. Further, since the matters resolved herein
are resolved on the basis of compromise and settlement, the Signatories agree that nothing
in this Agreement should be considered precedent.
F. This Agreement reflects a compromise, settlement and accommodation among the
Signatories, and the terms and conditions herein are interdependent. All actions by the
Signatories contemplated or required by this Agreement are conditioned upon entry by the
Commission of a final and appealable order materially consistent with this Agreement. if the
Commission does not accept this Agreement as presented and enters an order inconsistent
with any material term of this Agreement, any affected Signatory shall have the right to
withdraw from this Agreement, which withdrawal shall render the Agreement null and void.
Any Signatory electing to withdraw from this Agreement shall notify all other Signatories
in writing of such withdrawal. In the event of such withdrawal, any interim rates
implemented pursuant to this Agreement may be terminated by EGSI upon two weeks' prior
notice to the Commission, and the rates previously in effect shall be reinstated. This
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SUTLER, PORTER, GAY & DA 4 S SOUNDS Z013/016
Agreement is binding on each of the Signatories only for the purpose of settling the issues
herein and for no other purpose.
G. Each person executing this Agreement represents that (s)he is authorized to sign this
Agreement on behalf of the party represented. Execution of this Agreement by
representatives of a municipality constitutes a commitment to seek council approval of the
Agreement but shall not bind the municipality until this Agreement has been approved by the
city council.
H. As a result of this Agreement, the Signatories agree that all litigation between them in this
Docket shall be suspended, subject to the limitations set out in the Tolling Agreement
executed contemporaneously herewith_
Date of Execution: 'Ad" '1999.
0
ENTERGY GULF STATES, INC. GENERAL COUNSEL OF THE PUBLIC
UTILITY CO ION S
By; By:
By:
TEXAS INDUSTRIAL ENERGY
S
CONS R
By: M/W Z
E
&.101,
Of I
I
By:
OF PUBLIC UTILITY
THE STATE OF TEXAS
By:
02/02/99 16:29 FAX 512 474 7443_ BUTLER, PORTER, GAY & DA i S BOUNDS
j
LOW - INCOME INTERVENORS
By:
11
2014/016
INTERNATIONAL BROTHERHOOD OF
ELECTRICAL WORKERS
By:
100
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EB 322 BOUNDS 015/016
0
F, -Ol' 94�iM10111,95 ' Se1 :3 ?PnPAR AG CONSUMER P.3i5
Agreement is binding on each of the Signatories only for the purpose of settling the issues
herein and for no other purpose.
G. Each person executing this Agreement represents that (s)he is authorized to sign this
Agreement on behalf of the party represented. Execution of this Agreement by
representatives of a municipality constitutes a commitment to seek council approval of the
Agreement but shall not bind the municipality until this Agreement has been approved by the
city council,
H. As a result of this Agreement, the Signatoria agree that all litigation between them in this
Docket shall be suspended, subject to the limitations set out in the Tolling Agreement
executed contemporaneously herewith.
Date of Execution: _ .1999.
ENTERGY GULF STATES, INC. GENERAL COUNSEL OF THE PUBLIC
UTILITY C011'EVUSSION OF TEXAS
By: By:
CAS THE OFFICE OF PUBLIC UTILITY
COUNSEL
By: By:
TEXAS WDUSTRIAL ENERGY THE STATE OF TEXAS
CONSUMXRS
By: Bye
to
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FEB a1 '99 01 :49PM P,d/S
TIE MGR LOAD FACTOR
CC1wdERCIAL CUSTOMER GROUP .
LOW- IKCOME. INTERVENORS
BT:
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1MRNATIONAL BROTHERHOOD OF
ELECTRICAL WORKERS
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1 ) 00L-� 02/01/89 MON 14:06 (TX /Rl NO 54631