Ordinance 2014-20 - Entergy Rates ORDINANCE NO. 2014-20
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; 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 Finn, 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;
WHEREAS, the expert utility rate consultants retained to review the Company's rate
increase on behalf of the City have made proposed adjustments and concluded that Entergy has
not justified the need for the rate increase requested. The consultants' analyses support an
increase in base rates of$2.1 million. The consultants' analyses also support an increase in new
rider revenues of$6.9 million. The total first year annual increase supported by the consultant's
analysis is $9 million.
WHEREAS, the rate experts retained for the rate review have concluded that Entergy's
rate filing request includes rate increases for Entergy's proposed cost of capital, cost of
purchased power capacity, employee compensation and benefits, injuries and damages reserve,
and nuclear decommissioning expenses, which are unjustified by Entergy's filing;
WHEREAS, Entergy has failed to justify Entergy's proposed class allocation of certain
distribution costs;
WHEREAS, Entergy has failed to justify Entergy's proposed rates included in Schedule
SHL-LED for LED street lighting service;
WHEREAS, the statutory deadline to act on Entergy's rate increase request is March 15,
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.
1
'2
'
r
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 revenue requirement of
$673,242,504 is just and reasonable in accordance with Texas Utility Code § 36.003.
Section 4. The City finds that the annual base rate increase shall be billed to each
41 class to establish an equalized rate of return by class in accordance with the following table:
Total Approved Revenues by Class with an Equalized Rate of Return
Class Increase/(Decrease) Total Approved Revenues
x
Residential ($19,596,725) $353,301,581
Small General ($1,077,343) $18,879,404
Service
General Service $17,614,725 $148,355,241
Large General $2,061,268 $47,848,441
Service
i
Large Industrial $3,720,841 $96,209,838
Power
Lighting $58( 2,507) $8,647,999
Total $2,140,259 $673,242,504
i
I
t
The above total revenue increase, and revenue increase/(decrease) by class, total revenues, and
total revenues by class are consistent with the recommendation of City's experts retained to
review Entergy's rate increase request.
Section 5. The City fords that Entergy's rate design is reasonable except that
Entergy's adjusted billing determinates should be modified to reflect a 10 year weather
normalization.
Section 6. The City finds that Entergy should be permitted to recover Entergy's
rough production cost equalization expenses through surcharge amortized over three years for an
annual surcharge of$3,801,534.
Section 7. The City finds that Entergy should be permitted to recover Entergy's rate
case expenses through surcharge amortized over three years for an annual surcharge of
$3,126,322.
Section 8. Entergy's proposed Tariff Schedule SHL-LED should be adjusted to
reflect the following rates for LED street lighting:
2
Schedule SHL-LED Rates
LED Lamp Monthly Rate per
Wattage Monthly kWh Lamp
67 Watt 22 kWh $7.98
110 Watt 37 kWh $8.59
140 Watt 47 kWh $13.91
213 Watt 71 kWh $17.05
Section 9. Entergy's proposed special circumstances request to recover historical
capacity charges of $22,942,706 from customers through reconcilable fuel rates should be
denied.
Section 10. Except as modified by City's Ordinance setting rates, Entergy's rate
increase application on file with the City is approved.
Section 11. 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 March
31, 2014 in accordance with Texas Utility Code § 36.111, unless appealed within thirty days of
the effective date of this City's Ordinance setting rates. In the event of Entergy's appeal of this
City's Ordinance setting rates, the effective date of Entergy's rates will be suspended and will
coincide with the implementation and effective date of rates approved in Public Utility
Commission Docket No. 41791.
Section 12. 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 13. This ordinance shall become effective from and after its passage.
PASSED AND APPROVED this �� day of 2014.
THE CITY OF HUNTSVILLE
Mac Woodw •d, Mayor
ATTE Aeo6drdd
S TO FORM
I '
Lee dward, City Secretary r, City Attorney
3