ORD 2009-09 - Entergy Texas Approving Rate Increase 11/11/2008ORDINANCE NO.2009 -09
AN ORDINANCE BY THE CITY OF HUNTSVILLE, TEXAS ( "CITY ")
APPROVING THE RATES OF ENTERGY TEXAS INC. CONTAINED IN THE
NON - UNANIMOUS SETTLEMENT FILED IN ENTERGY TEXAS, INC.'S
RATE PROCEEDING INITIATED ON SEPTEMBER 26,2007; FINDING THAT
THE MEETING COMPLIES WITH THE OPEN MEETING ACT; MAKING
OTHER FINDINGS AND PROVISIONS RELATED TO THE SUBJECT; AND
DECLARING AN EFFECTIVE DATE.
WHEREAS, on or about September 26, 2007 Entergy Texas, Inc. ( "ETI" ) filed a
Statement of Intent with the City to increase electric rates in the ETI Service Area by $107.5
million per year in addition to an expected $5 million annual increase to its miscellaneous
service schedules resulting in a $112 million increase to customers; and
WHEREAS, the City of Huntsville suspended the effective date of ETI's rates within
its jurisdictional limits until at least September 29, 2008;
WHEREAS, on August 19, 2008 ETI agreed to extend the effective date until
October 24, 2008.
WHEREAS, on or about September 26, 2007 ETI also filed an application with the
Public Utility Commission of Texas to increase electric rates in the ETI Service area by $107.5
million per year in addition to an expected $5 million annual increase in its miscellaneous
service schedules resulting in a $112 million increase to customers; and
WHEREAS, City has intervened at the Public Utility Commission with various
other cities to review the rates, operations and services of an electric utility pursuant to their
authority under the Public Utility Regulatory Act §33.025; and
WHEREAS, on or about May 13, 2008 the Community Associations of the
Woodlands, Texas ( "CATW'), Entergy Texas, Inc. ( "ETI" or "the Company "), the Kroger Co.
( "Kroger "), Office of Public Utility Counsel ( "OPC "), Texas Legal Service Center ( "TLSC "),
Texas Ratepayers Organization to Save Energy ( "Texas ROSE ") and Wal -Mart Texas Stores, LP
( "Wal- Mart") entered into a settlement with ETI and the Entergy Service Area Cities' Steering
Committee recommended the approval of the terms of settlement to the Cities;
WHEREAS, the settlement represents a substantial reduction to ETI's original $112
million annual requested increase by authorizing a first year increase of $7,650,962 (0.55 %) and
a total increase in year two of $29,148.281 (2.08 %) and spreads the base rate increase to all
customer classes (see Exhibit A ).
WHEREAS, the merits and the reasonableness of the proposed rate settlement has
been reviewed and approved by three Administrative Law Judges ( "ALJs") at the State Office of
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Administrative Hearing (SOAH ") and the ALGs concluded that the settlement is reasonable and
in the public interest; and
WHEREAS, Cities rate consultants and attorney retained to review this matter have
all recommended approval of the settlement agreement.
NOW THEREFORE, BE IT RESOLVED 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 is hereby in
all things approved and adopted.
Section 2. The City of Huntsville hereby approves the rates established in ETIs Non -
Unanimous Stipulation filed in PUC Docket No. 34800.
Section 3. ETI is ordered to file with the City Secretary Tariffs consistent with the settlement
attached to this ordinance as Exhibit A.
Section 4. The meeting at which this resolution was approved was in all things conducted in
strict compliance with the Texas Open Meetings Act, Texas Government Code, Chapter 551.
Section 5. This ordinance shall become effective from and after its passage.
PASSED AND APPROVED THIS 11'x' day of November, 2008.
CITY OF HUNTSVILLE, TEXAS
dLurner, Mayor
ATTEST:
-6zev"'
Step ie Brim, City Secretary
APPROVED AS TO FORM:
� n
Thomas A. Leepe , Ci Attorney
Exhibit A
SOAH DOCKET NO.47.3 -08 -0334
P.U.C. DOCKET NO. 34800
APPLICATION OF ENTERGY GULF § BEFORE THE
STATES, INC. FOR A UTHORITY TO § STATE OFFICE OF
CHANGE RATES AND TO RECONCILE § ADMINISTRATIVE HEARINGS
FULL COSTS §
NON- UNANIMOUS STIPULATION
finis Stipulation is entered into between and among the Community Associations of the
Woodlands, Texas ( "CAIW "), Entergy Texas, Inc ( "ETI" or "the Company"), as successor in
interest to Entergy Gulf States, Inc -,' the Entergy Texas, Inc. Service Area Cities' Steering
Coinnrittee ( "Cities "), the Kroger Co ( "Kroger'), Oflice of Public Utility Counsel ( "OpC' ,),
I oxas Legal Service Center ( "TLSC "), 'Texas Ratepayers Organization to Save Energy ( "Texas
ROSE "), and Wal -Mart Texas Stores, LP ( "Wal- Maxi") (collectively, "Signatories "), and any
othci party that chooses to sign the Stipulation The Signatories stipulate and agree as follows:
I. BACKGROUND
On September 26, 2007, EII filed an application with the public Utility
Co.rin155i..n of :GJ 1 (f�l �(is t3rSsrO =e'') t qu's:nrg that the Comnr1.k51u_, x '
Pl • ' t l ) IJ+ rx.e
texiffs and rideis designed to collect a total non -fuel revenue requirement, for the Texas retail
jaiisdiction, of $605 million; (2) a set of proposed tariff schedules presented in the Company's
Electric Utility Rate Filing Package for Generating Utilities ( "Bate Filing Package" or "RFP ")
accompanying ETI,'s Application; (3) pursuant to P U C. SUBSf R. 25236 and the Public Utility
Regulatory AcC ( "PURA ") Section 39 455, a request for final reconciliation of ETI's fuel and
purchased power costs and fuel factor revenues for the Reconciliation Period from January 1,
Effective December ?l, 2007, Entergy Iexas, Inc succeeded to EGSI's tights and mspousibilities pwsuant to
Section 3,9 452(e) of the Public Utility Regulatory Act For contintity and ease of reference, the Company has
continued to make tefbreuce to EGSI for purposes of pleadings io this stye.
IEX Uru. CODs ANN title 2
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2006 to March 31, 2007, as well as fuel costs deferred from prior proceedings; and (4) certain
waivers to the Rate Filing Package instructions presented in RFP Schedule V accompanying
Yl I's Application
2 In addition to the Direct Iestimony fled with its Application, ETI filed Rebuttal
Testimony on May 2, 2008 Cities, OPC, CAIW, TLSC and Texas ROSE, Kroger, and Wtd-
Matt fled Direct Testimony on April 11, 2008, OPC also filed Cross - Rebuttal Testimony on
Apri I i8, 2008
3 The Signatories believe that a resolution of this proceeding pursuant to fire terms
set out below is desirable and in the public interest because the result is reasonable under the
circumstances and is based on evidence in the record Settlement will also conserve the
resources of the public and the Signatories and will eliminate controversy
II. AGRF,E,MENT
Overall Base irate Increase toy 'ETL, The Signatoties agree to an overall base
rate increase for ETI of $42,5 million over the present base rate revenues stated in Attachment A
commencing with bills rendered for the first billing cycle of October 2008 and a base rate
increase of $17 miiliou commencing with bills rendered for the first billing cycle of October
2009 Coincident with the $42 5 million base rate increwc, the Signatories agree ETl shall
implement tariffs designed to retain, on a usage basis, amounts of Rough Production Cost
Equaiization ( "RPCF') payments to be, made to I TI by Entergy Arkansas, fric , so that the
Company retains such payments and antottizes the regulatory liability, at a rate of $25 million
annually until the rates from the rate case identified in Paragraph 7 of this Section ale
implemartted, The Signatories further agree that this $25 million amount will serve as a credit
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(or offset) to the $42.5 million base rate increase Attachment A to this Stipulation provides the
method of implementation for the RPCE credit.
2 Rough Production Cost Equalization Payments. In addition to the provisions of
Paragraph 1 of this Section, F,TI will retain RPCE Payments in the following manner: beginning
with the first billing cycle of January 2009, BTI will implement a tariff designed, on a usage
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asis, for the Company to retain au additional $17 million annually until the October 2009 rate
increase goes into effect. This $42 million retention will revert back to the $25 million retention
upon the implementation of rates in October 2009.
3 2008 RPCF Payments. The 2008 RPCE payments will be used, if and as
necessary, to amortize future retentions described in Paragraphs 1 and 2. Any 2003 RPCE
payments not needed to ensure the proper level of RPCE- related offsets will be credited in the
matmei in which they would have been credited absent this Stipulation
4 2009 Increase.. The base sate increase of $17 million commencing with bills
rendered for the first billing cycle of October 2009 will be implemented using an abbreviated
tiling method on July 1, 2009- The Stipulating Parties agee to woilc in good faith wish each
other and with other interested pasties, including any non- settlmgparties, to develop the form of
an abbreviated filing to be made by the Company with all regulatory authorities with jurisdiction
over retail rates in'lexas, that is reasonable and that eflectuates the purposes of the settlement to
implement the second step base rate increase commencing with bills rendered for the fist billing
Cycle of October 2009, Those Signatories that can waive tights to challenge the October 2009
increase do so, except as to accuracy of calculations and conformance of tariffs with this
Stipulation OPC and Cities agree to be bound by the Stipulation, and therefore the 2009 base
late increase, to the extent allowed by law. Regardless of the foregoing, the expectation of the
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Signatories is that OP(.' and Cities will not challenge the amount of the 2009 increase and that
any oversight by those entities is limited to the accuracy of calculations and conformance of
tariffs with this Stipulation.
5 Purchased Power. Capacity costs associated with power purchased from third
parties will be treated as eligible fuel expense nr PCRF expense and such purchased power,
w'hcthei treated as eligible fuel or PCRF, will be subject to the standards set out in P.iJ-C, SIJBSI,
R § 25236 or § 25.238, as applicable, in future fuel reconciliation cases, until the
implementation date of rates contemplated in Paragraph 7 of this Section. Each Signatory shall
have the right to contest, in such future reconciliation cases, the reasonableness of such purchase
Power expenses. The Signatories further reserve the rigtmt to assert all factual and legal
argurnents they asserted in this docket as the basis for purchase power adjustments in these
reconciliation eases.
6 Transmission and Distribution Operation and Maintenance Project Expense.
An annual amount of $5 million of transmission and distribution operation and maintenance
expense will be deferred by project to a regulatory asset account beginning with the
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implementation date of the rates described in Paragraph -1 of this Section and ending with the
implementation date of rates described in Paragraph 7 Recovery of the regulatory asset will be
included specifically in the rates described in Paragraph 7 immodintely upon implementation of
those rates
Future Rate Case. The Company will file a rate case by December 31, 2009
based upon a test year ending Tune 30, 2009. Beginning with the date of implementation of rates
resulting £nom the 2009 rate case provided for in this paragraph, all jurisdictional separation
related N4SS -4 purchases will be recovered through a contemporaneous surcharge and will
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become reconcilable purchased power expenses under P.U.C- SU8S1. R. § 25.236.. The
Signatories, however, make no commitment concerning the treatment of jurisdictional separation
related MSS -4 purchases in any subsequent rate cases The Signatories abice to: (a) further
sddiess a Competitive Generation Services tariff in the 2009 rate case; (b) to work, in a
collaborative mannet, toward a mutually acceptable solution prior to the 2009 Late case; and (c)
that Ell will be made whole for any costs umecovered due directly to implementation of the
Competitive Generation tariff
8 Depreciation. A River Bend life extension adjustment is adopted consistent with
the regulatory treatment of'the Louisiana Public Set vice Commission, subject to FERC approval.
Should such approval not be obtained by February 1, 2009, a regulatory asset will be created that
represents a 20 -year extension of the life of River Bend. The creation of the regulatory asset, if
required, is intended to maintain the economic impact to all Signatories The regulatory asset
will be included specifically in the rates described in Paragraph 7 immediately upon
implementation of those rates. Additionally, the Signatories agree that the depreciation
adjustment of $2 7 million will be allowed, as identified in the rebuttal testimony of Company
:4Yitn.css Brian Caldwell at ExhibitB WC -R -3 on Page 27 of 28_
9 Riders. The Signatories support the following Riders:
a Both tine incremental city franchise fees currently being recovered through
a Rider and any prospective incremental city, franchise fees will be recovered through a Rider.
Existing non - incremental city franchise fees will be rolled into base rates and will not be stated
separately on a bit] or charged separately to customers;
Tcsti to o ray;
h An Energy Efficiency Rider, as proposed in the Company's Rebuttal
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c A Rate Case Expense Ridcr of'$5 million will be amortized over tluee (.3)
years (i e. 51,67 million per year); and
d All revenue from Ridets is in addition to (i) the base rate increases
provided for in Paragraph 1 of this Section and (ii) the amount retained by the Company pursuant
to Pa; agraphs 1, 2 and 3 of this Section.
10 Low- Ineo'me Programs.
a the Miscellaneous Electric Service Charge for reconnection will remain at
$12 0fl for tow - income customers;
b. ETI's Public Benefit Fund will be funded at an amount not to exceed $2
million annually and such amount will be rolled into base rates. In order to include a greater
portion of the eligible population in the program, the Company will use its best efforts to
contract for and implement an automatic enrollment program. the Company's automatic
ontolhnent program will be modeled upon the matching procedures used by other Texas utilities
to identify eligible customers and will be implemented within 30 days of the Commission's
issuance of the final order in this case. ETI will provide quarterly repotts to interested patties;
Ind
c With regard to the Company's Energy Efficiency Rider, the Company's
lore- income energy efficiency programs will be amended so as to ensure that funding is
maintained for the targeted energy efficiency program initiated in 2001 in Docket No, 24469
The Company will reinstate the Entergy Assist Program at a funding level of $1 9 million, based
upon 0 12% of Iwws gross revenues The Company will use its best efforts to contact with the
Texas Association of Community Action Agencies by October 1, 2008 for the administration of
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the Pnergy Assist Program with an annual funding level of $1 9 million effective January 1,
2009,
11 Storm Cost Accruals. Storm Cost Accruals will be increased by $2 million
annually (to a total annual accrual of .$3.65 million) beginning hnuary 1, 2009 This amount
will be subsumed in revenues recovered through base rates.
12 Class Allocation. 'the rate increase described in Paragraph I of this Section will
be allocated to all classes on an equal percentage basis Each lamp type and wattage identified in
the lighting class will receive the same equal percentage increase. Attachment A to this
Stipulation shows the manner in which the rate increase will be allocated to all classes.
13 No Puel or IPCR Disallowances. The approximately $858 million in feel and $25
million in IPCR requested by the Company, exclusive of interest on any over or render recovery
balance, is reconciled through March 31, 2007 and there will be no fuel or IPCR disallowances.
The over/under recovery balances at the end of the reconciliation period will be the beginning
balances for the next reconciliation period for both fuel and IPCR.
14 Texas Jurisdictional Numbers. The Signatories agree that all numbers referenced
in this Stipulation are Texas jurisdictional
III. IMPLEDffENTATION OF AGREEMENT
Obligation to Support this Stipulation. The Signatories will support this
Stipulation before the Commission and will tale reasonable steps to support Conuttission entry
of an order consistent with this Stipulation The Signatories contemplate submission of all
agroed proposed order for the Comm ssion's consideration
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2 Effect of Stipulation,
a. Agreement as to the resolution of any specific issue in this Stipulation
does not mean that any Signatory or the Commission approves of any particular treatment of
costs or the undellying assumptions associated with such costs- The failure to litigate any
specific issue in this docket does not waive any Signatory's rights to contest that issue in any
other current or fixture docket of project The failure to litigate an issue cannot be asserted as a
defense or estoppel, or any similar argument, by or against any Signatory in any other
proceeding The Signatories arrived at this Stipulation through extensive and heated negotiation
and compromise
b. The Signatories urge the Cmnmission to adopt an appropriate order
Consistent with the terms of this Stipulation Other than with regard to provisions pertaining to
fitture required actions or future rate treatment, the terms of this Stipulation may not be used
either as an admission or concession of any sort or as evidence in any proceeding oral or
written statements made during the course of the settlement negotiations may not be used for any
purposes other than as necessary to support the entry by the Commission of an order
implementing this Stipulation and -othe+ than to support the entry of such an order, all oral or
written statements made during the course of die settlement negotiations are governed by TEX.
R EVID 408 and are inadmissible in this or any other administrative agency or judicial
proceeding. I'lrc obligations set forth in this subsection 2 b- shall continue and be enforceable,
even if this Stipulation is terminated as provided below.
c This Stipulation reflects a compromise, settlement and accommodation
among the Signatories, and the Signatories agree that the temus and conditions herein are
interdependent All actions by the Signatories contemplated or required by this Stipulation are
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conditioned upon entry by the Commission of a final and appealable order fully consistent with
this Stipulation if the Commission does not accept this Stipulation as presented or enters an
order inconsistent with any taint of this Stipulation, any Signatory shall be released from all
commitments and obligations, and shall have the tight to seek hearing on all issues, present
evidence, and advance any positions it desires, as if it had not been a Signatory.
d Phis Stipulation is binding on each of the Signatories only lot the purpose
of settling the issues as set forth herein and forno other purposes.
3 Execution. The Signatories agree that this document may be executed in tnnitiple
counterparts and filed with facsimile signatures
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Executed as shown below:
Dated this _ _ day of May, 2008.
THE CO TTY AS OFFICE OF PUBLIC UTILITY
OF THE DL COUNSEL
K eea E. M, er Sara J. Fenis
B wn McC:auoll, LLP
I I I I Bagby, Suite 4700 Title: Assistant Public Counsel
Houston, TX 77002
Date: May, 2008
Title: Its Counsel
Date: May _, 2008
F.NT Y TEXAS, INC.
By
/otm Williams
Title: Its Attorney
Date: M-na) 2008
TEXAS LEGAL SERVICES CENTER
By:
Randall Cbapman
Title: Bxeoutive Director
Date: May � 2008
TEXAS RATEPAYERS'
ORGANIZATION TO SAVE ENERGY
ENTERGY TEXAS, INC. SERVICE By:
AREA CITIES' STEERING
CONLVIITTEE
Daniel J. Lawton
Title: Its Attorney
Date: Mayo, 2,008
TIIE KROGER CO.
By:
Michael L. Kurtz
Title: Its Attorney
Date: May 2008
10
Carol Biedr2yck
Tula: Executive Director
Date: May_, 2008
WAL -MART TEXAS STORES, LP
By:
Eric .1, Knthwohl
Rich May, aProfessional Corporation
176 Federal Street, 6t' Floor
Boston, MA 02110 -2223
Title: Its Counsel
Date: May_, 2008
16
llxeeutcd as shown below;
Dated this _ day of May, 2008
THE COMMUNITY ASSOCIATIONS
OF THE WOODLANDS
By' — --- --- ---- - -_.
Kathleen E Magnrder
Brown McCauoll, UP
I I I I BaSby, Suite 4'700
Houston, TX 7700:2
Title: Its Counsel
Date: May_._, 2008
ENTERGY TEXAS, INC.
By _._
John 1xri.11iams
Title: Its Attorney
Date: May __, 2008
ENIERGY TEXAS, INC. SERVICE
AREA CITIES' STEERING
CONILNETTEE
Daniel I Lawton
Title: Its Attorney
Date: May& 2008
ITIE'' KROGER CO.
WA
Michael L Kurtz
Title: Its Attorney
Date: May , 2005
10
OFFICE OF PUBLIC. UT11,11Y
COUNSEL
By.
Sara I Ferris
`I itle; Assistant Public Counsel
Date: May _- , 2008
TEXAS LEGAL SERVICES CENTER
By- - -- - -- - ---
Randall Chapman
I itle: Executive Director
Date: May_, 2008
TEXAS RATEPAYERS'
ORGANIZATION TO SAVE ENERGY
Carol Biedizycki
I itic: Executive Director
Date: May_, 2008 _
WAL- ;.MART TEXAS STORES, LP
By
Eric 7 Krathwohl
Rich May, a Professional Corporation
176 Federal Street, 6°i Floor
Boston, MA 02110 -2223
Title: Its Counsel
Date: May_. 2003
I
Executed as shown below:
Dated this______ day of May, 2008
THE COMMUNITY ASSOCIATIONS
OF THE WOODLANDS
- - --
Kathleen E. Magruder
Brown McCattoll, LLP
1 I 1 i Bagby, Suite 4700
Houston, TX 77002
Title: Its Counsel
Date: May.__, 2008
ENTERGY TEXAS, INC..
By: -- -
Iolur Williams
'Title. Its Attorney
Date_ May _, 2008
F.N"TERGY TEXAS, INC. SERVICE
AREA CITIES' STEERING
COMMITTEE
By:
Daniel J Lawton
Title: Its Attorney
Data: May --, , 2008
1" HE KROGER CO.
By =__
Michael L. Kurtz
Title: Its Attorney
Date: May_, 2008
10
OFFICE OF PUBLIC UTILITY
COUNSF,lfj
By: - /(r}/—
Sala I etris�
Title: Assistant Public Counsel
Date: Mayl"! , 2008
'TEXAS LEGAL SERVICES CENTER
Randall Chapman — - _ --
Title: Executive Directot
Date: May , 2008
TEXAS RATEPAYERS'
ORGANFLA'TION TO SAVE ENERGY
Carol Biedrzycki
Date: May __, 2008
WAL -M ART TEXAS S'T'ORES, LP
By' - — - -- - - - - -'
Eric 1 Krathwohl
Rich May, a Professional Co,potation
176 Federal Street, 6' Floor
Boston, MA 02110-2223
Till e: Its Counsel
Date: May_, 2008
18
Executed as shown below:
Dated this day of May, 2008
THE COMMUNITY ASSOCIATIONS
OF THE WOODLANDS
By - - --
Kathleen E. Magiudet
Brown McCanoll, LLP
I f f 1 Bagby, Suite 4700
Houston, TX 77002
Title: Its Counsel
Date: May 2008
ENTEItGY TEXAS, INC.
By: - - - - --
John Williams —
Iitle: Its AttomeY
Date: May —, 2008
EtNTERGY TEXAS, INC. SERVICE
AREA CITIES' STEERING
COMMITTEE
By. -
Daniel I_ Lawton
Title: Its Attoiney
Datc: May_, 2008
HE KROGER CO.
By.
Michael L Kurtz
Title: Its Attorney
Date: May. 2008
OFFICE OF PUBLIC UTILITY
COUNSEI,
B y:
Sata I. Fenis
Title: Assistant Public Counsel
Date: May,_, 2008
TEXAS LEGAL SERVICES CENTER
f3y:
Randall Chapman
Title: Executive Director
Date: May __, 2008
TEXAS RATEPAYERS'
ORGANIZATION TO SAVE ENERGY
By: —
Carol Biedtzycid
Title: &Ccutivc Diteotor -
Date: May_, 2008
WALTkl?T TE STOR LP
13y: _
Fzic J. Kra o 1
Rich May, a Piofessional Corporation
175 Federal Street, Ga' F100T
Boston, MA 02110 -2223
Title: Its Counsel
Date: MayAboo8
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