ORD 2009-43 - Entergy Rate Refund 06-16-2009ORDINANCE NO. 200943
ORDINANCE BY THE CITY OF HUNTSVILLE, TEXAS
( "CITY ") APPROVING THE RATE REFUND OF
ENTERGY TEXAS INC. CONTAINED IN THE
APPLICATION OF ENTERGY FOR AUTHORITY TO
IMPLEMENT NEW RPCEA RATE FILED BY ENTERGY
TEXAS, INC. ON MAY 26, 2009; 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 May 26, 2009, Entergy Texas, Inc. ( "ETI") filed a
Application for Authority to Implement New Rough Production Cost Equalization
( "RPCEA ") Rider ( "Application") with the City to refund to customers rough production
equalization receipts for ETI's Texas service territory;
WHEREAS, the RPCEA rates are anticipated to refund $13.24 in July, $12.71 in
August, and $14.79 in September for average residential customers using 1000 kWh per
month of electricity;
WHEREAS, the rough production cost equalization receipts were received by ETI
in 2008 pursuant to an order of the Federal Energ4 Regulatory Commission ( "FERC").
The FERC determined that the Entergy System Agreement no longer operated to
maintain the production costs of the various Entergy operating companies within a
reasonable level of parity. As a remedy, FERC implemented a Rough Production Cost
Equalization system m part of the Entergy System Agreement. The remedy requires
payments among the Entergy Operating Companies whenever an operating company's
production costs are greater or less than a percentage of the system average production
costs. For 2007, Entergy Arkansas, Inc.'s ( "EAP') production costs were substantially
below system average production costs. FERC ordered EAI to make payments to the
other operating companies in order to roughly equalize the production cost disparity;
WHEREAS, ETI calculates the total rough production cost equalization receipts
from EAI due to Texas retail customers to be $67.4 million and such amount is subject to
future adjustment;
WHEREAS, the RPCEA is designed to refund the amounts calculated by ETI to
be currently due in a timely manner over the summer of 2009;
WHEREAS, the law firm and consultant hired by City have reviewed the
Application, find it to be sufficient, and recommend the Application's approval; and
NOW THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE
CITY OF HUNTS VILLE, 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 approves the refund rates
established in ETI's Application.
Section 3. 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 4. This Ordinance shall become effective from and after its passage.
ATTEST:
City Secretary
�' day of MV -e 12009.
01
however, the provision is not applicable if the Other City or Municipality is
precluded from entering into a twenty -five (25) year term by law or city charter.
SECTION 2. The Base Franchise Fee Factor stipulated in Section 10 of the Franchise
Agreement shall be $ .0019049. In all other respects, Section 10 shall remain in full force and
effect.
SECTION 3. The Incremental Franchise Fee stipulated in Section 11 of the Franchise
Agreement shall be S .0012612. In all other respects, Section 11 shall remain in full force and
effect.
SECTION 4. Attachment B to the Franchise Agreement is replaced with the revised
Attachment B.
SECTION 5. 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 6. This ordinance shall become effective from and after passage.
PASSED AND APPgOVED by the ity Council of the City of Huntsville, Texas, at a
regular meeting on this the Iday of 20_7
THE CITY OF HUNTSVILLE
0
ATTEST:
City Secretary
ORDINANCE NO. 2009-43
ORDINANCE BY THE CITY OF HUNTSVILLE, TEXAS
( "CITY") APPROVING THE RATE REFUND OF
ENTERGY TEXAS INC. CONTAINED IN THE
APPLICATION OF ENTERGY FOR AUTHORITY TO
IMPLEMENT NEW RPCEA RATE FILED BY ENTERGY
TEXAS, INC. ON MAY 26, 2009; 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 May 26, 2009, Entergy Texas, Inc. ( "ETP') filed a
Application for Authority to Implement New Rough Production Cost Equalization
( "RPCEA ") Rider ( "Application ") with the City to refund to customers rough production
equalization receipts for ETI's Texas service territory;
WHEREAS, the RPCEA rates are anticipated to refund $13.24 in July, $12.71 in
August, and $14.79 in September for average residential customers using 1000 kWh per
month of electricity;
WHEREAS, the rough production cost equalization receipts were received by ETI
in 2008 pursuant to an order of the Federal Energy Regulatory Commission ( "FERC ").
The FERC determined that the Entergy System Agreement no longer operated to
maintain the production costs of the various Entergy operating companies within a
reasonable level of parity. As a remedy, FERC implemented a Rough Production Cost
Equalization system as part of the Entergy System Agreement. The remedy requires
payments among the Entergy Operating Companies whenever an operating company's
production costs are greater or less than a percentage of the system average production
costs. For 2007, Entergy Arkansas, Inc.'s ( "EAI ") production costs were substantially
below system average production costs. FERC ordered EAI to make payments to the
other operating companies in order to roughly equalize the production cost disparity;
WHEREAS, ETI calculates the total rough production cost equalization receipts
from EAI due to Texas retail customers to be $67.4 million and such amount is subject to
future adjustment;
WHEREAS, the RPCEA is designed to refund the amounts calculated by ETI to
be currently due in a timely manner over the summer of 2009;
WHEREAS, the law firm and consultant hired by City have reviewed the
Application, find it to be sufficient, and recommend the Application's approval; and
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 approves the refund rates
established in ETI's Application.
Section 3. 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 4. This Ordinance shall become effective from and after its passage.
ATTEST:
APPROVED this Z-5 day of 2009.
City Secretary
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