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ORD 2012-21 - Entergy suitAgenda Item ORDINANCE NO. 2012-21 AN ORDINANCE BY THE CITY OF HUNTSVILLE, TEXAS ("CITY") DENYING THE RATE INCREASE REQUEST OF ENTERGY TEXAS, INC. FILED ON NOVEMBER 28, 2011; 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 November 28, 2011 Entergy Texas, Inc. ("Entergy") filed a Statement of Intent with the City to increase electric rates in the Entergy Service Area by $111.8 million per year; and WHEREAS, the City of Huntsville suspended the effective date of Entergy's rates within its jurisdictional limits until at least April 1, 2012 and hired the Lawton Law Firm, P.C. to review the Company's rate change request and proposed tariffs; WHEREAS, the expert utility rate consultants retained to review the Company's rate increase on behalf of the City have made a range of proposed adjustments and concluded that Entergy has not justified the need for a rate increase. The consultants' analyses eliminate the Company's purported annual revenue increase, as set out in the recommendations made to the City in the Final Rate Report to Cities Steering Committee ("Report"). The range of adjustments, up to $118.8 million, eliminates any increase requested by Entergy. 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 cash working capital, accumulated deferred income taxes, depreciation rates, cost of purchased power capacity, employee compensation—including bonus, stock awards and other compensation—benefits, federal income tax estimates, and storm reserve charges, which are unjustified by Entergy's filing; WHEREAS, Entergy has failed to justify increasing the rates previously determined to be reasonable and necessary by this City and other Texas regulatory authorities; WHEREAS, the statutory deadline to act on Entergy's rate increase request is April 1, 2012; 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 and proposed tariff revisions requested in Entergy's Statement of Intent. Section 3. Entergy is hereby Ordered to continue operating under its existing approved rates. Section 4. 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 5. This ordinance shall become effective from and after its passage. PASSED AND APPROVED this 20th day of March 2012. ATTEST: oodward, ay Secretary Mac oodward, Ma, or APPROVED AS TO FORM: Sc eider, City Attorney