HomeMy WebLinkAboutORD 12-042 ORDINANCE NO. 12-042
AN ORDINANCE OF THE CITY OF BEAUMONT, TEXAS,
SETTING THE JUST AND REASONABLE RATES FOR THE
COST OF SERVICE ADJUSTMENT CLAUSE ("COSA") TO
BE CHARGED BY CENTERPOINT ENERGY
("CENTERPOINT") FOR GAS SERVICE FOR CUSTOMERS
IN THE CITY OF BEAUMONT, TEXAS; REQUIRING
REIMBURSEMENT OF MUNICIPAL RATE CASE
EXPENSES; FINDING THAT THE MEETING COMPLIES
WITH THE OPEN MEETINGS ACT; AND DECLARING AN
EFFECTIVE DATE FOR THIS ORDINANCE.
WHEREAS, on or about May 1, 2012, CenterPoint filed a Statement of Intent with the
City Secretary in Beaumont, Texas, requesting a rate increase of$0.62 per residential customer
per month, $0.82 per small general service customer per month, and $1.76 per large general
service customer per month for the Beaumont/Huntsville COSA Service Area;
WHEREAS, CenterPoint requested an effective date for the new rate schedule to go into
effect on August 1,2012;
WHEREAS, in order to exercise its exclusive original jurisdiction and properly review
the requested rates, it is necessary for the City to make a decision within 90 days of the May 1,
2012, filing, or July 30, 2012;
WHEREAS, the City retained the Lawton Law Firm, P.C. to review CenterPoint's rate
request and make necessary rate recommendations to the City; and
WHEREAS, on June 27, 2012, the Lawton Law Firm, P.C., filed a report with the City
on this matter outlining the options available and making recommendations to the City; and
WHEREAS, the Lawton Law Firm has recommended that the City approve the requested
COSA annual rate increase as stated in the June 27, 2012, letter from the Lawton Law Firm.
THE CITY COUNCIL OF THE CITY OF BEAUMONT, TEXAS, HEREBY
ORDAINS:
SECTION 1. The statements set out in the preamble to this ordinance are adopted herein
as if set forth herein.
SECTION 2. Based on the recommendations and review presented by the legal/rate
consultant Lawton Law Firm, whose report is attached as Exhibit "A," CenterPoint's proposed
rate increase of $0.62 per residential customer per month, $0.82 per small general service
customer per month, and $1.76 per large general service customer per month for the
Beaumont/Huntsville COSA Service Area is adopted and the Company shall file tariffs with the
City Secretary reflecting the annual rate increase.
SECTION 3. The Company shall promptly reimburse the City's COSA review rate case
expenses and may collect such expenses through surcharge based on Mcf usage.
SECTION 4. The Company's Cost of Service Adjustment Clause is approved.
SECTION 5. 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 6. This ordinance shall be effective immediately on passage.
PASSED AND APPROVED the 24th day of July, 2012.
ROVED:
Anr
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Mayor B Ames
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City Secretary
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THE LAWTON LAW FIRM, P.C.
701 Brazos Suite 500 •Atmiu.Texas 78701 • 512/3224019 • Fax:512/716.8917
June 27,2012
Mr.Tyrone Cooper Mr.Kyle Hayes
City Attorney,City of Beaumont City Manager,City of Beaumont
PO Box 3827 PO Box 3827
Beaumont,TX 77704 Beaumont,TX 77704
Re: CenterPoint 2012 Cost of Service Filing
Dear Mr. Hayes and Cooper:
As you are aware,on May 1,2012 CenterPoint Energy("CenterPoint"or"Company")
fled with the City of Beaumont("City")the annual Cost of Service Adjustment("COSA")
Tariff reporting the Company's annual operating results and costs. The annual COSA filing is
based on an agreed formulaic structure employing the Company's financial operating results
contained in the Company's 2011 Annual Report to the Railroad Commission of Texas. The
effective date of the proposed COSA rate adjustment is August 1,2012. The City must act prior
to August 1,201.2 to deny,modify or approve the rate proposal.
The Company's COSA proposal,which is based on the calendar year 2011 operating
results,provides for a COSA tariff adjustment as follows:
PROPOSED
CURRENT INCREASE MONTHLY
CUSTOMER. MONTHLY CUSTOMER
CLASS CHARGE AMOUNT CHARGE
Residential— -- $12.35 $0.62 $12.97
Gweral Service $16.43 $0.82 $17.25
Large General
Service; $35.16 $1.76 $36.92
Pagel of 2
EXHIBIT "A"
The estimated annual revenue increase for each customer class is as follows:
ANNUAL
REV I:NUE
CLASS IMPACT_ _
Residential $183,619
General Service $17,820
_Large General Service $1,584
Total $203,023
It should be noted that the COSA increase has been limited by the 5%annual cap
limitation. In other words,the actual COSA formula produced an annual revenue increase of
$519,383, but under the COSA formula annual customer charge increases are limited to a five
percent cap. Thus,the overall annual revenue increase is limited to$203,023,or$316,360 less
than the claimed 2011 cost level. As can be seen in Table 1,above,all monthly customer
charges have been limited to a 5%cap increase for the COSA increase.
We have reviewed the Company's COSA filing,schedules and workpapers and found all
calculations to be correct. Our review and analyses conclude that the Company's COSA filing
and increase conforms with the City's COSA rate tariff on file and should be approved.
We have attached a rate ordinance consistent with our recommendation to approve the
COSA rate increase request. The rate ordinance should be passed prior to August 1,2012. If
you have any questions or need additional information please contact me.
Sincerely,
"!Ao
Daniel Lawton !�
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