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Home My WebLink About025667 ORD - 03/02/2004ORDINANCE AN ORDINANCE OF THE CITY OF CORPUS CHRISTI, TEXAS FINDING, AFTER REASONABLE NOTICE AND HEARING, THAT AEP TEXAS CENTRAL COMPANY'S ELECTRIC TRANSMISSION AND DISTRIBUTION RATES AND CHARGES WITHIN THE CITY SHOULD BE CHANGED; DETERMINING JUST AND REASONABLE RATES; ADJUSTING STREET LIGHTING CHARGES; ADOPTING RECOMMENDATIONS OF CONSULTANTS; PROVIDING FOR RECOVERY OF RATE CASE EXPENSES; PRESERVING REGULATORY RIGHTS OF THE CITY; PROVIDING FOR REPEAL OF CONFLICTING ORDINANCE; AND DECLARING AN EMERGENCY WHEREAS, pursuant to § 33.001 of the Public Utility Regulatory Act, the City of Corpus Christi has exclusive, original jurisdiction over the electric rates, operations, and services provided within city limits; WHEREAS, on or about November 3, 2003, AEP Texas Central Company ("TCC" or "Company") filed with the City of Corpus Christi an application seeking to increase electric transmission and distribution rates by 14.7% on a system-wide basis; WHEREAS, the Company proposed an effective date of December 8, 2003, that was suspended by resolution to provide time to study the reasonableness of the application; WHEREAS, on December 19, 2003, TCC extended the effective date by two weeks; WHEREAS, the City of Corpus Christi, in a reasonably noticed public hearing considered the Company's application and a recommendation from the City's consultants who were retained to evaluate the merits of the Company's application; WHEREAS, the City has determined that the electric transmission and distribution rates charged by the Company within the City should be reduced pursuant to the recommendations of its consultants; NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF CORPUS CHRISTI, TEXAS: SECTION 1. That the existing rates and charges of AEP Texas Central Company are hereby found, after reasonable notice and hearing, to be unreasonable and shall be changed as hereinafter ordered. The changed rates resulting from this Ordinance are hereby determined to be just and reasonable rates to be observed and in force within the City. SECTION 2. The company shall reduce its electric transmission and distribution rates charged to customers located within City limits by 21% on a system-wide basis. The rate decrease shall be allocated to all customer classes uniformly on an equal percentage basis. ,_J 2 ',) 6 7 SECTION 3. The Company shall lower the facilities charge for both street lighting and non-roadway lighting by 21%. SECTION 4. The electric rates charged within City limits shall reflect a 9% return on equity and a capital structure comprised of 60% debt and 40% equity in order to reflect the historic Iow cost of capital and to prevent financial subsidization of TCC's parent company. SECTION 5. The electric rates charged within City limits shall reflect a total plant depreciation rate of 2.93%, a reduction to the Company's proposed rate of 3.22%. SECTION 6. TCC has failed to achieve the minimally accepted service reliability standards established by the Public Utility Commission and has failed to properly allocate sufficient resources to distribution maintenance. TCC shall refund, on a system-wide basis, $2,754,380 to customers located on feeders failing to meet Commission reliability standards for the years 2001 and 2002. SECTION 7. TCC has incorrectly interpreted the Integrated Stipulation and Agreement ("ISA") approved by the Public Utility Commission in Docket No. 19265. As a result, the electric rates hereby approved within City limits shall incorporate a $30 million system- wide reduction to ensure that the provisions of the ISA are implemented. SECTION 8. TCC's request for authority to defer bad debt expense and include such expense in the next rate case is denied. SECTION 9. TCC may not charge an account history fee to end-users, REPs or aggregators. Further, no service fee shall be charged to REPs or aggregators requesting a detailed billing and invoicing analysis. SECTION 10. Cities' rate case expenses are found to be reasonable and shall be reimbursed by the Company. SECTION 11. The electric rate reduction herein approved shall be effective for bills rendered on or after approval of this Ordinance. TCC shall file tariffs reflecting the change of rates herein ordered within 10 days of passage of this Ordinance. SECTION 12. The rates set forth in this Ordinance may be changed and amended by either the City or Company only as provided by law. SECTION 13. It is hereby found and determined that said meeting at which this Ordinance was passed was open to the public, as required by Texas law, and that advance public notice of the time, place and purpose of said meeting was given. SECTION 14. This Ordinance shall be served on AEP Texas Central Company by U.S. Mail to the Company's authorized representative, Ron Ford, 400 West 15th Street, Suite 610, Austin, Texas 78701. H:\LEG-DIR\Lisa\ORD3\March 2, 2004 AEP rate change-Ord doc SECTION 15. Nothing contained in this Ordinance shall be construed now or hereafter in limiting or modifying, in any manner, the right and power of the City under law to regulate the rates and charges of AEP Texas Central Company. SECTION 16. All ordinances, resolutions, or parts thereof, in conflict with this Ordinance are repealed to the extent of such conflict. SECTION 17. That upon written request of the Mayor or five Council members, copy attached, the City Council (1) finds and declares an emergency due to the need for immediate action necessary for the efficient and effective administration of City affairs and (2) suspends the Charter rule that requires consideration of and voting upon ordinances at two regular meetings so that this ordinance is passed and takes effect upon first,/',eading as an emergency measure this the ~r~. day of I J/k...O,-I"'C],~-''' , 2004. ATTEST: THE CITY OF CORPUS CHRISTI Armando Chapa City Secretary rSamuel L. Neal, Jr. Mayor ' APPROVED: Lisa Aguilar~-~ Assistant City Attorney for City Attorney H:\LEG-DIR\Lisa~ORD3~Vlarch 2, 2004 AEP ratc change-Or&doc Corpus Christi, Texas ,~;~ dayof ~?.~.~ , 2004 TO THE MEMBERS OF THE CITY COUNCIL Corpus Christi, Texas For the reasons set forth in the emergency clause of the foregoing ordinance an emergency exists requiring suspension of the Charter rule as to consideration and voting upon ordinances at two regular meetings: I/we, therefore, request that you suspend said Charter rule and pass this ordinance finally on the date it is introduced, or at the present meeting of the City Council. Respectfully, Mayor Council Members The above ordinance was passed by the following vote: Samuel L. Neal, Jr. ~(,~'"-~ Brent Chesney Melody Cooper Javier D. Colmenero Henry Garrett Bill Kelly Rex A. Kinnison Jesse Noyola Mark Scott H:XLEG-DIR\Lisa\ORD3\March 2, 2004 AEP rate change-Ord doc