HomeMy WebLinkAboutResolution - 5466 - Urges State Legislature To Deregulate The Retail Electric Utility Industry - 04_10_1997RESOLUTION NO. 546,
Item #36A
April 10, 1997
WHEREAS, the Legislature is considering legislation to deregulate the electric utility
in Texas; and
WHEREAS, the City of Lubbock owns and operates its own electric utility system,
bock Power & Light; and
WHEREAS, Lubbock Power & Light serves over 61 per cent of the electric customers
the City of Lubbock in an already competitive environment; and
WHEREAS, the City Council of the City of Lubbock should maintain local control over
electrical utility services provided to the citizens of the City of Lubbock to ensure fair treatment
of consumers; preservation of the quality, cost and reliability of electrical service; and protection
of the investment of Lubbock's citizens in a home owned electric utility; NOW THEREFORE:
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF LUBBOCK:
THAT the City Council of the City of Lubbock, Texas, and the Electric Utility Board of
the City of Lubbock, Texas, hereby urge the Legislature of the State of Texas to ensure that any
legislation to deregulate the retail electric utility industry recognize that several municipalities
own and operate electric utility systems in direct competition with investor owned electric
utilities and electric cooperatives; and
THAT electric services in and for such municipalities are locally controlled, electric rates
policies are set by city councils and local citizen utility boards; and
THAT the City of Lubbock should to maintain local control over electric utility services
vided to citizens of the City of Lubbock to ensure fair treatment of consumers, preservation of
quality, cost and reliability of electrical service and protection of the investment of the
wens of the City of Lubbock in a home owned utility; and
THAT the ability of municipally owned utilities to compete in a deregulated market not
unduly hampered or restricted to preserve the benefits of many years of direct competition for
use citizens; and issues of importance to the City of Lubbock include the following:
1) Local Control of Market Participation. Any retail deregulation legislation must
serve the current powers of the cities to set electric rates and establish electric utility policies.
2) Freeze/Reductions. Municipalities with home owned utilities already enjoy some of
lowest rates in the State of Texas and the nation, in Lubbock, Texas, it is not necessary to
;eze/reduce" such rates as they are already the result of direct competition for customers.
3) Local Control. In addition to the benefits of competition, municipalities are the most
ive level of government to the matters that are most important to citizen owners/consumers.
Decisions affecting local retail sales, rates and utility operations, including, but not limited to
planning, dispute resolution, and customer service functions (billing, metering, collections)
should remain under local control. Any legislation that preserves "de novo" appeals to the PUC
of all local decisions in effect totally nullifies local decision making and eliminates local control.
4) Wholesale Market Access. Municipal utilities must continue to be allowed to fully
participate in the wholesale market for electricity, including power purchases, sales and
marketing.
5) Local Control of Transition to Retail Competition. All transition issues should be
addressed locally through non-discriminatory processes. In addition to timing, those issues may
include the organizational structures of municipal electric utilities. No structural "unbundling"
or divestiture should be required.
6) Full Recovery of Stranded Investment. Municipally owned electric systems must be
able to fully recover the investments they have made to serve their citizens/owners. In addition
to stranded investment, local authorities should continue to have the ability to recover and be
compensated for other costs, and to recover sufficient revenue to provide a return to the city.
7) No Abrogation of Existing Contracts. Existing wholesale and retail power contracts
should remain valid for the term of the contract.
8) Preserve Existing Service Territories. The existing state certified electric service areas
of utilities should remain in their current configuration except that citizen owned municipal
utilities should be allowed to follow the boundaries of the municipality so that no citizens of the
municipality are denied the benefits of direct electric competition by the utility that they own and
9) Preserve Franchise Rights. The rights of municipalities to control public rights of way
to collect reasonable compensation for its use must be preserved so that the costs of such
;e do not have to be bome by the ad valorem tax payers as opposed to the utility customers.
10) Removing Barriers to Municipal Competitiveness. In either the wholesale or the retail
market, certain statutes applicable to local governments are very adverse to the competitive
situation of municipally owned utilities. In particular, some open records, open meetings, and bid
requirements place muncipally owned utilities at a tremendous disadvantage in competing with
private utilities.
o u.
11) Tax Exemption. Current municipal exemptions from state and local taxes should be
by the City Council this _ l n*li day of April , 1997.
V .•� Po.,
r. •MAYOR
ATTEST:
1 1 _ .. .
"Darnell,,
ON
Cass, City Manager
AS TO FORM:
v v- .,
d G. Vandiver,
Assistant City Attorney
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18, 1997