HomeMy WebLinkAboutResolution - 2014-R0324 - TX Railroad Commission - Utility Rates - 09/25/2014Resolution No. 2014-R0324
September 25, 2014
Item No. 1.1
RESOLUTION
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LUBBOCK,
TEXAS AUTHORIZING THE CITY'S PARTICIPATION IN A COALITION OF
SIMILARLY SITUATED CITIES IN PROCEEDINGS BEFORE THE RAILROAD
COMMISSION OF TEXAS AND THE TEXAS LEGISLATURE RELATED TO
THE CITY'S AUTHORITY TO EFFECTIVELY REVIEW AND REGULATE
UTILITY RATES; FINDING AND DETERMINING THAT THE MEETING AT
WHICH THIS RESOLUTION WAS PASSED WAS IN ACCORDANCE WITH
THE REQUIREMENTS OF THE TEXAS OPEN MEETINGS ACT; MAKING
OTHER FINDINGS AND PROVISIONS RELATED TO THE SUBJECT; AND
DECLARING AN EFFECTIVE DATE.
WHEREAS, the City of Lubbock, Texas, hereinafter referred to as "City," has
worked cooperatively with other similarly situated cities and has participated in utility
ratemaking proceedings before the Railroad Commission of Texas in coordination with
the Cities of Amarillo, Channing, and Dalhart; and,
WHEREAS, as recently as in the 83`d Regular Session of the Texas Legislature
the Legislature considered and rejected legislation that if enacted, would have negatively
affected municipalities' original jurisdiction to regulate a utility's rates, services, and
operations in the City; and,
WHEREAS, as recently as the 83`d Regular Session of the Texas Legislature in
2013, the Legislature considered and rejected legislation that if enacted, would have
negatively affected municipalities' ability to undertake a meaningful evaluation of a
utility's request to increase gas rates and effectively challenge unreasonable rate
increases; and,
WHEREAS, the Railroad Commission of Texas has initiated proceedings to
adopt new rules whose effect would be similar to the restrictions that the Legislature
rejected in its 83`d Regular Session; and,
WHEREAS, the rules the Railroad Commission of Texas proposed would
diminish, if not altogether eliminate, Texas cities' original ratemaking jurisdiction over
gas utilities and cities' ability to meaningfully review a gas utility's request to increase its
rates; and,
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WHEREAS, the City supports the efforts of other similarly situated cities'
opposition to proposed rules or laws that would diminish and/or eliminate municipalities'
ability to effectively regulate gas utility rates or to meaningfully participate in contested
proceedings before the Railroad Commission of Texas; and,
WHEREAS, as the Legislature noted in Section 101.002 of the Gas Utility
Regulatory Act, utilities are by definition monopolies in the areas they serve and as a
result, the normal forces of competition that regulate prices in a free enterprise society do
not operate and therefore, public agencies, including the City, regulate utility rates,
operations, and services as a substitute for competition; and,
WHEREAS, gas utilities continue to be monopolies whose rates are not governed
by the normal forces of competition; and,
WHEREAS, to provide fair, just, and reasonable rates and adequate and efficient
services, Section 103.001 of the Gas Utility Regulatory Act grants the City exclusive
original jurisdiction over the rates, operations, and services of a gas utility within the
municipality; and,
WHEREAS, under Section 103.001 of the Gas Utility Regulatory Act passed by
the Texas Legislature into law, a municipality regulating a gas utility has the right to
require gas utilities to submit information as necessary for the municipality to make a
reasonable determination of the utility's actual rate base, expenses, investment, and rate
of return for providing its services and to retain personnel necessary to make the
determination of reasonable rates; and,
WHEREAS, under Section 103.022 of the Gas Utility Regulatory Act, a
municipality participating in or conducting a ratemaking proceeding may engage rate
consultants, accountants, auditors, attorneys, and engineers to fully evaluate a utility's
request to change rates and the gas utility in the ratemaking proceeding shall reimburse
the municipality its reasonable rate case expenses; and,
WHEREAS, in order to ensure the reasonableness of gas utility rates and ensure
the adequacy of gas utility service by preserving cities' right to effectively investigate
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and challenge utility -proposed rate increases both before the City and before any state
Jagency that is authorized to regulate gas utilities' rates;
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF
THE CITY OF LUBBOCK, TEXAS:
I Section 1. That the findings set out in the preamble to this resolution are hereby in all
things approved and adopted.
Section 2. The City directs its representatives to oppose rules or legislation that would:
• Eliminate or reduce the ability of incorporated municipalities to exercise their
statutorily guaranteed original jurisdiction over gas utility rates.
• Allow the approval of increases in rates without a complete and thorough review
of a utility's capital expenditures or operating expenses by cities representing
their ratepayers' interests.
• Eliminate, delay, or diminish the reimbursement of municipalities' reasonable
costs incurred while investigating and challenging utility rate proposals or that
would otherwise reduce municipalities' ability to participate in the rate -setting
process.
Section 3. The City directs its representatives to support processes that:
• Uphold and enforce municipalities' original jurisdiction over gas utility
ratemaking.
• Preserve municipalities' ability to fully investigate and challenge gas
utilities' proposed changes to their rates and tariffs.
• Preserve municipalities' historical right to prompt reimbursement of
reasonable costs that the municipalities' incur while investigating and
challenging gas utilities' proposals to change their rates in all related
proceedings, without any onerous predicate requirements.
Section 4. The City authorizes the City Manager to engage the law firm of Herrera &
Boyle, PLLC and direct the City's advocates in these efforts before the Railroad
Commission of Texas and the Texas Legislature.
Section 5. That a copy of this resolution shall be sent to Mr. Alfred R. Herrera,
Herrera & Boyle, PLLC, 816 Congress Avenue, Suite 1250, Austin, Texas 78701, in his
role as Special Counsel to the City of Lubbock.
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That the meeting at which this resolution was adopted was in all things
in strict compliance with the Texas Open Meetings Act, Texas Government
Ater 551.
That this resolution shall become effective from and after its passage.
AND APPROVED this 25th day of September , 2014.
ATTEST:
Reb cca Garza, City Sec tar
APPROVED AS TO CONTENT:
Jim {derlt, Councilman, District 3
First Assistant C-ity Attorney
Res.Railroad Commission Rulemaking Final
9.10.14
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