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Home My WebLink AboutPO 5986: ENTERGY TEXAS - APPROVING RATE REFUNDInteroffice MEMORANDUM To: Mayor, City Council, and City Manager From: Mark Sokolow, City Attorney ~`j,,,^ ~j(~..-~ Date: June 9, 2009 Subject: P. 0. No. 5986; Council Meeting June 16, 2009 Attached is P. O. No. 5986 by the City of Port Arthur, Texas ("City") approving the rate refund of Entergy Texas, Inc. contained in the application of Entergy for authority to implement new RPCEA Rate filed by Entergy Texas, Inc. on May 26, 2009; finding that the meeting complies with the Open Meetings Act; making other findings and provision related to the subject; and declaring an effective date. MTS:ts Attachment cc: Dan Lawton THE LAWTON LAW FIRM 701 Brazos, Suite 500 Austin, Texas 78701 z.po5986_memo THE LAWTON LAW FIRM, P.C. 701 Br:ros Suine SW • Austin, Texas 73701 512/322{?01) • F:uc: 512/7163917 June 3, 2009 Mr. Tyrone Cooper City Attorney -City of Beaumont P.O. Box 3827 Beaumont, Texas 777(14 409-880-312). (fax) Mr. Kyle Hayes City Manager-City of Beaumont P.O. Box 3827 Beaumont, Texas 77704 409-880-3112 (fax) Mr. Paul Fukuda City Attorney -Bridge City 260 Kachal Post Office Box 846 Bridge City, Texas 77611 409-886-1353 (fax) Mc Jarnes Black City Attorney -City of Groves 3627 Professional Drive Port Arthur, Texas ?7643 409-982-0657 (fax) Mr_ Leonard Schneider City Attorney -City of Huntsville 2 Riverway, Suite 700 Houston, Texas 77056 (713) 623-6o1a (fax) Mr. Bryan Fowler City Attorney -City of Montgomery ]O1 Old Plantersville Road Montgomery, Texas 77316 93(i-597-6437 (fax) Mr. Mark Winberry City Attorney -City of Conroe P.O. Box 3066 Conroe, Texas 773(15 936-522-3009 (fax) Mr. D. E. Sosa City Manager-City of Groves P.O. Box 3286 Port Arthur, Texas 77643 409-963-3388 (fax) Mr. Bill Baine City Manager-City of Huntsville 1212 Ave. M Huntsville, TX 77340 936-291-5409 (fax) Mc Brad Stafford City Manager -City of Navasota 202 E. Washington Navasota, Texas 77868 936-825-2403 (fax) Mr. Cary Bovey City Attorney -City of Navasota Bovey & Bojoryuez, L.L.P. 12321 Hymeadow Drive, Suite 2-100 Austin, Texas 78750 512-250-0411 (fax) Mr. Richard Hughes City Attorney -City of Nederland 3120 Central Mall Drive Port Arthur, Texas 77642 401-724-7585 (fax) Mc Tommy Gunn City Attorney -City of Pinehurst 202 S. Border Orange, Texas 77630 409-882-0613 (fax) Mr. Andre ~Wimer City Manager -City of Port Neches 634 Avenue C Port Neches, Texas 77651 409-719302 (fax) Mr. Harry Wrigh[ Mr. Christopher Duyue City Manager -City of Nederland P.O. Box 967 Nededand,Texas77627 409-723-.1550 (fax) lvtr. Shawn Oubre City Manager -City of Orange 803 W. Green Avenue, Room 201 Orange, Texas 77630 409-988-7096 (fax) Mr. Pete Stcele City Attorney -City of Port Neches 3120 Central Mall Drive Port Arthur, Texas 77642 409-724-7450 (fax) Mr. Chip Van Steenberg, CGFO City Manager -City of Shenandoah 29955 IF{-45 N. Shenandoah, Texas 77381 287-367-2225 (fax) Mr. Larry Forester City Attorney -City of Silsbee City Attorney -City of Willis PO Box 18fi 414 West Phillips, Suite 100 Port Neches, Texas 77651. Conroe, Texas 77301 409-722-7215 (fax) 936-756-2606 (fax) Re: Entergy Texas, Inc.'s Receipt of Rough Production Equalization Costs from Arkansas Steering Committee of Cities located in Entergy Texas, Inc.'s Service Territory: As you are aware, Entergy Testis, Inc. ("Entergy" or "Company") filed an Application for Authority to Implement a New Rough Production Cost Equalization Rate with the Cities as well as the Public Utility Commission of Texas ("PUC" or "Commission"). Entergy proposes to refund to customers $67.4 million over three months. Entergy has calculated that the refund would result in residential customers using 1000 kWh's being refunded between $12.71 and $14.79 per rnonth for three mon[hs. We have reviewed the Companys Application and recommend its approval. Approval of (he Company s case as filed should result in customers receiving the benefit of the refund in the most efficient manner over the course of the summer months when bills tend to be the highest. Attached is a draft ordinance. approving the Compmry's application for the City to consider at its earliest convenience. The Company has advised us that even if Cities approve the Company's application as filed, the Company will reserve the right to appeal the Ordinances to the Public Utility Commission so that the rates may be se[ uniformly throughout the service area. if you have any questions or concerns, please call. Sincerely, Daniel J. Lawton P. O. No. 5986 06/02/09 is ORDINANCE NO. AN ORDINANCE BY THE CITY OF PORT ARTHUR, TEXAS ("CITY") APPROVING THE RATE REFUND OF ENTERGY TEXAS INC. CONTAINED IN THE APPLICATION OF ENTERGY FOR AUTHORITY TO IMPLEMENT NEW RPCEA RATE FILED BY ENTERGY TEXAS, INC. ON MAY 26, 2009; 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 May 26, 2009, Entergy Texas, Inc. ("ETI") filed a Application for Authority to Implement New Rough Production Cost Equalization ("RPCEA") Rider ("Application") with the City to refund to customers rough production equalization receipts for ETI's Texas service territory; and WHEREAS, the RPCEA rates are anticipated to refund $13.24 in July, $12.71 in August, and $14.79 in September for average residential customers using 1000 kWh per month of electricity; and WHEREAS, the rough production cost equalization receipts were received by ETI in 2008 pursuant to an order of the Federal Energy Regulatory Commission ("FERC"). The FERC determined that the Entergy System Agreement no longer operated to maintain the production costs of the various Entergy operating companies within a reasonable level of parity. As a remedy, FERC implemented a Rough Production Cost Equalization system as part of the Entergy System Agreement. The remedy requires payments among the Entergy operating Companies whenever an operating company's production costs are greater or less 2.po5986 than a percentage of the system average production costs. For 2007, Entergy Arkansas, Inc.'s ("EAI") production costs were substantially below system average production costs. FERC ordered EAI to make payments to the other operating companies in order to roughly equalize the production cost disparity; and WHEREAS, ETI calculates the total rough production cost equalization receipts from EAI due to Texas retail customers to be $67.4 million and such amount is subject to future adjustment; and WHEREAS, the RPCEA is designed to refund the amounts calculated by ETI to be currently due in a timely manner over the summer of 2009; and WHEREAS, the law film and consultant hired by City have reviewed the Application, find it to be sufficient, and recommend the Application's approval. NOW THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF PORT ARTHUR: 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. That the City of Port Arthur hereby approves the refund rates established in ETI's Application. Section 3. That 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. z.po5966 Section 4. This Ordinance shall become effective from and after its passage. Section 5. That a copy of the caption of this Ordinance be spread upon the Minutes of the City Council. READ, ADOPTED AND APPROVED on this day of A.D., 2009, at a Council Meeting of the City Council of the City of Port Arthur, Texas, by the following vote: AYES: Mayor City Counci] NOES: MAYOR ATTEST: CITY SECRETARY APPROVED AS TO FORM: ~`z~ s~,~.-~ CITY ATTORNEY APPROVED FOR ADMINISTRATION: CITY MANAGER z.po5986