1971-01-04 Regular Meeting - Laserfiche WebLink

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' Ffouston Lighting & Power Co • -3- After a comprehensive study and extended discussions with Company representatives the Houston Director of Public Service and the City Attorney ,jointly recommended that a new rate ordinance be enacted by the Houston Council in which the minimum step of the rates above referred to would be increased from $1.20 to $1.90. They found such adjustment would result in a return to the Company of approxi- mately 6.62, determined in same manner as in the 1962 Houston Lighting 8c Power Company rate hearings, using as a test period twelve months end- ing June 30, 1970, and that the return upon the Company's trended rate base would be approximately 6.48. Both of these figures are well below the 7.25 returns recently allowed by the Texas Railroad Commission. On December 22, 1970, the Houston City Council passed an ordinance (No. 70-3230) adopting the above recommendation. Although the Company felt very strongly that it should have been granted the full increase applied for, nevertheless it was decided that it was in the best interest of the Company and its customers to put an end to this matter by accepting the recommended adjustment. Since the Company is in the midst of the largest expansion program • in its history, it will materially assist the Company in financing this expansion to have this rate matter concluded. We are submitting a new ordinance designed to make effective in your City the rate Changes which have been made at Houston. Under this ordinance, despite the small increase, your rates will continue to be among the lowest in the State and Nation. We earnestly ask that you act on this matter as soon as possible in view of the fact the Company has under way mayor financing, in connection with which it is scheduled to file with the Securities & Exchange Commission its Registration Statement in late January, 1971, and it is very desirable that this rate matter be concluded prior to that time. Our financial records are available and we shall be glad to submit any information you desire. We regret that, despite our best efforts, this increase has been necessary. The Company considers it a privilege to serve your city. We are grateful for your past cooperation and we shall endeavor to merit your continued confidence. Yours very truly, HOUSTON LIGHTING & POWER COMPANY • By ,~ Division Manager