1979-07-11 Regular Meeting - Laserfiche WebLink

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`l'I~~ H~ria~~t' ~ c~u¢ut~amy Fbunov Lighting &tbrer July 2, 1979 Honorable Mayor and Board of Commissioners City of La Porte La Porte, Texas In July, 1978 Houston Lighting & Power Company made application for a general increase in its rate schedules. The rate relief requested was expected to be adequate to maintain the Company's financial integrity for approximately two years. However, the rates ultimately approved by regulatory authorities and placed into effect in December, 1978 were substantially less than those requested. We now find it again necessary to make application for a general rate increase in order to continue serving this area's immediate and future need for reliable electric service. • Deterioration of our Company's financial health is to some extent caused by such factors as increases in state and local taxes, environmental protection costs, and the impact of inflation on the cost of labor, material and services that we must use. It should be noted, however, that the primary factor adversely affecting our Company's financial position is the high cost of new construction. Tire unique growth in the Houston area has created unprecedented demands for electric service. We feel that we must satisfy the electrical requirements of this vibrant economy in the future as we have historically done. In the past three years, for example, our generating capacity has been increased by more than 17q~ through a $1.2 billion expansion program. In addition, we must continue the transition from gas and oil-fired generating plants to facilities that utilize more abundant domestic energy sources such as coal, lignite and nuclear fuel. In the next three years, 1979 through 1981, we are already committed to spend $2.4 billion to support our ongoing plant expansion. Thus, within the six-year period 1976 through 1981, the cost of plant expansions will almost double our total investment that we had in plant and other facilities in 1975. An expanding entity, whether it be a municipality or an electric company, must be kept in healthy financial condition if it is to provide for the needs of the community. So far, our • Company has been able to do a better job of keeping its rates down because its securities continue to be viewed favorably by the rating agencies and investcrs. It must be emphasized that P.O. Box 597 2000 Nasa 1 Seabrook, Texas 77586 (713) 474-4151