HomeMy WebLinkAboutO-1978-1128
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ORDINANCE NO.
1128
.
AN ORDINANCE RECITING THE CIRCUMSTANCES OF THE HOUSTON
LIGHTING & POWER COMPANY (HL&P) STATEMENT OF INTENT TO
CHANGE ELECTRIC RATES; SUSPENDING THE SCHEDULE OF RATES OF
HL&P FOR A PERIOD OF ONE HUNDRED TWENTY (120) DAYS FROM THE
EFFECTIVE DATE THEREOF; AND PROVIDING AN EFFECTIVE DATE FOR
THIS ORDINANCE.
WHEREAS, on July 14, 1978, the Houston Lighting & Power
Company (HL&P) filed a Statement of Intent to change its
rates for electric service within the City of La Porte and
has requested that said changes become effective on August 21,
1978; and
WHEREAS, HL&P has filed revised Tariff Schedules together
with statements specifying in detail each proposed change, a
.
rate filing package, and supporting testimony; and
WHEREAS, Section l7(a) of the Public Utility Regulatory
Act, Article l446c, Texas Revised Civil Statutes, gives the
governing body of each municipality exclusive original juris-
diction over electric rates within its municipal boundaries;
and
WHEREAS, Section 43(d) of the Public Utility Regulatory
Act authorizes the governing body of any municipality acting
as a Regulatory Authority to suspend the operation of any pro-
posed change in rates for a period not to exceed 120 days
.
beyond the date on which the scheduled rates would otherwise
go into effect, which period may be further extended for an
additional 30 days; and
WHEREAS, HL&P's proposed rate changes and the detailed
material supporting those changes require comprehensive
evaluation and study; now, therefore,
BE IT ORDAINED BY THE CITY COMMISSION OF THE CITY OF LA PORTE:
Section 1. That the changes in rates for electric ser-
vice within the City of La Porte proposed by Houston Lighting
& Power Company to become effective on August 21, 1978, should
.
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Ordinance No. 11~8
, Page 2.
e
be, and are, hereby suspended for a period of,120 days beyond
said proposed effective date, until December 19, 1978, subject
to an additional suspension of up to 30 days beyond said date
upon further resolution of this Commission.
Section 2. This Ordinance shall be effective immediately
upon its passage and approval.
PASSED AND APPROVED this the 2nd day of August, 1978.
CITY OF LA PORTE
~-
J. J. Meza, M yor
e
ATTEST:
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City Cl rk
AP~a/ ~
City Attorney
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CITY COUNCILMEN
LARRY :'>lcKASKLE
JunsO=" ROllINSON. JR.
LOUIS MACEY
HOMER L FORD
FRANK O. MANCllSO
JIM 'X'ESBIORELAND
FRA="K f. MANN
JOHNNY GOYEN
JIM McCONN, MAYOR
HOUSTON, TEX.-\.S 77001
CONTROLLER
KATHRYN J. WHITMIRE
J. WILLlA:-'l EARLE
Director
Department of Public Service
August 8~ 1979
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TO THE ~~YOR A~D CITY COUNCIL
OF THE CITY OF LaPORTE
Re: Houston Lighting & PO\\Ter Co. (t1HL&plI)
Rate Increase Request
Gentlemen:
The City of Houston has intervened before the' Public Utility
Commission of Texas in Docket No. 2676, the HL&P rat~ increase request.
The City of Houston has hired as a consultant in this matter the firm
or Touche Ross & Co. They are 'presently analyzing the rate filing package.
As the rate increase will affect all of the service area of HL&P,
the City of Houston invites you to join with us in evaluating the rate
request in order to determine the necessary increase, if any. We will
hold a meeting for all those cities caring to discuss the rate increase
and the rate case to be presented before the Public Utility Commission.
The meeting \vill be in room ItJ.OO of the City Hall Annex, City of
Houston from 1:30 to about 3:30 on Wednesday, August 15, 1979. If you
cannot attend but vlish to have information regarding the meeting, please
contact me at your earliest convenience.
I look fonvard to seeing you on l-lednesday.
Very tr.u1y yours,
~)- , . I L.
I' -' I" ~)
, . L ~ {
\, '_,. 1/[,,- Ii' v.(,':'::'-'l_- J.'~ .l.___
J. William Earle, Director
Department of Public Service
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T M L ~~~~TO~U~~~~a~~l L~~~7~66~
July 19, 1978
TO:
CITIES SERVED BY HOUSTON LIGHTING & POWER CO.
FROM:
TML STAFF
RE:
HL&P RATE INCREASE REQUEST
City representatives have asked that TML advise you of a meeting
of representatives from cities affected by the recent HL&P rate
increase request. This meeting will be held at 10:00 A.M. on
Friday, July 28, 1978, in the fourth floor conference room
(Room 4100A) of the City Hall Annex in Houston. The City Hall
Annex is directly across the street from the Houston City Hall
and is located in the downtown area near One Shell Plaza. You
are urged to have a representative in attendance if you wish to
discuss the appropriate handling of this rate request.
Simultaneously with the filing of the local rate cases, HL&P
filed a rural rate case with the Public Utility Commission.
The rural rate case filed with the PUC will likely be precedent
setting for the city rate cases because the PUC has appellate
jurisdiction from city regulation. Because of the importance
of the case at the PUC, Houston, Bay town and perhaps others
have filed interventions in such case. The deadline for
filing any such intervention is Monday, July 24, 1978. Because
of the limited time for filing interventions, TML has been
asked to file a blanket intervention which would allow its
member cities to participate or not, if they so choose, in
the case at the PUC.
If you have any questions concerning the case at the PUC,
appropriate handling at the local level, or the scheduled meeting
please call Harriet Hubacker, Assistant City Attorney, at
713/222-5165 in Houston, or Don Butler at 512/476-6604 in
Austin.
August 10, 1978
TO:
FROM:
SUBJECT:
CITIES SERVED BY HOUSTON LIGHTING & POWER COMPANY
LOUISE WARE, MAYOR, BELLAIRE - CHAIRMAN, STEERING COMMITTEE
STATUS REPORT - HL&P PROPOSED RATE INCREASE
On Friday, August 4, 197a, representatives of several cities met to
further discuss joint action in the above case. It was decided that a
consolidated effort should be made through the hiring of an attorney. Such
attorney would work with attorneys and rate consultants from Houston in
developing evidence for usage at the local level and presenting such
evidence at the Public Utility Commission. In return for such participation
by other cities, Houston is to pay for, and make available, all information
from their consultants, Touche-Ross & Co. Houston has committed to expend
up to $75,000.00 on this effort. There would be no expenses for the con-
sultants to the other cities, unless such cities want an individual
presentation. It is anticipated that one or more presentations will be
made on a jOint basis, without cost to cities other than Houston, for all
city representatives who might wish to attend.
The city representatives selected a steering committee composed
of the following to direct the activities of the case:
Louise Ware, Mayor, Bellaire - Chairman
Jim T. Brown, City Manager, West University Place
John B. Knox, Mayor, Missouri City
The representatives present also voted to hire Don Butler, an attorney
from Austin to represent their interests. It is anticipated that his fees
will run from $5,000.00 to an absolute maximum o'f $10,000.00. However, in
no event would any city be obligated to spend more than 5t per capita based
on 1970 population. A portion of this may be reimbursed depending upon
the extent of participation of other cities and reimbursement by the Company
under the Public Utility Regulatory Act. Enclosed find an authorization
which may be forwarded to the TML office in Austin. Such authorization, along
with appropriate payment, Should be made prior to September 30, 1978, so that
such city's participation can be noted prior to commencement of the PUC hearings.
Attached are a schedule of dates and a form Ordinance which may be
used to suspend the rates for 120 days. Such action may also be taken through
a resolution depending upon your particular city charter by using the same
language but putting it in the form of a resolution. Such resolution or
ordinance should be adopted prior to the proposed effective date of the rate
increase (August 21, 1978).
Any questions or communications may be directed, as applicable, to
either Mayor Ware, Bellaire City Hall, 7008 South Rice Avenue, Bellaire,
Texas, 77401 (7l3/667-S315), or Don Butler, 1225 Southwest Tower, Austin,
Texas, 78701 (512/476-6604).
HOUSTON LIGHTING & POWER COMPANY
PUC DOCKET No. 2001
D
Yes, our city wishes to participate with other cities in
a joint study of HL&P's rate increase request. We
authorize the consultants and attorneys for such cities
to act on behalf of our city in its regulatory capacity
to obtain all information necessary and pertinent to
HL&P's rate proposal in order to complete such study
for usage in our local rate case. Because the rural rate
case pending before the Public Utility Commission is a
public utility ratemaking proceeding which affects our
city, we authorize such consultants and attorneys to
conduct investigations, present evidence, advise and
represent our city with respect to Docket No. 2001,
pending before the Public Utility Commission.
Enclosed find our check based on a charge of 5t per capita
of 1970 population. (Checks should be made payable to
T.M.L. HL&P RATE CASE TRUST FUND.) It is understood that
a refund may be made depending upon the participation of
other cities and success in obtaining reimbursement from
HL&P, but that we will not be charged any additional amount.
D
No, the city does not wish to participate at this time.
SIGNED :
POSITION:
CITY OF:
SEND ALL CORRESPONDENCE REGARDING CASE TO:
NAME:
POSITION:
ADDRESS:
(Please return this form to: TML office, 1020 Southwest Tower, Austin, Texas, 78701.)
Before your City
July 14, 1978
August 21, 1978
September 20, 1978
November 19, 1978
December 19, 1978
January 18, 1979
Before the PUC
August 10, 1978
August 17, 1978
August 30, 1978
September 18, 1978
September 25, 1978
October 3, 1978
Dates to Remember in BL&P Rate Case
Filing date
Effective date
Initial public hearing date
"Bonding" date
End of first suspension (120 days)
End of second suspension (150 days)
Requests for information due
Hearing on protests of requests (10 a.m.)
Ans,,,ers to requests for information due
(1) Intervenors cases due; (2) Hearing
opens and recesses at 10 a.m.
PUC staff case due
Bearing begins at 9 a.m.
AN ORDINANCE SUSPENDING HOUSTON LIGHTING & PO\~ER COf>1PANY IS
PROPOSED INCREASE IN RATES FOR 120 DAYS; MAKING CERTAIN FINDINGS
AND PROVISIONS; AND DECLARING AN EMERGENCY.
* * * *
WHEREAS, Houston Lighting & Power Company filed a "Rate
Filing Package" stating its intent to increase rates within
the City of with the City Secretary pursuant to
Article 1446c on July 14, 1978; and
WHEREAS, the proposed effective date of the increased
rates is August 21, 1978; and
m~EREAS, the Ci ty of
desires to evaluate the
serits of such rate lncrease prlor to the inception of the
pro?osed rates; and
\'iHERE7~.S, the time necessary for a complete evaluation
resuires the proposed rates be suspended for a period of 120
days beyond August 21, 1978.
BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF
Section 1.
Having considered the time necessary to eval-
uate the merits of Houston Lighting & Power Company's proposed
rate increase, the City Council hereby finds that the proposed
rates should be suspended pursuant to Article 1446c and has so
notified Houston Lighting & Power Company prior to the passage
of this ordinance.
Section 2. Houston Lighting & Power Company's proposed
rates for customers within the city limits of the City of
are hereby suspended for a period of 120 days
beyond August 21, 1978, which date the rates would otherwise
become effective, or until a new rate ordinance for Houston
Lighting & Power Company is passed by City Council, whichever
comes first.
Section 3. There exists a public emergency requiring
that this ordinance be passed finally on the date of its intro-
duction, and the Mayor having in writing declared the existence
of such emergency and requested such passage, this ordinance
shall be passed finally on the date of its introduction, this
day of , A.D., 1978,
and shall take effect immediately upon its passage and approval
by the Mayor.
PASSED this
APPROVED this
day of
day of
____, A.D., 1978.
, A.D., 1978.
Mayor of the City of
-2-
The Light
compa11y
Houston Lighting & Power
July 14, 1978
Honorable Mayor and Board of Commissioners
City of La Porte
La Porte, Texas
Gentlemen:
In April of 1976 the Houston Lighting & Power Company
instituted a general increase in our rate schedules. It has been
more than two years since this change was made effective and
during that period, due to cost increases not within our control,
our rate of return has dropped below the level necessary to
provide sound financing of our Company's business.
The deterioration of our Company's return on investment has
been caused by such factors as general inflation, increases in
state and local taxes, environmental protection costs, and
similar items, which do not provide additional generating
capacity or efficiency for our system. It should be noted,
however, that the primary factor in our Company's declining
financial position has been the high cost of new construction.
In the past three years, 1975 through 1977, our generating
capacity has been increased by more than 16% from an expansion
program amounting to $1.1 billion, and the energy needs of this
area's growing economy are exerting an even greater demand for
reliable electric service which must be met in the immediate
future. In addition, we must continue the gradual transition
from gas and oil-fired generators to more abundant energy sources
such as coal, lignite and nuclear fuel. Just looking forward to
the next three years, 1978 through 1980, we are already co~~itted
to spend $1.6 billion to support our ongoing plant expansion.
The result of this is that within the six-year period, 1975
through 1980, plant expansions will be more than double our total
investment in plant and other facilities in 1974.
An expanding entity, whether it be a municipality or an
electric company, must be kept in healthy financial condition if
it is to operate successfully. So far our Company has been able
to do a better job of keeping its rates down because its
securities have carried a good rating among electric utilities.
P.O. Box 597 . 2000 Nasa 1 . Seabrook, Texas 77586 . (713) 474-4151
H~uslon '~tghting & Power Company
Page 2
It must be emphasized that our Company's ability to maintain its
credit rating has been of great benefit to our customers since we
have been able to finance our expansion programs on terms more
favorable than many other utilities. We have thus been able to
keep pace with the area's growing electrical needs and at the
same time maintain customer charges that are among the lowest of
all of the investor-owned electric utilities in the nation.
We estimate that between 60% and 65% of the $1.6 billion
required to meet our 1978-1980 expansion program may have to be
financed through the public sale of Company securities. With
such an expansion program facing us, we must be able to offer
securities of a quality commensurate with the other available
investment opportunities in order to compete effectively for the
investors' dollars. To do this we must have a record of earnings
that will make our securities attractive in today's highly
competitive money market, and without rate relief we cannot do
this.
We are including with this letter a Statement of Intent to
change rates for electric service along with the proposed revised
rate schedules for the Company's Tariff and the rate filing
package with supporting testimony that has been filed today with
the Public Utility Commission of Texas. We have requested that
the new rates become effective on August 21, 1978 and apply to
all service taken by each customer on or after that date. A
simultaneous filing of Statements of Intent is being made with
all of the municipalities exercising original jurisdiction over
the Company. The rate increases sought in each municipality and
in the rural areas under the direct original jurisdiction of the
Public Utility Commission are uniform for each class of customer
throughout the Company's service area.
We regret that a rate increase is necessary; however, we are
pleased to report that your rates will continue to be among the
lowest in the United States. It is a privilege to serve your
City and it will be our objective to keep our rates at the lowest
possible level consistent with good service and sound operations.
Yours very truly,
Ci9~S~ON LIGHTI~ ~}OWER COMP A. NY
~z;~~
astrict Manager
Enclosures
RESOWI'ION SUSPENDING RATE CHAN$ES
WHEREAS, on July 14, 1978, the Hooston Lighting & PcMer Canpany
(HL&P) filed a Statement of Intent to change its rates for electric setvice
within the City of am has requested that said changes
becane effective on August 21, 19787 am
. loJIiEREAS, HL&P has filed revised Tariff Schedules to;ether with
statements specifyi1'YJ in detail each proposed change, a rate filing package,
an::! supporti1'YJ testinony7 am
WHEREAS, Section 17(a) of the Public Utility Regulatot:y Act,
Article 1446c, Texas Revised Civil Statutes, gives the governi1'YJ body of each
municipality exclusive original jurisdiction over electric rates within its
nu.micipal bourrlaries; arrl
WHEREAS, Section 43 (d) of the .Public Utility Regulatot:y Act
authorizes the governi1'YJ bo3y of any municipality acting as a Regulatoty
Authori ty to susperrl the operation of any proposed change in rates for a
period oot to exceed 120 days beyond the date on which the scheduled rates
woold otherwise go into effect, which period may be further extended for an
Edditional 30 days; and
WHEREAS, HL&P's proposed rate changes and the detailed material
supporting those changes require canprehensive evaluation and study;
IT IS 'mEREFORE RESOLVED by the City Ca.mcil of the City of
, Texas: That the changes in rates for electric setvice wi thin the
City of pt:~ed by Houston Lighting & PcMer C~ to
becane effective on August 21, 1978 shoold be, am are, hereby suspemed for
a pericx3 of 120 days beyooo said proposed effective date, until December 19,
1978, subject to an additional suspension of up to 30 days beyond said date
. up:>n further resolution of this Cooneil. .
INIroOOCED, READ AND PASSED by the affimative vote of the City
Couneil of the City of , Texas, on this the day of
, 1978. -
ATI'EST:
Ci ty Clerlt
APProvED:
Ci ty Attorney
Houston
Li~hting
&Jlower
Company
Electric Tower
p. Q Box 1700
Houston,Texas 77001
July 20, 1978
To Municipalities and Coro~issioner's Courts within Houston
Lighting & Power Company Service Area
Gentlemen:
Houston Lighting & Power Company has filed a
Statement of Intent with the Public Utility Commission
of Texas to increase its rates. Pursuant to Commission
regulations we are hereby providing a copy of a notice
of prehearing conference regarding this application to
be held at the Commission offices in Austin, Texas, on
Monday, July 31, 1978, at 9 A.M.
Very truly yours,
c ~ t!J ~1
K. R. Hinckley
Group Vice President
KRH : j 1m
DOCKET NO. 200-1
APPLICATION OF HOUSTON LIGHTING
AND POWER COilP,I\NY FOR A RATE
INCREASE
I
I
I
PUBLIC UTILITY rOMMISSION
OF TEXtl)
NOTICE OF PREHEARI~G CONFERENCE
On July 14, 1978 Houston Lighting and Power Company filed a statement of intent to
increase its rates within unincorporated areas served by it on August 21, 1978. The
application and similar applications filed with each municipality served by HL&? vlould
result in a system-wide annual revenue increase of $174,900,000 or approxi~ately 12.6
percent of adjusted revenues. All customers and classes of customers would be affected
by the application. The number of customers affected is as follows: 721,163 residentials,
103,698 commercials, 1,478 industrials, 78 municipalities, and 6 public utilities. A copy
of the application, specifying in detail each proposed change, has been filed at the Com-
mission offices and with each municipality served by HL&P.
The Commission has jurisdiction over this application pursuant to art. 1446c, 5 17(e).
V.A.C.S. \.thich provides that the Commission shall have exclusive original jurisdiction
over electric utility rates within unincorporated areas. Pursuant to Commission Rules
052.01.00.024{b) and 052.01.00.052 a prehearing conference shall be held at the Commission
offices located at 7800 Shoal Creek Blvd., Austin, Texas on July 31. 1978 at 9;00 a.m.
Motions to intervene shall be filed by July 24, 1978 and written protests sha11 be filed
by August 28, 1978. The scope of the prehearing conference shall include consideration of
motions to intervene, alignment of parties, determination of a hearings schedule, consider-
ation of suspension of the effective date of the application, and other procedural matters.
Pursuant to art. 1446c, S 43(c), V.A.C.S. and Commission Rule 052.01.00.043(a)(2)(S),
HL&P is directed to provide a copy of this notice to all affected municipalities and to
the Commissioners Court of each county in which the proposed rate change would take effect.
ENTERED AT AUSTIN, TEXAS) on the ~day of JULY, 1978
PUBLIC UTILITY COMMISSION OF TEXAS
?~ab~ .
PHILIP F. R:Jl2n'- ~
Dr RECTOR OF !EARINGS
AND SECRETA OF THE COMMISSION
I,
The Light
company
Houston Lighting & Power
July 14,1978
Honorable Mayor and Board of Commissioners
City of La Porte
La Porte, Texas
Gentlemen:
In April of 1976 the Houston Lighting & Power Company
instituted a general increase in our rate schedules. It has been
more than two years since this change was made effective and
during that period, due to cost increases not within our control,
our rate of return has dropped below the level necessary to
provide sound financing of our Company's business.
The deterioration of our Company's return on investment has
been caused by such factors as general inflation, increases in
state and local taxes, environmental protection costs, and
similar items, which do not provide additional generating
capacity or efficiency for our system. It should be noted,
however, that the primary factor in our Company's declining
financial position has been the high cost of new construction.
In the past three years, 1975 through 1977, our generating
capacity has been increased by more than 16% from an expansion
program amounting to $1.1 billion, and the energy needs of this
area's growing economy are exerting an even greater demand for
reliable electric service which must be met in the immediate
future. In addition, we must continue the gradual transition
from gas and oil-fired generators to more abundant energy sources
such as coal, lignite and nuclear fuel. Just looking forward to
the next three years, 1978 through 1980, we are already co~~itted
to spend $1.6 billion to support our ongoing plant expansion.
The result of this is that within the six-year period, 1975
through 1980, plant expansions will be more than double our total
investment in plant and other facilities in 1974.
An expanding entity, whether it be a municipality or an
electric company, must be kept in healthy financial condition if
it is to operate successfully. So far our Company has been able
to do a better job of keeping its rates down because its
securities have carried a good rating among electric utilities.
P.O. Box 597 . 2000 Nasa 1 . Seabrook, Texas 77586 . (713) 474-4151
_.stOll lighting & Power Company
Page 2
It must be emphasized that our Company's ability to maintain its
credit rating has been of great benefit to our customers since we
have been able to finance our expansion programs on terms more
favorable than many other utilities. We have thus been able to
keep pace with the area's growing electrical needs and at the
same time maintain customer charges that are among the lowest of
all of the investor-owned electric utilities in the nation.
We estimate that between 60% and 65% of the $1.6 billion
required to meet our 1978-1980 expansion program may have to be
financed through the public sale of Company securities. With
such an expansion program facing us, we must be able to offer
securities of a quality commensurate with the other available
investment opportunities in order to compete effectively for the
investors' dollars. To do this we must have a record of earnings
that will make our securities attractive in today's highly
competitive money market, and without rate relief we cannot do
this.
We are including with this letter a Statement of Intent to
change rates for electric service along with the proposed revised
rate schedules for the Company's Tariff and the rate filing
package with supporting testimony that has been filed today with
the Public Utility Commission of Texas. We have requested that
the new rates become effective on August 21, 1978 and apply to
all service taken by each customer on or after that date. A
simultaneous filing of Statements of Intent is being made with
all of the municipalities exercising original jurisdiction over
the Company. The rate increases sought in each municipality and
in the rural areas under the direct original jurisdiction of the
Public Utility Commission are uniform for each class of customer
throughout the Company's service area.
We regret that a rate increase is necessary; however, we are
pleased to report that your rates will continue to be among the
lowest in the United States. It is a privilege to serve your
City and it will be our objective to keep our rates at the lowest
possible level consistent with good service and sound operations.
Yours very truly,
HOUSTON
LIGHTZp::y
Manager
Enclosures
LEGAL NOTICE
NOTICE OF PUBLIC HEARING
Notice is hereby given that the City Commission of the City of
La Porte will hold a public hearing on a proposed rate increase
filed by Houston Lightinq & Power Company, beginning on Wednesday,
September 20, 1978, at 7:05 P.M., at the City Commission Chamber,
City Hall, 604 West Fairmont Parkway, La Porte, Harris County,
Texas.
CITY OF LA PORTE
. 0.;1
~.~~~
Margle oyen
City Clerk
PUBLISH: September 14, 1978
!
MEMORANDUM
August 10, 1978
TO: Mayor and Council
FROM: J. R. Hudgens
SUBJECT: Houston Light and Power Rate Increase
On Friday, August 4, I attended a meeting in the Bellaire
Council Chambers reference the above. In attendance were repre-
sentatives from many communities (approximately 20) served by
Houston Light and Power, including Houston and Bay town. The pur-
pose of the meeting was to determine whether or not smaller com-
munities would band together, employ Council, and become an
intervenor in the Houston Light and Power rate case before the
Public Utilities Commission (PUC) in Austin. It was the concensus
of those representatives attending from the various smaller com-
munities that this would be beneficial to the efforts of Bay town
and Houston, as well as make known to the Public Utilities Com-
mission that the smaller cities were not going to abdicate their
rate-making authority to the PUC. All of the intervenors in
Austin will be categorized between municipalities, industry, etc.,
and the smaller communities would be placed in the same category
as Houston and Bay town, who have filed motion to be separate in-
tervenors.
A steering committee, comprised of Mayor Ware of Bellaire,
Mayor Holmes of Shoreacres, and Jim Brown, City Administrator of
West University Place, was selected from the cities represented.
Also, the cities represented voted to employ Don Butler, of the
Texas Municipal League, to represent the consortiums' interest be-
fore the PUC. The employment of Don Butler to represent the cities
was predicated on the respective interested communities pledging
five (5) cents per capita, based on their 1970 population, to cover
legal fees. This represents a cost to the City of La Porte of
some $350.00 to $375.00. I have, with the advice and consent of
part of the Council, committed the City of La Porte to support the
combined efforts of the smaller communities before the PUC. I am
requesting that Council ratify this commitment and authorize the
expenditure of the required dollars based on our 1970 population,
so that we may join with the other communities in making our concerns
known to the Public Utilities Commission.
J. R. Hudgens
City Administrator
JRH/cb
I
I
:wi
The Light
company
Houston Lighting & Power
July 14, 1978
Honorable Mayor and Board of Commissioners
City of La Porte
La Porte, Texas
Gentlemen:
In April of 1976 the Houston Lighting & Power Company
instituted a general increase in our rate schedules. It has been
more than two years since this change was made effective and
during that period, due to cost increases not within our control,
our rate of return has dropped below the level necessary to
provide sound financing of our Company's business.
The deterioration of our Company's return on investment has
been caused by such factors as general inflation, increases in
state and local taxes, environmental protection costs, and
similar items, which do not provide additional generating
capacity or efficiency for our system. It should be noted,
however, that the primary factor in our Company's declining
financial position has been the high cost of new construction.
In the past three years, 1975 through 1977, our generating
capacity has been increased by more than 16% from an expansion
program amounting to $1.1 billion, and the energy needs of this
area's growing economy are exerting an even greater demand for
reliable electric service which must be met in the immediate
future. In addition, we must continue the gradual transition
from gas and oil-fired generators to more abundant energy sources
such as coal, lignite and nuclear fuel. Just looking forward to
the next three years, 1978 through 1980, we are already co~~itted
to spend $1.6 billion to support our ongoing plant expansion.
The result of this is that within the six-year period, 1975
through 1980, plant expansions will be more than double our total
investment in plant and other facilities in 1974.
An expanding entity, whether it be a municipality or an
electric company, must be kept in healthy financial condition if
it is to operate successfully. So far our Company has been able
to do a better job of keeping its rates down because its
securities have carried a good rating among electric utilities.
P.O. Box 597 . 2000 Nasa 1 . Seabrook, Texas 77586 . (713) 474-4151
'Houston lighting & Power Company
Page 2
It must be emphasized that our Company's ability to maintain its
credit rating has been of great benefit to our customers since we
have been able to finance our expansion programs on terms more
favorable than many other utilities. We have thus been able to
keep pace with the area's growing electrical needs and at the
same time maintain customer charges that are among the lowest of
all of the investor-owned electric utilities in the nation.
We estimate that between 60% and 65% of the $1.6 billion
required to meet our 1978-1980 expansion program may have to be
financed through the public sale of Company securities. With
such an expansion program facing us, we must be able to offer
securities of a quality commensurate with the other available
investment opportunities in order to compete effectively for the
investors' dollars. To do this we must have a record of earnings
that will make our securities attractive in today's highly
competitive money market, and without rate relief we cannot do
this.
We are including with this letter a Statement of Intent to
change rates for electric service along with the proposed revised
rate schedules for the Company's Tariff and the rate filing
package with supporting testimony that has been filed today with
the Public Utility Commission of Texas. We have requested that
the new rates become effective on August 21, 1978 and apply to
all service taken by each customer on or after that date. A
simultaneous filing of Statements of Intent is being made with
all of the municipalities exercising original jurisdiction over
the Company. The rate increases sought in each municipality and
in the rural areas under the direct original jurisdiction of the
Public Utility Commission are uniform for each class of customer
throughout the Company's service area.
We regret that a rate increase is necessary; however, we are
pleased to report that your rates will continue to be among the
lowest in the United States. It is a privilege to serve your
City and it will be our objective to keep our rates at the lowest
possible level consistent with good service and sound operations.
Yours very truly,
HOUSTON
LIG7~~:NY
Manager
Enclosures
"
'fhe Light
company
Houston Lighting & Power
July 14, 1978
Honorable Mayor and Board of Commissioners
City of La Porte
La Porte, Texas
Gentlemen:
In April of 1976 the Houston Lighting & Power Company
instituted a general increase in our rate schedules. It has been
more than two years since this change was made effective and
during that period, due to cost increases not within our control,
our rate of return has dropped below the level necessary to
provide sound financing of our Company's business.
The deterioration of our Company's return on investment has
been caused by such factors as general inflation, increases in
state and local taxes, environmental protection costs, and
similar items, which do not provide additional generating
capacity or efficiency for our system. It should be noted,
however, that the primary factor in our Company's declining
financial position has been the high cost of new construction.
In the past three years, 1975 through 1977, our generating
capacity has been increased by more than 16% from an expansion
program amounting to $1.1 billion, and the energy needs of this
area's growing economy are exerting an even greater demand for
reliable electric service which must be met in the immediate
future. In addition, we must continue the gradual transition
from gas and oil-fired generators to more abundant energy sources
such as coal, lignite and nuclear fuel. Just looking forward to
the next three years, 1978 through 1980, we are already committed
to spend $1.6 billion to support our ongoing plant expansion.
The result of this is that within the six-year period, 1975
through 1980, plant expansions will be more than double our total
investment in plant and other facilities in 1974.
An expanding entity, whether it be a municipality or an
electric company, must be kept in healthy financial condition if
it is to operate successfully. So far our Company has been able
to do a better job of keeping its rates down because its
securities have carried a good rating among electric utilities.
P.O. Box 597 . 2000 Nasa 1 . Seabrook, Texas 77586 . (713) 474-4151
Houston lighting & Power Company
Page 2
It must be emphasized that our Company's ability to maintain its
credit rating has been of great benefit to our customers since we
have been able to finance our expansion programs on terms more
favorable than many other utilities. We have thus been able to
keep pace with the area's growing electrical needs and at the
same time maintain customer charges that are among the lowest of
all of the investor-owned electric utilities in the nation.
We estimate that between 60% and 65% of the $1.6 billion
required to meet our 1978-1980 expansion program may have to be
financed through the public sale of Company securities. With
such an expansion program facing us, we must be able to offer
securities of a quality commensurate with the other available
investment opportunities in order to compete effectively for the
investors' dollars. To do this we must have a record of earnings
that will make our securities attractive in today's highly
competitive money market, and without rate relief we cannot do
this.
We are including with this letter a Statement of Intent to
change rates for electric service along with the proposed revised
rate schedules for the Company's Tariff and the rate filing
package with supporting testimony that has been filed today with
the Public Utility Commission of Texas. We have requested that
the new rates become effective on August 21, 1978 and apply to
all service taken by each customer on or after that date. A
simultaneous filing of Statements of Intent is being made with
all of the municipalities exercising original jurisdiction over
the Company. The rate increases sought in each municipality and
in the rural areas under the direct original jurisdiction of the
Public Utility Commission are uniform for each class of customer
throughout the Company's service area.
We regret that a rate increase is necessary; however, we are
pleased to report that your rates will continue to be among the
lowest in the United States. It is a privilege to serve your
City and it will be our objective to keep our rates at the lowest
possible level consistent with good service and sound operations.
Yours very truly,
HOUSTON LIGHTIN~ ~ER COMPANY
Q-~ZY?~
~~:::-M~nager '
Enclosures