HomeMy WebLinkAboutResolution No. 2000-41 RESOLUTION NO. R2000-41
RESOLUTION OF THE CITY OF FRIENDSWOOD RATIFYING THE
SETTLEMENT AGREEMENT REACHED IN PUC DOCKET NO. 22650
REGARDING RELIANT ENERGY HL&P'S REQUEST TO INCREASE
ITS FUEL FACTOR AND IMPOSE A SURCHARGE TO RECOVER
UNDER-COLLECTED FUEL COSTS.
* � � * � � � * � * � � :� �
WHEREAS, on or about June 9, 2000 Reliant Energy HL&P (HL&P or Company) filed
a request with the Public Utility Commission (PUr) to increase its fuel factor and to impose a
surcharge to recover under-collected fuel costs that was designated as Docket No. 22650;
WHEREAS, the City of Friendswood intervened in Docket No. 22650 to protect the
interests of its residents;
WHEREAS, the Public Utility Regulatory Act and the Substantive Rules of the PUC
permit electric utilities to recover current fuel costs and preclude challenges to the
reasonableness of such costs until a fuel reconciliation case, which in the case of HL&P likely
will not be filed until the first quarter of 2002;
WHEREAS, there is no dispute that the price HL&P pays for natural gas used to
generate electricity has increased significantly, causing the Company to fail to recover its fuel
costs;
WHEREAS, the City of Friendswood, in cooperation with other Gulf Coast Cities,
participated fully in PUC Docket No. 22650 and achieved concessions from HL&P to remove
non-fuel costs and projected over-recoveries from its application and reduced overall bill impact
so as to mitigate the adverse effect on consumers;
WHEREAS, Counsel for the City of Friendswood recommends ratification of a
settlement agreement reached in PUC Docket l�o. 22650 as producing results that achieve all
that is possible under circumstances where parties are precluded from litigating the
reasonableness of costs;
WHEREAS,the terms of the settlement agreement include:
• Removal of $290 million in projected fuel undercollections from the fuel
factor calculation;
• Removal of $3 million in mine reclamation costs from the fuel factor and
more than $18 million in mine reclamation costs from the surcharge; and
• Reimbursement by HL&P for cities' rate case expenses that will not be
surcharged in any way to customers.
WHEREAS, the Settlement Agreement is a unanimous agreement involving the
Company, the Commission Staff, Texas Industrial Energy Consumers, the Office of Public
Utility Counsel, and the City of Houston, in addition to the Gulf Coast Coalition of Cities which
includes the City of Friendswood.
THEREFORE BE IT RESOLVED B�' THE CITY COUNCIL OF THE CITY OF
TEXAS:
Section 1. The Settlement Agreement reached in PUC Docket No. 22650 is ratified
and approved.
Harold L. Whitaker
Mayor
ATTEST:
0
, s
De oris McKenzie, T
City Secretary