City eyes utility rate process

By Erika Pedroza | Published Saturday, January 19, 2013

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Bridgeport councilmembers took steps Tuesday night to keep for-profit utility companies from having free rein with rates and to protect those citizens that may use those companies.

The council approved a resolution drafted by the Oncor Cities Steering Committee to protect the traditional role of cities as the 83rd Texas Legislature, which commenced Jan. 8, wades through bills filed by for-profit utility companies to eliminate or limit city’s jurisdiction in the rate-making process.

This would enable the companies to increase and expedite rate changes and forego fees to cities, leading to a reduction in revenue for the municipalities.

“As the old saying goes, when the legislature’s in session, nobody’s safe,” City Administrator Brandon Emmons said. “We have to do what we can to help protect our interest, our residents’ interest. One of the ways we do that is through the work of the Oncor Cities Steering Committee. They lobby for legislation on our behalf, representing our residents and our interests in certain actions taken by these for-profit utility companies.”

Similar to the Atmos City Steering Committee, the 150-member coalition of cities served by these for-profit utility companies intervenes in rate cases and advocates for affordable electric energy for its members and their residents in the deregulated electric market.

This resolution protects the city’s interests in regards to three separate issues – public rights-of-way encroachment, original jurisdiction and reimbursement of reasonable rate case expenses.

“Typically, when utility companies utilize our right-of-ways for their for-profit business, they pay a franchise fee to the city,” Emmons said. “Every time the legislature is in session, the utility companies try to have the fees waived. We want to make sure these fees are intact. Original jurisdiction, this statute allows the city to have original jurisdiction, which is basically saying that we have the authority to set rates that are charged in our cities by these companies. And reimbursement of reasonable rate case expenses allows us to recoup our expenses (when we have to) analyze a rate case.”

Currently, a retail electric provider, such as Oncor, that desires to amend its rates must file a rate case with the Texas Public Utilities Commission (PUC). However, municipalities in Texas retain original jurisdiction in ratemaking cases and have the opportunity to review the rate amendment case and recommend action.

The resolution also urged the legislature to:

  • facilitate and encourage public/private partnership opportunities between cities and electric generation developers in creating small-scale (not to exceed 50 MW) power plants capable of rapidly meeting peak power needs.
  • resist any efforts to transform the energy-only ERCOT market into a capacity market which would increase the price of electricity.
  • enhance protections against anti-competitive activities in the wholesale market and require the PUC to reform its rules related to Voluntary Mitigation Plans and allow cities and other interested parties to participate in review of such plans.
  • require the PUC to establish certain uniform products that must be offered by all retail electric providers (“REPs”) and to establish new rules governing the powertochoose and powertosavetexas websites that will better inform retail customers of complaints against REPs and better educate customers regarding the economic and market benefits of reducing demand during peak periods.

Emmons added that because of the city-owned electric system, the number of residents affected is small.

“It’s important that we lobby for them,” he said.

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