RAILROAD COMMISSION OF TEXAS GAS SERVICES DIVISION GAS UTILITIES INFORMATION BULLETIN No. 821 RAILROAD COMMISSION OF TEXAS Elizabeth A. Jones, Chairman Michael L. Williams, Commissioner Victor G. Carrillo, Commissioner Stephen L. Pitner Director Gas Services Division
TABLE OF CONTENTS SECTION PAGE SECTION 1 - NEW APPEALS AND APPLICATIONS FILED... 2 SECTION 2 - APPEALS AND APPLICATIONS SET FOR HEARING... 3 SECTION 3 - STATUS OF PENDING CASES... 3 SECTION 4 - NOTICES OF DISMISSAL... 3 SECTION 5 - ORDERS OF THE COMMISSION...4-7 SECTION 6 - MISCELLANEOUS...8-10 Orders were issued in the following dockets: GUD No. 9469 Statement of Intent filed by Centerpoint Energy Entex to Change the Rates in the Environs of the City of Houston, Texas Order on Remand. 1
SECTION 1 NEW APPEALS AND APPLICATIONS FILED DOCKET NO. -- 9734 CAPTION -- Application of Atmos Energy Corp., Mid-Tex Division for Test Year 2006 Annual Interim Rate Adjustment for the Environs Areas. DATE FILED -- May 31, 2007 FILED BY -- Charles R. Yarbrough, II EXAMINER -- Stephen Pitner 2
SECTION 2 APPEALS AND APPLICATIONS SET FOR HEARING OR PREHEARING CONFERENCE None at this time. SECTION 3 STATUS OF PENDING CASES None at this time. SECTION 4 NOTICES OF DISMISSAL None at this time. 3
SECTION 5 ORDERS OF THE COMMISSION BEFORE THE RAILROAD COMMISSION OF TEXAS STATEMENT OF INTENT FILED BY CENTERPOINT ENERGY ENTEX TO CHANGE THE RATES IN THE ENVIRONS OF THE CITY OF HOUSTON, TEXAS GAS UTILITIES DOCKET NO. 9469 ORDER ON REMAND Notice of Open Meeting to consider this Order was duly posted with the Secretary of State within the time period provided by law pursuant to TEX. GOV T CODE ANN. Chapter 551 et seq. (Vernon 1994 & Supp. 2004). On June 8, 2004 the Commission issued its final order in this docket. Entex subsequently filed a suit for judicial review of the Commission s final order, which was ultimately considered on appeal by the Third District Court of Appeals. On August 4, 2006, the Court of Appeals issued an opinion and judgment reversing the Commission s order and remanding the case to the Commission for further proceedings consistent with the Court of Appeals ruling. After due consideration of the option and judgment of Court of Appeals, the Commission finds that it is necessary to issue and order on remand in this docket to implement the rulings of the Court of Appeals. The Railroad Commission of Texas adopts the following findings of fact and conclusions of law as follows: FINDINGS OF FACT 1. Centerpoint Energy Entex (Entex) owns and operates a gas distribution system in Houston and its environs, referred to as the Houston Division. 2. The Houston Division includes Entex s service territory that is: (a) inside the city limits of the City of Houston; (b) inside the city limits of other surrounding local municipalities; and (c) within the environs of the Houston Division. 3. The Houston Division is comprised of the cities of Houston, Bellaire, Bunker Hill Village, City of Pasadena, the City of Hedwig Village, Deer Park, Galena Park, Hilshire Village, Humble, Hunters Creek Village, Jacinto City, Jersey Village, Meadows Place, Missouri City, Nassau Bay, New Waverly, Piney Point Village, Roman Forest, Stafford, Southside Place, Spring Valley, West University, South Houston, and 283,853 environs customers. 4. On June 13, 2003, Entex requested a rate increase from the City of Houston for rates charged within the municipality. 5. Entex originally proposed an increase in rates of $27.5 million for the Houston Division. 4
6. During negotiations with the City of Houston, Entex agreed to a base rate increase of approximately $8.4 million, calculated on a division-wide basis. Entex was also allowed to increase its services charges by approximately $5.5 million in total, division-wide. The total increase on a division-wide basis, negotiated with the City of Houston was $14,082,652. 7. The following cities within the Houston Division have approved rates identical to the rates approved within the City of Houston: Bellaire, Bunker Hill Village, City of Pasadena, the City of Hedwig Village, Deer Park, Galena Park, Hilshire Village, Humble, Hunters Creek Village, Jacinto City, Jersey Village, Meadows Place, Nassau Bay, New Waverly, Piney Point Village, Roman Forest, Stafford, Southside Place, Spring Valley, and South Houston. 8. On June 8, 2004, the Commission issued its final order in this case approving the proposed rate increase as requested by Entex, except for issues related to the recovery of franchise fees. 9. The Commission s June 8 th Order denied Entex s proposed method of recovering franchise fees from all customers. 10. By opinion and judgment issued on August 4, 2006, the Court of Appeals concluded that the record did not contain substantial evidence to support the Commission s finding and conclusion that it was unreasonable for Entex to recover a share of the municipal franchise fee from environs customers as proposed. 11. Entex originally proposed to recover franchise fees pursuant to the terms of the Tax Adjustment Rate sheet proposed by Entex, attached as Exhibit 1, to this Order on Remand. 12. The Court found that the evidence in support of the Entex s proposed rate design for recovery of municipal franchise fees was uncontroverted. 13. Based upon this ruling the Third Court of Appeals ordered that the case be remanded to the Commission for entry of an order consistent with this holding. CONCLUSION OF LAW 1. Entex is a gas utility as defined in TEX. UTIL. CODE ANN. 101.003 (7) and TEX. UTIL. CODE ANN. 102.001 (Vernon Supp. 2004), and is subject to the Commission s jurisdiction under TEX. UTIL. CODE ANN. 104.002 & 121.051 (Vernon 1998). 2. The Commission has jurisdiction over the subject matter of this case under TEX. UTIL. CODE ANN. 102.001 (Vernon 1998). 3. The revenue, rates, and rate design recommended in the findings of fact are just and reasonable, are not unreasonably preferential, prejudicial, or discriminatory, and are sufficient, equitable, and consistent in application to each class of consumer, as required by TEX. UTIL. CODE ANN. 104.003 (Vernon 2004). 4. The revenue, rates, and rate design recommended in the findings of fact fix an overall level of revenues for Entex that will permit Entex a reasonable opportunity to earn a reasonable return on invested capital used and useful in rendering service to the public over and above reasonable and necessary operating expenses, within the meaning and intent of TEX. UTIL. CODE ANN. 104.052 (Vernon 2004). 5. Pursuant to the opinion of the Court of Appeals in CenterPoint Energy Entex v. Railroad Commission of Texas, (citation) Entex provided sufficient evidence to establish that its proposed rate design for the recovery of franchise fees was reasonable. 5
IT IS THEREFORE ORDERED THE RAILROAD COMMISSION OF TEXAS THAT Entex shall recover its franchise fees pursuant to the terms of the Tax Adjustment Rate Sheet proposed by Entex, and attached to this Order on Remand. SIGNED this 30th day of May, 2007. RAILROAD COMMISSION OF TEXAS /s/ ELIZABETH A. JONES CHAIRMAN /s/ MICHAEL L. WILLIAMS COMMISSIONER VICTOR G. CARRILLO COMMISSIONER ATTEST /s/ Kim Williamson SECRETARY 6
CENTERPOINT ENERGY ENTEX RATE SHEET TAX ADJUSTMENT RATE SCHEDULE NO. TA-2 The Customers shall reimburse the Company for the Customers proportionate part of any tax, charge, impost, assessment or fee of whatever kind and by whatever name (except ad valorem taxes and income taxes) levied upon the Company by any municipality in the Houston Division and/or any other governmental authority under any law, rule, regulation, ordinance, or agreement (hereinafter referred to as the Tax ). If the law, rule, regulation, ordinance, or agreement levying the Tax specifies a method of collection from Customers, then the method so specified shall be utilized provided such method results in the collection of taxes from the Customers equal to the taxes levied on the Company. If no method of collection is specified, then the Company shall collect an amount calculated as a percentage of the Customers bills. The percentage shall be determined so that the collection from Customers within the Company s Houston Division is equal to the taxes levied on the Company. The initial Tax Adjustment Rate shall be based on the Taxes that are levied upon the Company on the effective date of this Rate Schedule. The Company will initiate a new or changed Tax Adjustment Rate beginning with the billing cycle immediately following the effective date of the new or changed Tax as specified by the applicable law, rule, regulation, ordinance, or agreement, provided that the Company has the customer billing data necessary to bill and collect the Tax. If at any time there is a significant change which will cause an unreasonable over or under collection of the Tax, the Company will adjust the Tax Adjustment Rate so that such over or under collection will be minimized. The Tax Adjustment Rate (calculated on a per Ccf or per Mcf basis, as appropriate) shall be reported to the applicable governmental authority by the last business day of the month in which the Tax Adjustment Rate became effective. EFFECTIVE DATE July 3, 2007 7
1. OFFICE OF THE DIRECTOR A. Publications SECTION 6 MISCELLANEOUS STEPHEN L. PITNER, GAS SERVICES DIVISION DIRECTOR 1. Texas Utilities Code Titles 3 and 4. Now available at the State of Texas website at: http://www.capitol.state.tx.us/statutes/uttoc.html Special Rules of Practice and Procedure and Substantive Rules. Commission s Website at: Now available thru the http://info.sos.state.tx.us/pls/pub/readtac$ext.viewtac?tac_view=4&ti=16&pt=1&ch=7 2. a. Annual Report for Fiscal Year 2004 Now available via the Commission s website at: http://www.rrc.state.tx.us/divisions/gs/tablecon04.htm b. Annual Report for Fiscal Year 2003 Now available via the Commission s website at: http://www.rrc.state.tx.us/divisions/gs/tablecontents03.html c. Annual Report for Fiscal Year 2002 Now available via the Commission s website at: http://www.rrc.state.tx.us/divisions/gs/tablecontents02.html d. Annual Report for Fiscal Year 2001 available via the Commission s website at: http://www.rrc.state.tx.us/divisions/gs/tablecontents01.html e. Annual Report for Fiscal Year 2000 - $17.00 (includes statistical data for 1999) f. Annual Report for Fiscal Year 1999 - $9.00 (includes statistical data for 1998) g. Annual Report for Fiscal Year 1998 - $7.00 (includes statistical data for 1997) 3. Six MCF Monthly Residential Gas Bill Analysis for Twenty-five Texas Cities - $2.00 Now available via the Commission s website at: http://www.rrc.state.tx.us/divisions/gs/rap/sixmcf.html Anyone who wishes to obtain a copy of any of the publications or maps listed in Section A should contact the Central Records Section at 512-463-6887 OR 512-463-6882 P. O. Box 12967, Austin, Texas 78711-2967. B. Interest Rate on Customer Deposits We have been advised by the Public Utility Commission that the interest rate to be applied to customer deposits in calendar year 2007 is 4.68%. All gas utilities should use 3.09% through December 31, 2006 and use 4.68% effective January 1, 2007. 8
2. UTILITY AUDIT SECTION A. Maintains headquarters and three district offices as follows: Headquarters - William B. Travis Building 1701 North Congress, P. O. Box 12967, Austin, Texas 78701 Telephone (512) 463-7022 Ed Abrahamson, Director, Utility Audit Section Fax (512) 475-3180 Shannon Miller, Program Specialist Pearl Rodriguez, Program Specialist Rachel Hampton, Administrative Assistant Dallas District- 1546 Rowlett Rd., Suite 107, Garland, Texas 75043 Telephone (972) 240-5757 Fax (972) 303-1897 Yolandra Davis, Auditor Josh Settle, Auditor Austin District- P. O. Box 12967, Austin, Texas 78711-2967 Telephone (512) 463-7022 Fax (512) 475-3180 Stephen Cooper, Senior Auditor Houston District- 1706 Seamist Drive. Suite 501 Telephone (713) 869-8425 Houston, TX 77008-3135 Fax (713) 869-3219 Margie Stoney, Senior Auditor Larry Alcorn, Auditor Dale Francis, Auditor LaToya Johnson, Auditor Konata Uzoma, Auditor B. Gas Utility Tax, Annual Reports and Audit Reports 1. Questions relating to gas utility tax, call Rachel Hampton at (512) 463-7022. 2. Questions relating to annual reports, call Rachel Hampton or Pearl Rodriguez at (512) 463-7022. 3. Inquiries relating to audit reports, call Pearl Rodriguez at (512) 463-7022. C. Available Information Copies of gas utility annual reports (1999 to present), as well as information relating to any of the above, A through C, are available for review at the William B. Travis Building, Gas Services Division, 9th Floor, 1701 North Congress. All requests for copies must be made in writing and should be addressed to the Audit Section. Copies will be provided for a fee, depending on the volume of copy work desired, allow a minimum of five days for completion of requests. Inquiries regarding copies should be directed to the Audit Section at (512) 463-7022, or Fax your request to (512) 475-3180. 3. MARKET OVERSIGHT A. Maintains the following office to assist you: Headquarters - William B. Travis Building 1701 North Congress, P.O. Box 12967, Austin, Texas 78711 Telephone (512) 463-7164 William O. Geise, Director B. Gas Utilities Information Bulletin Published on the Commission s web site at: http://www.rrc.state.tx.us/divisions/gs/rap/rapbls.html 9
C. Proposals For Decision Published on the Commission s web site at: http://www.rrc.state.tx.us/divisions/gs/rap/pfds.html D. Tariff Filings Questions pertaining to the filing of tariffs and/or quality of service rules should be directed to Kathy Arroyo, Yolanda Lovelace or Marie Blanco at (512) 463-7167. E. Curtailments Curtailment questions should be referred to (512) 463-7167. Curtailment reports made Monday through Friday, 8:00 a.m. to 5:00 p.m., should be made to (512) 463-7167. Curtailment reports made during hours other than those specified above and holidays, should be made to (512) 463-6788. F. Compliance Filings Questions regarding gas utilities docket compliance filing requirements should be referred to Mark Brock at (512) 463-7164. G. Complaints and Inquiries All complaints and inquiries relating to the gas utility industry should be directed to the Market Oversight Section at (512) 463-7164. H. Pending RRC Rules and Regulations: GUD No. 9277 Amendments to 7.305 Curtailment Rule 4. HEARINGS AND LEGAL ANALYSIS A. Miscellaneous Anyone wishing to obtain copies of appendices to Orders appearing in Section 5 of this Bulletin should contact the Legal Division at (512) 463-7017. B. Status of Pending Cases The status of all pending cases listed in Section 3 of this Bulletin is for informational purposes only and is complete up to the time of printing of this Bulletin. For a more accurate status of pending cases, please call the Legal Division at (512) 463-7017. 10