Title
Consider and take action on a resolution by the City of League City, Texas (“City”) denying the distribution cost recovery factor rate request of Texas-New Mexico Power Company made on or about April 6, 2020; authorizing participation in a coalition of similarly situated cities; authorizing participation in related rate proceedings; requiring the reimbursement of municipal rate case expenses; and authorizing the retention of special counsel (City Attorney)
Background:
On April 6, 2020 Texas-New Mexico Power Company (“TNMP”) submitted an Application for Approval of a Distribution Cost Recovery Factor (“DCRF”) to increase its annual revenues by approximately $14.7 million. TNMP proposes to implement this increase on September 1, 2020.
TNMP’s application affects all retail electric providers (“REPs”) serving end-use retail electric customers in TNMP’s service-area and will affect the retail electric customers of those REPS to the extent the REPs choose to pass along these charges to their customers, which we expect REPs to attempt to do.
A DCRF permits TNMP to recover a profit on the incremental investment it made in its distribution assets during the one-year period year following the end of the test year in its last general rate case or DCRF proceeding, whichever is the most recent; that one-year period for this filing is January 1, 2019 through December 31, 2019. A DCRF filing is a streamlined single-issue proceeding outside of a comprehensive base rate case that moves very quickly. The Commission’s rules dictate, pursuant to State law, that September 1, 2020, absent good cause, is the effective date for new rates. This means, absent good cause, the case will be resolved in approximately 150 days. Discovery is also very limited allowing parties to serve, absent good cause, no more than 20 requests for information and requests for admissions of fact. Finally, the City must make its final decision within 60 days of the filing of the application ...
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