Control Number : 45747
Item Number : 109
Addendum StartPage : 0
^^^^IVED
SOAH DOCKET NO. 473-16-3581
PUC DOCKET NO. 45747
APPLICATION OF CENTERPOINT
ENERGY HOUSTON ELECTRIC, LLC
TO AMEND ITS DISTRIBUTION COST
RECOVERY FACTOR AND TO
RECONCILE DOCKET NO. 44572
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REVENUES
§
2016 jut? 15 PH h: (
BEFORE THE STA'^^6PP~CE'r c, 0 i;
h i^;F'iG C,LERq
OF
ADMINISTRATIVE HEARINGS
UNOPPOSED STIPULATION AND SETTLEMENT AGREEMENT
The signatories to this unopposed stipulation (Stipulation) are CenterPoint Energy Houston
Electric, LLC (CenterPoint Houston); the Staff of the Public Utility Commission of Texas (Staff);
Office of Public Utility Counsel (OPUC); City of Houston and Houston Coalition of Cities
(HCOC) ( collectively "COH");' Texas Coast Utilities Coalition (TCUC);2 and Gulf Coast
Coalition of Cities ( GCCC). The following parties are not opposed to this Stipulation: Alliance
for Retail Markets; TXU Energy Retail Company LLC; Texas Energy Association for Marketers;
Texas Industrial Energy Consumers, State of Texas Agencies and Institutions of Higher Education,
and Mr. Michael J. Hershey. The parties who are signing as signatories to the Stipulation shall be
referred to individually either as a Signatory or by the acronym assigned above, and collectively
as the Signatories.
RECITALS
WHEREAS, on April 4, 2016, CenterPoint Houston filed an application to amend its
distribution cost recovery factor (DCRF) pursuant to Substantive Rule 25.243 (Application) and
sought an increase in distribution revenues of approximately $49,351,913 (which includes
reconciliation of an $11.2 million overrecovery from the DCRF approved in Docket No. 44572)
' The City of Houston is a Signatory to the Stipulation and the remaining cities in the Houston Coalition of Cities are
unopposed.
2 The TCUC member cities of Baytown, League City, Pearland, Wharton, and Freeport are Signatories to the
Stipulation. The TCUC cities of Clute, West Columbia, and Shoreacres are unopposed.
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for setting DCRF Rates effective for the period September 1, 2016 to August 31, 2017, and
$60,596,164 for rates effective September 1, 2017; and
WHEREAS, the Signatories wish to avoid the uncertainty, time, inconvenience and
expense of further litigation of this proceeding by compromising and resolving this proceeding in
its entirety;
NOW, THEREFORE, the Signatories, through their undersigned representatives, hereby
enter into this Stipulation on the following terms:
ARTICLE I
1.
The DCRF revenue requirement resulting from CenterPoint Houston's Application will be
reduced to $45 million for setting DCRF Rates effective for the period September 1, 2016
to August 31, 2017;
2.
If the Company does not request an amendment to its DCRF in 2017, effective September
1, 2017, CenterPoint Houston's DCRF revenue requirement will be $49 million for DCRF
Rates effective on or after September 1, 2017. These DCRF Rates will remain in effect
unless and until a new DCRF is approved or rates are changed in a base rate case.
3.
Nothing in this Stipulation shall be interpreted to prohibit the Company from filing a
request to amend its DCRF in 2017.
4.
Consistent with the requirements outlined in Section 2 of the Commission's General
Instructions for Earnings Reports, CenterPoint Houston will provide detailed supporting
documentation describing the basis for and calculation of any adjustments underlying the
earnings calculation presented in its Earnings Monitoring Report as part of its pre-filed
testimony and workpapers in all future DCRF filings.
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5.
CenterPoint Houston will identify and quantify all DCRF costs included in invested capital
that resulted from changes in accounting practices that have been implemented since the
Company's last base rate case in all future CenterPoint Houston DCRF filings.
6.
CenterPoint Houston will develop detailed support explaining the basis for and calculation
of joint transmission and distribution project costs allocated to the distribution function and
for which CenterPoint Houston seeks to recover through its DCRF and present such
information with its pre-filed testimony and workpapers in all future DCRF filings.
7.
CenterPoint Houston will provide additional support to demonstrate that amounts
requested in future DCRF cases are accurately recorded and eligible for recovery through
the DCRF, and that the DCRF formula has been properly calculated.
8.
CenterPoint Houston shall be allowed to account for CenterPoint Houston's and any
municipal rate case expenses associated with this DCRF proceeding and to subsequently
request recovery of the expenses in a future rate proceeding or to include these costs with
other expenses in a proceeding to collect those expenses through a separate surcharge. Rate
case expenses in connection with this proceeding are subject to a final determination by
the Commission as to the reasonableness and necessity of those expenses.
9.
The Signatories intend for the DCRF rates shown on Exhibit A to this Stipulation to be
effective on and after September 1, 2016. To ensure rate implementation on this date, if
necessary Signatories agree to support a motion for interim rates consistent with the rates
shown on Exhibit A, effective on and after September 1, 2016, pending final resolution of
this case.
10.
The Signatories agree to support the entry of any order required to give effect to the terms
of this Stipulation.
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11.
Within 5 business days of issuance of a final order, CenterPoint Houston will file with the
Commission a compliance tariff consistent with that final order.
12.
The Signatories agree that investments recovered through this agreement are subject to
reconciliation under Substantive Rule 25.243(f).
ARTICLE II
A.
Effect of Modification of Stipulation
If the Commission issues a final order that is inconsistent with the terms of the Stipulation,
each Signatory has the right to withdraw from the Stipulation, to submit testimony, and to obtain
a hearing and advocate any position it deems appropriate with respect to any issue in this
Stipulation. The Signatories further agree that the terms and conditions in this Stipulation are
interdependent and that the various provisions of this Stipulation are not severable.
B.
No Precedent
Because the matters resolved herein are resolved on the basis of compromise and
settlement, nothing in this Stipulation should be considered precedent, except to the extent the
Signatories agree to the matters related to future filings identified in Article I at Paragraph Nos. 2
and 3 above, which Signatories acknowledge are subject to Commission approval in those future
filings. No Signatory shall be deemed to have agreed to the propriety of any theory or principle
that may be said to underlie any of the issues resolved by this Stipulation. Because this is a
settlement, the Signatories recognize that no Signatory is under any obligation to take the same
position in any other docket, except as specifically required by this Stipulation, whether or not the
docket presents the same or similar circumstances. This Stipulation is binding on each of the
Signatories only for the purpose of settling the issues herein and for no other purpose. Oral and
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written statements made during the course of settlement negotiations shall not be used as an
admission or concession of any sort or as evidence in this or any other proceeding.
C.
Entire Agreement
This Stipulation is the entire understanding and agreement of the Signatories to this
Stipulation, and it supersedes prior understandings and agreements, if any, among the Signatories
with respect to the subject matter of the Stipulation. There are no representations, agreements,
arrangements, or understandings, oral or written, concerning the subject matter hereof between
and among the Signatories to this Stipulation which are not fully expressed herein.
D.
Authorization to Sign
Each person executing this Stipulation represents that he or she is authorized to sign the
Stipulation on behalf of the Signatory represented.
E.
Countersigned Originals
This document may be countersigned by each Signatory on separate originals. Each
signature shall be treated as if it is an original signature.
This Stipulation has been executed, approved, and agreed to by the Signatories hereto in
multiple counterparts, each of which shall be deemed an original, on the date indicated below by
the Signatories hereto, by and through their undersigned duly authorized representatives.
This
Stipulation shall be effective and binding when it is signed by all Signatories.
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CENTERPOINT ENERGY HOUSTON
ELECT C,LLC
Signed this /
day of June, 2016.
PUBLIC UTILITY COMMISSION OF
TEXAS STAFF
Signed this
day of June, 2016.
CITY OF HOUSTON and HOUSTON
COALITION OF CITIES
Signed this
day of June, 2016.
Signed this
day of June, 2016.
Keith Wall
Alton J. Hall Jr.
GULF COAST COALITION OF CITIES
Hannah Wilchar
6
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CENTERPOINT ENERGY HOUSTON
ELECTRIC, LLC
Signed this
day of June, 2016.
Keith Wall
PUBLIC UTILITY COMMISSION OF
TE
F
Signed this jj^ day of June, 2016.
Sam Chang
OFFICE OF PUBLIC UTILITY COUNSEL
Signed this
day of June, 2016.
Siggned this
day of June, 2016.
Signed this
day of June, 2016.
Signed this
day of June, 2016.
Laurie Barker
CITY OF HOUSTON and HOUSTON
COALITION OF CITIES
Alton J. Hall Jr.
TEXAS COAST UTILITIES COALITION
Brennan Foley
GULF COAST COALITION OF CITIES
Hannah Wfichar
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CENTERPOINT ENERGY HOUSTON
ELECTRIC, LLC
--]Signed this
day of June, 2016.
Signed this
day of June, 2016.
Keith Waff
PUBLIC UTILITY COMMISSION OF
TEXAS STAFF
Sam
OFFICE F PUBLIC TILITY COUNSEL
_
Signed this _^J^day of June, 2016.
^.
a rie Barker
CITY OF HOUSTON and HOUSTON
COALITION OF CITIES
Signed this
day of June, 2016.
Signed this
day of June, 2016.
Signed this
day of June, 2016.
Alton J. Hall Jr.
TEXAS COAST UTILITIES COALITION
Brennan Foley
GULF COAST COALITION OF CITIES
Hannah Wiflchar
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CENTERPOINT ENERGY HOUSTON
ELECTRIC, LLC
Signed this
day of June, 2016.
Signed this
day of June, 2016.
Signed this
day of June, 2016.
Keith Wall
PUBLIC UTILITY COMMISSION OF
TEXAS STAFF
Sam Ch
OFFICE OF PUBLIC UTILITY COUNSEL
Laurie Barker
CITY OF HOUSTON and HOUSTON
COALITION OF ITIES
Signed thisI-3kday of June, 2016.
Alton J. Hall Jr.
TEXAS COAST UTILITIES COALITION
Signed this
day of June, 2016.
Signed this
day of June, 2016.
Brennan Foley
GULF COAST COALITION OF CITIES
Hannah Wilchar
6
9
CENTERPOINT ENERGY HOUSTON
ELECTRIC, LLC
Signed this
day of June, 2016.
Signed this
day of June, 2016.
Signed this
day of June, 2016.
Signed this
day of June, 2016.
Keith Wall
PUBLIC UTILITY COMMISSION OF
TEXASSTAFF
GULF COAST COALITION OF CITIES
Hannah Wilchar
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---GY
_. _ _^
CENTER POINT ENER_..OUSTON
H
Signed this
day of June, 2016.
Signed this
day of June, 2016.
Signed this
day of June, 2016.
Signed this
day of June, 2016.
^ Signed this
day of June, 2016.
Signed this
day of June, 2016.
ELECTRIC, LLC
Keith Wall
PUBLIC UTILITY COMMISSION OF
TEXAS STAFF
_._.^...^._._ -,_.
Sam Chang
OFFICE OF PUBLIC UTILITY COUNSEL
Laurie Barker
CITY OF HOUSTON and HOUSTON
COALITION OF CITIES
Altonv J. Hall Jr. v_._....
TEXAS COAST UTILITIES COALITION
Brennan FoTey
GU
-a
COAST COALITION OF CITIES
alt ^'iie ^^r
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Exhibit A
Settlement
Sheet No. 6.14.10
Page 1 of 4
Chapter 6: Company Specific Items
CenterPoint Energy Houston Electric, LLC
Applicable: Entire Service Area
6.1.1.6.13
RIDER DCRF - DISTRIBUTION COST RECOVERY FACTOR
APPLICABILITY
Each Retail Customer connected to the Company's distribution system will be assessed a
nonbypassable distribution service charge adjustment pursuant to this rider. The charges derived
herein, pursuant to Substantive Rule §25.243, are necessitated by incremental distribution costs
not included in the Company's last general rate case proceeding before the Commission.
MONTHLY RATE
The REP, on behalf of the Retail Customer, will be assessed this distribution service charge
adjustment based on the monthly per unit cost (DCRF) multiplied times the Retail Customer's
appropriate monthly billing determinant (kWh, Billing kVA, or 4 CP kVA).
The DCRF shall be calculated for each rate according to the following formula:
DCRF =
[((DICc - DICRc) * RORAT) + (DEPRc - DEPRRC) + (FITc - FITRC) + (OTc OTRC) - E(DISTREVRC-cLASS * %GROWTHCLASS)] * ALLOCci,ass / BDc-CLASS
Where:
DICc = Current Net Distribution Invested Capital.
DICxc = Net Distribution Invested Capital from the last comprehensive base-rate
proceeding.
RORAT = After-Tax Rate of Return as defined in Substantive Rule §25.243(d)(2).
DEPRc = Current Depreciation Expense, as related to Current Gross Distribution Invested
Capital, calculated using the currently approved depreciation rates.
DEPRRC = Depreciation Expense, as related to Gross Distribution Invested Capital, from the
last comprehensive base-rate proceeding.
FITc = Current Federal Income Tax, as related to Current Net Distribution Invested
Capital,including the change in federal income taxes related to the change in return on rate
base and synchronization of interest associated with the change in rate base resulting from
Revision Number: 1 st
Effective: 09/01/16
12
Chapter 6: Company Specific Items
Exhibit A
Settlement
Sheet No. 6,14.10
Page 2 of 4
CenterPoint Energy Houston Electric, LLC
Applicable: Entire Service Area
additions to and retirements of distribution plant as used to compute Net Distribution
Invested Capital.
FITRC = Federal Income Tax, as related to Net Distribution Invested Capital from the last
comprehensive base-rate proceeding.
OTc = Current Other Taxes (taxes other than income taxes and taxes associated with the
return on rate base), as related to Current Net Distribution Invested Capital, calculated using
current tax rates and the methodology from the last comprehensive base-rate proceeding,
and not including municipal franchise fees.
OTRC = Other Taxes, as related to Net Distribution Invested Capital from the last
comprehensive base-rate proceeding, and not including municipal franchise fees.
DISTREVRC-CLASS (Distribution Revenues by rate class based on Net Distribution Invested
Capital from the last comprehensive base-rate proceeding) =(DICRc-cLASS * RORAT) +
DEPRRC-CLASS + FITRC-CLASS + OTRC-CLASS.
%GROWTHcLASS ( Growth in Billing Determinants by Class) =(BDC-CLASS - sDRC-CLASS) /
BDRCCLASS
DICRC-CLASS = Net Distribution Invested Capital allocated to the rate class from the last
comprehensive base-rate proceeding.
DEPRRC-CLASS = Depreciation Expense, as related to Gross Distribution Invested Capital,
allocated to the rate class in the last comprehensive base-rate proceeding.
FITRC-CLASS = Federal Income Tax, as related to Net Distribution Invested Capital, allocated
to the rate class in the last comprehensive base-rate proceeding.
OTRC-CLASS = Other Taxes, as related to Net Distribution Invested Capital, allocated to the
rate class in the last comprehensive base-rate proceeding, and not including municipal
franchise fees.
ALLOCCLASS = Rate Class Allocation Factor approved in the last comprehensive base-rate
proceeding, calculated as: total net distribution plant allocated to rate class, divided by total
net distribution plant. For situations in which data from the last comprehensive base-rate
proceeding are not available to perform the described calculation, the Rate Class Allocation
Factor shall be calculated as the total distribution revenue requirement allocated to the rate
class ( less any identifiable amounts explicitly unrelated to Distribution Invested Capital)
divided by the total distribution revenue requirement (less any identifiable amounts
Revision Number: lst
Effective: 09/01/16
13
Exhibit A
Settlement
Chapter 6: Company Specific Items
Sheet No. 6.14.10
Page 3 of 4
CenterPoint Energy Houston Electric, LLC
Applicable: Entire Service Area
explicitly unrelated to Distribution Invested Capital) for all classes as approved by the
commission in the electric utility's last comprehensive base-rate case.
The Allocation Factor for each listed rate schedule is as follows:
Residential Service
Secondary Service Less Than or Equal to 10 kVA
Secondary Service Greater Than 10 kVA
Primary Service
Transmission Service
Street Lighting Service
53.0715%
2.1103%
35.1158%
1.6447%
0.1383%
7.9193%
BDc-cLnss= Rate Class Billing Determinants (weather-normalized and adjusted to reflect the
number of customers at the end of the period) for the 12 months ending on the date used for
purposes of determining the Current Net Distribution Invested Capital. For customer classes
billed primarily on the basis of kilowatt-hour billing determinants, the DCRF shall be
calculated using kilowatt-hour billing determinants. For customer classes billed primarily
on the basis of demand billing determinants, the DCRF shall be calculated using demand
billing determinants.
BDRC-CLASS = Rate Class Billing Determinants used to set rates in the last comprehensive
base-rate proceeding.
Rate Class
Effective: 9/1/2016
DCRF Charge
Effective: 9/1 /2017
DCRF Charge
Billing Units
Residential Service
$ 0.000795
$ 0.000866
per kWh
Secondary Service Less
Than or Equal to 10 kVA
Secondary Service
Greater Than 10 kVA
Primary Service
$ 0.001061
$ 0.001155
per kWh
$ 0.136574
$ 0.148714
per Billing kVA
$ 0.060299
$ 0.065659
per Billing kVA
Transmission Service
$ 0.002657
$ 0.002893
per 4CP kVA
Lighting Services
$ 0.011658
$ 0.012694
per kWh
Revision Number: 1 st
Effective: 09/01/16
14
Chapter 6: Company Specific Items
Exhibit A
Settlement
Sheet No. 6.14.10
Page 4 of 4
CenterPoint Energy Houston Electric, LLC
Applicable: Entire Service Area
DETERMINATION OF BILLING DEMAND FOR DISTRIBUTION SYSTEM CHARGES
Determination of Billing kVA For loads whose maximum NCP kVA established in the 11
months preceding the current billing month is less than or equal to 20 kVA, the Billing kVA
applicable to the Distribution System Charge shall be the NCP kVA for the current billing
month. For all other loads, the Billing kVA applicable to the Distribution System Charge shall
be the higher of the NCP kVA for the current billing month or 80% of the highest monthly
NCP kVA established in the 11 months preceding the current billing month (80% ratchet). The
80% ratchet shall not apply to seasonal agricultural Retail Customers.
This rate schedule is subject to the Company's Tariff and Applicable Legal Authorities.
Revision Number: 1 st
Effective: 09/01/16
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