NOC-AE-13003023, Response to Request for Additional Information Regarding Financial Assurance for Decommissioning - 2013 Update (TAC Nos. MF2248 & MF2249)

Response to Request for Additional Information Regarding Financial Assurance for Decommissioning - 2013 Update (TAC Nos. MF2248 & MF2249)

ML13233A317
Person / Time
Site:	South Texas
Issue date:	08/05/2013
From:	Harrison G South Texas
To:	Document Control Desk, Office of Nuclear Reactor Regulation
References
NOC-AE-13003023, TAC MF2248, TAC MF2249
Download: ML13233A317 (19)

Text

Nuclear Operating Company South Terns Pro/ect Electric GeneratingStation PO. goe 289 Wadsworth, Texas 77483 August 5, 2013 NOC-AE-1 3003023 File No.: D57, G25 10 CFR 50.75 U. S. Nuclear Regulatory Commission Attention: Document Control Desk Washington, DC 20555-0001 South Texas Project Units 1 and 2 Docket Nos. STN 50-498, STN 50-499 Response to Request for Additional Information Regarding STP Financial Assurance for Decommissioning -2013 Update (TAC Nos. MF2248 AND MF2249)

References:

1. George Harrison, STP Nuclear Operating Company, to NRC Document Control Desk, "Financial Assurance for Decommissioning - 2013 Update,"

dated April 25, 2013 (NOC-AE-13002985) [ML13142A196]

2. NRC Request for Additional Information (RAI), STP Nuclear Operating Company, Decommissioning Funding Status Report, dated July 3, 2013 (AE-NOC-13002453) [ML13184A323]

The STP Nuclear Operating Company (STPNOC) hereby submits the attached response to Request for Additional Information dated July 3, 2013, resulting from the NRC staff's review of the status report referenced above. The response is based upon information provided by the individual co-owners of the South Texas Project:

• NRG South Texas LP;

• City Public Service Board of San Antonio; and

• City of Austin - Austin Energy.

This letter contains no NRC commitments.

If there are any questions, please contact either Jim Morris at (361) 972-8652 or me at (361) 972-8074.

r George Harrison General Manager, Financial Services jrm

Enclosure:

Response to NRC Request for Additional Information

Attachment:

Order of the Public Utility Commission of Texas dated April 29, 2013 Aoc)

STI: 33738051

NOC-AE-13003023 Page 2 of 2 cc:

(paper copy) (electronic copy)

Regional Administrator, Region IV A. H. Gutterman, Esquire U. S. Nuclear Regulatory Commission Morgan, Lewis & Bockius LLP 1600 East Lamar Boulevard Arlington, TX 76011-4511 Balwant K. Singal U. S. Nuclear Regulatory Commission Balwant K. Singal John Ragan Senior Project Manager Chris O'Hara U.S. Nuclear Regulatory Commission Jim von Suskil One White Flint North (MS 8 B1) NRG South Texas LP 11555 Rockville Pike Rockville, MD 20852 NRC Senior Resident Inspector Kevin Polio U. S. Nuclear Regulatory Commission Richard Peha P. O. Box 289, Mail Code: MNl16 City Public Service Wadsworth, TX 77483 C. M. Canady Peter Nemeth City of Austin Crain Caton & James, P.C.

Electric Utility Department 721 Barton Springs Road C. Mele Austin, TX 78704 City of Austin Richard A. Ratliff Texas Department of State Health Services Robert Free Texas Department of State Health Services

ENCLOSURE South Texas Project Units 1 and 2 Financial Assurance for Decommissioning Response To NRC Request for Additional Information Issued July 3, 2013

Enclosure NOC-AE-13003023 Page 1 of 2 RAI #1: Citation for real rate of returns As stated in Title 10 of the Code of Federal Regulations (10 CFR), paragraph 50.75(f)(1),

the information in [the Decommissioning Funding Status (DFS)] report must include [... ] the assumptions used regarding rates of escalation in decommissioning costs, rates of earnings on decommissioning funds, and rates of other factors used in funding projections...

By letter dated April 25, 2013 (Agencywide Documents Access and Management System (ADAMS) Accession No. ML13142A196), STP Nuclear Operating Company (STPNOC) reported the following for City of Austin - Austin Energy:

• 4.913% rate of escalation in decommissioning costs for South Texas Project (STP), Units 1 and 2, and

• 2.94% rate of earnings on decommissioning funds for STP 1 and 2.

Please provide the basis for the assumptions used by City of Austin - Austin Energy regarding rates of escalation in decommissioning costs, rate of earnings on decommissioning funds, and rates of other factors assumed in your DFS report. Please verify the reported escalation and earnings rate and provide a calculated real rate of return.

Response

For the City of Austin (Austin Energy), the assumptions regarding rates of escalation in decommissioning costs, rate of earnings on decommissioning funds, and rates of other factors assumed in the DFS report are inputs to the rates established by the City Council of the City of Austin, which has rate-setting authority for Austin Energy. The rate of earnings is based upon actual earnings experience of the Austin Energy trust funds. The rate of escalation is based upon the actual annualized escalation rate of the NRC's formula amount in 10 CFR 50.75(c) from 1986 to 2011. The assumed real rate of return is negative 1.973%, which is lower than the positive 2% real rate of return authorized by NRC's regulations in 10 CFR 50.75(e)(1)(ii).

Although Austin Energy sets its own rates, these rates are subject to potential review by the Public Utility Commission of Texas (PUCT), because some of Austin Energy's customers are located outside the city limits of the City of Austin. Rates approved by the City Council of the City of Austin on June 7, 2012 were subject to review by the PUCT. The rate of escalation in decommissioning costs and rate of earnings on decommissioning funds reported to NRC by Austin Energy were inputs upon which Austin Energy's rates for collection of decommissioning trust funds were established, and these inputs were submitted for review by the PUCT.

Ultimately, the rate case before the PUCT was settled, and the current Austin Energy rates were approved pursuant to the PUCT's Order dated April 29, 2013 in Docket No. 40627. Attached is a copy of this PUCT Order, which does not specifically address the projected rate of escalation and rate of earnings implicitly included within the rates.

Enclosure NOC-AE-13003023 Page 2 of 2 RAI #2: Reporting Requirements The provisions of 10 CFR 50.75(f)(1) and (2) require the licensee to report the amount of funds accumulated to the end of the calendar year preceding the report.

By letter dated April 25, 2013, STPNOC provided the amounts accumulated in the decommissioning trust funds at the end of the calendar year preceding the date of the report for items included in 10 CFR 50.75 (b) and (c) for each licensee. As reported by STPNOC, the fund balances for NRG and City Public Service Board of San Antonio as of December 31, 2012, include "funds accumulated based upon a site-specific study that includes license termination and other costs."

Please clarify the meaning of "other costs" and indicate what portion of the NRG and City Public Service Board of San Antonio accumulated fund balances for STP, Units 1 and 2, are designated for radiological decommissioning activities only. Please specify if any of the accumulated funds for STP, Units 1 and 2 are for non-radiological decommissioning costs.

Response

The amounts accumulated are based upon a site specific study, which includes non-radiological site restoration costs that may go beyond the requirements of 10 CFR 50.75. The amounts reported are available for purposes of completing radiological decommissioning pursuant to 10 CFR 50.75, and the "other costs" are expected to be incurred during the site restoration phase that occurs after radiological decommissioning is substantially complete.

RAI #3: Amounts accumulated The provisions of 10 CFR 50.75(f)(1) and (2) require the licensee to report the amount of funds accumulated to the end of the calendar year preceding the report.

In its letter dated April 25, 2013, STPNOC did not state if the amount of decommissioning funds accumulated was an after-tax amount.

Please provide the after-tax amount of funds accumulated through December 31, 2012 for all licensees.

Response

On December 14, 2012, NRG made withdrawals from the trust funds to pay for the expected remaining taxes due for net realized gains and other income for 2012. Thus, the balances reported by NRG as of December 31, 2012, already reflect a subtraction for the expected tax liability associated with net realized gains and other income for 2012.

CPS Energy and Austin Energy are municipal utility companies, and therefore, no taxes are paid on realized gains or other income in their trust funds. Thus, the amounts reported of the total market value of the accumulated balances for each trust fund as of December 31, 2012 reflect the "after-tax" amounts.

ATTACHMENT 1

M III1111 11111 1111tl 111111111111li Control Number: 40627 Item Number: 436 Addendum StartPage: 0

PUC DOCKET NO. 40627 "-

SOAH DOCKET NO. 473- 13-0935 PETITION BY HOMEOWNERS § PUBLIC UTILITY COM I N UNITED FOR RATE FAIRNESS To § REVIEW AUSTIN RATE ORDINANCE § OF TEXAS NO. 20120607-055 § ORDER This Order addresses the rate-filing package (RFP) of the City of Austin d/b/a Austin Energy (Austin Energy or AE) filed pursuant to § 33.104 of PURA' in response to the Petition by Homeowners United for Rate Fairness to Review the City of Austin Rate Ordinance No. 20120607-055 passed by the Austin City Council on June 7, 2012 (June 7 1h ordinance). An unopposed stipulation and settlement agreement (agreement) was signed by a majority of the parties (signatories) that resolves all issues in this case. The agreement is included as Exhibit A to this Order. Consistent with the agreement, Austin Energy is hereby ordered to change rates for customers outside the City of Austin in accordance with this Order.

I. Findings of Fact ProceduralHistory

1. Austin Energy is a municipally-owned utility serving over 400,000 customers and a population of almost one million in the Greater Austin area.

2. Austin Energy's 437-square mile service area includes customers in the City of Austin, the environs, and the following municipalities: Bee Cave, Buda, Cedar Park, Creedmoor, Del Valle. Lakeway, Manchaca, Manor, Mustang Ridge, Pflugerville, Rollingwood, Sunset Valley, Village of the Hills, and Westlake Hills.

3. Following a public process, the Austin City Council (council) unanimously approved a system-wide rate increase for Austin Energy ratepayers through Ordinance No. 20120607-055 on June 7, 2012. The rates approved by the council became effective on October 1, 2012.

P'ublic Utility Regulatory Act, TEX. UTIL. CODE ANN. §§ 11.001-66.016 (Vernon 2007 & Supp. 2012)

(PURA).

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PUC Docket No. 40627 Order Page 2 of 12 SOAH Docket No. 473-13-0935

4. The council found Austin Energy's adjusted test-year revenue requirement of

$1,123,477,268 to be just and reasonable. However, to mitigate the impact of the rate increase on Austin Energy's customers, the council approved a system-wide revenue requirement in the lesser amount of $1,109,871,703, a $91,634,419 increase over system-wide revenues under previous rates. Because certain commercial customers are currently served Linder long-term contracts with fixed base rates, these customers will not begin to receive service under the new rates until the expiration of their contracts, no later than June 1, 2015. As a result, Austin Energy will not collect from these customers

$20,345,009 of the increase approved by the council until the expiration of the contracts.

Therefore, the new rates that Austin Energy implemented on October 1, 2012, provide for a $71,289,410 increase (a system-wide average increase of 7%) over prior rates, including a $44,383,091 increase (11.7%) over system-wide revenues from prior residential rates.

5. In addition to increases to the revenue requirement, the June 7 th ordinance consolidated Austin Energy's previous 24 rate classes into 12 rate classes.

6. Pursuant to PURA § 33.103(a), Austin Energy issued a 14-day report stating the effect of the governing body's decision on each class of ratepayer on June 21, 2012. This 14-day report was published in the Austin American Statesman, the newspaper of widest circulation throughout Austin Energy's service area.

7. Austin Energy also provided notice to its customers through a bill insert that detailed the new rates for each customer class.

8. On August 2, 2012, Homeowners United for Rate Fairness (HURF) filed a petition for review of the June 7 th ordinance. That petition was supplemented with additional signatures on August 6, 2012.

9. On September 7, 2012, Austin Energy filed a Statement of Review indicating that it did not contest the validity of HURF's petition.

10. In response to HURF's petition, and pursuant to PURA § 33.104, Austin Energy filed its rate-filing package (RFP) on November 1, 2012. The RFP included the direct testimony of 24 witnesses and additional materials to demonstrate to the Commission that the 000000002

PUC Docket No. 40627 Order Page 3 of 12 SOAH Docket No. 473-13-0935 revenue requirement and corresponding rate design approved by the council were just and reasonable as applied to Austin Energy's customers outside the City of Austin.

I1. Because the Commission does not have an RFP for municipally-owned utilities, Austin Energy organized its RFP based upon the Non-Investor-Owned Utility Transmission Cost of Service RFP, supplemented by the Investor-Owned Utility Transmission and Distribution Cost of Service RFP.

12. Austin Energy's cost of service was presented using the cash flow method.

13. The 12-month test-year used in Austin Energy's RFP was October 1, 2008 through September 30, 2009. At the time Austin Energy began the rate review process in the summer of 2010; this was the time period with the most recent audited financial statements available. This was the same test-year presented to the council.

14. On November 5, 2012, the Commission referred this case to the State Office of Administrative Hearings (SOAH) to conduct an evidentiary hearing and to prepare a proposal for decision.

15. Commission Staff participated in this docket. Additionally, the following parties were granted intervenor status in this proceeding, without objection: HURF, the Office of Public Utility Counsel (OPUC), Westlake United Methodist Church (WUMC), Texas Ratepayers' Organization to Save Energy/Texas Legal Services Center (Texas ROSE/TLSC), Citizens for Fair Affordable Innovative Rates (FAIR), and the City of Lakeway.

16. On November 8, 2012, Data Foundry. Inc. moved to intervene as a customer of AE. On November 15, 2012, Austin Energy and OPUC objected to the intervention of Data Foundry claiming that Data Foundry lacked standing to intervene by failing to prove standing as a customer outside the City of Austin.

17. Data Foundry responded to the objections of Austin Energy and OPUC, presenting a lease for 200-square-feet of a 1,500-square-foot storage facility outside the City of Austin.

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PUC Docket No. 40627 Order Paige 4 of 12 SOAH Docket No. 473-13-0935

18. On November 16, 2012, the Commission issued the Preliminary Order specifying issues to be addressed in this case. After receiving briefing on threshold issues, the Commission issued the Supplemental Preliminary Order addressing threshold legal and policy issues, on December 13, 2012. In the Supplemental Preliminary Order, the Commission held that (a) the 185-day deadline stated in PURA § 33.054(c) was mandatory and could not be modified; and (b) in determining what known and measurable changes are to be considered for its de novo review of the June 7 1h ordinance in this docket, the Commission may consider only known and measurable changes that were available to the council at the time the June 7th ordinance was passed. The Commission further ruled that to the extent that there is evidence available to the Commission that was not available at the time the council made its decision, the evidence would be admissible only for purposes of determining what conditions existed at the time the council acted.

19. With the agreement of the parties and as authorized by SOAH Order No. 2, issued on November 28, 2012, Austin Energy filed the supplemental direct testimonies of Pat Sweeney and Ann Little on December 12, 2012, to address additional issues set forth in the Preliminary Order. The parties' agreement also established that the 185-day deadline applicable to this case was to be measured from December 12, 2012, making the statutory deadline June 15, 2013. The Commission approved the measurement of the 185-day deadline from December 12, 2013 in the Supplemental Preliminary Order.

20. At the December 18, 2012 prehearing conference, Data Foundry was granted party status based on the lease documentation showing Data Foundry to be a customer outside the City of Austin. The Administrative Law Judges (ALJs) also determined that no additional notice was necessary.

21. On February 7, 2013, the following intervenor parties filed direct testimony: HURF, Data Foundry, OPUC, and Texas ROSE/TLSC. On this same date, FAIR and WUMC filed statements of position.

22. On February L1, 2013, the City of Lakeway sought leave to withdraw as an intervenor, which request was granted in SOAH Order No. 7 on February 19, 2013.

23. On February 14, 2013, Commission Staff filed its direct testimony.

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PUC Docket No. 40627 Order Page 5 of 12 SOAH Docket No. 473-13-0935

24. On February 20, 2013, HURF, OPUC, Data Foundry, Texas ROSE/TLSC and WUMC filed cross-rebuttal testimony.

25. On February 22, 2013, Austin Energy filed rebuttal testimony in response to Commission Staff and the intervenor parties.

26. On February 26, 2013, the signatories reached an agreement in principle that resolved all issues in this proceeding.

27. At the prehearing conference on March t, 2013, the parties informed the ALJs that an agreement had been reached. During the prehearing, the ALJs ordered a stay of the procedural schedule to allow parties to Finalize the agreement.

28. On March 1, 2013, the council approved the terms set forth in the agreement in a public meeting.

29. After being notified that the council approved the terms on March 1, 2013, the ALus issued SOAH Order No. 9, canceling the hearing on the merits scheduled to commence on March 4, 2013.

30. On March 18, 2013, the signatories filed the agreement, signed by Austin Energy, Commission Staff, OPUC, HURF, Texas ROSE/TLSC, WUMC, and FAIR. Data Foundry indicated that, while not a signatory to the agreement, it would not oppose issuance of a final order in this proceeding consistent with the terms of the agreement.

31. On March 27, 2013, the SOAH ALJs issued Order No. 11, which granted the signatories unopposed motion and admitted into evidence the agreement, the supplemental direct testimony of Mark Dreyfus in support of the agreement, Austin Energy's amended tariffs reflecting new rates for customers outside the City of Austin, and the prefiled exhibits of Austin Energy, Commission Staff, HURF, OPUC, TLSC/Texas ROSE, WUMC, and 2

Data Foundry.

2 On March 28. 20 13. Data Foundry submitted exhibit copies of witness Kelso King's testimony as directed in SOAH Order No. 1I.

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PUC Docket No. 40627 Order Page 6 of 12 SOAH Docket No. 473-13-0935 Descriptionof the Agreement

32. The signatories agree that a negotiated resolution of this proceeding is desirable and in the public interest because the result is reasonable under the circumstances, is supported by the evidence, will conserve the public's and the signatories' resources, and will eliminate controversy.

Base Rates

33. The rates that will result from the agreement will apply only to ratepayers who receive service at points of delivery outside the City of Austin, and will apply only to service received at locations outside of the City of Austin.

34. Under the rates approved in the June Vh 7 ordinance, Austin Energy's revenue requirement for customers outside the City of Austin was $159,970,582. Under the rates in this agreement, Austin Energy's revenue requirement for customers outside the City is

$153,794,692.

35. The agreement provides for a reduction to the revenue collected from residential customers whose points of delivery -are located outside the City of Austin in the amount of $5,751,892.

36. Of the $5,751,892 revenue requirement reduction:

(a) $4,299,895 is assigned to reduce the residential class energy charges in order to achieve the rates specified in Finding of Fact No. 40 and the Residential-Outside Austin tariff, attached as Exhibit B to this Order.

(b) $1,205,734 is assigned to reduce the residential class Community Benefit Charge (CBC), by the reduction in the amount charged for the Customer Assistance Program and the removal of the Service Area Lighting component from the residential class CBC in the portion of AE's service territory outside the City of Austin, as shown in the attached CBC tariff for points of delivery outside of Austin, Austin Energy will collect $80,188 associated with this change in the CBC to customers outside the City of Austin under the Service Area Lighting tariff, (c) Commercial customers outside the City are assigned a total of $326,45 1 in base rate reductions:

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PUC Docket No. 40627 Order Page 7 of 12 SOAH Docket No. 473-13-0935 (l) Base rate revenues for the secondary voltage _ 10 kW < 50 kW class outside the City are reduced by $32,422; (2) Base rate revenues for the secondary voltage > 50 kW class outside the City are reduced by $132,011; (3) Base rate revenues for the primary voltage < 3 MW class outside the City are reduced by $63,219; and (4) Base rate revenues for the primary voltage > 3 MW < 20 MW class outside the City are reduced by $98,799.

37. The $162,018 reduction for the primary voltage < 3 MW class and the primary voltage

> 3 MW < 20 MW class outside the City of Austin would translate into a $2.5 million system-wide reduction for the primary voltage < 3 MW class and the primary voltage > 3 MW < 20 MW class.

38. These rate reductions for commercial customers bring the affected classes outside the City of Austin closer to cost of service.

39. The agreement provides that the residential customer charge will remain at $10.00, as approved in the June 71h ordinance. OPUC does not agree to the $10.00 customer charge.

40. The agreement provides that the $4,299,895 reduction will result from Austin Energy's five-tier rate structure within the residential class being adjusted as follows:

Summer Rates (per kWh) Winter Rates (per kWh)

I" Tier SO.03750 $0.01800 2 "dTier $0.08000 $0.05600 3 rd Tier $0.09325 $0.07170 4 th Tier $0.09325 $0.07170 5L1Tier $0.09325 $0.07170

41. In the portion of Austin Energy's service territory outside of the City of Austin, Austin Energy will offer the Houses of Worship and Independent School District discounts as adopted by Austin City Council, but the revenue effect of providing these discounts has been imputed to the reduction in the revenue requirement established in Finding of Fact Nos. 35 and 36.

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PUC Docket No. 40627 Order Page 8 of 12 SOAH Docket No. 473-13-0935

42. The agreement provides that Austin Energy may rely upon the modified A&E 4CP production cost allocation methodology approved in the June 7 1h ordinance and as set forth in Austin Energy's RFP.

Fuel Charge

43. The agreement provides that a public hearing will be conducted prior to Austin Energy changing its charge for fuel, purchased power, and related costs via the Power Supply Adjustment (PSA) approved by council in June of 2012. Signatories agreed that a PSA change, if any, must be considered as part of the City of Austin's annual budgeting process. This term of the agreement does not alter Austin Energy's ability to adjust the PSA to eliminate any over- or under-recovery if the balance of the PSA costs is more than 110% or less than 90% of PSA costs actually incurred, pursuant to the PSA tariff.

The right to appeal a change to the PSA or fuel adjustment clause under PURA is not affected by the fact that the action is taken through the City of Austin's annual budget process.

Riders

44. The signatories agree that AE will charge residential customers outside the City

$0.001180 per kWh for Customer Assistance Program (CAP) funding. As a result, Austin Energy will charge approximately $442,923 less to residential customers outside the City of Austin than under current rates. It is Commission Staffs position that this amount aligns CAP funding levels with the State of Texas System Benefit Fund. It is TLSC/Texas ROSE's position that this funding amount is reasonable for purposes of the agreement because it is within the range of low-income program funding previously approved by the Commission. Notwithstanding this limitation, AE will fully fund the CAP at $9.6 million, as approved by the council. Additionally, the CAP charge will be set annually through the City budget process, pursuant to the tariff. TLSC/Texas ROSE also agreed to this funding amount for purposes of the agreement because AE agreed to supplement the low-income funding to reach the level of funding approved in the June 7 th ordinance.

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PUC Docket No. 40627 Order Page 9 of 12 SOAH Docket No. 473-13-0935

45. The agreement provides that Austin Energy shall charge service-area lighting customers outside the City of Austin under the Service Area Lighting tariff rather than charging these costs to customers outside the City of Austin through the Service Area Lighting component of the CBC, as stated in Finding of Fact No. 36(b).

46. The signatories agree that the Commission has no jurisdiction to consider the rate-case expenses incurred by Austin Energy after the council's adoption of the June 7 Ih ordinance.

Consistency of the Agreement with PURA and Cmnmission Rules

47. The agreement is the result of good faith negotiations by the parties, and these efforts, as well as the overall result of the agreement viewed in light of the record as a whole, support the reasonableness and benefits of the terms of the agreement.

48. The reductions to the revenue requirement in the agreement are consistent with applicable provisions of PURA and Commission rules.

49. A residential customer charge of $10.00, as approved in the June 7 th ordinance, is reasonable for customers outside the City of Austin under the terms of the agreement.

50. Austin Energy's tiered rate structure for residential energy charges provided in the agreement is reasonable for customers outside the City of Austin.

51. Austin Energy's CBC, as modified by the agreement, is reasonable for customers outside the City of Austin.

52. Austin Energy's funding for its low-income programs included as part of the stipulated revenue requirement under the agreement in this case is reasonable.

53. Austin Energy's use of the modified A&E 4CP for production cost allocation under the terms of the agreement is reasonable.

II. Conclusions of Law

1. Austin Energy is a municipally-owned utility as defined in PURA § 11.003(11).

2. PURA exempts municipally-owned utilities from Commission regulation, with some exceptions, subject to PURA §§ 33.101-. 104.

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PUC Docket No. 40627 Order Page 10 of 12 SOAH Docket No. 473-13-0935

3. The Commission has jurisdiction over this matter pursuant to PURA § 33.101.

4. Based upon Findings of Fact Nos. 8-9 and pursuant to P.U.C. PROC. R. 22.244(d), the signatures on the petition were determined to be valid and the appeal of the June 7 'h ordinance was properly perfected.

5. The Commission has original jurisdiction over Austin Energy's transmission rates; therefore, the Commission did not consider Austin Energy's transmission rates in this appeal.

6. The 185-day deadline stated in PURA § 33.054(c) is mandatory and cannot be modified.

7. Pursuant to PURA § 33.054(a), the appropriate test-year for the Commission to review in this proceeding was the test-year presented to the Austin City Council, October 1, 2008 through September 30, 2009.

8. In determining what known and measureable changes are to be considered for its de novo review of the June 7 th ordinance in this docket, the Commission may only consider known and measureable changes that were available to the council at the time the June 7 'h ordinance was passed, except that to the extent that there is evidence available to the Commission that was not available at the time the council made its decision, the evidence would only be admissible for purposes of determining what conditions existed at the time the council acted.

9. The agreement, taken as a whole, is a just and reasonable resolution of all the issues it addresses, is consistent with the relevant provisions of PURA, the Commission's rules, and the public interest.

10. The rates that will result from the agreement will not be unreasonably preferential, prejudicial, or discriminatory, but will be sufficient, equitable, and consistent in application to each group of customers.

It. Austin Energy's tariffs and rate schedules included as Exhibit B to this Order accurately reflect the terms of the agreement, as applied to customers outside the City of Austin.

The Commission does not have jurisdiction over the portions of the tariffs that apply only 000000010

PUC Docket No. 40627 Order Page 11 of 12 SOAH Docket No. 473-13-0935 to inside the City of Austin and this Order does not affect those portions of Austin Energy's tariffs.

12. Under PURA, municipally-owned utilities may pursue reasonable policy goals in the design of rates, subject to Commission review on appeal.

13. Austin Energy's rates resulting from the agreement are just and reasonable and meet the requirements of PURA § 36.003 for customers outside the City of Austin.

14. The agreement resolves all issues pending in this proceeding.

15. The Commission's adoption of a final order consistent with the agreement satisfies the requirements of TEX. GOv'T CODE ANN. §§ 2001.001 - 2001.9023 (Vernon 2012) without the necessity of a decision on contested case issues resulting from a hearing on the merits.

16. The requirements for informal disposition pursuant to P.U.C. PROC. R. 22.35 have been met in this proceeding.

III. Ordering Paragraphs In accordance with these findings of fact and conclusions of law, the Commission issues the following Order:

1. Consistent with the agreement, the rates set by the City of Austin in the June 7 'h ordinance for customers whose delivery points are outside the City of Austin are affirmed, except to the extent modified by this Order and the agreement.

2. Consistent with the agreement, the tariffs, rate schedules, and riders that apply to customers outside the City of Austin are approved and shall become effective June 1, 2013, for customers outside the City of Austin.

3. Within 20 days of this Order, Austin Energy shall file a clean record copy of the approved tariffs to be stamped "Approved" by Central Records and retained for future reference.

4. The entry of this Order consistent with the agreement does not indicate the Commission's endorsement of any principle or methodology that may underlie the agreement. Further, 000000011

PUC Docket No. 40627 Order Page 12 of 12 SOAH Docket No. 473-13-0935 the entry of this Order should not be regarded as precedent as to the appropriateness of any principle or methodology underlying the agreement.

5. All other motions, requests for entry of specific findings of fact, conclusions of law, and ordering paragraphs, and any other requests for general or specific relief, if not expressly granted in this Order, are hereby denied.

SIGNED AT AUSTIN, TEXAS the .. _Lday of April 2013.

PUBLIC UTILITY COMMISSION OF TEXAS DONNA L S-W ff RAAN KfENN&"rH W. AND!nJa7., COVMMSSIONER ti:\cad mVorders\fi nal\40000\406271o.docx 000000012