Citizens of Jasper for Fair and Equitable Rates

03/12/2025

The Jasper City Council on Monday voted to adjust the water rates in Jasper to reflect equal rates for customers outside the city and outside the city limits. As you may recall, a petition was filed at the PUCT (Public Utilities Commission Texas) on this issue. Since the rates are revenue based and does not use city taxes to own and operate the water and sewage systems, there was no justification for having higher rates outside the city. This higher rate outside the city was actually subsidizing the rates inside the city and would have been very difficult for the city to defend at the commission. There is one thing however that is very important to highlight. The water study that was provided to the city showed that the current rates for water was deficient by 6.7% revenue to actual cost and 61% deficient for sewer to actual cost. The petition to the commission did point out that the city had not performed a cost-of-service study for many years. The main reason for the petition was to have levelized rates. The fact the revenue was deficient, and the council had to make the hard decision to raise the revenue to match the cost was not part of the complaint to the commission. This deficiency was created over years with the previous ordinance that automatically raised water and sewage rates by the CPI and capped at three percent. There is no telling how long the rates were not covering the cost because the difference was being covered up by using the Cambridge/SRMPA fund to make up the difference. At this rate and if it remained unchecked, the Cambridge /SRMPA fund would have been depleted and all departments receiving these funds to make their budgets whole would have been in serious trouble. So in summary this council had to fix the deficiency that was created by a 2008 ordinance and over the years, the rates were not sufficient to cover the cost of the service being provided. I am sure the city knew this when they passed a deficient budget in October last year. Regardless, a cost of service was required and unfortunately, this city council had to fix a problem that was not of their creation.

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01/29/2025

One more follow up on the relationship of Jasper and Sam Rayburn Municipal Power Agency (SRMPA), SRPMA is a municipal power agency formed by the three cities of Jasper, Liberty, and Livingston to combine their power requirements and enable SRMPA to negotiate power supply in their behalf. How did SRMPA get its credit to be able to enter in power arrangements that they have? It was based on the credit of the three cities and the rate paying customers of those municipal utilities. Without this rate base (the customers), SRMPA would not have good enough credit rating for SRMPA to be formed much less raise the money and credit for them to operate. SRMPA without the financial backing of the three municipal utilities and their customers would not be able to operate. A municipal power agency when formed is a non-profit entity and its purpose is to secure power for its members using the combined credit of it’s members and the rating is based on the strength of the ability for those cities to collect from their customers and pay SRMPA. Municipal power agencies cannot exist without the financial backing of the members. So when someone says there is no relationship between SRMPA and the activities they enter into, remember who formed SRMPA and for what purpose.

01/28/2025

I was reading a post by Mr. Lequin Hilderbrand on the East Texas Banner. While I do agree with the concept of not tearing down and building a positive environment and a better place to live and work, there are some statements that need to be clarified. This is not written to be adversarial but to clarify some of the statements that were made in the article. As far a Proposition A, that was an issue that was voted on before I got involved and my comments are not addressing that issue except to address the specific comments that the operating expenses of $8.8 million are higher than the revenues of $7.5 million. Since none of these numbers match what is posted on the City Web Site, I assume that Mr. Hilderbrand has assess to numbers that are not posted and since there is not matching numbers in the budget or posted actuals, I don’t know if he is talking actuals for the previous fiscal year or the budget that was approved in September for this year’s fiscal year. What I can say, if you look at the posted budget you will see an item for transfer to the general fund. I was told by the City during the settlement talks that the built-in earnings for the City were about 9.6% (represented by a transfer to the general fund) for the proposed budget for the 2024/2025 fiscal year. For the last couple of years, money from the Cambridge funds have been used by the City to reduce the revenues collected from the customers so when Mr. Hilderbrand says they collected less money than the expense, this is more than likely the explanation. Listening to the Council meetings while the budget was being approved, I believe the council voted to use $1 million from the reserved funds instead of raising the rates. I believe the council also approved using an additional $2 million to offset the fuel cost over 8 months. Since this is not reflected in the posted budget, I assume this is still in effect. So, while it is true that the City collected less from the customers than the expenses, funds reserved for use of the City to be used for electric expenses were used. This is a limited amount of money since the Cambridge Project has expired and should be used wisely to keep the cost reasonable to the customers for years to come.
I next will address the statement that there is no relationship between SRMPA and the City of Jasper. While it is true that SRMPA was formed by the cities of Jasper, Livingston, and Liberty to be the power supplier, it is not accurate to say that there is no associated cost. The power supply contract between SRMPA and Entergy Wholesale Marketing providing power to the three cities and the Cambridge project are most definitely tied together. When SRMPA board was notified in 2022 that the current price of capacity ~ $9.62/kwmonth (which was above market at the time) was going to expire at the end of 2022, the SRMPA board took no action to find a different power supply and Entergy raised the price for capacity to ~ $12.32/kwmonth. This was a 28% increase in the cost of capacity. This again was above the market price of capacity at that time. To terminate the power supply for the city supply would have also terminated the Cambridge project which was still in effect at the time. To clarify the board of SRMPA is made up of two representatives from each of the cities of Jasper, Livingston, and Liberty. The executive director for SRMPA serves as in an advisory position to the board who are the decision makers for SRMPA. The last time I checked, the price that SRMPA is paying is still the same amount even though the Cambridge project has expired. As far as the so called “gift”, SRMPA is an entity created to provide power for the benefit of the three cities and is a nonprofit. SRMPA is not able to make a profit and could not legally retain the profits from the Cambridge project and dispersed the money to the cities on three equal shares. That is not exactly what I would call a gift but then again, I’m not a lawyer. As far as the forensic audit, I have no comment on that issue. I never have accused anyone of any criminal wrongdoing and that is not my purpose for this response. The Citizens of Jasper for Fair and Equitable Rate did however, have a disagreement with the city on how the Cambridge funds should be used and the lack of transparency in the process of a review if the City needed to adjust rates. Both of these issues were addressed in the settlement. I have no comment on the statement in the video that the City Manager admitted that the customers were being overcharged but I will make this statement. When Entergy was charging SRMPA $9.62/kwmonth and then went to $12.32/kwmonth, my experience with power supply agreement during that period shows that the expense for capacity charged to the cities, is costing the rate payers in Jasper ~$130,000 a month higher than the market at the time the increase took place. I am not saying that Jasper is not passing the expense through at the amount they are charged but I am saying the cities representatives on SRMPA did not require or request proposals or entertain any formal alternatives for a power supply. I am not going to get into a got you type of discussion about the difference between a refund or a disbursement. At the time of the settlement, Jasper had received ~$67 million plus any interest during the ten years, and only had $29 million left at the time of settlement. I agree with the statement that the $1 million for the basketball court did not come out of the $29 million specified in the settlement but it did come out of the revenues received from SRMPA.
In summary, this is background and clarity on the relationship between the cities and SRMPA and how it impacts the customers of those cities. As far as I know, there has been no wrongdoing on the issues discussed but the two parties have settled on the issues and as far as I know, all of the terms of the settlement are being followed.

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09/11/2024

Correction to my last post, I was just informed that they did vote to keep the electric rates the same for the next years and there is no increase next year. If that is the case, than the rebate is an actual reduction of what customers would pay for next year.

09/11/2024

I know the final decision on the electric rates and tax increase is still pending for the City of Jasper but wanted to make an observation on what I think was passed last night regarding the use of the Cambridge. While I do agree with giving the customers a break using the Cambridge funds there is a difference between giving the customers a rebate of $1M dollars spread over 8 months and using the funds to prevent the need to raise rates at the proposed 11% in three years plus whatever they need in the next two years as well. If the increase goes into effect on October 1, the city will start collecting ~ 3.4% increase on the base revenue component of the bill plus an increase in the monthly charge. This will be off set by the motion that was passed last night starting with the December through July billing periods. Than when that period of the rebates end just before the hottest month of the year, the rates will go to full approved rates including the increase so don’t get comfortable and than be shocked by your August bill. Just wanted to point out that a rebate and using the money to keep rates the same which sounds like it would have the same effect, the truth is a little different. So if the council approves the increase later this month, any future rates would be compounded off of the new rate. Not saying that I will enjoy the rebate but pointing out the differences.

08/31/2024

One more thing on the electric rates. I believe the utility ( in the case the city electric department) has the obligation to provide reliable power at a reasonable. They will submit budgets in the case of Jasper every year. A Utility needs to publicly justify the rate ask. The city council members are the regulators in the case of Jasper. It is their job to weigh the needs of the utility and the customers and regulate the Utility. Not being a council member and not seeing the information they get from the departments, this may or may not be happening. However, what is different here, customers should have access to the information, and be able to ask questions. The Utility should be prepared to answer those question in a public forum. Not withstanding public comment which should be limited at a public meeting, being allowed to have five minutes to ask questions on material that you have seen for just a few days and the departments not being prepared to answer the questions is not a transparent process.Therefore, it is up to the council, hopefully in a public forum to ask these question so the public can hear. My question were there any adjustments to the original budget submitted, we don’t know. I will say through the attorney they hired, he is trying to be transparent but the process that was laid out to the council and no public discussion until the budget is presented to the City, the city need to move up. Their timeline so a complete review can take place. Yes this is an improvement but there is a ways to go.

08/31/2024

I just read Mayor Anderson’s monthly statement mainly focused on the electric rates. In his statement, he asked if the Citizens of Jasper for fair and equitable rates got the outcome they were looking for or wanted. Since I was part of that process I can answer that. The answer is no! We are still paying $12.32/Kw month for the power coming from SRMPA and that is about double the going rate for capacity. We are asking for a more robust process in setting rates and although this year the customers had more say so in voicing their opinion, there has been no explanation about the drivers of the rate increase. The last two years have seen the biggest increases in base rates that Jasper has ever experienced. Last year was 7.6% and this year it is close to 11% (to be implemented over theee years). I am not saying this increase may not be justified but I am saying the City has not even tried to discuss the drivers. The outcome agreed to by the group that participated in the process did not want to be punitive to the City but get an outcome that preserved what Cambridge funds that haven’t been spent/wasted to use for keeping electric fair for the future since the ability to even have those funds were because of an overpriced capacity contract. In any settlement, both sides do not get everything they wanted but one that worked. I can honestly say I think the City is trying, but this is a new process and I don’t think the City is used to justifying rate increases even if they are needed. I know there is a lot of history here in Jasper but from my standpoint, let’s move forward. Remember, the rates here are reasonable but they still need to be based on cost with a reasonable margin which by city ordinance is 10% over expenses. So did we get what the groups wanted with the filing, again the answer is no! Did the group get a fair outcome for the City and the citizens, I believe the answer is yes!

08/30/2024

Also reflecting on the rate case decision that is front of our city council. When we were doing research into our complaint at the Texas Utility Commission Jasper was automatically raising rates every year due to a calculation based on on the CPI (Consumer Price Index). The reason this was never an issue is because it was automatic and took place with no discussion or transparency. You can look at chapter 24 of the City of Jasper Code chapter 24 to verify what I am saying. This can be found on the web at municode.com under Texas than Jasper. This took place even though they had access to the Cambridge funds and could have modified rates if they chose to. The increase that happened in 2023, when we filed our case was a 7.6% increase in base rates (not total bill) and now they are proposing an 11% increase in base rates, even though it will be implemented in three stages. These are large increases over a two year period which I am sure drove the recommendation to “phase the rate in” . I asked at the meeting and was told that this did not lock the rates in for the next three years and if they needed to adjust rates for 2026 it would be on top of the deferment. The transparency has improved greatly but still falls short of explaining the drivers for the 11% increase even if it is deferred because the new rate will be the starting point for the rates discussion next year!

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08/29/2024

Just wanted to summarize what I heard in the meeting last night. The proposed three-year phase in of the rate increase would not lock in the rates for the next three years. If they need to raise rates again next year, it would be on top of what is approved this year. They have increased the transfer to the general fund to around 9.7% (Increase of $333K over last year) above the total expense in the budget. Looks like the actual budget that the City controls increased around another $300K. This being said, in my opinion, if the council decides to use the interest off of the Cambridge funds, there should be little to no increase in rates. I know there has been a lot of history in this town over the Cambridge funds and the statute passed by the citizens of Jasper over the cap of not charging 10% over the coast of providing service but going forward if the City manages its cost and the Cambridge, The citizens should be in good shape to keep the rates in Jasper fair and reasonable and below what a lot of other customers are paying in other places. The Cambridge funds hid a lot of fallacies and spending that were in past budgets past by the city. But depleting the Cambridge fund s completely is not a good plan either. Without the funds available, we as rate payers would be paying to cover their cost and if any major capitol projects were needed, we would be paying to finance those projects. That being said, doesn't mean that you don't use those funds at all. One other thing to keep in mind, Jasper through its association with SRMPA is still paying $12.32/KWmonth for capacity when the market is half that. This is costing the rate payers in Jasper about $110-$130 a month more than it should. As long as that current contract is in place, this will be happening.. So long story short, there are still improvements that can be made but in reality if we work together, we can keep the City and the customers satisfied.

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08/26/2024

There seems to be a lot of confusion about the rates that are being charged by the City of Jasper. To start with you have a base rate or what the City calls an energy charge which is currently about $0.02/Kw. The rest of the rate we customers pay which last billing cycle was $0.089/Kw is made up of fuel and other market charges that the city pays to Entergy Wholesale marketing and the capacity charge that SRMPA also pays to Entergy for the right to call on the energy from the resources that are included in the contract. Other than the influence that the City has on the SRMPA and what they agree to pay Entergy, the City does not control that fuel and capacity charge which should be a straight pass through. The only thing Jasper sets rates on is the base rate charge and they are proposing to go to $0.0236 next year. This does not include any transfers from the Cambridge funds which can be utilized to manage rates. Using the funds is something that I believe the City may use for the 2025 rates. How much of these funds to use is the question. The Cambridge contract is not in effect any more and the funds that the City have to manage rates and other expenses needed to serve electricity will not be replenished except for any interest it earns. In other words, once spent, it is gone. This needs to be managed to keep rates reasonable and managed to the maximum benefit of the electric customers. For those that say the group that brought the issues forward caused rates to increase, they are completely wrong and uninformed. The City has the right to continue to use the Cambridge fund for the electric rates as they see fit. The settlement did not prevent that. The only thing the settlement prevented was using for things other than electric rates like basketball courts, broadband and other items. So when it comes to setting electric rates, the settlement did not change anything except calling for transparency in the process. The customers have had more information provided to them this year than in years past. This is a process and you have the chance to voice your opinion on Wednesday

08/15/2024

The City of Jasper has posted a public meeting to discuss the proposed electric rates. The rates proposed are at the bottom of the post. The problem is that there is not enough information posted to see if these charges are just and reasonable. What are the details of the expenses leading to an increased revenue requirement. What projects and other operations and maintenance are included in the cost of service. In order to have a meaningful discussion means that this information should be made public before the meeting on the 28th. The Cambridge contract incremental revenues have come to an end. However, there are funds available to be used if in the best interest. I understand that these funds need to be managed since once they are gone, they are gone. The City's recommendation as I understand it is not to use any of the funds this year. There has been no explanation of why this is their recommendation. Might be a prudent decision but worth a conversation. These funds should also be earning interest, and the interest can be used without touching the principal. All of this is still speculation since the information necessary to have a productive discussion is not available to the public at this time that I know of. Hoping to get there before the meeting on the 28th.

07/16/2024

For purposes of being transparent, here is the settlement agreement that was approved at the Jasper City council meeting last night. This agreement will help keep the electric rates in Jasper reasonable for future years. The funds will be used for the purposes of providing electrical service to customers that otherwise would recovered in rates. . It also calls for more transparency and the ability for participation in rate reviews. Again, thank to everyone involved in the effort.

SETTLEMENT AGREEMENT

This Settlement Agreement (Settlement Agreement) is made by and between the City of Jasper (City) and the Citizens of Jasper for Fair and Equitable Rates (CJFER), acting on their own behalf and also on behalf of the ratepayers outside the City of Jasper. Collectively, the City and CJFER are referred to herein as the “Parties” to this Settlement Agreement.

In consideration of the mutual covenants, promises, and commitments contained herein, the Parties agree as follows:

1. The City agrees to commit the funds shown on Attachment A, totaling $29,027,161.55 (plus all subsequent accumulated interest arising from such amounts), for purposes of providing electric utility service to its electric utility customers and shall not commit such funds to any purpose other than the provision of electric utility service. The “provision of electric utility service” includes, but is not limited to, the acquisition of necessary materials and equipment used to provide electric service, any and all direct or supporting services and expenses designed to ensure the provision of electric utility service, the reduction of debt incurred for expenses associated with the provision of electric utility service, any administrative and general expenses associated with the provision of electric utility service, or any other expense that would otherwise be included in the electric utility rates for customers of the City.
2. The City agrees to maintain, on the City’s webpage, helpful information related to the detailed components of electric utility bills, additional itemization of bill charges and the various components that comprise the rates on a customer’s bill, and will provide a frequently asked questions section to provide helpful information to allow customers to understand the various components of their electric utility service bill. The City will cooperate with CJFER to ensure that the webpage includes the most appropriate information for customers.
3. The City agrees that for future electric utility rate changes (other than changes to pass-through charges or rates), the City will first hold a public hearing at which public comment is taken, before any rate changes are approved by the city council. This public hearing may occur as part of a city council meeting, but shall include (1) a presentation by City staff of the recommended rate change action and supporting reasons, and (2) an opportunity for public comment on the rate change, prior to the city council approving the rate change.
4. Upon ex*****on of this Agreement by all Parties, CJFER agrees to dismiss its petitions of appeal in Docket No. 55646 and Docket No. 55688, both proceedings which are currently pending before the Public Utility Commission of Texas (PUC) and the State Office of Administrative Hearings (SOAH).
5. The City agrees not to seek to recover any rate case expenses associated with PUC Docket Nos. 55646 and 55688 from ratepayers as a surcharge or additional fee, provided that such dockets are properly dismissed as required by this Agreement.
6. This Settlement Agreement is made as a settlement of disputed claims and is made without any admission of liability by any Party. The disputed claims include any and all challenges to the current and past electric rates of the City, and any components of those rates, charged to electric utility customers of the City, whether residing within or outside the municipal limits of the City. The disputed claims and the currently pending proceedings in PUC Docket Nos. 55646 and 55688 are referred to herein as the “Dispute.”
7. The Parties and all of their employees, officers, agents, owners, attorneys, representatives, predecessors, successors and assigns, forever release and discharge one another and all of their employees, officers, managers, members, agents, attorneys, predecessors, successors and assigns from any and all claims, debts, demands and causes of action, under any legal, statutory, common law or equitable theory, arising out of or related to the Dispute.
8. Nothing in this Settlement Agreement shall be construed to excuse compliance with any state, federal or local law, rule or regulation concerning the subject matter of the Dispute or this Settlement Agreement.
9. This Settlement Agreement shall not be construed against the Party preparing it, but shall be construed as if it were prepared jointly by all affected persons, and any uncertainty or ambiguity shall not be interpreted against any such person.
10. This Settlement Agreement will be binding upon the Parties and their respective successors and assigns. The individuals executing this Settlement Agreement on behalf of any Party or Parties represent that they have obtained all necessary approvals and authority to so execute this Settlement Agreement, and have done so with adequate opportunity to consult counsel of their choosing.
11. This Settlement Agreement is an integrated instrument, and may not be modified or altered except by a writing signed by all of the parties and/or their successors in title.
12. The Parties may execute any such further documents as may be necessary to accomplish the purposes of this Settlement Agreement.
13. This Settlement Agreement shall be construed in accordance with the laws of the State of Texas. Any action to enforce this Settlement Agreement shall be brought and maintained exclusively in the courts of the State of Texas and venue for any such litigation shall be in Jasper County, Texas.
14. This Settlement Agreement may be executed and delivered in one or more counterparts, each of which shall be deemed to be an original, but all of which together shall constitute one and the same instrument.
15. The Effective Date of this Settlement Agreement shall be the date the last of the Parties signs the Settlement Agreement.

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