The Robstown City Council has approved an ordinance on first reading allowing several commercial electric customers in Calallen to withdraw from the city's electrical service.
The ordinance, if approved next month on second reading, would allow Corpus Christi Medical Center-Northwest and several doctors' offices in the Five Points-area to opt out of Robstown Utility Systems and switch to Nueces Electric Cooperative for more economical electrical service.
Robstown Utility Systems superintendent Roy Gutierrez asked the city council at its Jan. 14 meeting to approve the ordinance and allow the electric switchover for customers in the Five Points-area only.
Mayor Pro Tem Elias Vasquez, who chaired the meeting, asked what was in it for the city before the ordinance passed unanimously on first reading.
"Nothing," Gutierrez replied. "Can you stop them from switching over to the co-op area? No. In order for me to proceed, I need the city council to sign off on this. It's just good business to have (the ordinance) in place anyway."
Gutierrez said Corpus Christi Medical Center-Northwest and about 15 doctors' offices in Calallen requested the switch due to Robstown's electric rate hike.
The Robstown Electric Department's rates increased substantially in May when the Robstown Utility Systems entered into a new, 7-year wholesale power-buying contract with AEP.
"That's what prompted their request for a switch-over," Gutierrez said. "They're blessed that they're located in this dually certificated corridor where they can do some shopping, looking out for the best interests of their company. That's why they requested the switchover."
Officials with Corpus Christi Medical Center-Northwest did not return calls for comment.
Sarah Fisher, manager of communications and regulatory affairs for Nueces Electric Cooperative, said the co-op welcomed the new businesses.
"My understanding is they initiated the switchover through our retail division and we worked with them and the retail division to help move this process along," Fisher said. "It's a significant load for us. So we'll definitely be pleased to have them."
In the mid 1960s, the Robstown Electric Department extended an electric line five miles, primarily along County Road 69, to service the former Northwest Hospital and other customers along FM 624.
The 400-foot wide corridor was grandfathered into the Nueces Electric Cooperative's service area when new service territories were drawn by the Public Utility Commission of Texas in the mid-1970s.
The corridor is now considered a "dually certificated territory" by the PUC, with service from both Robstown and Nueces Electric Cooperative.
Two farmhouses between Robstown and FM 624 are also in the dually certificated territory and are currently serviced by Robstown, Gutierrez said. He said the farmhouse owners have not requested a switchover.
The ordinance allowing certain customers to opt out of Robstown's electric service will heard by the Robstown City Council again in February on second and final reading.
If adopted, Calallen customers opting out must pay between $300 and $1,000 per meter, depending on the type of service. The fees are for disconnection, removal and testing/re-calibration of each meter, for the cost of disconnection and removal of the service drop line used to serve the facility, and the general and administrative expenses incurred by the switchover and closing the account.
Gutierrez said the co-op would have to install its own electric lines to service the corridor, or rent or buy Robstown's line. He said Calallen customers could switch back to Robstown if they wanted, as long as the city owns the electric line extending to the area.
"We will work with the city of Robstown and just negotiate with them what they indicated to the consumers that they are willing to do," Fisher said.
Gutierrez said the city could prevent Calallen electric customers from switching to other electric providers, but not Nueces County Cooperative, since a portion of Calallen is in both the city's and the co-op's service territory.
Gutierrez said Robstown Utility Systems would maintain the electric line along County Road 69, and perhaps lease it to another electric company, but he said he was not interested in selling the line.
"It won't affect the rates," Gutierrez said, adding electrical consumption is down at the hospital.
Gutierrez said the customer losses in Calallen could be recouped by adding new businesses at the planned outlet mall and the U.S. Army warehouse along Highway 77 on Robstown's east end.
However, not all of the area near the Richard M. Borchard Regional Fairgrounds is in Robstown's service area.
The Robstown Electric Department's service territory is based on the city's boundaries in the 1970s when the electric service territories were drawn.
Robstown's electric service territory stops just east of Highway 77. Its eastern boundary includes Fairgrounds Field, the new Keach Family Library and the site of the future outlet mall.
Gutierrez said he expected the Robstown Electric Department to pick up all of the initial phase of the planned Outlets at Corpus Christi Bay.
"I think all of it is going to be inside our service area," he said.
However, future expansions of the outlet mall to the north of the initial site would likely be in the service territory of Nueces Electric Cooperative.
"We haven't spoken with anyone at the outlet malls, but certainly that area is near the boundary between Nueces Electric Cooperative and the city of Robstown," Fisher said. "Where the actual load is located will determine who serves the electricity needs."