HomeMy WebLinkAboutOrdinance 8601T- y
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ORDINANCE NO. ~~~
AN ORDINANCE SUSPENDING THE RATE INCREASE PROPOSED IN THE
STATEMENT OF INTENT FILED BY LONE STAR GAS COMPANY ON
JUNE 4, 1982, FOR 120 DAYS BEYOND THE INTENDED EFFECTIVE
DATE OF JULY 29, 1982; ADOPTING DECLARATIONS AND FINDINGS
IN PREAMBLE; PROVIDING A SEVERABILITY CLAUSE; AND PROVID-
ING AN EFFECTIVE DATE.
WHEREAS, on June 24, 1982, the Lone Star Gas Company filed with
the City Secretary of the City of Fort Worth a Statement of Intent
to Change Rates prerequisite to a proposed change in gas rates to
become effective July 29, 1982, which change is estimated by the
Company to increase its adjusted total operating revenue in the
amount of $7,038,915; and
WHEREAS, under Articles 1446(c) and 6050 et. seq. R.C. S. , the
City Council of the City of Fort Worth is charged with the duty of
making a "reasonable determination of rate base, expenses, invest-
ment and rate of return within the municipal boundaries," of the
City of Fort Worth; and
WHEREAS, it is a matter of public necessity that a thorough in-
vestigation be conducted and hearings held on such requested major
change in rates; and
WHEREAS, it is necessary that the proposed rate increase in-
tended to become effective on July 29, 1982, be suspended as autho-
rized by Article 1446c, R.C.S., for 120 days beyond the date on
which the schedule of proposed rates would go into effect; NOW,
THEREFORE,
BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF FORT WORTH,
TEXAS:
That the rate increase of Lone Star Gas Company proposed to
become effective on July 29, 1982, be and the same is hereby
suspended as authorized by Article 1446(c) (The Public Utility
Regulatory Act), Revised Civil Statutes of Texas, for 120 days be-
yond such date on which the schedule of proposed rates would other-
wise have gone into effect, that is until October 27, 1982.
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SECTION II.
That all of the declarations and findings contained in the pre-
amble of this ordinance are made a part hereof and shall be fully
effective as part of the ordained subject matter of this ordinance.
SECTION III.
Should any portion, section or part of a section of this ordi-
nance b e declared invalid, inoperative or void for any reason by a
court of competent jurisdiction, such decision, opinion or judgment
shall in no way impair the remaining portions, sections or parts of
sections of this ordinance, which said remaining provisions shall be
and remain in full force and effect.
SECTION IV.
That this ordinance shall take effect and b e in full force and
effect from and after the date of its passage, and it is so or-
dained.
APPROVED AS TO FORM AND LEGALITY:
City Attorney
Date: 1- ~-~ -~ Z
ADOPTED:
EFFECTIVE:
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City of Fort Worth, 2'exas
J1~fayor anc~ Council Comrrd.a,~nication
DATE REFERENCE SUBJECT PAGE
NUMBER Lone Star Gas Company's Request
7/20/82 ~~G~.53fiS to Increase Rates in Fort Worth for _~
On June 24, 1982, Lone Star Gas Company filed its "Statement of Intent to Change
Rates" with Fort Worth and the sixteen other cities which comprise the "Fort Worth
Distribution System." The proposed effective date for the new rates is July 29,
1982, thirty-five days after filing. The Company's application requests new rates
that would produce an additional $7.039 million (13.14%) on test-year commercial
and residential revenues of $53.567 million. The rate schedule proposes a monthly
basic minimum charge of $5 per residential customer and $8 per commercial
customer, an increase of $1.25 and $1, respectively. A summer and winter rate
differential is proposed, as follows:
Present Rate,
per Mcf
Proposed Rate,
per Mcf
Winter $2.64636 I Same
Summer $2.64636 r
$4.41788
$4.1678 $•25/Mcf differential
The City of Fort Worth has original jurisdiction over gas utilities operating
within its boundaries. The timetable established by the Public Utility Regulation
Act (Art. 1446c, R.C.S.) must be complied with or the proposed rates will go into
effect automatically on the 35th day after filing. The Act provides that the re-
quested rate increase can be suspended for 120 days (October 27,1982), and, if
additional time is required before a final determination is made, the suspension
period nay be extended for an additional 30 days. If no final determination is
reached after 150 days, the proposed rates are deemed to be approved. The Act per-
mits the use and employment of consultants to assist the cities in their study and
analysis of the propriety and effect of the proposed rate increases and provides
for reimbursement to the cities for reasonable consultant and other regulatory
costs.
The various alternatives available to the City Council were explained in Informal
Report No. 3727, furnished the City Council on June 24, 1982.
Past experience has demonstrated both the need for and efficiency of utilizing
consultants with expertise in these matters to analyze and make recommendations on
utility rate requests. This was done in the most recent Lone Star Gas rate cases
(M&C G-4549 - 5/20/80).
The Utilities Supervisor has been in contact with representatives of McMorries &
Associates, Amarillo, concerning this rate request, and they have indicated their
willingness to perform the technical analysis of the necessity and propriety of
the request and to work with the City in these matters in a timely manner, for a
fee not to exceed $20,000 plus expenses. The McMorries firm has been the City's
consultant in two cases several years ago and has performed satisfactorily. This
firm is a long established utility rate consultant and represents primarily cities
and governmental entities before the Public Utility Commission and Railroad
Commission. If the City Council concurs in retaining a consultant, it is antici-
pated that that expertise will be utilized to analyze the request and report to
the Council. Along with such report, hearings should be scheduled at several
Council meetings to gather citizen input and Company comment on the proposed rate
~:~ ~, ,
DATE REFERENCE
NUMBER SUBJECT PAGE
7/20/82
~*G-5365 Lone Star Gas Con an 's Re uest
p y q
~
or ~
to Increase Rates in Fort Worth __
_
increase. Thereafter, but prior to October 27, 1982, the Council could take actin
on the proposed/requested rate increase. If the Company were to be dissatisfied
with the Council's actions taken, it could appeal that decision to the Railroa
Commission in Austin.
An ordinance suspending the proposed local gas rate increase for a period of 12
days to facilitate the expert analysis, report, hearings and appropriate actions
has been prepared and is attached.
Recommendation:
It is recommended:
1. That the City Council adopt the proposed ordinance suspending the implementa
tion of the proposed rates for 120 days from July 29, 1982, to October 27,
1982,
2. That the City Council authorize the City Manager to engage the firm o
McMorries and Associates to analyze the Lone Star Gas Company rate increas
request, at a fee not to exceed $20,000.
Attachment
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ORIGINATING
DEPARTMENT HERO; Wade Adkins G OTHER (DESCRIBE)
CITY SECRETARY
FOR ADOITlONAI INFORMATION Morris Platson Ext 6124
CONTACT
DATE