HomeMy WebLinkAboutResolution 5330-01-2021 A Resolution
NO. 5330-01-2021
A RESOLUTION OF THE CITY OF FORT WORTH, TEXAS
SUSPENDING THE JANUARY 23, 2021 EFFECTIVE DATE
OF COSERV GAS, LTD.'S REQUESTED INCREASE TO
PERMIT THE CITY TIME TO STUDY THE REQUEST AND
TO ESTABLISH REASONABLE RATES; APPROVING
COOPERATION WITH OTHER CITIES IN THE COSERV
GAS, LTD. SERVICE AREA; HIRING LEGAL AND
CONSULTING SERVICES TO NEGOTIATE WITH THE
COMPANY AND DIRECT ANY NECESSARY LITIGATION
AND APPEALS; AUTHORIZING INTERVENTION IN
DOCKET OS-20-00005136 AT THE RAILROAD
COMMISSION; REQUIRING REIMBURSEMENT OF
CITIES' RATE CASE EXPENSES; FINDING THAT THE
MEETING AT WHICH THIS RESOLUTION IS PASSED IS
OPEN TO THE PUBLIC AS REQUIRED BY LAW;
REQUIRING NOTICE OF THIS RESOLUTION TO THE
COMPANY AND LEGAL COUNSEL
WHEREAS, on or about November 13, 2020, CoSery Gas, Ltd. ("CoServ" or
"Company"),pursuant to Gas Utility Regulatory Act § 104.102, filed with the City of Fort Worth
("City") a Statement of Intent to change gas rates in all municipalities exercising original
jurisdiction within the Company's service area, effective January 23, 2021; and
WHEREAS, the City is a gas customer of CoSery and a regulatory authority with
exclusive original jurisdiction over the rates and charges of CoSery within the City; and
WHEREAS, it is reasonable for the City of Fort Worth to cooperate with other similarly
situated cities in conducting a review of the Company's application and to hire and direct legal
counsel and consultants and to prepare a common response and to negotiate with the Company
and direct any necessary litigation; and
WHEREAS, the Gas Utility Regulatory Act § 104.107 grants local regulatory authorities
the right to suspend the effective date of proposed rate changes for ninety (90) days; and
WHEREAS, CoSery has filed an application with the Railroad Commission, Docket No.
OS-20-00005136 that could become the docket into which appeals of city action on the CoSery
filing are consolidated; and
WHEREAS, the Gas Utility Regulatory Act § 103.022 provides that costs incurred by
Cities in ratemaking activities are to be reimbursed by the regulated utility.
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THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF
FORT WORTH, TEXAS:
SECTION 1. That the January 23, 2021, effective date of the rate request submitted by
CoSery on or about November 13,2020,be suspended for the maximum period allowed by law to
permit adequate time to review the proposed changes and to establish reasonable rates.
SECTION 2. That the City is authorized to cooperate with other cities in the CoSery
service area to hire and direct legal counsel and consultants, negotiate with the Company, make
recommendations to the City regarding reasonable rates and to direct any necessary administrative
proceedings or court litigation associated with an appeal of a rate ordinance and the rate case filed
with the City or Railroad Commission.
SECTION 3. That, subject to the right to terminate employment at any time, the City of
Fort Worth hereby authorizes the hiring of Thomas Brocato of the law firm of Lloyd Gosselink
Rochelle & Townsend, P.C., and consultants to represent the City in all matters associated with
the CoSery Gas application to increase rates and appeals thereof.
SECTION 4. That intervention in Railroad Commission Docket No. OS-20-00005136 is
authorized.
SECTION 5. That the City's reasonable rate case expenses shall be reimbursed by
CoServ.
SECTION 6. That it is hereby officially found and determined that the meeting at which
this Resolution is passed is open to the public as required by law and the public notice of the time,
place, and purpose of said meeting was given as required.
SECTION 7. A copy of this Resolution shall be sent to CoServ, care of Charles Harrell,
CoSery Gas,Ltd. 7701 South Stemmons Freeway,Corinth,Texas 76210(CHarrell@coserv.com),
and to Thomas Brocato at Lloyd Gosselink Rochelle & Townsend, P.C., 816 Congress Avenue,
Suite 1900,Austin, Texas 78701 (tbrocato@lglawfirm.com).
PASSED AND APPROVED this 12th day of January 2021.
ATTEST: "
FORT.�'L .
City Secretary: Mary J. Kayser
U�
TE
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City of Fort Worth,Texas
Mayor and Council Communication
DATE: 01/12/21 M&C FILE NUMBER: M&C 21-0038
LOG NAME: 21COSERV RATE INC
SUBJECT
(ALL)Adopt a Resolution Suspending Rate Increases Proposed by CoSery Gas,Ltd.,and Retention of Legal Counsel and Consultants to Study
Propriety of Proposed Rate Increases
RECOMMENDATION:
It is recommended that the City Council adopt the attached resolution which:
1. Suspends the implementation of the rate increases filed with the City by CoSery Gas,Ltd.,on November 13,2020;and
2. Authorizes the City Manager or his designee to cooperate with other cities served by CoSery Gas,Ltd.,to hire direct legal counsel(Lloyd
Gosselink Rochelle&Townsend, P.C.)and consultants in regard to the rate increase filing.
DISCUSSION:
The purpose of this Mayor and Council Communication(M&C)is to take action to suspend the implementation of the proposed rate increases
filed by CoSery Gas, Ltd.(CoServ). On November 13,2020,CoServ,pursuant to Subchapter C of Chapter 104 of the Gas Utility Regulatory Act,
filed its Statement of Intent to change gas rates at the Railroad Commission of Texas(RRC)and in all municipalities exercising original jurisdiction
within its service area. The proposed effective date for the new rates is January 23,2021.
CoSery is seeking to increase its gas rates on a system-wide basis by$9,600,000.00 per year,and by$8,113,409.00 in the incorporated areas.
This equates to an increase of 11.6%on total revenues or a 29.0%increase in base rates for the incorporated areas. CoSery is also requesting:
(1)commission approval of depreciation rates for distribution and general plant;(2)a prudence determination for capital investment;(3)a finding
that the approvals of the administrative orders by the Gas Services Division of the commission based on the accounting order in Gas Utilities
Docket No. 10695 are reasonable and accurate;and(4)a surcharge on customer bills to recover the reasonable rate case expenses associated
with the filing of this statement of intent.
Under state law,the City has original jurisdiction over the rates,operations,and services of any gas utility operating in the City. If the City fails to
take some action regarding the filing before the effective date of January 23,2021,CoServ's rate request is deemed approved. In order to have
sufficient time to analyze the rate filing,the City is allowed to suspend the proposed rate change for up to 90 days after the date the rate change
would otherwise be effective. During the suspension period,the gas utility's current rates will continue in effect.
The attached resolution suspends the January 23,2021 effective date of CoServ's rate increase for the maximum period permitted by law
and allows the City to cooperate with other cities served by CoSery to hire and direct legal counsel(Lloyd Gosselink Rochelle&Townsend,
P.C.)and consultants,negotiate with CoServ,make recommendations to the City regarding reasonable rates and to direct any necessary
administrative proceedings or court litigation associated with an appeal of a rate ordinance and the rate case filed with the City or Railroad
Commission. Because this is a rate-making proceeding,CoSery will reimburse the cities for legal and consulting costs.
A Form 1295 is not required because:This M&C does not request approval of a contract with a business entity.
FISCAL INFORMATION/CERTIFICATION:
The Director of Finance certifies that approval of this recommendation will have no material effect on City funds.
Submitted for City Manager's Office by, Dana Burghdoff 8018
Originating Business Unit Head: Steve Cooke 5134
Additional Information Contact: Roger Venables 6334