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Home My WebLink AboutOrdinance 26175-05-2023ORDINANCE NO. 26175-05-2023 AN ORDINANCE BY THE CITY OF FORT WORTH, TEXAS AUTHORIZING AND APPROVING MEMBERSHIP IN THE CITIES SERVED BY SIENERGY (CITIES) FOR THE PURPOSE OF PROTECTING THE INTEREST OF THE CITY AND ITS CITIZENS WITH RESPECT TO SIENERGY MATTERS; FURTHER SUSPENDING THE JUNE 9, 2023 EFFECTIVE DATE OF THE STATEMENT OF INTENT OF SIENERGY, LP TO INCREASE RATES WITHIN INCORPORATED AREAS OF NORTH, CENTRAL, AND SOUTH TEXAS; TO PERMIT THE CITY TIME TO STUDY THE REQUEST AND TO ESTABLISH REASONABLE RATES; FINDING THAT THE CITY'S REASONABLE RATE CASE EXPENSES SHALL BE REIMBURSED BY THE COMPANY; AUTHORIZING PARTICIPATION WITH THE CITIES SERVED BY SIENERGY; HIRING LEGAL AND CONSULTING SERVICES TO NEGOTIATE WITH THE COMPANY AND DIRECT ANY NECESSARY LITIGATION AND APPEALS; FINDING THAT THE MEETING AT WHICH THIS ORDINANCE IS PASSED IS OPEN TO THE PUBLIC AS REQUIRED BY LAW; REQUIRING NOTICE OF THIS ORDINANCE TO THE COMPANY AND LEGAL COUNSEL. WHEREAS, on or about May 5, 2023, SiEnergy, LP (SiEnergy or Company) filed with the City of Fort Worth (City) and the other affected North, Central, and South Texas municipalities a Statement of Intent seeking to increase gas utility rates within the incorporated areas of the North, Central, and South Texas to be effective June 9, 2023; and WHEREAS, the City is a regulatory authority with an interest in the rates and charges of SiEnergy; and WHEREAS, the Cities Served by SiEnergy (Cities) is a coalition of similarly situated cities served by SiEnergy, LP (SiEnergy) that have joined together to efficiently and cost effectively review and respond to gas issues affecting rates charged in SiEnergy's service area; and WHEREAS, the City is a member of the Cities Served by SiEnergy (Cities) (such participating cities are referred to herein as Cities), a coalition of similarly situated cities served by SiEnergy that have joined together to efficiently and cost effectively review and respond to electric issues affecting rates charged in SiEnergy's service area; 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, the City retains its rights as a city with original jurisdiction including the right to suspend the application; and WHEREAS, the City's Charter grants the City Council the power by ordinance to fix and regulate the rates of all public utilities in the City; and WHEREAS, the City's consultants and attorneys recommend that the City suspend the application for further review; and WHEREAS, SiEnergy has filed an application with the Railroad Commission that could become the docket into which appeals of city action on the SiEnergy 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. NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF FORT WORTH, TEXAS: SECTION 1. That the findings and recitations set out in the preamble of this Ordinance are found to be true and correct and are hereby adopted by the City Council and made a part hereof for all purposes. SECTION 2. That the June 9, 2023, effective date of the request to increase rates submitted by SiEnergy on or about May 5, 2023, be suspended for the maximum period allowed by law to permit adequate time to review the proposed changes and to establish reasonable rates. SECTION 3. That the City is a member of the Cities Served by SiEnergy (Cities) municipalities in this proceeding and, subject to the right to terminate employment at any time, hereby authorizes the hiring of Jamie L. Mauldin of the law firm of Lloyd Gosselink Rochelle and Townsend, P.C., and Karl J. Nalepa of the consulting firm of ReSolved Energy Consulting, L.L.C., as well as any additional consultants deemed necessary, to review the Company's filing, negotiate with the Company, make recommendations regarding reasonable rates and to direct any necessary administrative proceedings or court litigation associated with an appeal of city action. SECTION 4. That the City shall work with Cities in the review and evaluation of whether the proposed rates are appropriate, fair, just, and reasonable; and intervene as a necessary party in the Railroad Commission of Texas' consideration of the SiEnergy rate filing as it affects the customers in the unincorporated areas of North, Central and South Texas. SECTION 5. That the City's reasonable rate case expenses shall be reimbursed in full by SiEnergy. SECTION 6. That it is hereby officially found and determined that the meeting at which this Ordinance 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. That a copy of this Ordinance shall be sent to June M. Dively, SiEnergy, LP at 3 Lakeway Centre CT, Suite 110, Lakeway, Texas 78734 and to Jamie L. Mauldin at Lloyd Gosselink Rochelle & Townsend, P.C., 816 Congress Avenue, Suite 1900, Austin, Texas 78701. SECTION 8. That this Ordinance shall be and become effective from and after its adoption. ATTEST: 1 A Assistant City Attorney Jannette S. Goodall, City Secretary 4.00c�pnn� Adopted: May 23, 2023 a ��ir0F01?P0d ,�o ,�°��° 0 0 0 0 PP'r` G0 00 S )►,0000000000° � a 2 Haan_ Q�04444a City of Fort Worth, Texas Mayor and Council Communication DATE: 05/23/23 M&C FILE NUMBER: M&C 23-0423 LOG NAME: 21 SIENERGY RATE SUBJECT (ALL) Adopt an Ordinance Suspending Rate Increases Proposed by SiEnergy, LP., and Retention of Legal Counsel and Consultants to Evaluate the Proposed Rates RECOMMENDATION: It is recommended that the City Council: 1. Adopt the attached ordinance which suspends the implementation of the rate increases filed with the City of Fort Worth by SiEnergy, LP., on May 5, 2023; and 2. Authorizes the City Manager or his designee to cooperate with other cities served by SiEnergy, LP., to hire direct legal counsel (Lloyd Gosselink Rochelle & Townsend, P.C.) and to evaluate the proposed rates. DISCUSSION: The purpose of this Mayor and Council Communication (M&C) is to act to suspend the implementation of the proposed rate increases filed by SiEnergy, LP. (SiEnergy or Company). On May 5, 2023, SiEnergy, 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 June 9, 2023. SiEnergy is seeking an increase of $9.69 million on a systemwide basis, which results in $2.67 million revenue increase in the incorporated areas or a 47.3% increase over current adjusted revenues, excluding gas costs. Because the proposed rates will increase the SiEnergy's total aggregate revenues by more than 2.5%, the proposed rate increase constitutes a "major change" in rates as that term is defined by Texas Utilities Code § 104.101. In addition, the Company requests (1) approval of new depreciation rates for its distribution and general plant; (2) authorization to amortize its acquisition adjustment over a 6-year period; (3) a determination that the Company's invested capital placed into service between October 1, 2017 through March 31, 2023 was prudent, necessary and reasonably incurred; (4) a determination that the expenses recorded for Winter Storm Uri and Covid-19 in the regulatory asset accounts authorized by the Commission are reasonable, accurate, and eligible for recovery, - and (5) all reasonable rate case expenses incurred in connection with the Statement of Intent filing are authorized for recovery by the Company. Under state law, the City has original jurisdiction over the rates, operations, and services of any gas utility operating in the City. The City's Charter grants the City Council the power by ordinance to fix and regulate the rates of all public utilties in the City. If the City fails to take some action regarding the filing before the effective date of June 9, 2023, SiEnergy's rate request is deemed approved. 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 ordinance suspends the June 9, 2023 effective date of SiEnergy's rate increase for the maximum period permitted by law and allows the City to cooperate with other cities served by SiEnergy to hire and direct legal counsel (Lloyd Gosselink Rochelle & Townsend, P.C.) and consultants, negotiate with SiEnergy, 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, SiEnergy will reimburse the cities for legal and consulting costs. This will serve ALL COUNCIL DISTRICTS. 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 these recommendations will have no material effect on City funds. Submitted for City Manager's Office b . Dana Burghdoff 8018 Originating Business Unit Head: Steve Cooke 5134 Additional Information Contact: Juanita Rigsby 8518