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Home My WebLink AboutOrdinance 26366-08-2023ORDINANCE NO. 26366-08-2023 AN ORDINANCE OF THE CITY OF FORT WORTH SUSPENDING THE SEPTEMBER 1, 2023 EFFECTIVE DATE OF COSERV GAS, LTD.'S REQUESTED RATE CHANGE TO PERMIT THE CITY TIME TO STUDY THE REQUEST AND TO ESTABLISH REASONABLE RATES; APPROVING COOPERATION WITH OTHER CITIES IN THE COSERV SERVICE AREA, TO HIRE LEGAL AND CONSULTING SERVICES AND TO NEGOTIATE WITH THE COMPANY AND DIRECT ANY NECESSARY LITIGATION AND APPEALS; REQUIRING REIMBURSEMENT OF THE STEERING COMMITTEE OF CITIES SERVED BY COSERV GAS' RATE CASE EXPENSES; 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 July 28, 2023, 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 its service area, effective September 1, 2023; and WHEREAS, the City is a gas utility customer and a regulatory authority under the Gas Utility Regulatory Act ("GURA") and under Chapter 104, § 104.001 et seq. of GURA has exclusive original jurisdiction over CoServ's rates, operations, and services within the City; 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, in order to maximize the efficient use of resources and expertise, it is reasonable for the City to cooperate with other 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, it is not possible for the City to complete its review of CoServ's filing by the September 1, 2023 effective date proposed in CoServ's Statement of Intent; and WHEREAS, the City will need an adequate amount of time to review and evaluate CoServ's rate application to enable the City to adopt a final decision as a local regulatory authority with regard to CoServ's requested rate increase; and WHEREAS, GURA § 104.107 grants local regulatory authorities the right to suspend the effective date of proposed rate changes for ninety (90) days; and 2061 /04/8647429 WHEREAS, GURA § 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 September 1, 2023 effective date of the rate request submitted by CoSery on or about July 28, 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 authorized to cooperate with other cities in the CoSery service area, CoSery Gas Cities, and subject to the right to terminate employment at any time, hereby authorizes the hiring of Thomas L. Brocato of the law firm of Lloyd Gosselink Rochelle and Townsend, P.C. and consultants, to review CoServ's filing, 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 4. That the City's reasonable rate case expenses shall be reimbursed by CoServ. Section 5. 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 6. That a copy of this Ordinance shall be sent to CoServ, care of Charles D. Harrell, CoSery Gas Ltd., 7701 South Stemmons, Corinth, Texas 76210-1842, and to Thomas Brocato, counsel for CoSery Gas Cities, at Lloyd Gosselink Rochelle & Townsend, P.C., P.O. Box 1725, Austin, Texas 78767-1725 (tbrocatoklglawfirm.com). Section 7. That this Ordinance shall be and become effective from and after its adoption. PASSED AND APPROVED this 22nd day of August 2023. APPROVED AS TO FORM AND LEGALITY: Assistant City Attorney CITY SECRETARY qs� A Jannette S. Goodall a FOR 400000 n 00 4 2061/04/8647429 2 City of Fort Worth, Texas Mayor and Council Communication DATE: 08/22/23 M&C FILE NUMBER: M&C 23-0694 LOG NAME: 21COSERV RATE INCREASE 2023 SUBJECT (ALL) Adopt Attached Ordinance 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 ordinance which: 1. Suspends the implementation of the rate increases filed with the City by CoSery Gas, Ltd. on or about July 28, 2023; 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 regarding 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 July 28, 2023, 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 September 1, 2023. CoSery is seeking to increase its annual revenues in incorporated areas by $10.3 million, which is an increase of 7.5% including gas costs, or 27.3% excluding gas costs. CoSery is also requesting: (1) new depreciation rates for distribution and general plant; (2) a prudence determination for capital investment; (3) specification of the factors to be used in any Interim Rate Adjustment Filing the Company makes pursuant to Texas Utilities Code § 104.302; 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. 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. If the City fails to take some action regarding the filing before the effective date of September 1, 2023, CoServ's rate request is deemed approved. To have enough 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 September 1, 2023 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 these recommendations will have no material effect on City funds Submitted for City Manager's Office by. Dana Burghdoff 8018 Originating Business Unit Head: Ricardo Salazar 8379 Additional Information Contact: Juanita Rigsby 8518