HomeMy WebLinkAboutOrdinance 26608-11-2023 ORDINANCE NO.26608-11-2023
AN ORDINANCE OF THE CITY OF FORT WORTH,
TEXAS FINDING THAT COSERV GAS, LTD.'S
STATEMENT OF INTENT TO INCREASE RATES WITHIN
THE CITY SHOULD BE DENIED; FINDING THAT THE
CITY'S REASONABLE RATE CASE EXPENSES SHALL
BE REIMBURSED BY THE COMPANY; 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 THE CITY'S LEGAL COUNSEL;
AND PROVIDING AN EFFECTIVE DATE
WHEREAS, the City of Fort Worth, Texas ("City") is a gas utility customer of CoSery
Gas, Ltd. ("CoServ" or "Company") and is a regulatory authority under the Gas Utility
Regulatory Act ("GURA") with 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,the City cooperated with a coalition of similarly situated cities served by the
Company that have joined together to facilitate the review and response to natural gas issues
affecting the rates charged in CoServ's service area ("CoSery Gas Cities"or"Steering Committee
of Cities Served by CoSery Gas, Ltd."); and
WHEREAS, on or about July 29, 2023, CoSery filed with the City a Statement of Intent
to Increase Rates seeking to increase natural gas rates by $10.3 million annually in incorporated
areas; and
WHEREAS, on August 22, 2023, the City passed Ordinance No. 26366-08-2023 to
suspend the effective date of CoServ's requested rate increase for 90 days, the maximum period
allowed by law; and
WHEREAS, CoSery Gas Cities hired and directed legal counsel and consultants to
prepare a collective response to the Company's requested increase, which resulted in a
conclusion that CoServ's proposed rates are not reasonable; and
WHEREAS, CoSery Gas Cities' attorneys recommend that members deny the requested
increase; and
WHEREAS, GURA § 103.022 provides that costs incurred by CoSery Gas Cities in
ratemaking activities are to be reimbursed by the regulated utility.
1
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE
CITY OF FORT WORTH,TEXAS:
Section 1. That the rates proposed by CoSery to be recovered through its gas rates
I charged to customers located within the City limits, are hereby found to be unreasonable and
shall be denied.
Section 2. That the Company shall continue to charge its existing rates to customers
within the City.
Section 3. That the City's reasonable rate case expenses shall be reimbursed in full
by CoServ.
Section 4. 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 5. That a copy of this Ordinnace 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, counsel for CoSery Gas Cities, Lloyd
Gosselink Rochelle & Townsend, P.C., 816 Congress Avenue, Suite 1900, Austin, Texas 78701
(tbrocato a,lglawfirm.com).
Section 6. That this Ordinance shall be and become effective from and after its
adoption.
PASSED AND APPROVED this 28'day of November 2023.
��4�nnnzi
ATTEST: ,A-j0000 0 G,
00 Oo Aa�
Jannette S. Goodall Mom,0 0 �
City Secretary �►oa o0 F,
IV
00000000C,��b
APPROVED AS TO FORM AND LEGALITY: 4tz- TE 7o
U4&
Christopher Austria
Assistant City Attorney
I
E
2
City of Fart Worth,Texas
Mayor and Council Communication
DATE: 11/28/23 M&C FILE NUMBER: M&C 23-1018
LOG NAME: 21 COSERV RATE INCREASE 2023 DENIAL
SUBJECT
(ALL)Adopt Ordinance Denying Rate Increase Proposed by CoSery Gas,Ltd
RECOMMENDATION:
It is recommended that the City Council adopt the attached ordinance denying the rate increase proposed by CoSery Gas,filed on or about July
28,2023.
DISCUSSION:
On July 28,2023,CoSery Gas,Ltd(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.
On August 22,2023;by Mayor and Council Communication 23-0694,City Council adopted Ordinance No.26366-08-2023 that suspended the
September 1,2023 effective date of CoServ's requested rate increase for 90 days;the maximum period allowed by law,and authorized the City
Manager or his designee to cooperate with other cities served by CoServ,to hire direct legal counsel(Lloyd Gosselink Rochelle&Townsend,P.C.)
and consultants for negotiations with CoServ.
In participation with other cities;by way of the Steering Committee of Cities Served by CoSery Gas,Ltd. (CoSery Gas Cities),consultant
services were engaged to facilitate the review and response to natural gas issues affecfing the rates charged in CoServ's service area.The
consultants identified numerous unreasonable expenses and proposed significant reductions to CoServ's request.Settlement discussions are
ongoing,but no agreement has been reached.
Accordingly,CoSery Gas Cities'attorneys recommend that the City of Fort Worth take final action and deny CoServ's rate change by December 7
2023.Once the City of Fort Worth has acted,CoSery will have 30 days to appeal the decision to the Railroad Commission where the appeal will
be consolidated with CoServ's filing.
Under state law,the City of Fort Worth has original jurisdiction over the rates,operations,and services of any gas utility operating in the City. The
City of Fort Worth Charter grants the City Council the power by ordinance to fix and regulate the rates of all public utilities in the City,
It is recommended that the City Council adopt the attached ordinance to deny CoServ's requested rate increase,
Because this is a rate proceeding,CoSery will reimburse CoSery Gas Cities for their reasonable rate case expenses. Legal counsel and
consultants,approved by CoSery Gas Cities,will submit monthly invoices that will be forwarded to CoSery for reimbursement.
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 the recommendation will have no material effect on City funds.
Submitted for City Manager's Office bv: Dana Burghdoff 8018
Originating Business Unit Head: Ricardo Salazar 8379
Additional Information Contact: Juanita Rigsby 8518
Expedited