HomeMy WebLinkAboutIR 7025 INFORMAL REPORT TO CITY COUNCIL MEMBERS No. 7025
To the Mayor and Members of the City Council June 4 , 1985
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Subject: LONE STAR GAS COMPANY 'S REQUEST TO INCREASE LOCAL GAS
RATES - FILED MAY 29, 1985
The letter requesting an increase of $4.45 million in gas
rates, together with related material , was transmitted to the
City Council in the packets on Thursday, May 30, 1985. Mr.
Cumbie requested that he be permitted to address the Council ,
and the item is on the June 4 "presentations" agenda.
Background:
Under Texas state law, all cities have "Original Jurisdiction"
over rates , service and operations of both electric and gas
utilities. Secondary or appellate jurisdiction for the utility
after the City has taken action in gas rate matters rests with
the Railroad Commission of Texas (RRC) through the regulatory
law embodied in Article 1446e ( 1983 ) The Gas Utility Regulatory
Act (hereinafter GURA) . Appellate procedures in electric rate
cases rest with a different agency, the Public Utility
Commission of Texas (PUC) through Article 1446c, the Public
Utilities Regulatory Act (hereinafter the PURA) .
Section 5 .08 of the GURA provides that the regulatory authority
( i .e. the City Council) can suspend the operation of the in-
creased rates for 90 days beyond the 35 days the rates would
ordinarily go into effect. The utility is permitted to place
the proposed rates into effect under bond 90 days from the date
the proposed rate would have gone into effect. The bond rates
are refundable in the event the final rate, as a result of the
appeal process, is found to be lower than the proposed rate.
Other sections of both the GURA and the PURA provide that
public hearings be held and investigations of the need of the
increase be conducted before a decision is reached. Both the
GURA and the PURA provide that the City as regulator can engage
consultants to assist in its study and that costs of this rate
study be borne by the utility requesting the increase .
There has been no activity or change in basic gas rates in Fort
Worth since the present rates became effective on November 23,
1982. In this case , filed June 24, 1982 , the City Council sus-
pended the implementation of the rate increase and authorized
the engagement of the consultant, William McMorries &
Associates. These consultants costs were borne by the company,
and in R&C G-5475 dated November 9 , 1982, the Council approved
a smaller-than-requested increase by adopting ordinance
No. 8690 .
ISSUED BY THE CITY MANAGER FORT WORTH, TEXAS
INFORMAL REPORT TO CITY COUNCIL MEMBERS No. 7025 p.2
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To the Mayor and Members of the City Council June 4 , 1985
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Subject: LONE STAR GAS COMPANY'S REQUEST TO INCREASE LOCAL GAS
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RATES - FILED MAY 29, 1985 -
Conclusion:
The City's administrative staff, within the next two weeks,
will examine and analyze the company' s rate request and will
provide, by June 18, 1985, a written report and recommendation
for City Council on the "suspension" of the rates, authoriza-
tion for employment of the consultant at the company' s expense
and other related matters.
If there is a need for additional information, it will be pro-
vided upon request.
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Doug Harman
City Manager
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LISSUED BY THE CITY MANAGER FORT WORTH, TEXAS