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Home My WebLink AboutOrdinance 15644ORDINANCE NO. ~' , AN ORDINANCE DENYING THE RATES AND CHARGES REQUESTED BY TXU GAS COMPANY IN ITS "STATEMENT OF INTENT TO CHANGE RATES" AS FILED WITH THE CITY ON MAY 23, 2403; SETTING FORTH FINDINGS BY THE CITY COUNCIL RELATED THERETO; CONFII~:MING THE MAXIMUM PERMITTED RATES AND CHARGES THAT TXU GAS MAY CONTINUE TO ASSESS CUSTOMERS IN THE CITY OF FORT WORTH; PROVIDING THAT THIS ORDINANCE IS CUMULATIVE, REPEALING ALL ORDINANCES AND SECTIONS OF ORDINANCES IN CONFLICT HEREWITH; PROVIDING FOR SEVERABILITY, AND PROVIDING AN EFFECTIVE DATE. WHEREAS, TXU Gas Company {"TXU Gas"} provides natural gas service to all classes of customers within the City of Fort Worth {"City") pursuant to a franchise granted by the City Council for such purpose, as reflected in Ordinance No. 14692, as amended by Ordinance No. 15275; and WHEREAS, pursuant to and in accordance with Section 143.441 of the Texas Utilities Code, the City Council has exclusive original jurisdiction over TXU Gas's rates, operations and services in the City; and WHEREAS, TXU Gas is currently assessing tariffs, service charges and rates in accordance with Ordinance No. 14438, adopted by the City Council on December 12, 2444, for and related to its provision ofnatural gas service to customers in the City; and ~~ III~:IZ1~_~tS, jar>uai~f 1~~ 5~~~~i~>n I~~-1.1~>~' ~~i~ tl~c ~i~c~a~ l'tilitics C'~~~ic. ~1`~LT Gras ~.tl ~ ..C~. ~~~~.1 .~i li,,.~ ,.~~ ~~i ~?: ~l'~. ~~ ,. ~..~t i. ,i~ .,I!1 .ill; >~~1'.'lj ~i~~ ~1`. Al ~., i11 .l ~l~t<hi«l ~tatcn~l'nt c~1~~i~ the E~ro~~uc~l inlr~a5~~, 4ii~ thl` ~f~I~Ct That the E~r~~~~~?s~~l in~r~~a5c is expected to have on TXU Gas's revenues and (iii) each class and number of consumers affected; and WHEREAS, in accordance with Section 104.102 of the Texas Utilities Code, on May 23, 2003 TXU Gas filed with the City Secretary a "Statement of Intent to Change Rates" (the "Statement"}; and WHEREAS, pursuant to Chapters 103 and 104 of the Texas Utilities Code, the City is required to (i) analyze the Statement; (ii) conduct a public hearing in order to determine the propriety of the proposed rate increase as set forth in the Statement (the "Public Hearing"); and (iii) make a reasonable determination of TXU Gas's rate base, expenses, investment and rate of return in the City; and WHEREAS, pursuant to Section 104.107 of the Texas Utilities Code, on June 17, 2003 the City Council adopted Ordinance No. 15590 suspending implementation of TXU Gas's proposed rate schedule, as set forth in the Statement, from June 27, 2003 until September 25, 2003; and WHEREAS, on June 17, 2003 the City Council adopted Resolution No. 2954 authorizing the City to join a consortium of other municipalities served by TXU Gas (the "Consortium") in order to analyze jointly with those municipalities the basis of the Statement and to utilize professional assistance provided to Consortium members to assist tl~r C~it~ i» it r~~~ic~~ ~~1~ I\t~ (;~i~' F~rohc»~~i rate schcdu(c. ~~s ~~t forth i~~ the ~~..~~~ ~~HFKI~,~ti. ~~~.n ,;n., r;, ~,~~..~~;i ~~ ~~_~ ~,f~, ~1.~,, i .:i;l;~~ t ~>~l~_ 1\l~ i rec~uirc~l to sul~t~,il i~~Jurn~atic~n a~ ~l~~~n~~~i ~~~:~~~»ar~ 1~~ t!~~ C~i~~ in ur~l~~r i~ur tl~~ ~ its t:o ~; ~ ~,~ make a reasonable determination of TXU Gas's rate base, expenses, investment and rate of return in the City; and WHEREAS, the Statement does not contain information specific to TXU Gas's Fart Vi~arth Distribution System and TXU Gas has subsequently failed and refused to provide the City with data specific to the Fart Worth Distribution System, and WHEREAS, the Consortium's counsel recommends that all Consortium members deny TXU Gas's proposed rate schedule, as set Earth in the Statement; and WHEREAS, the Public Hearing was conducted on August 19, 20Q3 at which all interested parties were given a full opportunity to comment an the Statement; NOW THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF FORT WORTH, TEXAS: Section L FINDINGS. That the City Council, pursuant to its exclusive original jurisdictional authority over the rates, operations and services of TXU Gas within the City and in the exercise of its sound legislative discretion, makes the fallowing findings of fact: 1.I. The statements set faith in the recitals above are true and correct. 1.2, 13~c~iusc the Stat~~mc~lt does not contain inlormatian specific to TXU \~IIP.. f~7~' ~ ;t\ ;l,l~ Il~?l I~~~~iA~'~1 {I~~1P; ~ ~~- „ll~~l~;li,il,l~l; 1'iC~~'j~.ll:~ lt~i t~'~~' ~ 11\ t~i;Il~l~, l~ lll;:~l; a iL':;~t~l',;i;i~~ lj~'1~1'I~iIlla;lt)I1 h~ 1 ~~ l~a~ ~ 1~:11~ f~~t~~', ~'5~~~'I15~5, -ars{~3 investment and rate of return in the City, as required by Section 1C}3.021 of the Texas Utilities Code. 1.3. Because the City has not received from TXU information necessary for the City Council to make a reasonable determination of TXU Gas's rate base, expenses, investment and rate of return in the City, as required by Section 103.Q21 of the Texas Utilities Code, the City Council cannot make findings as to whether the rates requested by TXU Gas in its Statement are reasonable or unreasonable. Section 2. RATES AND CHARGES ORDERED. That based on the findings of fact set forth in Section 1 of this Ordinance, the rates requested by TXU Gas in its Statement are hereby denied. Accordingly, Ordinance Na. 14438 shall continue in full force and effect in its entirety, and TXU Gas shall continue to assess tariffs, service charges and rates in accordance with Ordinance No. 14438, adopted by the City Council on December 12, 24{}Q, for and related to its provision of natural gas service to customers in the City. ~l'CII~111 Z C"T ~Il 1 iTYt=I~ k~ t~l~l_C`T ~\U 1Z1~J'1~ ~1 Ot~ ((>~I~l 1( Il\(~ OKl)Iti.~1< t I'Kt)~ ltilO~~. llrit this C7r~lirrincc sl~~ilf i,~ cun~~,lati~~ of all ~~r~linan~'~~~ ul the fits. e~r~E~t ~y U ,. other ordinances, in which case the conflicting provisions of such other ordinances are hereby repealed. Section 4. SEVERABILITY. That if any portion, section or part of a section of this Ordinance is subsequently declared invalid, inoperative or void for any reason by a court of competent jurisdiction, the remaining portions, sections ar parts of sections of this Ordinance shall be and remain in full force and effect and shall not in any way be impaired or affected by such decision, opinion or judgment. Section 5. EFFECTIVE DATE. That this C}rdinance shall take effect and be in full force and effect from and after the date of its adoption. The City Secretary is hereby directed to deliver a certified copy ofthis Ordinance to TXU Gas. AND IT IS SQ QRDAI\"ED. :~UUI'i1~LJ<\~U (II~f~t~1 IvI: ~,, +~'ity of Fort T~Yortli, .~'exas ~~~~~r rand ~; c~c~nc~[ c~nnnnur~~cc~t~~on DATE F2EPERENCE NUMBEE; Lt'~G NAME PAGE 8/19003 ~_~4057 02TXUGAS 1 of 2 su~..tEC~r ADOPT ORDINANCE DENYING TXU GAS COMPANY'S REQUEST FOR ADJUSTMENTS TO C_OCAI_ RATES AND CHARGES RECOMMENDATION: It is recommended that the City Council adopt the attached ordinance denying the rate adjustments proposed by TXU Gas Company in the Statement of Intent to Change Rates filed by TXU Gas Company on May 23, 2003. DISCUSSION: Under state law, the City Council has exclusive original jurisdiction over the rates, operations and services of any gas utility operatingrn the City of Fort Worth. On May 23, 2003, TXU Gas Company {"TXU Gas") filed with the City a Statement of Intent to Change Rates in the Company's "Statewide Natural Gas System" comprised of 437 towns and cities {"Statement"). The proposed rates are approximately 7.2°l° higher than the aggregate of the rates in the individual cities and are expected to increase revenue to TXU Gas by $69.5 million. From Fort Worth, the proposed rates would generate approximately 5.54% more revenue than the current rates, but residential rates would increase by 9.58%. The rate filing is projected to produce $4.2 million per year in additional revenue for TXU Gas from Fart Worth customers. On June 17, 2003, the City Council adopted Ordinance Na. 15590 suspending implementation of the proposed rate schedule until the later of September 25, 2043, ar the date on which the City Council adopted a rate order in response to the Statement. On the same day, the City Council approved Resolution No. 2954 authorizing the City to participate in a consortium of municipalities that are also analyzing similar rate filings in their jurisdictions {"Consortium"). Review of the Statement by City staff and counsel for the Consortium shows that the rates requested by TXU Gas in the Statement are based on the costs associated with operating distribution systems in 436 other municipalities, as well as TXU Gas's pipeline system, over which the City has no jurisdiction. Costs associated with operating that portion of the system in Fort Worth are not separated. As a result, it is City staffs position tha# TXU Gas has not provided the City with information sufficient for the City Council to make a reasonable determination of TXU Gas's rate base, expenses, investment and rate of return in the City, all of which are necessary in order for the City Council to make a finding as to whether the rates requested by TXU Gas in its Statement are reasonable or unreasonable V'Vhen a gas utility requests a rate change that constitutes a major change over the rates currently ~n effect. the City Council is required to conduct a public hearing in order to determine the propriety of the proposed rates. Following a public hearing on this matter. it ~s recor~~mended that the City Council adopt the attached ordinance denying the rate changes requested by TXU Gas in its Statement and ordering a continuation of existing maximum authorized rates and charges in the City of Fort Worth.. pursuant to and in accordance with prdinance No 14438. adopted by the City Council on Decer~~ber ~r, nuns, ' fQr t~,. t-? ~ ~ ~~~. ~ ~1,~11r=~"'.'~rr~ J. ,~; ~ .. _. j• .,.. ,1 Y ;('. .' ~ ~ ~ ~'ity af'Fart T~Tlart~i, Texas ~~1r~c~~-or ur~d ~~,ounci[ ~~~~~un~cc~~~c~n REFERENCE LOG NAME PAGE 8119/03 G-14Q57 02TXUGAS 2 of 2 sue~EC~ ADAPT ORDINANCE DENYING TXU GAS COMPANY'S REG2UEST FOR ADJUSTMENTS TO FOCAL RATES AND CHARGES FISCAL INFORMATION/CERTIFICATCON: The Finance Director certifies that this action will have no material effect on City funds. 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