HomeMy WebLinkAboutIR 9662 INFORMAL REPORT TO CITY COUNCIL MEMBERS No. 9662
To the Mayor and Members of the City Council August 19, 2014
`�` Page 1 of 1
r
SUBJECT: PENDING RULEMAKING AT THE TEXAS RAILROAD COMMISSION
Under state law, Texas cities have original jurisdiction over gas utilities and their rates. If a utility
requests a rate increase and cities deny it, the case is appealed to the Texas Railroad
Commission (the RRC). Cities can then participate in that appeal to ensure that ratepayers are
protected with rate-case expenses for both utilities and cities ultimately being passed on to
consumers across the entire system.
The RRC has proposed two new rules that would substantially undermine all cities' ability to
participate in rate cases.
One rule would require cities intervening in rate cases to consolidate and limit discovery, making
it more difficult to establish whether a proposed rate increase is supported by the evidence.
The second rule would change how City rate-case expenses are passed through to consumers.
Currently, because a municipal intervener's actions have the potential to benefit customers
throughout the system, intervening cities can recover their expenses from the utility, which
passes those costs on to all ratepayers in the system.
The new rule would impose the surcharge for rate-case expenses of intervening cities only on
customers living in those cities that intervened, even though all rate payers in the system would
continue to benefit from those cities' success. This change would create a disincentive for city
participation in rate cases and would disproportionately pass on the rate case expense surcharge
only to select customers even though all customers would benefit. During the 2013 legislative
session, bills were introduced proposing similar changes, but those bills were defeated. Note that
under the proposed new rule, the utility's rate-case expenses would still be passed through to all
customers in the system.
Both the Texas Municipal League and the multi-city Atmos Cities Steering Committee coalition,
which the City has worked with since 2006, have recommended that concerned cities submit
comments to the RRC opposing the rules and also that cities contact their state elected officials
to voice their opposition to the RRC's new rules.
Staff is recommending that the Mayor submit a letter to the RRC on behalf of the City with copies
to Tarrant County State Delegation.
If you have any questions or concerns concerning this matter, please contact Bridgette Garrett, Utility
Manager at 817-392-8518 or by e-mail at bridgette.aarrette fortworthtexas.goV.
David Cooke
City Manager
ISSUED BY THE CITY MANAGER FORT WORTH, TEXAS