HomeMy WebLinkAboutOrdinance 144381
ORDINANCE NO. ~ ~t' ~ 3 d
AN ORDINANCE ESTABLISHING MAXIMUM PERMITTED
RATES AND CHARGES THAT TXU GAS DISTRIBUTION MAY
ASSESS RESIDENTIAL AND COMMERCIAL CUSTOMERS IN
THE CITY OF FORT WORTH; APPROVING RATES FOR
INDUSTRIAL CUSTOMERS IN THE CITY OF FORT WORTH, AS
ESTABLISHED BY CONTRACT BETWEEN TXU GAS
DISTRIBUTION AND SUCH INDUSTRIAL CUSTOMERS;
ADOPTING DECLARATIONS AND FINDINGS RELATED TO
RATES AND CHARGES ASSESSED TO RESIDENTIAL,
COMMERCIAL AND INDUSTRIAL CUSTOMERS IN THE CITY
OF FORT WORTH; REPEALING ORDINANCE NO. 12075;
PROVIDING A SEVERABILITY CLAUSE; AND PROVIDING AN
EFFECTIVE DATE.
WHEREAS, on May 26, 2000, TXU Gas Distribution ("TXU Gas"), a division
of TXU Gas Company (formerly Lone Star Gas Company), filed with the City Secretary
a "Statement of Intent to Change Rates" under which higher rates charged by TXU Gas
would go into effect in the City on July 3, 2000; and
WHEREAS, pursuant to Section 104 107 of the Texas Utilities Code, on June
13, 2000 the City Council adopted Ordinance No 14216 suspending implementation of
TXU Gas's proposed rate schedule from July 3, 2000 until September 28, 2000; and
r
WHEREAS, pursuant to M&C G-12933, on June 13, 2000 the City Council
authorized the retention of Diversified Utility Consultants, Inc to assist the City m its
review of the TXU Gas's proposed rate schedule; and
WHEREAS, on July 28, 2000 TXU Gas filed an updated rate filing ("Rate
Filing") with the City, incorporated herein by reference for all purposes, which
established a new proposed implementation date of September 1, 2000, and agreed to the
City's right to suspend implementation of the schedule proposed by such updated Rate
Filing for up to ninety (90) days following such new proposed implementation date; and
Page 1 of 12
TXU Gas Rate Ordinance
WHEREAS, pursuant to Section 104 107 of the Texas Utilities Code, on August
29, 2000 the City Council adopted Ordinance No 14314 suspending implementation of
TXLJ Gas's updated rate schedule from September 28, 2000 until November 30, 2000;
and
WHEREAS, on November 21, 2000 TXU Gas agreed to extend the date for
implementation of TXU Gas's updated rate schedule from November 30, 2000 to
December 5, 2000; and
WHEREAS, on December 1, 2000 TXU Gas agreed to extend the date for
implementation of TXU Gas's updated rate schedule from December 5, 2000 to
December 12, 2000; and
WHEREAS, pursuant to Chapters 103 and 104 of the Texas Uhhties Code, the
City is required to (i) analyze TXU Gas's Rate Filing, as updated, (ii) conduct a public
hearing m order to determine the propriety of the proposed rate increase (the "Public
Hearing"), and (iii) make a reasonable determination of TXU Gas's rate base, expenses,
investment and rate of return m the City; and
WHEREAS, the Public Hearing was conducted on December 12, 2000 at which
all interested parties were given a full opportunity to comment on the Rate Filing;
NOW THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF
THE CITY OF FORT WORTH, TEXAS:
Section 1.
FINDINGS.
That the City Council, pursuant to its exclusive original ~unsdichonal authority
over the rates, operations and services of TXLJ Gas within the Crty and m the exercise of
its sound legislative discretion, makes the following findings of fact:
Page 2 of 12
TXU Gas Rate Ordinance
1.1. TXCT Gas's distribution properties used and useful in serving residential
and commercial consumers m rts Fort Worth Distribution System comprise agate -
Base of $77,141,859
1.2. TXU Gas is entitled to a 9 75% Rate of Return on its Rate Base. This
Rate of Return is fair, reasonable and dust under the facts and circumstances
evident from the circumstances presented.
1.3. TXLJ Gas requires an annual net operating income of $7,475,718 on
revenues from annual residential and commercial operating revenues of
$79,809,850 to achieve the Rate of Return.
1.4. The City does not have evidence of any unfair advantage by either TXLJ
Gas or rts industrial customers m the City with regard to contract negotiations for
industrial gas rates, and therefore, in accordance with Section 104 003(b) of the
Texas Utilities Code, contractual industrial gas rates are considered to be dust and
reasonable.
1.5. Based on the above facts, the City Council finds that rates for residential
customers m the Crty, as requested by TXLT Gas m rts Rate Filing, are
unreasonable.
1.6. Based on the above facts, the Crty Council finds that rates for commercial
customers m the Crty, as requested by TXU Gas m rts Rate Filing, are
unreasonable.
1 7. Based on the above facts and in accordance with the mandates of Sectlon
104 003(b) of the Texas Utilities Code, the City Council approves rates for
industrial customers m the Crty established by contract between TXU Gas and
such industrial customers. Therefore the City declines to establish rates for
industrial customers m the City as requested by TXU Gas m rts Rate Filing.
Section 2.
RATES AND CHARGES ORDERED.
That based on the findings of fact set forth m Sectlon 1 of this Ordinance and in
accordance with the schedules set forth m this Section 2, TXU Gas is hereby authorized
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TXU Gas Rate Ordinance ~
to assess the following maximum permitted rates and charges for customers m the Crty,
which rates and charges the City Council hereby determines to be fair, dust and
reasonable.
2.1. Residential Gas Rates.
The following rates are the maximum permitted rates and charges
applicable to residential customers per meter per month or for; any part of a month
for which gas service is avallable at the same location.
Customer Charge $8 00
All Consumption @ $3 8301 per Mcf
An off-peak sales discount of $0.25 per Mcf will apply to residential
customers' volume purchased In excess of 8 Mcf for the following billing months
May, June, July, August, September and October
If the service period is .less than twenty-eight (28) days m a given month,
the customer charge shall be $0.2857 times the number of days' service.
2.2. Commercial Gas Rates.
The following rates are the maximum permitted rates and charges
applicable to commercial customers per meter per month or for any part of a
month for which gas service is available at the same location.
Customer Charge
First 20 Mcf @
Next 30 Mcf @
Over 50 Mcf @
$14 00
$4 1150 per Mcf
$3 8150 per Mcf
$3 6650 per Mcf
r If the service penod is less than twenty-eight (28) days m a given month,
the customer charge shall be $0.5000 times the number of days' service.
Page 4 of 12
TXU Gas Rate Ordinance
2.3. Gas Cost Adjustment.
Each monthly bill at the rates and charges set forth in Sections 2.1 and 2.2
shall be adjusted for gas cost as follows
2.3.1. The City gate rate increase or decrease applicable to current billing
month residential and commercial sales shall be estimated to the nearest
$0 0001 per Mcf based upon.
(a) The City gate rate estimated to be applicable to volumes
purchased dunng the current calendar month, expressed to the
nearest $0 0001 per Mcf ("Re" m the summary below), less r
(b) The base City gate rate of $2 7535 per Mcf, multiplied by
(c) A volume factor of 1 0216 determined m estabhslung the
above rates for the distribution system.
2.3.2. Correction of the estimated adjustment determined by Section
2.3 1 shall be included as part of the adjustment for the second following
bilking month. The correcting factor ("C" m the summary below) shall be
expressed to the nearest $0 0001 per Mcf based upon.
(a) The corrected adjustment amount based on the actual City
gate rate, less
(b) The estimated adjustment amount billed under Section
2.3 1, divided by
(c) Distribution system residential and commercial sales Mcf
recorded on TXLT Gas's books dunng the pnor year for the month
that the correction is included as part of the adjustment.
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TXU Gas Rate Ordinance
In summary, the gas cost adjustment ("GCA" m the summary below) shall
bey determined to the nearest $0 0001 per Mcf by Section 2.3 1 plus
Section 2.3.2 as follows.
GCA = [(1 0216)(Re - $2.7535) + C]
2.4. Weather Normalization Adjustment.
Effective with bills rendered dunng the October 2000 through May 2001
billing months, and annually thereafter for the October through May billing
months, the residential and commercial consumption rates for gas service, as
adjusted, shall be subject to a weather normalization adjustment each billing cycle
to reflect the impact of variations m the actual heating degree days dunng the
period included m the bilking cycle from the normal level of heating degree days
dunng the period included m the billing cycle. The, weather normalization
adjustment will be Implemented on a per Mcf basis and will be applicable to the
heating load of each customer dunng the period Included In the billing cycle. It
will be determined separately for residential and commercial customers based on
heating degree data recorded by the D/FW Airport weather station. The
adjustment to be made for each billing cycle well be calculated according to the
following formula.
WNA=NDD-ADD x Mx AHL
ADD
WHERE.
WNA = Weather normalization adjustment
NDD = Normal heating degree days during the period covered by the billing cycle
ADD = Actual heating degree days during the period covered by the billing cycle
M = Weighted average margin per Mcf included m the commodity portion of the
rates effective during the October through May billing months
AHL = Actual heating load per customer
The heating load to which the weather normalization adjustment is to be
applied for residential and commercial customers shall be determined by
subtracting the base load for the customer from the total volume being billed to
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TXU Gas Rate Ordinance
the customer The base load of a customer is the average level of nonheating
consumption.
The weather normalization adjustment shall be subject to a fifty percent
(50%) limitation factor based on temperatures being fifty percent (50%) warmer
or colder than normal. The weather normalization adjustment will be calculated
to the nearest $0 0001 per Mcf.
2.5. Tax Adjustment.
The tax adjustment shall be an amount equivalent to the proportionate part
of any tax or any other governmental imposition, rental, fee or charge (except
state, county, city and special dlstnct ad valorem taxes and taxes on net income)
levied, assessed or imposed subsequent to December 31, 1999, upon or allocable
to the TXLJ Gas's distribution operations, by any new or amended law, ordinance
or contract.
2.6. Rate Case Expenses.
TXU Gas's initial "Statement of Intent to Change Rates", filed with the
City on May 26, 2000, and the subsequent Rate Filing, constitute a ratemaking
proceeding. Pursuant to Section 103 022(a) of the Texas Uhhhes Code, the City
was authonzed to engage Diversified Utility Consultants, Inc to assist the City m
its analysis of this ratemakmg proceeding. Pursuant to Section 103 022(b) of the
Texas Uhlrties Code, TXLJ Gas shall reimburse the City the sum of $37,000 00,
which is the actual and reasonable cost of services rendered by Diversified Utility
Consultants, Inc on behalf of the City dunng the course of this ratemaking
proceeding ("Rate Case Expenses") TXLT Gas shall make such reimbursement in
full to the City within thirty (30) calendar days following receipt of an itemized
statement from the City
In accordance with state laws and regulations, TXU Gas may recover the
costs of this reimbursement to the City, as well as TXU Gas's actual and
reasonable rate case expenses m the amount of $23,000, through a surcharge to
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TXU Gas Rate Ordinance
TXLT Gas's customers. It is hereby ordered that if TXiJ Gas elects to recover, in
whole or In part, the costs of this reimbursement through a surcharge to its
customers in the City, It shall do so through a surcharge designed for a six (6)
month nominal recovery penod. The surcharge per Mcf shall be calculated by
dividing the Rate Case Expenses to be recovered by one-half of the adjusted
annual sales volume to residential and commercial customers. When a surcharge
is applicable, monthly status reports will be provided to the Crty to account for the
collections. TXU Gas shall refund to its customers any over collection of rate
case expenses that may occur
2.7. Special Provisions and Adjustments.
2.7.1. Payment of Bills and Disconnection of Gas Service.
A customer's blll from TXU Gas shall be due and payable when
received. Each bill shall clearly reflect a "present meter reading" date or a
"for service through" date and each blll will be marled to a customer
within five (5) calendar days of such stated dates. Each bill shall also
clearly reflect a "past due" date. The "past due" date shall be fifteen (15)
calendar days following the "present meter reading" date or the "for
service through" date. If TXLJ Gas has not received payment by the "past
due" date, TXLT Gas shall not disconnect a customer for failure to pay
until TXLT Gas has provided at least ten (10) calendar days' advance
wntten notice separate from the monthly bill to the customer pnor to
disconnection, specifying the effective date after which service is subject
to disconnection. Notwithstanding any other provision regarding the "past
due" date, no customer's service shall be terminated for non-payment of
any amount until thirty (30) days after the bill for that amount has been
mailed.
Page 8 of 12
TXU Gas Rate Ordinance
2.7.2. Connection and Reconnection Charges.
TXU Gas may assess the following maximum charges as (i) a
connection charge for the initial inauguration of gas service or (ii) for each
reconnection of gas service where service has been discontinued at the
same premises for any lawful reason, for connections or reconnections
made during the time periods indicated below
8 00 A.M. to 5.00 P.M., Monday through Fnday• $35 00
After hours, weekends and New Year's Day, Memorial Day,
Fourth of July, Labor Day, Thanksgiving Day, Christmas Day•
$52 50
These charges shall not be assessed (i) for a builder who uses gas
temporarily during construction or for display purposes, (ii) whenever gas
service has been temporarily interrupted due to system outage or service
work done by TXU Gas, or (iii) for any reason deemed necessary for TXU
Gas's operations.
2.7.3. "Read for Change" Charge.
TXU Gas may assess a maximum "read for change" charge of
$12 00 when it is necessary for a TXU Gas employee to read the meter at
a currently served location due to a change in the billable party
2.7 4. Miscellaneous Charges.
(a) T_XiJ Gas may assess a maximum handling charge of
$16.25 for each check returned to TXU Gas for any reason.
(b) A charge of $4 75 shall be made for each trip by a TXU
Gas employee to a customer's residence or place of business when
there is an amount owed to TXU Gas that is past due. This charge
shall not be assessed when the trip is required for safety
investigations or when gas service has been temporarily interrupted
because of system outage or service work done by TXU Gas.
Page 9 of 12
TXU Gas Rate Ordinance
2.8. Main Line Extension Charges.
TXU Gas shall not be required to extend mains in any public rights-of-
way more than one hundred feet (100') to serve any one customer The charge for
extending males beyond one hundred feet (100') shall be calculated as the total
length of the extension m feet minus one hundred feet (100') times the actual cost
per foot of the total extension.
Section 3
RESERVATION OF RIGHTS.
In order to ensure that rates and charges assessed by TXU Gas in the City are dust
and reasonable to both TXU Gas and rts customers, the Crty reserves the right and
privilege at any time to increase, decrease, alter change or amend this Ordinance or the
rates established herein or to enact any ordinance or adopt any rates and charges which
would effectuate that purpose. In this connection, the Crty further reserves the right and
privilege to exercise any authority and power granted to it under any applicable law,
ordinance or administrative rule or regulation.
Section 4.
REHEARING BY CITY COUNCIL.
If TXU Gas disputes all or any portion of this Ordinance, prior to filing an appeal
with the Railroad Commission of Texas, TXU Gas shall file with the Crty Secretary a
Page 10 of 12
TXU Gas Rate Ordinance
request for rehearing on the meets by the City Council and shall comply with the
procedures established for such a rehearing as set forth in this Section 4 Upon receipt of
a request for rehearing, the City Council will promptly provide a forum during a public
hearing m an open meeting m order for TXU Gas to set forth the aspects of this
Ordinance which TXL7 disputes. The City Council shall have sixty (60) calendar days
following the date of such rehearing to render a final decision. Action of the Crty
Council shall not be considered final for purposes of appeal to the Railroad Commission
of Texas until a final decision on any motion for rehearing has been rendered. The
provisions of this Ordinance shall remain in full force and effect from and after its
adoption unless modified by a subsequent ordinance adopted by the City Council as a
result of a final decision following a rehearing.
Section 5.
SEVERABILITY
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 or 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~udgment.
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TXU Gas Rate Ordinance
Section 6.
EFFECTIVE DATE.
This Ordinance shall take effect and be m full force and effect from and after the
date of its adoption. The City Secretary is hereby directed to deliver a certified copy of
this Ordinance to TXU Gas.
AND IT IS SO ORDAINED.
ADOPTED AND EFFECTIVE l2-/2-11'D
APPROVED AS TO FORM AND LEGALITY
By•
Peter Vaky
Assistant City Attorney
Date• /2-l f'~ G-13093 ~
Page 12 of 12
TXU Gas Rate Ordinance
City of Fort Worth, Texas
~IANOr' A11iI~ ~Og11C'1~ ~alrtlr1u111CAt1011
.r .. ~.
DATE REFERENCE NUMBER LOG NAME PAGE
12/5/00 G-13093 02RATES 1 of 3
SUBJECT TXU GAS DISTRIBUTION REQUEST FOR INCREASE IN LOCAL RATES
RECOMMENDATION
It is recommended that the attached ordinance be adopted by the City Council establishing new
residential and commercial gas rates to be charged by TXU Gas Distribution within the City of Fort
Worth
DISCUSSION
On May 26, 2000, TXU Gas Distribution (TXU Gas), a division of TXU Gas Company (formerly Lone
Star Gas Company), filed with the City of Fort Worth a Statement of Intent to Change Rates in the City
and the twenty-two other area municipalities which comprise what TXU Gas calls its "Fort Worth
Distribution System"
On June 13, 2000, the City Council adopted Ordinance No 14216 suspending implementation of the
proposed rate schedule until September 28, 2000, and approved M&C G-12933 authorizing the City to
retain Diversified Utility Consultants, Inc. (DUCT) to assist the City's review of TXU Gas' filing
On July 28, 2000, TXU Gas amended its May 26, 2000 filing with new data, and on August 29, 2000
(M&C G-13000), the City extended the suspension period in effect from September 28, 2000, to
November 30, 2000 (Ordinance No 14314) The Texas Railroad Commission has recently decided a
similar distribution rate case for the City of Dallas TXU agreed to extend the suspension period to
December 5, 2000, so that the City Council may have the benefit of the Railroad Commissioners'
decision
DUCT has completed its analysis of the rate filing and has issued a preliminary report. DUCT
recommends a decrease of $3,094,694 system-wide for residential and commercial customers,
compared to the company's request for an increase of $6,790,436 If the consultants' report is adjusted
for the issues that the Railroad Commission decided in the Dallas case, the result would be an increase
of $2,574,034 TXU Gas has agreed to accept this increase for its residential and commercial gas
rates Staff recommends that the City Council adopt an ordinance based on DUCI's recommendations,
adjusted to reflect the Railroad Commission's decision in the Dallas case
TXU is requesting the City to set rates for their industrial customers, as well as their residential and
commercial customers. The City has never done this before, and DUCT recommends that we do not do
it this time
TXU is proposing a Cost of Service Adjustment clause (COSA) and a Plant Investment Cost
Adjustment (PICA) clause The PICA would authorize the company to adjust the rates for annual
changes in net plant investment to the system The COSA would allow adjustments for changes to
expense accounts DUCT recommends that the City Council disallow both of these automatic
adjustment clauses
A comparison between the Company's request and the consultants' findings is summarized as follows
City of Fort Worth, Texas
~11~1A~-or And C'auncil ~'airtmun~cAt~an
_ _ _ _
DATE REFERENCE NUMBER LOG NAME PAGE
12/5/00 G-13093 02RATES 2 of 3
SUBJECT TXU GAS DISTRIBUTION REQUEST FOR INCREASE IN LOCAL RATES
Adjusted for
Company Consultant RRC Decision
Operating Revenues at Present Rates $77,235,816 $77,235,816 $77,235,816
Proposed Additional Revenues 6,790,436 (3,920,485) 2,574,034
Total Operating Revenues (1+2) 84,026,252 74,141,122 79,809,850
Less (adjusted) Operating Expenses 72,495,765 65,505,515 69,653,302
Less Federal Income Tax 2,982,799 2,190,057 2,680,830
Net Operating Income (3-4-5) 8,547,688 6,445,548 7,475,718
Rate Base (Adjusted Value of Property) 87,014,257 73,473,648 77,141,859
Rate of Return (Line 6/7) 9 82% 8 77% 9 75%
The following tables show the current, proposed and recommended rates
RESIDENTIAL Present Company Recommended
Customer Charge $ 8 00 $ 8 00 $ 8 00
All million cubic feet 3 7469 4 0574 3 8301
Off Peak Discount* .25 .25 .25
COMMERCIAL
Customer Charge $14 00 $14 00 $14 00
First 20 million cubic feet 3 9242 4 1887 4 1150
Next 30 million cubic feet 3 6415 3 8887 3 8150
Over 50 million cubic feet 3 5002 3 7387 3 6650
An off -peak sales discount will apply to residential customers' volume purchases in excess
of 8 million cubic feet for each of the billing months of May through October
TXU has also requested changes in miscellaneous charges as shown below
Present Recommended
Connection Charge
Normal Business Hours $27 50 $35 00
After Hours 41.25 52.50
Read for Change Charge -0- 12.00
Returned Check Charge 13 75 16.25
Collection Charge 9 50 4 75
The consultant concurs that these increases are fair and reasonable
;,
City of Fort Worth, Texas
Agar And Caunc~( Cainn~tun~cAt~ian
~~
ATE
12/5/00 REFERENCE NUMBER
G-13093 LOG NAME
02RATES PAGE
3 of 3
SUBJECT TXU GAS DISTRIBUTION REQUEST FOR INCREASE IN LOCAL RATES
FISCAL INFORMATION/CERTIFICATION
The Finance Director certifies that this action will have no material effect on City funds.
CB k
Submitted for City Manager's FUND ACCOUNT CENTER AMOUNT CITY SECRETARY
Office by: (to)
~~~ov~o
Charles Boswell 8511 CITY CQUNC~~,
Originating Department Head: ~ ~vjti;jyp~;]~
DEC 12 2000
Charles Boswell 8511 (from)
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Adopted Ordnance It!t?o~_.f~~,$