HomeMy WebLinkAboutOrdinance 12075
ORDINANCE N0. ~~~
ATTACHMENT A
r
AN ORDINANCE REGULATING THE RATES AND CHARGES OF ALL
PERSONS, FIRMS, CORPORATIONS OR ASSOCIATIONS OF PERSONS
ENGAGED IN THE BUSINESS OF FURNISHING, DISTRIBUTING, OR
DELIVERING NATURAL GAS TO RESIDENTIAL AND COMMERCIAL
CUSTOMERS IN THE CITY OF FORT WORTH, TEXAS; REPEALING
ORDINANCE NO. 10849; AND PROVIDING AN EFFECTIVE DATE.
WHEREAS, on April 19, 1995, Lone Star Gas Company made
application for an increase in Residential and Commercial gas rates
designed to produce additional revenues of $6,634,762 from its Fort
Worth Distribution System consumers, including $4,'83.9,230 from
.'
customers in the City of Fort Worth; and
WHEREAS, a public hearing has been held on this application of
Lone Star Gas Company, at which all interested parties were given
a full opportunity to be heard on the requested rate increase; and
WHEREAS, the hearing on said rate increase application has now
been concluded and closed and the City Council has duly considered
all matters presented to it;
NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY
OF FORT WORTH, TEXAS:
SECTION 1.
That the City Council of the City of Fort Worth, in the
exercise of its sound legislative discretion, finds the following
facts to be established: 2
a. That Lone Star Gas Company's distribution properties used
and useful in serving the consumers in the Fort Worth
Distribution System comprise an Invested Capital Rate
Base of $56,254,055 and an Adjusted Value Base Rate of
$85, 013, 704.
b. That Lone Star Gas Company is entitled to a 8.860 rate of
return on its Invested Capital Rate Base and a 5.87 rate
of return on its Adjusted Value Rate Base; and that said
rates of return are fair, reasonable and just under the
facts and circumstances presented;
c. That Lone Star Gas Company requires a net operating
income of $4,984,109 on revenues from residential and
commercial gas sales and service of $96,101,197 to
achieve the foregoing fair rates of return.
d. That the rates hereinafter fixed are determined to be
fair, just and reasonable; and that all previously -
adopted rates and charges for gas service to residential
and commercial customers in the City of Fort Worth should
be and are hereby repealed effective September 1, 1995.
SECTION 2.
That for all gas billed on and after September 1, 1995, all
persons, firms, corporations or associations of persons engaged in
the business of furnishing, distributing or delivering natural gas
to residential and commercial consumers in the City of Fort Worth
are hereby authorized to charge for their product and service in
accordance with the following schedules:
A. Rasidentia~ and omm rcial Rate
The following rates are the maximum applicable to
residential and commercial consumers per meter per month
or for any part of a month for which gas service is
available at the same location.
-2-
1.
Customer Charge $8.00
All Consumption @ $5.3868 Per Mcf
B.
2;.
Residential•
An off-peak sales discount of $.25 per Mcf will apply to
residential customers' volume purchased in excess of 8
Mcf for each of the billing months May through October.
If the service period is less than 28 days i.n a month,
the customer charge is $0.2857 times the number of days`
service.
Commercial•
Customer Charge
First 20 Mcf @
Next 30 Mcf @
Over 50 Mcf @
$14.00
5.5750 Per Mcf
5.2'750 Per Mcf
5.1250 Per Mcf
If the service period is less than 28 days in a month,
the customer charge is $0.5000 times the number of days'
service.
Gas Cost .Adjustment
Each monthly bill at the above rates shall be adjusted for gas
cost as follows:
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) A volume factor of 1.0301 determined in
establishing the above rates for the distribution
system as the ratio of adjusted purchased volumes
divided by adjusted sales volumes.
b) The City gate rate estimated to be applicable to
volumes purchased during the current calendar
month, expressed to the nearest $0.0001 per Mcf
(shown below as "Re").
2. Correction of the estimated adjustment determined by Item
B 1. above shall be included as part of the adjustment
for the second following billing month. The correcting
-3-
factor (shown below as "C") shall be expressed to the
nearest $0.0001 per Mcf based upon:
a) The corrected adjustment amount based upon the
actual City gate rate, less
b) The estimated adjustment amount billed under Item B
1, above, divided by
c) Distribution system residential and commercial
sales Mcf recorded on the Company's books during
the prior year for the month that the correction is
included as part of the adjustment.
3. The adjustment determined by Item B 1. and Item B 2.
above shall be multiplied by a tax factor of 1.06146 to
include street and alley rental and state occupation tax
due to increasing Company revenues under this gas cost
adjustment provision..
In summary, the gas cost adjustment (GCA) shall be determined
to the nearest $0.0001 per Mcf by Item B 1., Item B 2., and
Item B 3. as follows:
GCA = [Item B 1. + Item B 2.] X Item B 3.
GCA = [(1.0301) (Re - $4.0200) + C] X 1.06146
C.
Weather Normalization Adjustment
The Weather Normalization Adjustment clause authorized in the
rate ordinance dated August 4, 1992 will continue in effect as
follows:
Effective with bills rendered during the October 1995 through
Mary 1996 billing months, and annually thereafter for the
October through May billing months, the above residential and
commercial consumption rates for gas service, as adjusted,
will be subject to a weather normalization adjustment each
billing cycle to reflect the impact of variations in the
actual heating degree days during the period included in the
billing cycle from the normal level of heating degree days
during the period included in 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 during 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
-4-
billing cycle will be calculated according to the following
formula:
D.
E.
WNA=NDD- ADDxMxAHL
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 = Weighte d average margin per Mcf included
in the commodity portion of the rates
effecti ve 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 customers is determined by
subtracting the residential class base load from the total
volume being billed to the customer. The heating load to
which the weather normalization adjustment is to be applied
for commercial customers is determined by subtracting the base
load for the customer from the total volume being billed to
the customer. The base load of a customer is the average
level of nonheating consumption.
The weather normalization adjustment is subject to a 50$
limitation factor based on temperatures being fifty percent
warmer or colder than normal. The weather normalization
adjustment will be calculated to the nearest $.0001 per Mcf.
Tax Adjustment
The tax adjustment shall be an amount equivalent to the
proportionate part of any new tax, or increased tax, or any
other governmental imposition, rental, fee or charge (except
state, county, city and special district ad valorem taxes and
taxes or net income) levied, assessed or imposed subsequent to
July 1, 1994, upon or allocable to the Company's distribution
operations, by any new or amended law, ordinance or contract.
Rate Case Expense
It is the intention of Lone Star Gas Company to recover the
current and any unrecovered prior rate case expense through a
surcharge designed for a six-month nominal recovery period.
The surcharge per Mcf would be calculated by dividing the rate
case expense to be recovered by one-half of the adjusted
-5-
annual sales volume to residential and commercial customers.
When a surcharge is applicable, monthly status reports will be
provided to account for the collections.
F.
Special Provisions and Adjustments
1. Bills are due and payable when rendered and if not paid
within 15 days of the date shown on the bill as the
"present meter reading" date or the "for service through"
date, subjects the customers to immediate termination of
gas service unless they have made other payment
arrangements with the Company.
Provision of service is subject to the following schedule
of charges:
2.
In addition to the charges and rates set out above, the
Company shall charge and collect the sum of:
Schedule
Charge
8 a.m. to 5 p.m. Monday through Friday $27.50
Night, week-end and holiday $41.25
as a connection charge for the initial inauguration of
gas service, for each inauguration of service when the
billable party has changed and for each reconnection of
gas service where service has been discontinued at the
same premises for any reason, with the following
exceptions:
a) For a builder who uses gas temporarily during
construction or for display purposes.
b) Whenever gas service has been temporarily
interrupted because of system outage, or service
work done by Company; or
c) For any reason deemed necessary for Company
operations.
A returned check handling charge of $13.75 will be made
for each check returned to the Company for any reason.
3.
4. A charge of $9.50 shall be made for each trip by a
Company employee to a customer's residence or place of
business when there is an amount owed to the Company that
is past due. This charge shall not be made when the trip
-6-
is required for safety investigations or when gas service
has been temporarily interrupted because of system outage
or service work done by Company.
SECTION 3.
For the purpose of assuring rates to be charged by Lone Star
Gas Company which are just and reasonable to the consumers of
natural gas within the corporate limits of the City of Fort worth
as well as Company, City reserves unto itself the right and
privilege at any time to increase, decrease, alter, change or amend
this ordinance or the rates herein established and provided for, or
to enact any ordinance or adopt any such rates which would
effectuate such purpose. In so doing, City further reserves unto
itself the right and privilege of exercising any power granted it
under statutory law, administrative rule or regulations or
otherwise.
SECTION 4.
Lone Star Gas Company shall pay all reasonable rate case
expenses to the City of Fort Worth, Texas, not to exceed
$26, 000.00.
SECTION 5.
If any section, subsection, sentence, clause, phrase or
portion of this ordinance is for any reason held invalid or
unconstitutional by any court of competent jurisdiction, such shall
be deemed a separate, district and independent provision and such
-7-
holding shall not affect the validity of the remaining portions
thereof.
SECTION 6.
All ordinances or parts of ordinances in conflict with this
ordinance are hereby repealed.
SECTION 7.
That this ordinance shall take effect on September 1, 1995 and
it is so ordained.
PROVED A TO FO AND LEGALITY:
City Attorney
~~~(~~
Date•
Adopted:, /) `~~`~`~
Effective date:
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City of Fort Worth, Texas
Mayor and Council Communication
DATE 'REFERENCE NUMBER LOG NAME PAGE
08/08/95 G-11188 12RATES 1 of 3
SUBJECT LONE STAR GAS COMPANY REQUEST FOR INCREASE IN LOCAL RATES
RECOMMENDATION
It is recommended that
1 An ordinance (attachment A) be adopted by the City Council establishing new residential
and commercial gas rates to be charged by Lone Star Gas Company, within the City of Fort
Worth, as recommended by Bill McMorries' the City's consultant, and
2 Lone Star Gas Company be invoiced to reimburse the City of Fort Worth for the funds
expended to engage the consultant, in an amount not to exceed 526,000 00
DISCUSSION
On April 19, 1995, the Lone Star Gas Company filed a request for authority to increase its
residential and commercial rates in Fort Worth and the 18 other cities comprising its Fort Worth
Distribution System The requested rates are designed to produce additional revenues of 56 635
million on Lone Star's Fort Worth Distribution System That portion of the requested increase
attributable to customers in the City of Fort Worth would be 54,839,230
On May 9, 1995, the City Council approved M&C C-14808, which authorized the engagement
of a consultant Bill R McMorries, P E , of Amarillo, Texas, to evaluate the propriety and
justification for the rate request In addition, the Council approved Ordinance No 11949, which
suspended the implementation of the new rate until August 23, 1995
The consultant now has completed his study and report He recommends that 54 429 million
additional revenue will be required system-wide, which is 67 percent of the Company's requested
increase of 56 635 million The amount attributable to customers in the City of Fort Worth
would be 53,237,176 The comparison between the Company's and the consultant's findings
is summarized as follows
Company Consultant
(lN THOUSAND 5)
1 Operating Revenues at Present Rates, Adjusted 591,672 591,672
2 Proposed Additional Revenues 6,635 4,429
3 Total Operating Revenues (1 + 2) 98,307 96,101
4 Less (adjusted) Operating Expenses 90,507 89,562
5 Less .Federal Income Tax 1,975 .1,555
6 Net Operating Income (3-4-5) 5,825 4,984
7 Rate Base (Adjusted Value of Property) 91,624 85,014
8 Rate of Return (Line 617) 6 36% 5 86%
City of Fort forth, Texas
Mayor and Council Communication
DATE REFERENCE NUMBER LOG NAME PAGE
08/08/95 G-11188 12RATES 2 of 3
SUBJECT LONE STAR GAS COMPANY REQUEST FOR INCREASE IN LOCAL RATES
The following tables show the current, proposed, and recommended rates
RESIDENTIAL
Customer Charge
All Mcf
Peak Period
Off Peak Discount*
COMMERCIAL
Customer Charge
First 20 Mcf
Next 30 Mcf
Over 50 Mcf
PRESENT COMPANY PROPOSEDCONSULTANT
7 00 8 00 8 00
- 5 6267 5 38680
5 2020 - -
25 25 25
12 00 14 00 14 00
5 4478 5 5749 5 5750
5 1478 5 2749 5 2750
4 9978 5 1249 5 1250
* An off-peak sales discount will apply to residential customers' volume purchases in excess
of 8 Mcf for each of the billing months May through October
A bill comparison using current, proposed and recommended residential and commercial rates
is attached (Attachment B)
Lone Star Gas Company has also requested increases in miscellaneous charges as shown below
' From To
Connection Charge
8 a m to 5 p m Monday through Friday S25 00 S27 50
Nights, Weekends and Holidays 40 00 41 25
Returned Check Charge 7 50 13 75
Collection Charge (per trip) S 7 00 S 9 50
City of Fort Worth, Texas
Mayor and Council Communication
s
DATE
08/08/95 REFERENCE NUMBER
G-11188 LOG NAME
12RATES PAGE
3 of 3
SUBJECT LONE STAR GAS COMPANY REQUEST FOR INCREASE IN LOCAL RATES
The consultant concurs that these increases are fair and reasonable
CB a
Submitted for City Manager's FUND ACCOUNT CENTER AMOUNT CITY SECRETARY
Office by• (to)
APPROVED
Charles Boswell $500 CITY COUNCIL
Originating Department Head
auG ~~ 1~~5
Wade Adkins 7623 (from)
l Gc~,tJ ~ii.a~i~t-il./
For Additional Information City Socretarp of the
City of Fort Worth,?exaa
Contact:
Danny Reed 6798