HomeMy WebLinkAboutPO 6544: APPROVING THE RATE INCREASE SETTLEMENT OF TEXAS GAS SERVICE COMPANY P.O. No. 6544
03/21/16 gt
ORDINANCE NO.
AN ORDINANCE BY THE CITY OF PORT ARTHUR, TEXAS ("CITY")
APPROVING THE RATE INCREASE SETTLEMENT OF TEXAS GAS
SERVICE COMPANY; SETTING FINAL RATES; APPROVING A RATE
CASE EXPENSE COLLECTION SURCHARGE; FINDING THAT THE
MEETING COMPLIES WITH THE OPEN MEETINGS ACT; MAKING
OTHER FINDINGS AND PROVISIONS RELATED TO THE SUBJECT;
AND DECLARING AN EFFECTIVE DATE
WHEREAS, on or about December 30, 2015, Texas Gas Service Company filed a
Statement of Intent with the City to consolidate the existing South Jefferson County
Service Area and the Galveston Service Area into a newly created Gulf Coast Service
Area and to increase natural gas rates by $3.171 million per year; and
WHEREAS, Texas Gas Service Company updated and revised its original rate
request for the Gulf Coast Service Area to $3.308 million per year; and
WHEREAS, the City of Port Arthur suspended the effective date of the Texas
Gas Service Company's rates within its jurisdictional limits until at least May 3, 2016 and
hired the Lawton Law Firm, P.C. to review the Company's rate change request and
proposed tariffs; and
WHEREAS, the expert utility rate consultants retained to review Texas Gas
Service Company's rate increase on behalf of the City have made a range of proposed
adjustments and concluded that Texas Gas Service Company has not justified the need
for a $3.308 million annual rate increase. The consultants' analyses recommend
reducing the Texas Gas Service Company annual rate request by about $1.208 million
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resulting in an annual increase of about $2.1 million for the Gulf Coast Service Area;
and
WHEREAS, Texas Gas Service Company, Railroad Commission Staff, South
Jefferson County Service Area Cities, and Galveston Service Area Cities participated in a
number of settlement discussions to resolve the rate case issues without litigation; and
WHEREAS, Texas Gas Service Company has agreed to settle the rate request at
a rate increase level of $2.3 million per year for the combined Gulf Coast Service Area,
setting the residential customer charge at $13.00 per month, allocating costs to
customer classes based on Company witness Cummings Option 3 allocation which
minimizes residential class impact while no other customer class is moved further from
cost based revenue assignment, and the current separate gas cost clauses for South
Jefferson County Service Area Cities and Galveston Service Area Cities will be
maintained in the newly combined Gulf Coast Service Area level, and reasonable rate
case expenses will be recovered from all customers through a 24 month surcharge; and
WHEREAS, the Railroad Commission Staff, the Lawton Law Firm retained to
represent the South Jefferson Service Area Cities, and counsel for the Galveston Service
Area Cities have recommended approval of the Settlement terms as a reasonable
alternative to resolve the rate case issues without litigation; and
WHEREAS, the statutory deadline to act on Texas Gas Service Company's rate
increase request is May 3, 2016.
NOW THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE
CITY OF PORT ARTHUR, TEXAS:
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Section 1. That the statement and findings set out in the preamble to this
Ordinance are hereby in all things approved and adopted.
Section 2. That the City of Port Arthur hereby approves rates and tariffs
consistent with the Texas Gas Service Company proposed Settlement.
Section 3. That Texas Gas Service Company is hereby Ordered to file with the
City rates and tariffs consistent with the proposed Settlement.
Section 4. That the meeting at which this Ordinance was approved was in all
things conducted in strict compliance with the Texas Open Meetings Act, Texas
Government Code, Chapter 551.
Section 5. That this ordinance shall become effective from and after its
passage.
READ, ADOPTED AND APPROVED on this day of A.D.,
2016, at a Regular Meeting of the City Council of the City of Port Arthur, Texas, by the
following vote: AYES:
Mayor:
Councilmembers: ,
NOES: .
Deloris "Bobbie" Prince, Mayor
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ATTEST:
Sherri Bellard, City Secretary
AP ROVED AS TO FORM:
/17
Valecia R. T eno, City Attorney
APPROVED FOR ADMINISTRATION:
Brian McDougal, City Manager
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