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HomeMy WebLinkAboutItem 09 - TXU Lone Star PipelineITEM N _ q _ nNowaft MEMO TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL FROM: ROGER NELSON, CITY MANAGER l J1� MEETING DATE SUBJECT: RECOMMENDATION: JANUARY 4, 2000 TXU LONE STAR PIPELINE — RESOLUTION FOR INTERVENTION City Council approve a resolution authorizing the City Manager to participate in the steering committee of cities served by TXU Lone Star Pipeline for intervention in GUD NO. 8976, the application to the Railroad Commission to increase the city gate rate. FUNDING SOURCE: The City of Grapevine will not incur any cost for participation. BACKGROUND: TXU Lone Star Gas has filed an application to increase the city gate rate with the Railroad Commission. The "gate rate" is monitored by the Railroad Commission and represents the amount charged to transport natural gas from its source to the "gate" or entry of Grapevine. The filing would increase rates by $20.4 million (16% increase) and result in increased charges of approximately 15 cents per Mcf. The average monthly residential consumption on most Lone Star distribution systems varies from 4 to 6 Mcf, meaning that most residential customers would experience an average monthly increase of .60 to .90 cents. Lone Star claims that the average residential user will see a 75 cent per month increase. The steering committee through Geoffrey Gay, of Butler, Porter, Gay & Day, will coordinate the hiring of consultants to propose an alternative case, present information at public hearings and file legal briefs with the Railroad Commission. The Railroad Commission will then issue a final order on the rate case at the end of May 2000. December 28, 1999 (4:20PM) The steering committee currently has funds available for the consultants' review. However, in the event that additional funds are requested from the participating cities, all the costs will be reimbursed by TXU Lone Star Pipeline (as required by law). The Staff and City Attorney recommend approval of the resolution in order to help ensure that our residents and TXU customers receive fair and reasonable rates. December 28, 1999 (4:20PM) RESOLUTION NO. A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF GRAPEVINE, TEXAS AUTHORIZING INTERVENTION IN GUD NO. 8976, TXU LONE STAR PIPELINE'S APPLICATION TO THE RAILROAD COMMISSION TO INCREASE ITS CITY GATE RATE; FUTHER AUTHORIZING PARATICIPATION WITH THE STEERING COMMITTEE OF CITIES SERVED BY LONE STAR IN PROCEEDING BEFORE THE RAILROAD COMMISSION OR SUBSEQUENT APPEALS; REQUIRING RATE CASE EXPENSE REIMBURSEMENT OF REASONABLE COSTS INCURRED BY THE STEERING COMMITTEE FOR ATTORNEYS, CONSULTANTS AND WITNESSES AND OTHER ASSOCIATED COSTS; AND PROVIDING AN EFFECTIVE DATE WHEREAS, the city of Grapevine pursuant to GURA §103.023 has standing in each case before the Railroad Commission that relates to a gas utility's rates and services in the municipality; and WHEREAS, on October 29, 1999 TXU Lone Star Pipeline filed a proceeding with the Railroad Commission (GUD NO. 8976) to increase its city gate rate revenues by $20.4 million; and WHEREAS, the City of Grapevine and its residents may be adversely impacted by increases in the city gate rate; and WHEREAS, the City of Grapevine is entitled pursuant to GURA § 103.22 to reimbursement of its reasonable costs associated with participation in rate making proceedings; and WHEREAS, the Steering Committee of Cities served by Lone Star is a standing committee with representatives from numerous Cities that are experienced in employing, directing and coordinating efforts of lawyers, consultants and expert witnesses working on behalf of cities in regulatory proceedings. NOW THEREFORE BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF GRAPEVINE, TEXAS THAT: Section 1. That the City of Grapevine is authorized to intervene in Railroad Commission GUD NO. 8976. Section 2. That the City of Grapevine will participate with other Cities in GUD NO. 8976 and in any subsequent appeals of that administrative through involvement with the Steering Committee of Cities Served by Lone Star. The Steering Committee is authorized to retain attorneys, consultants and expert witnesses that may be necessary to protect the interests of cities and their residents. Section 3. That Lone Star shall promptly reimburse reasonable costs incurred by the Steering Committee of Cities Served by Lone Star for efforts undertaken in GUD NO. 8976. Section 4. That a copy of this resolution shall be sent to Jay Doegey, City Attorney of Arlington, Texas and Chairman of the Steering Committee of Cities Served by Lone Star, 200 W. Abram Drive, Arlington, Texas 76010; fax number 817-453-6897. Section 5. That this resolution shall become effective from and after the date of its passage. PASSED AND APPROVED BY THE CITY COUNCIL OF THE CITY OF GRAPEVINE, TEXAS on this the 4th day of January, 2000. ATTEST: LAIWa RES. NO. 2 APPROVED: