HomeMy WebLinkAboutItem 08 - TXU Proposed Gas RatesMEMO TO:
FROM
MEETING DATE
SUBJECT:
RECOMMENDATION:
HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
ROGER NELSON, CITY MANAGER 1� 2 (V
A
JUNE 17, 2003
RESOLUTION TO SUSPEND THE EFFECTIVE DATE OF TXU
.PROPOSED GAS RATES
City Council approval of the resolution to suspend the effective date of the TXU Gas
proposed rates.
FUNDING SOURCE:
The City of Grapevine is working with a coalition of cities from the TXU service area to
retain consultants for review of the rate case filing. The city will not incur any immediate
costs for this process.
BACKGROUND:
On May 23, 2003, TXU Gas Company filed a rate case with the City of Grapevine. This
latest rate case has been filed in cities throughout the TXU gas distribution system and
represents a comprehensive endeavor. As mentioned during our last rate review, this
case represents TXU's efforts to create `statewide rates' for all of its distribution system.
According to the TXU Rate Case Executive Summary, TXU Gas has proposed an
overall rate increase of 7.2% in the system. Residential customers in Grapevine will
realize an increase of approximately 7.3% or an additional $3.99 per month (on typical 6
MCF residential bill) under current gas cost. Commercial customers will see an
increase of approximately 3.2% or an estimated $8.00 per month (on a typical 30 MCF
commercial bill).
The attached resolution provides for the suspension of the proposed rates indefinitely in
order to allow substantial time to review the case details. Also, the resolution provides
approval of cooperation with other cities to hire consultants qualified to analyze the case.
Geoffrey Gay, an attorney with Lloyd, Gosselink, Blevins, Rochelle, Baldwin, and
Townsend, is the lead attorney on the case and is facilitating (with cities'
representatives) the retention of additional experts in financial and utility fields. The
June 9, 2003 (4:47PM)
staff will provide updates throughout the proceeding weeks regarding the status of the
case.
The Staff and the City Attorney recommend approval of the resolution.
myl
June 9, 2003 (4:47PM)
IX
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
GRAPEVINE SUSPENDING THE EFFECTIVE DATE OF
TXU GAS DISTRIBUTION'S REQUESTED RATE
CHANGES TO PERMIT THE CITY TIME TO STUDY THE
REQUEST AND TO ESTABLISH REASONABLE RATES;
APPROVING COOPERATION WITH OTHER CITIES
WITHIN THE TXU GAS DISTRIBUTION SYSTEM TO
CREATE A STEERING COMMITTEE TO HIRE LEGAL AND
CONSULTING SERVICES AND TO NEGOTIATE WITH
THE COMPANY AND DIRECT ANY NECESSARY
LITIGATION; REQUIRING REIMBURSEMENT OF CITIES'
RATE CASE EXPENSES; AUTHORIZING INTERVENTION
IN THE PROCEEDING AT THE RAILROAD COMMISSION;
REQUIRING NOTICE OF THIS RESOLUTION TO THE
COMPANY AND PROVIDING AN EFFECTIVE DATE
WHEREAS, on or about May 23, 2003, TXU Gas Distribution, a division of TXU
Gas Company, filed with the City of Grapevine a Statement of Intent to change gas
rates in all municipalities within the TXU Gas Distribution System; and
WHEREAS, it is reasonable for the City of Grapevine to cooperate with other
cities in a review of the Company's application and create a Steering Committee to
coordinate the hiring and direction of legal counsel and consultants and to negotiate
with the Company and direct any necessary litigation; and
WHEREAS, the Gas Utility Regulatory Act grants local regulatory authorities the
right to suspend the effective date of proposed rate changes; and
WHEREAS, the Gas Utility Regulatory Act provides that costs incurred by Cities
in ratemaking activities are to be reimbursed by the regulated utility; and
WHEREAS, the Gas Utility Regulatory Act grants local regulatory authorities the
right to intervene in rate proceedings filed at the Railroad Commission.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY
OF GRAPEVINE, TEXAS:
1. That the effective date of the tariff changes submitted by TXU Gas
Distribution on or about May 23, 2003, be suspended to permit adequate time to review
the proposed changes and to establish reasonable rates.
2. That the City is authorized to cooperate with other Cities within the TXU
Gas Distribution System to create a Steering Committee to hire and direct legal counsel
and consultants, negotiate with the Company, make recommendations to the City
regarding reasonable rates and to direct any necessary litigation associated with an
appeal of a rate ordinance and the rate case filed at the Railroad Commission.
3. That the City's reasonable rate case expenses shall be reimbursed by
TXU Gas Distribution.
4. That the City is authorized to intervene in TXU Gas Distribution's rate case
filed at the Railroad Commission filed on or about May 23, 2003.
5. That a copy of this suspension resolution be sent to the local
representative of TXU Gas Distribution.
6. 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 17th day of June, 2003.
ATTEST:
APPROVED AS TO FORM:
RES. NO. 2