OR 98-857 Lone Star Gas Company's rates should be changed
ORDNANCE NO. 98857
AN ORDINANCE OF TFIE CITY OF COPPELL, TEXAS FINDING, AFTER
REASONABLE NOTICE AND HEAR1NG, THAT LONE STAR GAS
COMPANY'S RATES AND CHARGES WITHIN THE CITY SHOULD BE
CHANGED; DETERMINING JUST AND REASONABLE RATES;
APPROVING THE COMMERCIAL RATE FOR PUBLIC SCHOOL GAS
SERVICE AND PROVIDING A RATE MODERATION PLAN FOR
SCHOOLS TRANSITIONING TO THE COMMERCIAL RATE; PROVIDING
FOR A WEATHER NORMALIZATION CLAUSE AND REJECTING OTHER
PROPOSED AUTOMATIC ADJUSTMENT CLAUSES; PROVIDING FOR
RECOVERY OF RATE CASE EXPENSES; ADOPTING A MOST FAVORED
NATIONS CLAUSE; PRESERVING REGULATORY RIGHTS OF THE CITY;
ORDERING THAT THIS ORDINANCE BE SERVED ON LONE STAR GAS
COMPANY; PROVIDING FOR REPEAL OF CONFLICTING ORDINANCES.
WHEREAS, the City of Coppell, ("City") acting as a regulatory authority, has previously
suspended the effective date of Lone Star Gas Company' s ("Lone Star") application to increase
rates in the City in order to study the reasonableness of that application;
WHEREAS, the City on /7)0~!/Cj/~',q'~ , considered the Company's
application and a report from the City' s consultants who were retained to evaluate the merits of
Lone Star' s application in a reasonably noticed public hearing;
WHEREAS, the City has determined that the Company' s rates within the City should be
changed and that the Company's application should be granted, in part, and denied, in part;
NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY
OF COPPELL, TEXAS:
SECTION 1. That the existing rates and charges of Lone Star are hereby found, after
reasonable notice and hearing, to be umeasonable and shall be changed as hereinafter ordered.
The changed rates resulting from this Ordinance are hereby determined to be just and
reasonable rates to be observed and in force within the City.
SECTION 2. That it is hereby ordered that Lone Star's rates in the City be set on the
basis of a 3.52% increase in overall system average revenues for residential and commercial
customers, with a 3.91% increase in system average residential revenues and a 1.96% increase
in system average commercial revenues on the Lewisville Distribution System. The increase in
system average revenues also includes a $12,318 increase in other revenue (associated with
service charges) over test year levels. Revenues from the City of Coppell are authorized to
increase over test year levels in the following manner: $140,623 ($2,747,644 to $2,888,267) for
residential customers; $12,875 ($632,607 to $645,482) for commercial customers; and $2,407
($31,235 to $33,642) for service charges. The residential and commercial rates resulting from
this Ordinance shall be adjusted upward or downward from a base per Mcf city gate rate set by
the Railroad Commission of Texas by a Gas Cost Adjustment Factor authorized by the Railroad
Commission of Texas.
SECTION 3. That service to school customers shall be under the commercial rate as
proposed by Lone Star effective on November 10, 1999.
SECTION 4. That the Weather Norrealization Adjustment Clause proposed by Lone Star
is approved, but the other automatic adjustment clauses proposed by Lone Star are unreasonable
and are specifically rejected.
SECTION 5. That residential and commercial monthly customer charges of $7.25 and
$12.50 are reasonable and are hereby approved.
SECTION 6. That the miscellaneous service changes proposed by the Company are
reasonable and are hereby approved.
SECTION 7. That approval of a most favored nations clause is reasonable and in the
public interest and Lone Star is ordered to provide residents of the City of Coppell the benefits
of any agreement or order applicable elsewhere in the Lewisville Distribution System.
SECTION 8, Lone Star shall file with the City, no later than the effective date of the
changed rates ordered herein, revised Tariffs and Schedules, together with rate design
workpapers and supporting data as requested, setting forth the rates, tariffs and changes based
upon the increases and changes prescribed herein. Such Tariffs and Schedules may be modified
or amended by the City Council to comply with the provisions of this Ordinance within twenty
(20) days from the date of filing with the City, otherwise the same shall be considered approved
as filed.
SECTION 9. That the fees and expenses associated with the City retaining counsel and
consultants to investigate the Company's application are reasonable and are to be paid by Lone
Star and recovered from ratepayers through a system-wide surcharge spread over a six month
period. Incremental fees and expenses associated with this matter up to the amount of a
reasonable estimate previously submitted to Cities are to be added to the unrecovered balance as
they are paid by Lone Star. The Company shall provide a monthly accounting to the City
showing, by months, the amount recovered through the surcharge.
SECTION 10. That recovery of the portion of franchise fees currently collected from the
City of Coppell residents through a surcharge shall continue to be collected through a surcharge
that is not separately identified on customer billings.
SECTION 11. That the rate changes ordered herein become effective for billing on
November 29, 1998.
SECTION 12. This Ordinance shall be served on Lone Star by U.S. mail to the
Company's authorized representative, Greg Huckaby, TU Electric/Lone Star Gas, Texas
Utilities Companies, 2990 Long Prairie, Suite B, Flower Mound, Texas 75022.
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SECTION 13. That nothing contained in this Ordinance shall be construed now or
hereae~er in limiting or modifying, in any manner, the fight and power of the City under law to
regulate the rates and changes of Lone Star.
SECTION 14. All ordinances, resolutions, or parts thereof, in conflict with this
Ordinance are repealed to the extent of such conflict.
SECTION 15. It is hereby found and determined that said meeting at which this
Ordinance was passed was open to the public, as required by Texas law, and that advance public
notice of the time, place and purpose of said meeting was given.
PASSED AND APPROVED, this the t/C~/k day of /7?tgl/e~/9 (.f, , 1998.