ST9302-CS 960816DALE IL BURTON
Director, Munidpal Retalions
and Economic Development
A
Lone Star Gas Company
301 S. Harwood St. * Dallas, Texas 75201-5696
August 16, 1996
AUG 19
Honorable Mayor Tom Morton
City of Coppell
P. O. Box 478
Coppell, TX 75019-4409
Dear Mayor Morton:
Attached is notice of a main line extension rate change previously approved by the City
Council. This rate is applied for extensions to residential customers beyond the no-charge limit
provided in our franchise agreement. Main line extensions beyond any applicable free limit for
commercial and industrial customers are performed at actual cost. Direct recovery of these extra
costs from customers has helped to control the investment in our distribution system and to keep
residential rates lower than they otherwise would
This notice is provided in compliance with our agreement to keep the City informed of the
main line extension charge each year. The new charge of $7.20 per foot is the standard rate for
computing gas main extensions under cash deposit contracts. This is an increase from the previous
rate of $7.00. The new charge became effective on June 1, 1996.
Please let me know if you need additional information regarding this matter. There is no
need for the City to take additional action on this previously approved charge.
Sincerely,
Dale Burton
DB:no
Attachment
FORWAILOED TO
NOTICE OF MAIN LINE EXTENSION
RATE CHANGE FOR CERTAIN
RESIDENTIAL CUSTOMERS
Lone Star Gas Company hereby gives notice of a change in its main line extension rate for
certain residential customers. Affected are those bona fide residential customers who seek service
beyond the applicable free limit in municipalities and environs area that have a residential main line
extension rate based on the lesser of the system-wide average cost of construction, including all
overheads, for the prior fiscal year or the adjusted actual cost as determined by applying the latest
Handy-Whitman Index to the 1975 actual base cost of $2.94. A bona fide residential customer uses
gas for heating and water heating, or the equivalent load thereof, at a minimum. The affected
municipalities and environs areas are listed on Lone Star's Rate Schedule Nos. 304 and 304-A as
Rate 304-2 municipalities and environs areas.
Effective June 1, 1996, the bona fide residential customer main line extension rate for Rate
304-2 municipalities and environs areas is $7.20 per foot. The $7.20 per foot residential customer
main line extension rate is established by rounding to the nearest one-tenth of one dollar the lesser
of the system-wide weighted average cost of construction, which is $7.83 per foot, or the adjusted
actual cost, which is $7.16 per foot, as determined by applying the latest Handy-Whitman Index to
the 1975 actual base cost. The attached schedule details the calculations.
Residential customers other than bona fide residential customers shall pay actual cost for main
line extensions beyond the free limit.
LONE STAR GAS COMt'ANY
AVERAGE COST OF GAS MAIN EXTENSION
1996
A. Total main extension cost for pipe size 6" and
smaller in 1995:
Total footage of main extension pipe 6" and
smaller in 1995:
Average cost of gas main extensions per foot:
Total Main Extension Cost $3.253,008 =
Total Footage 415,522
B. Handy-Whitman trend in cost for 1995:
C. Gas Main Extension Cash Deposit Contract
price effective June 1, 1996.
$ 3,253,008
415,522~et
$ 7.83 per foot
$ 7.16 per foot
$ 7.20 per foot