Item Coversheet
  CITY COUNCIL AGENDA MEMO
MEETING DATE: 12/14/2020
DEPARTMENT:Gov Relations
DIRECTOR:Brandi Youngkin, Director of Policy & Government Relations
AGENDA ITEM:Approval of a Resolution suspending the effective date of CoServ Gas Ltd.'s requested gas rate increase to permit the City time to study the request and to establish reasonable rates. 
RECOMMENDED ACTION:Adoption of Resolutions

ITEM SUMMARY

Resolution No. 2020-12-6(R):To suspend the January 23, 2021 effective date of CoServ Gas, Ltd.’s (“CoServ”) requested increase to permit the City time to study the request and to establish reasonable rates; approving cooperation with other cities in the CoServ Gas, Ltd. service area; hiring legal and consulting services to negotiate with the Company and direct any necessary litigation and appeals; authorizing intervention in Docket OS-20-00005136 at the Railroad Commission; requiring reimbursement of Cities’ rate case expenses; finding that the meeting at which this Resolution is passed is open to the public as required by law;  requiring notice of this Resolution to the Company and legal counsel; and providing an effective date. Adopted

 

 

PREVIOUS ACTION/PRESENTATION

On January 12, 2009, the City of Plano approved a Resolution requesting the suspension of the effective date of CoServ Gas, Ltd. requested rate changes to permit the City time to study the request and to establish reasonable rates. 

BACKGROUND

On November 13, 2020, CoServ Gas, Ltd. (“CoServ” or “Company”), pursuant to Subchapter C of Chapter 104 of the Gas Utility Regulatory Act, filed its Statement of Intent to change gas rates at the Railroad Commission of Texas (“RRC”) and in all municipalities exercising original jurisdiction within its service area, effective January 23, 2021.  

 

CoServ is seeking to increase its gas rates on a system-wide basis by $9.6 million per year, and by $8,113,409 million in the incorporated areas.  This equates to an increase of 11.6% on total revenues, or 29.0% increase in base rates for the incorporated areas.  CoServ is also requesting: (1) Commission approval of depreciation rates for distribution and general plant; (2) a prudence determination for capital investment; (3) a finding that the approvals of the administrative orders by the Gas Services Division of the Commission based on the Accounting Order in Gas Utilities Docket No. 10695 are reasonable and accurate; and (4) a surcharge on customer bills to recover the reasonable rate case expenses associated with the filing of this statement of intent. 

 

The Resolution suspends the January 23, 2021 effective date of the Company’s rate increase for the maximum period permitted by law to allow the City, working in conjunction with other similarly situated cities with original jurisdiction served by CoServ, to evaluate the filing, to determine whether the filing complies with the law, and if lawful, to determine what further strategy, including settlement, to pursue. 

 

The law provides that a rate request made by CoServ cannot become effective until at least 35 days following the filing of the application to change rates.  The law permits the City to suspend the rate change for 90 days after the date the rate change would otherwise be effective.  If the City fails to take some action regarding the filing before the effective date, CoServ’s rate request is deemed approved.

FINANCIAL SUMMARY/STRATEGIC GOALS

This item has no financial impact. 

 

Approval of this Resolution relates to the City's Strategic Plan Critical Success Factor of Excellent, Innovative and Accountable City Government.

ATTACHMENTS:
DescriptionUpload DateType
Memo11/25/2020Memo
Resolution11/25/2020Resolution