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<br />The bill impact of the settlement on average residential and commercial customers will <br />be as follows: I <br /> <br /> Present Settlement Increase % Change <br />Residential @ <br />5 McfMo. $40.03 $40.49 $0.46 1.15% <br />Commercial @ <br />30 McfMo. $208.31 $208.36 $0.05 0.02% <br /> <br />The Company is in the process of consolidating more than 200 Lone Star distribution <br />systems into six or seven regional distribution systems. This filing reflected consolidation of <br />several old Lone Star systems. <br /> <br />The Settlement results in common rates for each class of customers in all 121 affected <br />clhes. Overall percentage changes by city vary wildly because of different existing rates (some <br />existing rates are higher than the new rates requested by TXU and result in rate decreases) and <br />different mixes of residential, commercial and industrial customers. No two Cities have the <br />same percentage change, yet all residential, commercial and industrial customers will pay the <br />same rate regardless of which of the 121 cities is called "home." A chart reflecting percentage <br />changes for residential and commercial classes, with and without gas costs, for each of the 27 <br />coalition cities is attached as Exhibit A. The 94 Cities that did not join the coalition are either <br />very small or were disinterested because they would be entitled to a rate decrease, regardless of <br />outcome. <br /> <br />TXU proposed monthly customer charges of $8.00 for residential and $14.00 for <br />commercial customers. The Cities' Settlement Committee directed that the customer charges be <br />set at $7.00 and $12.00 respectively and that all other revenues be recovered through a <br />volumetric charge. The new rates for residential and commercial customers will be: <br /> <br />Residential <br />Customer Charge <br />All Consumption <br /> <br />$7.00 <br />$1.2108 per Mcf <br /> <br />Commercial <br />Customer Charge <br />First 20 Mcf <br />Next 30 Mcf <br />Over 50 Mcf <br /> <br />$12.00 <br />@ $1.2108 per Mcf <br />@ 0.9108 per Mcf <br />@ 0.7608 per Mcf <br /> <br />The large percentage increase for industrials proposed by the Company and <br />recommended pursuant to the Settlement Agreement is attributable to historic under-allocation of <br />fixed costs and an application of an allocation methodology that all parties agree would have a <br />reasonable expectation of adoption by the Railroad Commission if this case were to be reviewed <br />on appeal. The allocation is consistent with the allocation methodology approved by the <br />