2003-031-ORD DENYING TXU GAS COMPANY'S REQUEST TO CHANGE RATES INSIDE COP
ORDINANCE NO. 2003-031
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF PARIS,
PARIS, TEXAS, DENYING TXU GAS COMPANY'S REQUEST TO
CHANGE RATES INSIDE THE CITY LIMITS OF THE CITY OF PARIS,
AS PART OF THE COMPANY'S STATEWIDE GAS UTILITY SYSTEM;
PROVIDING A REQUIREMENT FOR A PROMPT REIMBURSEMENT OF
COSTS INCURRED BY THE CITY; FINDING THAT THE MEETING AT
WmCH TmS ORDINANCE IS PASSED IS OPEN TO THE PUBLIC AS
REQUIRED BY LAW; PROVIDING AN EFFECTIVE DATE; AND
PROVIDING FOR NOTICE OF TmS ORDINANCE TO TXU GAS
COMPANY.
WHEREAS, on or about May 23, 2003, TXU Gas Company (the "Company") filed with
the City of Paris, Paris, Texas ("City"), a Statement of Intent to change gas rates in all
municipalities within the Company's statewide gas utility system effective June 27, 2003; and,
WHEREAS, the City has previously extended the effective date of the Company's rate
filing; and,
WHEREAS, the City has exclusive original jurisdiction to evaluate the Company's
Statement of Intent as it pertains to the distribution facilities located within the City, pursuant to
Texas Utilities Code ~~102.001(b) and 103.001; and,
WHEREAS, the Texas Utilities Code ~103.022 provides that costs incurred by the City
in ratemaking activities are to be reimbursed by the regulated utility; and,
WHEREAS, the City is participating with a coalition of over 120 other cities in opposition
to the Company's filing at the Railroad Commission, said coalition being known as the Allied
Coalition of Cities ("ACC"), in GUD No. 9400 pending at the Commission; and,
WHEREAS, ACC and the Company have reached a procedural agreement regarding the
schedule for processing GUD No. 9400 that includes TXU's concession to allow one hundred
fifteen (115) additional days to process the rate case and ACC's commitment that member cities
expedite the process of getting city action appealed to the Commission; and,
WHEREAS, ACC and TXU jointly endorse the City's denial of the Company's rate
application pending before the City; and,
WHEREAS, counsel for ACC, upon review of the Company's filing and upon consultation
with various consultants, recommends fmdings that the Company's proposal is unjustified and
unreasonable; NOW, THEREFORE,
BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF PARIS, PARIS,
TEXAS:
Section 1. That the findings set out in the preamble to this ordinance are hereby in all
things approved.
Section 2. That the Company's Statement of Intent to change gas rates within the City,
as part of the Company's statewide gas utility system, is found to be unreasonable because: (a)
TXU's requested return on equity is excessive, generating more than 86% of the requested
increase in rates; (b) the basis for TXU' s proposed consolidations (of regional distribution systems
and of pipeline costs with distribution costs) has not been established; (c) the City's jurisdiction
to increase pipeline rates has not been established and, therefore, the proposed pipeline cost
increases should be disallowed; (d) revenue requirements should be reduced rather than increased;
and (e) the TXU filing should be denied pursuant to agreement with the Company; and is therefore
denied in all respects.
Section 3. That the costs incurred by the City in reviewing the Company's application be
promptly reimbursed by the Company.
Section 4. That this Ordinance shall become effective immediately from and after its
passage, as the law and charter in such cases provide.
Section 5. That it is hereby officially found and determined that the meeting at which this
Ordinance is passed is open to the public as required by law and that public notice of the time,
place, and purpose of said meeting was given as required.
Section 6. That a copy of this ordinance, constituting final action on the Company's
application, be forwarded to the appropriate designated representative of the Company within 10
days as follows: Autry L. Warren, Director Gas Regulatory, TXU Business Services, 1601 Bryan
Street, Dallas, Texas 75201-3402.
DULY PASSED AND APPROVED by the City Council of the City of Paris, Paris,
Texas, on this the 14th day of July, 2003.
ATTEST:
~~'-'~""t. \)
Mattie Cunningham, City Clerk ~