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HomeMy Public PortalAboutOrdinance No. 638-91 06-10-1991 • ORDINANCE NO. 6 3 8 AN ORDINANCE REGULATING THE RATES AND CHARGES OF ALL PERSONS, FIRMS, CORPORATIONS OR ASSOCIATIONS OF PERSONS ENGAGED IN THE BUSINESS OF FURNISHING, DISTRIBUTING, OR DELIVERING NATURAL GAS TO RESIDENTIAL AND COMMERCIAL CUSTOMERS IN THE CITY OF RICHLAND HILLS, TEXAS; PROVIDING A SAVING CLAUSE; PROVIDING A PENALTY CLAUSE; PROVIDING A SEVERABILITY CLAUSE; AND PROVIDING AN EFFECTIVE DATE. WHEREAS, on February 6, 1991, Lone Star Gas Company made application for an increase in Residential and Commercial gas rates designed to produce additional revenues of $3,715,813.00 from its Fort Worth Distribution System consumers; and WHEREAS, a public hearing has been held on this application of Lone Star Gas Company, at which all interested parties were given a full opportunity to be heard on the requested rate increase; and WHEREAS, the hearing on said rate increase application has now been concluded and closed and the City Council has duly considered all matters presented to it; NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY • OF RICHLAND HILLS, TEXAS: I. That the City Council of the City of Richland Hills, in the exercise of its sound legislative discretion, finds the following facts to be established: A. That Lone Star Gas Company's distribution properties used and useful in serving the consumers in the Fort Worth Distribution System comprise an Invested Capital Rate Base of $47,113,562.00 and an Adjusted Value Base Rate of $73,422,435.00. B. That Lone Star Gas Company is entitled to a 12.5% rate of return on equity, a 10.71% rate of return on its Invested Capital and a 6.87% rate of return on its Adjusted Value Rate Base; and that said rates of return are fair, reasonable and just under the facts and circumstances presented. C. That Lone Star Gas Company requires a net operating income of $5,045,862.00 on revenues from residential and commercial gas sales of $92,619,269.00 to achieve the foregoing fair rates of return. • ORDINANCE NO. 6 3 8 Page 1 • D. That the rates hereinafter fixed are determined to be fair, just and reasonable; and that all previously adopted rates and charges for gas service to residential customers in the City of Richland Hills should be and are hereby repealed effective July 1, 1991. II. That for all gas consumed on and after July 1, 1991, and billed on and after July 1, 1991, all persons, firms, corporations or associations of persons engaged in the business of furnishing, distributing or delivering natural gas to residential and commercial consumers in the City of Richland Hills are hereby authorized to charge for their product and service in accordance with the following schedules: A. Residential and Commercial Rates The following rates are the maximum applicable to residential and commercial consumers per meter per month or for any part of a month for which gas service is available at the same location. 1. Residential: Customer Charge $7.00 All Consumption @ $5.2020 per Mcf An off-peak sales discount of $0.25 per Mcf will apply to • residential customers' volume purchased in excess of 8 Mcf for each of the billing months May through October. If the service period is less than 28 days in a month, the customer charge is $0.25 times the number of days' service. 2. Commercial: Customer Charge $12.0000 First 20 Mcf @ 5.4478 per Mcf Next 30 Mcf @ 5.1478 per Mcf Over 50 Mcf @ 4.9978 per Mcf If the service period is less than 28 days in a month, the customer charge is $0.4286 times the number of days' service. B. Rate Schedule for Schools The Rate Schedule for Public Free Schools is withdrawn from the Fort Worth Distribution System. Service will be provided to public schools under the Commercial Rate established herein. Upon expiration of the current contract year of the Commercial Public School Rate contracts now in effect, the • Commercial Public School Rate will no longer be available. ORDINANCE NO. 6 3 8 Page 2 • C. Gas Cost Adjustment Each monthly bill at the above rates shall be adjusted for gas cost as follows: 1. The City gate rate increase or decrease applicable to current billing month residential and commercial sales shall be estimated to the nearest $0.0001 per Mcf based upon: a. A volume factor of 1.0312 determined in establishing the above rates for the distribution system as the ratio of adjusted purchased volumes divided by adjusted sales volumes. b. The City gate rate estimated to be applicable to volumes purchased during the current calendar month, expressed to the nearest $0.0001 per Mcf (shown below as "Re"). c. The base City gate rate of $4.0200 per Mcf. 2. Correction of the estimated adjustment determined by Item B 1. above shall be included as part of the adjustment for the second following billing month. The correcting factor (shown below as "C") shall be expressed • to the nearest $0.0001 per Mcf based upon: a. The corrected adjustment amount based upon the actual City gate rate, less b. The estimated adjustment amount billed under Item B 1. above, divided by c. Distribution system residential and commercial sales Mcf recorded on the Company's books during the prior year for the month that the correction is included as part of the adjustment. 3. The adjustment determined by Item B 1. and Item B 2. above shall be multiplied by a tax factor of 1.06226 to include street and alley rental and state occupation tax due to increasing Company revenues under this gas cost adjustment provision. In summary, the gas cost adjustment (GCA) shall be determined to the nearest $0.0001 per Mcf by Item B 1., Item B 2., and Item B 3. as follows: GCA = [Item B 1. + Item B 2.] x Item B 3. • GCA =[(1.0312) (Re - $4.0200 + C] x 1.06226 ORDINANCE NO. 6 3 8 Page 3 • D. Weather Normalization Adjustment Effective with bills rendered during the October, 1991 through April, 1992, billing months and annually thereafter for the October through April billing months, the above residential and commercial consumption rates for gas service will be subject to a weather normalization adjustment each billing cycle to reflect the impact of variations in the actual heating degree days during the period included in the billing cycle from the normal level of heating degree days during the period included in the billing cycle. The weather normalization adjustment will be implemented on a per Mcf basis and will be applicable to the volume consumed by each customer during the period included in the billing cycle. It will be determined separately for residential and commercial customers based on heating degree data recorded by the D/FW weather station. The adjustment to be made for each billing cycle will be calculated according to the following formula: NDD-ADD WNA = x M ADD Where: WNA = Weather normalization adjustment NDD = Normal heating degree days during the period covered by the . billing cycle ADD = Actual heating degree days during the period covered by the billing cycle M = Weighted average margin per Mcf included in the commodity portion of the rates effective during the October through April billing months The weather normalization adjustment will be calculated to the nearest $0.0001 per Mcf. E. Tax Adjustment The tax adjustment shall be an amount equivalent to the proportionate part of any new tax, or increased or decreased tax, or increase or decrease of any other governmental imposition, rental, fee or charge (except state, county, city and special district ad valorem taxes and taxes on net income) levied, assessed or imposed subsequent to July 1, 1991, upon or allocable to the Company's distribution operations, by any new or amended law, ordinance or contract. F. Rate Case Expense It is the intention of Lone Star Gas Company to recover the current and any unrecovered prior rate case expense through a surcharge designed for asix-month nominal recovery period. • ORDINANCE NO. H 3 R Page 4 • The surcharge per Mcf will be calculated by dividing the rate case expense to be recovered by one-half of the adjusted annual sales volume to residential and commercial customers. When a surcharge is applicable, monthly status reports will be provided to account for the collections. G. Special Provisions and Adjustments 1. Restoration of service is subject to the following schedule of reconnect charges: In addition to the charges and rates set out above, the Company shall charge and collect the sum of: chedul har e 8:00 a. m. to 5:00 p. m., Monday through Friday $25.00 Night, week-end and holiday $40.00 as a reconnect charge for each reconnection or reinauguration of gas service, where service has been discontinued at the same premises for any reason, with the following exceptions: • a. For a builder who uses gas temporarily during construction or for display purposes. b. For the first occupant of the premises. c. Whenever gas service has been temporarily interrupted because of system outage, service work or appliance installation done by Company; or d. For any reason deemed necessary for Company operations. 2. A returned check handling charge of $7.50 will be made for each check returned to the Company for reasons of non-sufficient funds, account closed, payment withheld, invalid signature or improper preparation. 3. A charge of $7.00 shall be made whenever it is necessary to send a Company employee to a customer's premises to collect amounts owed for gas service. • ORDINANCE NO. 6 3 8 Page 5 • III. For the purpose of assuring rates to be charged by Lone Star Gas Company which are just and reasonable to the consumers of natural gas within the corporate limits of the City of Richland Hills as well as Company, City reserves unto itself the right and privilege at any time to increase, decrease, alter, change or amend this ordinance or the rates herein established and provided for, or to enact any ordinance or adopt any such rates which would effectuate such purpose. In so doing, City further reserves unto itself the right and privilege of exercising any power granted it under statutory law, administrative rule or regulations or otherwise. IV. Lone Star Gas Company shall pay all reasonable rate case expenses to the City of Fort Worth, Texas, not to exceed $26,000.00 V. Severability Clause. That it is hereby declared to be the intention of the City Council that the sections, paragraphs, sentences, clauses and phrases of this ordinance are severable, and if any phrase, clause, sentence, paragraph or section of this ordinance shall be declared invalid or unconstitutional by the valid judgment or decree of any court of competent jurisdiction, such invalidity or unconstitutionality shall not affect any of the remaining phrases, clauses, sentences, paragraphs and sections of this ordinance, since the same would have been enacted by the City Council without the incorporation in this ordinance of any such invalid or • unconstitutional phrase, clause, sentence, paragraph or section. VI. All ordinances or parts of ordinances in conflict with this ordinance are hereby repealed. PROVIDED, however, that nothing herein shall alter or repeal the provisions of Ordinance No. 550, the Lone Star Gas Franchise Ordinance, which ordinance is saved from repeal and continued in effect hereby. VII. Penalty Clause. Any person violating or failing to comply with the provisions of this ordinance, as listed above, shall be deemed guilty of a misdemeanor and, upon conviction, may be fined not to exceed Two Hundred ($200.00) Dollars, and each day's violation shall constitute a separate offense. VIII. Effective Date. This ordinance shall be in full force and effect from and after its passage and publication as provided by the Richland Hills City Charter and the laws of the State of Texas. • ORDINANCE NO. 6 3 8 .Page 6 • PRESENTED, GIVEN FIRST READING AND APPROVED at a regular meeting of the Richland Hills City Council on the 10th day of June, 1991, by a vote of 4 ayes, 0 nays, and 1 abstentions. APPRO D ames R. ruitt, Mayor ATTEST: Pauline Kempe, City Secretary APPROVED AS TO FORM: F'~ , / Paul F. Wieneskie, City Attorney • 0246a/dd/060691 • ORDINANCE NO. 6 3 8 Page 7