03-52 - O TOWN OF PROSPER, TEXAS ORDINANCE NO. 03-52
AN ORDINANCE OF THE TOWN OF PROSPER, TEXAS, DENYING
TXU GAS COMPANY'S REQUEST TO CHANGE RATES IN THIS
MUNICIPALITY, AS A PART OF THE COMPANY'S STATEWIDE GAS
UTILITY SYSTEM; PROVIDING A REQUIREMENT FOR A PROMPT
REIMBURSEMENT OF COSTS INCURRED BY THE TOWN; FINDING
THAT THE MEETING AT WHICH THIS ORDINANCE IS PASSED IS
OPEN TO THE PUBLIC AS REQUIRED BY LAW; AND PROVIDING
FOR NOTICE OF THIS ORDINANCE TO TXU GAS COMPANY
WHEREAS, on or about May 23, 2003, TXU Gas Company (the "Company") filed with
the Town of Prosper ("Town"), a Statement of Intent to change gas rates in all municipalities
within the Company's statewide gas utility system effective June 27, 2003;
WHEREAS, the Town has previously extended the effective date of the Company's rate
filing;
WHEREAS, the Town has exclusive original jurisdiction to evaluate the Company's
Statement of Intent as it pertains to the distribution facilities located within the Town, pursuant to
Texas Utilities Code §§ 102.001(b) and 103.001;
WHEREAS, the Texas Utilities Code § 103.022 provides that costs incurred by the Town
in ratemaking activities are to be reimbursed by the regulated utility;
WHEREAS, the Town 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
Allied Coalition of Cities ("ACC"), in GUD No. 9400 pending at the Commission;
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;
WHEREAS, ACC and TXU jointly endorse the Town's denial of the Company's rate
application pending before the Town;
WHEREAS, counsel for ACC, upon review of the Company's filing and upon
consultation with various consultants, recommends findings that the Company's proposal is
unjustified and unreasonable; and
NOW, THEREFORE, BE IT ORDAINED BY THE TOWN COUNCIL OF THE TOWN
OF PROSPER, TEXAS:
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SECTION 1. The Company's Statement of Intent to change gas rates within the Town,
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 Town'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 2. The costs incurred by the Town in reviewing the Company's application
shall be promptly reimbursed by the Company.
SECTION 3. This Ordinance shall become effective immediately from and after its
passage, as the law provides.
SECTION 4. That it is hereby officially found and determined that the meeting at which
this Ordinance is passed is open to the public and that public notice of the time, place and
purpose of said meeting was given as required by law.
SECTION 5. 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 Town Council of the Town of Prosper,
Texas, on this the /9 ' day of &dust , 2003.
C ARL SWANG , yor
ATTESTE AND CORRECTLY
DougloG.C. Mouse!
Ilifer i m Town Secretary
APPROVED AS TO FORM:
31411Town Attoey
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