O-2854-9-09ORDINANCE NO. 2854-9-09
' AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF ALLEN, COLLIN
COUNTY, TEXAS, FINDING THAT THE CURRENT RATES OF COSERV GAS
LTD. ARE UNREASONABLE; APPROVING COSERV GAS LTD.'S REVISED AND
UNCONTESTED TARIFFS; SETTING THE EFFECTIVE DATE OF NEW TARIFFS
AS OCTOBER 1, 2009; FINDING RATE CASE EXPENSES REASONABLE;
FINDING THAT ANY RELIEF REQUESTED BY COSERV GAS LTD. NOT
SPECIFICALLY GRANTED HEREIN IS DENIED; FINDING THAT THE MEETING
AT WHICH THIS ORDINANCE IS PASSED IS OPEN TO THE PUBLIC AS
REQUIRED BY LAW; PROVIDING FOR NOTICE OF THIS ORDINANCE TO
COSERV GAS LTD.; AND PROVIDING AN EFFECTIVE DATE.
WHEREAS, on or about December 18, 2008, CoSery Gas Ltd. ("CoServ" or "Company"), filed with the City
of Allen, Texas, ("City") a Statement of Intent to change gas rates in all municipalities within the CoSery
System; 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(6) and §
103.001; and,
WHEREAS, the City suspended the initial effective date of CoServ's rate request, and CoSery subsequently
extended the effective date of the rate increase to allow the City to investigate the Company's filing and to
' consider settlement of the request; and,
WHEREAS, failure to take action regarding CoServ's rate request by September 20, 2009, will cause CoServ's
filed request to become effective for all CoSery customers within the municipal limits; and,
WHEREAS, the City joined the Coalition of Cities Served by CoSery ("Cities"), a group of other cities
similarly affected by CoServ's rate request to jointly hire counsel and an independent consultant to review
CoServ's application; and,
WHEREAS, after consideration of the Company's filing and the report issued by Cities' expert, the City
concludes that CoServ's current rates are unreasonable and should be changed; and,
WHEREAS, the Company and Cities have reached an agreement as to CoServ's filed request to increase rates
conditioned upon final approval by Cities; and,
WHEREAS, the Company's requested increase in system -wide annual revenues of $2,915,367 is excessive,
and the Company has agreed to an increase in system -wide base revenues of $1,300,000, and to retain its current
schedule of miscellaneous service charges; and,
WHEREAS, Cities' rate case expenses incurred in this proceeding are reasonable and necessary in the amount
specified below and should be reimbursed by CoServ; and,
WHEREAS, the Company's rate case expenses in the amount specified below are reasonable and necessary;
and,
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WHEREAS, the City has reviewed the tariffs proposed by the Company in settlement between the Company
and the Coalition of Cities Served by CoSery and has determined that approval of the tariffs is in the best
' interest of the City and its residents, results in just and reasonable rates, and, therefore, should be approved by
the City; and,
WHEREAS, since the Company filing is based upon system -wide standardized rates and tariffs, it would be
inappropriate for any city or residents of any city to receive benefits not enjoyed by the entire system.
NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF
ALLEN, COLLIN COUNTY, TEXAS, THAT:
SECTION 1. It is in the best interest of the City and its residents to adopt the revised tariffs attached hereto
this Ordinance as Exhibit A that reflects the settlement agreement reached between CoSery and the Coalition of
Cities Served by CoServ.
SECTION 2. The adoption of the attached revised tariffs provides for just and reasonable rates to be charged
system -wide by the Company.
SECTION 3. Cities' rate case expenses in the amount of $59,439 are reasonable and necessary and shall be
reimbursed by CoServ. CoServ's rate case expenses are found to be reasonable and necessary in the amount of
$325,655. Rate case expenses shall be recovered as provided in Rate Schedule 9 (RIDER RCE —RATE CASE
EXPENSES) of the tariffs in Exhibit A hereto, using surcharge of $0.00271 per Ccf, including interest as
specified in the Rider.
SECTION 4. The effective date of the new tariffs is October 1, 2009
' SECTION 5. No specific rate base, return, revenue or cost adjustments or rate making methodologies are
approved in reaching the revenue requirements' settlement that leads to the rates and charges adopted by this
ordinance.
SECTION 6. Relief requested by CoSery not specifically addressed herein is denied.
SECTION 7. 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 8. A copy of this Ordinance, constituting final action on the CoSery application, be forwarded to
the appropriate designated representative of the Company, Charles D. Hanel], Chief Financial Officer, CoSery
Gas Ltd., 7701 South Stemmons, Corinth, Texas 76210-1842, and to Geoffrey Gay, legal counsel to Cities,
within 10 days.
SECTION 9. This Ordinance shall take effect immediately from and after its passage and acceptance and it is
accordingly so ordained.
Ordinance No. 2854-9-09, Page 2
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DULY PASSED AND APPROVED BY THE CITY COUNCIL OF THE CITY OF ALLEN, COLLIN
COUNTY, TEXAS, ON THIS THE 8m DAY OF SEPTEMBER, 2009.
APPROVED AS TO FORM:
Peter G. Smith, CITWATTORNEY
APPROVED:
Stephen TAFrell, MAYOR
ATTEST:
Shelley B. Geo CITY SCRET Y
Ordinance No. 2854-9-09, Page 3