O-2191-7-03' ORDINANCE NO. 2191-7-03
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF ALLEN,
COLLIN COUNTY, 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 CITY;
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 TXU GAS COMPANY; AND PROVIDING AN
EFFECTIVE DATE.
WHEREAS, on or about May 23, 2003, TXU Gas Company (the "Company") filed with the City of
Allen ("City'l, 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 suspended the effective date of the proposed new rates for 90 days to evaluate the
reasonableness of existing rates and the merits of TXU's proposed changes; 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 (mown as 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 findings that the Company's proposal is unjustified and unreasonable; and
NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF ALLEN,
COLLIN COUNTY, TEXAS, THAT:
SECTION 1: 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
t 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 2: The costs incurred by the City in reviewing the Company's application be promptly
reimbursed by the Company.
SECTION 3: This Ordinance shall become effective immediately from and after its passage, as the law
and charter in such cases provide.
SECTION 4: 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 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.
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DULY PASSED AND APPROVED BY THE CITY COUNCIL OF THE CITY OF ALLEN,
COLLIN COUNTY, TEXAS, ON THIS THE 22 No DAY OF JULY, 2003.
APPROVED AS TO FORM:
/ e G. SmitATTORNEY
APPROVED:
tephe Terrell, MAYOR
ATTEST:
Shelley B. George; TItAIC, CITY SECRETARY
Ordinance No. 2191-7-03. Page 2