2005-225S:\Our Documents\0rdinances\05\CoServ Recovery Expenses doc
ORDINANCE NO. 2,605--225-
AN ORDINANCE OF THE CITY OF DENTON, TEXAS, FINDING, AFTER REASONABLE
NOTICE, THAT CERTAIN RATE CASE EXPENSES OF COSERV GAS LTD. ARE
REASONABLE; PROVIDING FOR RECOVERY OF RATE CASE EXPENSES; PROVIDING
FOR REPEAL OF CONFLICTING ORDINANCES; AND PROVING FOR AN EFFECTIVE
DATE.
WHEREAS, on or about August 25, 2004, CoServ Gas Ltd. ("CoServ" or "Company"),
filed with the City of Denton, Texas, a Statement of Intent to change gas rates in all
municipalities within the CoServ System effective October 1, 2004; 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 Company and the Coalition of Cities Served by CoServ ("Cities")
reached an agreement as to CoServ's filed request to increase rates; and
WHEREAS, the agreement between the Company and the Cities was finally approved by
the City of Denton, Texas, by Ordinance dated, January 18, 2005; and
WHEREAS, the issue of rate case expenses incurred by the Company was severed from the
Ordinance approving the agreement; and
WHEREAS, the City has retained jurisdiction over the rate case expense reimbursement
issue as a result of extensions of the jurisdictional deadline by CoServ, pursuant to said
agreement; and
WHEREAS, the City has previously determined that the Cities' rate case expenses are
reasonable and should be reimbursed by CoServ; and
WHEREAS, the Cities' rate case expenses do not include the expenses incurred by the
City of Denton and Denton has agreed that its rate case expenses shall be billed to the Company
separately by Denton and shall not be surcharged to any customers outside the City of Denton;
and
WHEREAS, the amount of rate case expenses incurred by the Company that were
reasonable and necessary are $260,041.00; NOW, THEREFORE,
THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS:
SECTION 1. The findings set forth in the preamble of this Ordinance are incorporated
by reference into the body of this Ordinance as if fully set forth herein.
SECTION 2. That the Cities' and Denton's rate case expenses have previously been
found to be reasonable and shall be reimbursed promptly by the Company.
S\Our Documents\Ordinances\05\CoServ Recovery Expenses.doc
SECTION 3. That it is in the best interest of the City and its residents to approve rate
case expenses incurred by CoServ Gas Ltd., in the total amount of $260,041.00 and only those
Company expenses are hereby found to be reasonable and necessary.
SECTION 4. That the Company is authorized to recover the rate case expenses.
reimbursed to the Cities, exclusive of those incurred by the City of Denton, and the Company's
rate case expenses approved herein through a consumption-based 12-month surcharge calculated
on a system-wide basis. That the City of Denton's rate case expenses, those of Diversified
Utility Consultants, Inc., are reasonable and shall also be reimbursed by CoServ. That the
Company is authorized to recover the rate case expenses reimbursed to the City of Denton
through a consumption based 18-month surcharge calculator for the City of Denton service area.
The surcharge shall be based upon anticipated City of Denton system-wide volumetric
consumption for the calendar year 2005, estimated by the Company to be 1366934 Ccf.
SECTION 5. That after submission of the Cities' and Denton's expenses, the Company
shall calculate the surcharge and submit the calculation to the City. Six months after the first
date on which any rate case expense surcharge is due from customers, the Company shall submit
a statement to the City showing the amount recovered by the Company through the surcharge
and the amount remaining to be recovered. The Company shall also submit a final reconciliation
to the City, not more than thirty (30) days after one year from the first date on which any rate
case expense surcharge is collected by the Company, to prove that the Company has not over-
recovered rate case expenses. Any over-recovery shall be promptly refunded by the Company.
The Company may submit the initial calculations and progress reports to the Cities' rate steering
committee chairman and legal counsel to comply with this provision, unless the City makes a
written request that the calculations and reports be submitted to the City.
SECTION 6. That all relief requested by CoServ not specifically addressed herein is
denied.
SECTION 7. 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 8. That a copy of this ordinance, constituting final action on rate case expense
issues resulting from the CoServ Statement of Intent filed with the City to change gas rates in all
municipalities within the CoServ System, be forwarded to the appropriate designated
representative of the Company, Charles D. Harrell, Chief Financial Officer, CoServ Gas Ltd.,
7701 South Stemmons, Corinth, Texas 762 1 0-1 842, within ten (10) days.
SECTION 9. Nothing contained in this Ordinance shall be construed now or hereafter as
limiting or modifying, in any manner, the right and power of the City under law to regulate the
rates and charges of CoServ Gas Ltd.
SECTION 10. All ordinances, resolutions, or parts thereof, in conflict with this
Ordinance are repealed to the extent of such conflict.
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SECTION 11. This Ordinance shall become effective immediately upon its passage and
approval.
PASSED AND APPROVED this the &Trr day of 2005.
EULINE BROCK, MAYOR
ATTEST:
JENNIFER WALTERS, CITY SECRETARY
BY: 6b.41 Zm~ alyw"
V
APPROVED AS TO LEGAL FORM:
EDWIN M. SNYDER, CITY ATTORNEY
BY:
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