1999-059 NOTE Amended by Ordinance No 2001-251
AN ORDINANCE FIXING AND DETERMINING THE GENERAL SERVICE RATE TO BE
CHARGED FOR SALES OF NATURAL GAS TO RESIDENTIAL AND COMMERCIAL
CUSTOMERS IN THE CITY OF DENTON, DENTON COUNTY, TEXAS, PROVIDING FOR
THE MANNER IN WHICH SUCH RATE MAY BE CHARGED, APPROVING THE COM-
MERCIAL RATE FOR PUBLIC SCHOOL GAS SERVICES, PROVIDING FOR A
WEATHER NORMALIZATION CLAUSE, PROVIDING FOR A SCHEDULE OF SERVICE
CHARGES, PROVIDING FOR A MAIN LINE EXTENSION RATE, PROVIDING AN OPEN
MEETINGS CLAUSE, AND PROVIDING AN EFFECTIVE DATE CLAUSE
WHEREAS, the C~ty of Denton ~s a regulatory authority under the Gas Utthty Regulatory
Act ("GURA") Ut~ht~es Code § 103 001, and has original jurisdiction over the rates of Lone Star
Gas, a d~vlmon of ENSERCH Corporation, a wholly owned subsidiary of Texas Utd~t~as Com-
pany ("LSGC' or "Company"), and
WHEREAS, LSGC on October 23, 1998 filed w~th the C~ty of Denton, Texas a State-
ment of Intent requesting rates and charges for gas sales m the C~ty of Denton customers be
creased $440,428 per annum, requesting ~ncreases m service charges to C~ty of Denton custom-
ers ~n the amount of $35,667 per annum, requesting continuation of the Weather Normahzat~on
Clause, requesting implementation of a Cost of Service Adjustment Clause ("COSA") and Plant
Investment Cost Adjustment Clause ("PICA"), and
WHEREAS, the schedule of rates proposed by LSGC was suspended for a period of 90 days
from November 27, 1998 the effective date stated m the Company's Statement of Intent for fur-
ther rewew and investigation by Ordinance No 98-397, and
WHEREAS, on December 16, 1998 the C~ty of Denton retained the firm of D~vermfied
Utility Consultants, Inc ("DUCI" or "Consultant") to rewew the Company's proposed rates and
charges, and
WHEREAS, the C~ty Council hawng conmdered LSGC's request, the Consultant's Re-
port and F~ndmgs, the Company's response report to the Consultant's F~ndmgs, and after reason-
able not~ee and having conmdered tins matter at three separate meetings of the City Counml, m of
the opunon and finds that LSGC's rates should be mcreased at the amount of 3%, or a $225,797
increase In gas sales rates, and approval of the $35,667 annual increase m service charges, con-
t~nued ~mplcmentatlon of the Weather Normahzat~on Clause and demal of the COSA and PICA
adjustment clauses which will result m fmr, just, and reasonable rates and charges and should be
approved and rates set ~n accordance therewxth, NOW, THEREFORE,
THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS
~ That effective with the gas balls rendered on or after the date of the passage
of thru orchnance, the maximum general service rate for sales of natural gas rendered to remden-
tml and commercml customers within the C~ty hm~ts of Denton, Texas by Lone Star Gas, a
sion of ENSERCH Corporation, a wholly owned subsidiary of Texas Utilities Company, its suc-
cessors and assigns, are hereby ~ncreased $225,797 in annual revenue and $35,667 per annum for
service charges to customers in the City of Denton, and the rates shall include the Gas Cost Ad-
justment Clause requested by the Company as more fully set forth m Section II of ttus ordinance,
the Tax Adjustment Clause requested by the Company as more fully set forth m Section III of
this ordinance, the Main Line Extension Rate requested by the Company as more fully set forth
m Section IV of this ordinance, and the continuation of the Weather Normalization Clause The
Company shall file w~th the C~ty wltlun ten days of the effective date of this ordinance tariffs
consistent w~th this ordinance and with rates designed with a $5 50 monthly customer charge for
residential customers and a $10 00 monthly customer charge for commercial customers and total
revenues m accordance with this ordinance which tariffs shall be attached to and made a part of
th~s ordinance for all purposes as Exlubat "A" The rates shall also be designed to spread the ~m-
pact of the increase equally among all residential and commercial customers The rates estab-
hshed thereby shall be those under wlueh the Company shall be authorized to render gas services
and collect charges from ~ts customers for the sale of gas within the corporate limits of the City
effective w~th gas services utilized by the customers on and after the final date of passage of this
ordinance All other rate rehef requested by the Company IS hereby demed
~ That the residential and commercial rates set forth above shall be adjusted
upward or downward from a base of 2 7535 per MCF by the gas cost adjustment factor ex-
pressed as an mount per thousand cubic feet (MCF) of natural gas for changes ~n the intercom-
piny city gate rate charge as authorized by the Railroad Commission of Texas or other regula-
tory body having jurisdiction for gas delivered to the Denton distribution system according to the
gas cost adjustment factor w~thin the tariff attached as Exhibit "A"
~ That the residential and commercial rates set forth above shall be adjusted
upward or downward for changes m taxes and other governmental impositions, rental fees, or
charges according to the tax adjustment clause m the tariff attached as Exhibit "A"
~ That m addition to the aforesaid rates, Company shall have the right to
collect such reasonable charges as are necessary to conduct ~ts bus~ness and to can~ out its rea-
sonable rules and regulations The charges set forth ~n the schedule of service charges and in the
mare hne extension rate w~thm the tariff attached as Exhibit "A" are hereby approved Services
for wh~cla no charge is set out may be performed and charged for by Company at a level estab-
hshed by the normal forces of competition
i~ That in addition to the aforesmd rates, the Company shall pay to the City
for payment to the Consultant the full amount of the rate case expense estimated at $20,000 In
accordance w~th §103 22 of GURA The City Council hereby finds and determines that the rate
case expense charged by the Consultant was fmr and reasonable The Company is authorized to
recover die current rate case expense through a surcharge designed for a slx-month nominal re-
covery period The Company will provide monthly status reports to the City to account for the
collection of the rate ease expense
Page 2
TI~B_Q!!.Q..h~ That the rates approved hereby fix the overall revenues of the Company at
a level which will permit LSGC a reasonable opportunity to earn a reasonable return on its in-
vested capital used and useful m rendenng service to the pubhc over and above the Company's
reasonable and necessary operating expenses and are just and reasonable All other rates re-
quested, including the COSA and PICA adjustment clauses, are hereby demed
~ That the rates approved hereby shall be effective and m force for all
consumption from and after the effective date of the tanffrequired to be filed hereby and shall be
charged and observed thereafter until rewsed according to law
~ That the action of the C~ty Council of the C~ty of Denton enacting this
ordinance constitutes, on the date of Its final passage, a final determination of rates for LSGC
within the City of Denton
SECTION IX. That nothing contained m this ordinance shall be construed now or here-
after as limiting or modifying, ~n any manner, the right and power of the City under the law to
regulate the rates and charges of LSGC
~ That should any part, sentence, or phrase ofth~s ordmance be determined
to be unlawful, void, or unenforceable, the vahdlty of the remmmng portions of this ordinance
shall not be adversely affected No portion of this ordinance shall fad or become inoperative by
reason of the invahthty of any other part All provisions of this ordinance are severable
~ That all ordinances, resolutmns, or part thereof, in confl~ct herewith are
repealed to the extent of such conflict
~ That the City Council has found and determine that the meeting at
which this ordinance is considered IS open to the public and that not,ce thereof was given in ac-
cordance with the provisions of the Texas open meetings law, Tex Gov't Code ch 551, as
amended, and that a quorum of the City Council was present
~ That flus ordinance shall become effective immediately upon ~ts pas-
sage and approval
PASSED AND APPROVED this the c:~ ~'°~day of~~,_, 1999
JAngLER, ~VIAYOR
Page 3
ATTEST
JENNIFER WALTERS, CITY SECRETARY
API~OVED AS TO LEGAL FORM
HERBERT L PROUTY, CITY ATT~ORNEY
Page 4
EXHIBIT A
ATTACHMENT TO ORDINANCE FOR
CITY OF DENTON, TEXAS
LONE STAR GAS COMPANY
TARIFFS & SCHEDULES
ITEM A RATES
Subject to apphcable adjustments, the follo~ng rates are the maximum
apphcable to res~denbal and commercial consumers per meter per month or
for any part of a month for which gas service ~s available at the same
Iocabon
Residential
Customer Charge $ 5 5000
All Consumption @ 3 7022 Per Mcf
If the service period ~s less than 28 days m a month the customer charge ~s
$1964 bmes the number of days serwce If the consumpbon contains a
port~on of an Mcf, a prorata port,on of the per Mcf charge Nil be made
Commercial
Customer Charge $ 10 0000
F~rst 20 Mcf @ 4 0820 Per Mcf
Next 30 Mcf @ 3 7820 Per Mcf
Over 50 Mcf @ 3 6320 Per Mcf
If the service period ~s less than 28 days ~n a month the customer charge ~s
$ 3571 bmes the number of days service If the consumpbon contains a
porhon of an Mcf, a prorata port,on of the per Mcf charge w~ll be made
B~lls are due and payable when rendered and must be pa~d ~th~n fifteen
days from monthly b~lhng date
Res~denhal Off-Peak Sales D~scount
An off-peak sales discount of $ 25 per Mcf will apply to resldenbal
customers' volume pumhased ~n excess of 8 Mcf for each of the bflhng
months May through October
ITEM B GAS COST ADJUSTMENT
Each monthly b;ll at the above rates shall be adjusted for gas cost as follows
(1) The c~ty gate rate ~ncrease or decrease apphcable to current b~lhng
month res~denbal and commercial sales shall be esbmated to the
nearest $0 0001 per Mcf based upon
(a) The c~ty gate rate esbmated to be apphcable to volumes
purchased dunng the current calendar month, expressed to
the nearest $0 0001 per Mcf (shown below as "Re"), less
(b) The base c~ty gate rate of $2 7535 per Mcf, mult~phed by
(c) A volume factor of 1 0524 determined ~n estabhshmg the above
rates for the dmtnbubon system as the rabo of adjusted
purchased volumes dlwded by adjusted sales volumes
(2) Correcbon of the estimated adjustment determined by Item B (1)
above for the second precadmg b~lhng month shall be included as
part of the adjustment The correcbng 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 c~ty
gate rate, less
(b) The esbmated adjustment amount b~lled under Item B (1)
above, dlwded by
(c) D~stnbubon system res~denbal and commercial sales Mcf
recorded on the Company's books during the pnor year for the
month that the correct~on is included as part of the adjustment
(3) The adjustment determined by Item B (1) and Item B (2) above shall
be mulbphed by a tax factor of 1 03986 to include street and alley
rental and state occupation tax due to the change ~n Company
revenues under th~s gas cost adjustment prows~on
In summary, the gas cost adjustment (GCA) shall be determined to the
nearest $0 0001 per Mcr' 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 0524) (Re - $2 7535) + C]X 1 03986
2
ITEM C WEATHER NORMALIZATION ADJUSTMENT
Effective w~th b~lls rendered during the October 1998 through May 1999
billing months, and annually thereafter for the October through May b~lhng
months, the above residential and commercial consumption rates for gas
service, as adjusted, shall be subject to a weather normahzabon adjustment
each billing cycle to reflect the impact of vanat~ons ~n the actual heating
degree days dunng the period included in the b~lhng cycle from the normal
level of heating degree days dunng the period ~ncluded m the b~lhng cycle
The weather normahzat~on adjustment w~ll be ~mplemented on a per Mcf
bas~s and will be applicable to the heating load of each customer during the
penod included m the bflhng cycle It ~11 be determined separately for
residential and commercial customers based on heating degree data
recorded by the D/FW A~rport weather station The adjustment to be made
for each b~lhng cycle vail be calculated according to the follov~ng formula
WNA = NDD - ADD x M x AHL ADD
Where WNA = Weather normahzatlon adjustment
NDD = Normal heabng degree days dunng the
period covered by the bllhng cycle
ADD = Actual heabng degree days during the
period covered by the b~lhng cycle
M= Weighted average margin per Mcf
~ncluded m the commodffy porbon of the
rates effective dunng the October through
May b~lhng months
AHL = Actual heating load per customer
The heabng load to which the weather normalization adjustment ~s to be
applied for residential and commercial customers ~s determined by
subtracting the base load for the customer from the total volume being b~lled
to the customer The base load of a customer ~s the average level of
nonheat~ng consumption
The weather normahzatlon adjustment ~s subject to a 50% hm~tat~on factor
based on temperatures being fifty percent warmer or colder than normal
The weather normahzat~on adjustment vail be calculated to the nearest
$ 0001 per Mcf
3
ITEM D TAX ADJUSTMENT
Each monthly b~ll, as adjusted above, shall be adjusted by an amount
equivalent to the proportionate part of any new tax, or any tax increase or
decrease, or any Increase or decrease of any other governmental ~mpos~t~on,
rental fee or charge (except state, county, c~ty and special d~stnct ad valorem
taxes and taxes on net ~ncome) lewed, assessed or ~mposed subsequent to
December 31, 1997, upon or allocated to the Company's d~stnbubon
operations, by any new or amended law, ordinance or contract In addition,
each monthly b~ll, as adjusted above, shall be further adjusted to ~nclude any
municipal franchise fee or street and alley tax now or hereafter ~n effect m
th~s c~ty to the extent that such municipal franchise fee or street and alley tax
~s at a rate h~gher than 2% of the Company's gross receipts
ITEM E SCHEDULE OF SERVICE CHARGES
(1) Connection Charge
In add~tton to the charges and rates set out above, the Company shall
charge and collect the sum of
Schedule Charf:le
Bus~ness Hours $ 35 00
After Hours 52 50
For each reconnectlon of gas serwce where service has been
d~scont~nued at the same premises for any reason, for the initial
~naugurat~on of service, and for each inauguration of service when the
b~llable party has changed, vath the following excepbons
(a) For a builder who uses gas temporarily dunng construction or
for d~splay purposes
(b) Whenever gas serwce has been temporarily ~nterrupted
because of system outage or serwce work done by Company,
or
(c) For any reason deemed necessary for company operations
(2) Read For Change Charge
A read for change charge of $12 00 ~s made when ~t ~s necessary for
a company employee to read the meter at a currently served location
because of a change m the b~llable party
4
(3) Returned Check Charges
A returned check handhng charge of $16 25 is made for each check
returned to the Company for any reason
(4) Delinquent Notification Charge
A charge of $4 75 shall be made for each trip by a Company
employee to a customer's residence or place of business when there
is an amount owed to the Company that is past due Th~s charge
shall not be made when the trip is required for safety ~nvestlgat~ons
or when gas serwce has been temporarily ~nterrupted because of
system outage or service work done by Company
ITEM F MAIN LINE EXTENSION RATE
The charge for extending mains beyond the free limit estabhshed by
Franchme for residential, commercial, and ~ndustnal customers shall be
based on the actual cost per foot of the extension
5
ORDINANCE NO
AN ORDINANCE ESTABLISHING MAXIMUM PERMITTED RATES AND CHARGES
THAT TX-'U GAS DISTRIBUTION MAY ASSESS RESIDENTIAL AND COMMERCIAL
CUSTOMERS IN THE CITY OF DENTON, APPROVING RATES FOR INDUSTRIAL
CUSTOMERS 1N THE CITY OF DENTON ESTABLISHED BY CONTRACT BETWEEN
TXU GAS DISTRIBUTION AND SUCH INDUSTRIAL CUSTOMERS, ADOPTING
DECLARATIONS AND FINDINGS RELATED TO RATES AND CHARGES ASSESSED TO
RESIDENTIAL, COMMERCIAL AND INDUSTRIAL CUSTOMERS IN THE CITY OF
DENTON, PROVIDING FOR RECOVERY OF RATE CASE EXPENSES, REPEALING
ORDINANCE NO 99-059, PROVIDING A SEVERABILITY CLAUSE, AND PROVIDING
AN EFFECTIVE DATE
WHEREAS, on or about February 26, 2001, TXU Gas D,smbutlon ("TXU Gas"), a
d~vlslon of TXU Gas Company (formerly Lone Star Gas Company), filed with the City Secretary
a "Statement of Intent to Change Rates" under which lugher rates charged by TXU Gas would go
into effect m the C~ty of Denton (Denton) effective March 23, 2001, and
WHEREAS, pursuant to SecUon 104 107 of the Texas Utilities Code, on March 6, 2001,
the City Council passed Resolution No 2001-010 suspending implementation of TXU Gas's
proposed rate schedule from March 23, 2001 until June 21, 2001, and
WHEREAS, the C~ty Cotmcfl authorized Denton tojmn the Northwest Metro Mid-Cities
D~smbuuon System Coahtlon of ClUes (C~tles) and authorized the hmng of rate consultants and
an attomey and further authorized the retention of Diversified Utthty Consultants, Inc to assist
Denton ~n its review of the TXU Gas's proposed rate schedule, and
WHEREAS, on April 3, 2001, TXU Gas filed an updated rate filing ("Rate Filing") w~th
the Cities and Denton, ~ncorporated herein by reference for all purposes, and
WHEREAS, TXU Gas agreed to extend the date for implementation of TXU Gas's
updated rate schedule from June 21, 2001 to July 21, 2001, and
WHEREAS, pursuant to Chapters 103 and 104 of the Texas Utilities Code, the C~tIes and
Denton are required to 0) analyze TXU Gas's Rate Filing, as updated, 0l) conduct a public
hearing m order to determine the propriety of the proposed rate increase (the "Pubhc Heanng"),
and (m) make a reasonable determlnatmn ofTXU Gas's rate base, expenses, investment and rate
of return m Denton, and
WHEREAS, the Pubhc Heanng was conducted on July 17, 2001 before the enactment of
this ordinance at whmh all interested part~es were g~ven a full opportumty to comment on the
Rate Filing, NOW, THEREFORE,
THE CITY COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS
SECTION 1 FINDINGS That the City Council, pursuant to its exclusive original
jurisdictional authority over the rates, operations and service of TXU Gas within Denton and in
the exercise of its sound legislative discretion, after reasonable notice and heanng, makes the
following fmchngs of fact
1 1 TXU Gas filed with Denton's City Council a Statement of Intent to change residential,
commercial and mdustnal rates charged to consumers within Denton and also filed the Tariff for
Gas Service in the Northwest Metro Mld-Cltlas Distribution System ('°tariff for Gas Service")
and the supporting cost of Service Schedules ("Schedules") TXU Gas has agreed to an overall
Northwest Metro Mid-Cities Distribution System Rate Settlement The agreed residential
customer class annual increase is $2,511,718 and the commercial customer class annual increase
of $1,034,951 throughout the System That TXU Gas has agreed that the maximum general
service revenues for sales of natural gas rendered to residential customers (without the cost of
gas included) will be $2,327,483 and for commercial customers will be $902,589 (without the
cost of gas included) within the city limits of Denton, Texas, ~n annual revenue for service
charges to customers The Gas Cost Adjustment clause, Weather Normalization AdJustment
Clause, Tax AdJustment Clause, Miscellaneous Service Charges Clause required by TXU Gas as
more fully set forth in Section 2 of this Ordinance are found to be just and reasonable
1 2 Denton does not have evidence of any unfair advantage by either TXU Gas or its
industrial customers in Denton with regard to contract negotiations for industrial gas rates, and
therefore, in accordance with Section 104003(b) of the Texas Utilities Code, contractual
industrial gas rates are considered to be just and reasonable
1 3 Based on the above facts, the City Council finds that rates for residential customers in
Denton, as requested by TXU Gas in its Rate Filing, are unreasonable and shall be changed as
hereafter ordered
1 4 Based on the above facts, the City Council finds that rates for commercial customers in
Denton, as requested by TXU Gas in its Rate Filing, are unreasonable and shall be changed as
hereafter ordered
1 5 Based on the above facts and m accordance with the mandates of Section 104 003(b) of
the Texas Utilities Code, the City Council approves rates for industrial customers in Denton
established by contract between TXU Gas and such industrial customers Therefore, Denton
declines to establish rates for industrial customers in the City as requested by TXU Gas in its
Rate Filing
1 6 Based on the above facts, the City Council finds that the changed rates for residential and
commercial customers determined as a result of TXU Gas and the Cities' Settlement are just
and reasonable
Page 2 of 9
SECTION 2 RATES AND CHARGES ORDERED That based on the fin&ng of fact
set forth m Seetaon 1 of this Ordinance and ~n accordance with the schedules set forth m th~s
Section 2, TXU Gas is hereby authorized to assess the following maximum penmtted rates and
charges for customers ~n Denton, winch rates and charges the C~ty Council hereby determines to
be fmr, just and reasonable on all consumption of gas on and after July 21, 2001
2 1 Resldentml Gas Rates
The follow,ng rates are the maximum permitted rates and charges apphcable to residential
customers per meter per month or for any part of a month for which gas service ~s avmlable to
the same location
Customer Charge $7 00
All Consumption @ $0 8335
If the servme period ~s less than twenty-eight (28) days m a given month, the customer charge
shall be $0 25 t, mes the number of days' service
2 2 Commermal Gas Rates
The followmg rates are the maximum permitted rates and charges apphcable to commercial
customers per meter per month or for any part of a month for whmh gas service is available at
the same location
Customer Charge $12 00
Flrst20Mcf~ $ 1 1371 perMcf
Next 30Mcf~ $ 8371perMcf
Over 50Mcf~ $ 6871 perMcf
If the service period ~s less than twenty-e~ght (28) days in a given month, the customer charge
shall be $0 4286 t~mes the number of days' service
2 3 Gas Cost Adlustment
Each monthly bill at the rates and charges set forth in Sections 2 1 and 2 2 shall be adjusted for
gas cost as follows
2 3 1 The City gate rate Increase or decrease applicable to current bflhng month
residential and commermal sales shall be estimated to the nearest $0 0001 per Mcfbased
upon
(a) The C~ty gate rate estimated to be appheable to volumes purchased dunng
the current calendar month, expressed to the nearest $0 0001 per Mcf ("Re" in the
summary below), less
Page 3 of 9
(b) The base City gate rate of $0 00 per Mcf, mult~phed by
(c) A volume factor of 1 0117 detenmned m estabhshlng the above rates for
the distribution system
2 3 2 Correction of the estimated adjustment detenmned by Section 2 3 1 shall be
~ncluded as part of the adjustment for the second following billing month The correcting
factor ("C" m the summary below) shall be expressed to the nearest $0 0001 per Mcf
based upon
(a) The corrected adjustment amount based on the actual C~ty gate rate, less
(b) The estimated adjustment amount billed under Sectmn 2 3 1, dlwded by
(c) Distribution system residential and commercial sales Mcf recorded on
TXU Gas's books dunng the prior year for the month that the correction ~s
included as part of the adjustment
In summary, the gas cost adjustment ("GCA" m the summary below) shall be determined
to the nearest $0 0001 per Mefby Section 2 3 1 plus Section 2 3 2 as follows
GCA = [(1 0117) (Re - $0 00) + C]
2 4 Weather Normalization Adlustment
Effective w~th bills rendered dunng the October 2001 through May 2002 bfihng months, and
annually thereafter for the October through May bllhng months, the residential and commercial
consumption rates for gas service, as adjusted, shall be subject to a weather normahzat~on
adjustment each bdhng cycle to reflect the impact of variations ~n the actual heating degree days
dunng the period included ~n the billing cycle from the normal level of heating degree days
dunng the period included ~n the billing cycle The weather normahzat~on adjustment will be
~mplemented on a per Mcf bas~s and will be apphcable to the heating load of each customer
dunng the period included m the bfihng cycle It w~ll be determined separately for residential
and commercial customers based on the heating degree data recorded by the DFW Airport
weather station The adjustment to be made for each bfihng cycle will be calculated according to
the following formula
NDD - ADD
WNA = ADD x M x AHL
Where WNA = Weather normahzatlon adjustment
NDD = Normal heating degree days dunng the penod covered by
the bdhng cycle
ADD = Actual heating degree days dunng the period covered by
the bllhng cycle
Page 4 of 9
M-- Weighted average margin per Mcf included in the
commodity portion
AHL = Actual heating load per customer
The heating load to which the weather normahzatlon adjustment ~s to be apphed for residential
and commercial customers ~s determined by subtracting the base load for the customer fi.om the
total volume being billed to the customer The base load of a customer is the average level of
non-heating consumption
The weather normahzatlon adjustment ~s subject to a 50% lam~tat~on factor based on
temperatures being fii~y percent warmer or colder than normal The weather normahzat~on
adjustment will be calculated to the nearest $0 0001 per Mcr
2 5 Tax Adlustment
Each monthly bill, as adjusted above, shall be adjusted for mummpal franchise fees (street and
alley rental taxes) and the state gross receipts taxes ~mposed by Section 182 021 - 182 025 of the
Texas Tax Code Mtmimpal fi.ancluse fees are determined by each mty's fi.ancluse ordinance
Each monthly bill, as adjusted above shall also be adjusted by an amount eqmvalent to the
proportionate part of any new tax, or an tax ~ncrease or decrease, or any ~ncrease or decrease of
any other governmental ~mpositmn, rental fee, or charge (except state, county, city and special
district ad valorem taxes and taxes on net ~ncome) levied, assessed or imposed subsequent to
September 30, 2001, upon or allocated to the Company's d~stnbut~on operations, by any new or
amended law, ordinance or contract
Municipal fi.anchise fees (street and alley rental taxes) and the state gross receipts taxes ~mposed
by Sections 182 021 - 182 025 of the Texas Tax Code shall continue to be collected pursuant to
~ndlvldual ~ndustnal contracts
2 6 Rate Case Expenses
TXU Gas's ~mtlal "Statement of Intent to Change Rates", filed w~th Denton on February 26,
2001, and the subsequent Rate Filing, const~tate a ratemak~ng proceeding Pursuant to Section
103 002(a) of the Texas Utlhties Code, the Northwest Metro M~d-Clt~es Distribution System
was authorized to lure rate case consultants and an experienced utlhty attorney and Denton was
authorized to engage Diversified Utility Consultants, Inc to assist Denton xn its analysis of tlus
ratemakmg proceeding Pursuant to Section 103 022(b) of the Texas Uttht~es Code, the C~tles
rate case expenses are found to be reasonable and TXU Gas shall reimburse the Cities the
reasonable cost of services of the rate case consultants and utility attorney (Geoffrey Gay) and
Denton's rate case expenses are found to be reasonable and TXU Gas shall reimburse Denton the
addational sum of $12,500 00, wluch is the actual and reasonable cost of servmes rendered by
D~versffied Utlhty Consultants, Inc on behalf of Denton dunng the course of th~s ratemak~ng
proceeding ("Rate Case Expenses") TXU Gas shall make such rmmbursement ~n full to the
Page 5 of 9
C~t~es and Denton w~thm tlurty (30) calendar days following receipt of an ~tem~zed statement
from the C~t~es and Denton
TXU Gas ~s authorized to recover rate case expenses reimbursed to Denton and the C~hes and
also may recover TXU's rate case expenses (at an mount not to exceed $85,000 for all the C~hes
including Denton) through a per MCF surcharge based upon total system sales as set forth ~n
Rader 4106 as a part of their rewsed Tariff for Gas Semce to be attached and made a part of th~s
ordmance
It ~s hereby ordered that ff TXU Gas elects to recover, ~n whole or m part, the costs of th~s
m~mbursement (mclurhng D~versffied Utthty Consultants, Inc's rate case expenses, Denton's
pomon of the C~t~es and TXU's rate case expenses as set forth above) through a surcharge to ~ts
customers ~n Denton, ~t shall do so through a surcharge designed for a slx (6) month nonunal
recovery period The surcharge per Mcf shall be calculated by d~wdmg the Rate Case Expenses
to be recovered by one-half of the adjusted annual sales volume to res~dentml and commercml
customers When a surcharge ~s apphcable, monthly status reports will be prowded to Denton to
account for the collections TXU Gas shall refund to ~ts customers any over collection of rate
case expenses that may occur
2 7 M~scellaneous Service Charges
2 7 1 Connection Charge (Residential & Commermal)
The following connection charges apply
Schedule Charge
Bus~ness Hours $35 00
After Hours $52 50
For each reconnect~on of gas service where servme has been dmcont~nued at the same
premises for any reason, for the lmtml ~naugurat~on of servme, and for each ~naugurat~on
of servme when the b~llable party has changed, w~th the following exceptions
(a) For a bmlder who uses gas temporarily dunng construction or for d~splay
purposes
(b) Whenever gas service has been temporarily mterrupted because of system
outage or servme work done by Company, or
(c) For any reason deemed necessary for company operations
2 7 2 Read For Change Charge (Residential & Commem~al)
Page 6 of 9
A read for change charge of $12 00 ~s made when ~t ~s necessary for a company employee
to read the meter at a currently served location because of a change ~n the bdlable party
2 7 3 Returned Check Charges (Residential & Commercial)
A returned check handling charge of $16 25 ~s made for each check returned to the
Company for any reason
2 7 4 Dehnquent Notfficat~on Charge (Residential, Commermal, & Industrial)
A charge of $4 75 shall be made for each trip by a Company employee to a customer's
residence or place of business when there ~s an amount owed to the Company that ~s past
due This charge shall not be made when the trip ~s reqmred for safety ~nvest~gat~ons or
when gas serwce has been temporarily ~ntermpted because of system outage or serwce
work done by Company
2 7 5 Mmn L~ne Extenmon Rate
The charge for extending mains beyond the free hm~t estabhshed by Franchise for
remdentlal, commermal, and industrial customers shall be based on the actual costs per
foot of the extension
2 7 6 Charge for Instalhng and Mmntmmng and Excess Flow Valve (Residential)
A customer may request the ~nstallat~on of an excess flow valve on a new service hne or
on a service hne being replaced prowded that the servme hne wall serve a single
remdence and operate continuously throughout the year at a pressure of not less than 10
ps~g The customer will pay the actual costs ~ncurred to tnstall the excess flow valve
That cost will include the costs of the excess flow valve, the labor costs reqmred to install
the excess flow valve and other assocmted costs The estimated total costs to ~nstall an
excess flow valve ~s $50 00 Tlns cost ~s based on mstathng the excess flow valve at the
same t~me a service hne ~s installed or replaced The excess flow valve will be installed
on the service hne upstream of the customer's meter and as near as practical to the mmn
A customer requmng maintenance, repmr, or replacement of an excess flow valve wall be
reqmred to pay the actual cost of locatmg and repalnng or replacing the excess flow
valve The cost to perform tins serwce will normally range from $200 00 to $2,000 00,
depending on the amount of work reqmred This cost wall be determined on an ~nd~wdual
proj eot bas~ s
Th~s tariff ~s being filed m accordance w~th the U S Department of Transportation rule
requmng the installation of an excess flow valve, ~f requested by a customer, on new or
replaced serwce hnes that operate continuously throughout the year at a pressure of not
less than 10 ping and that servme a tangle residence The rule further states that the
customer will bear all costs of mstalhng and m~untmnlng the excess flow valve
Page 7 of 9
2 7 7 Recovery of Connection Costs Associated w~th Certmn Stand-By Gas Generators
(Commercial)
Commercial customers ~nstallmg stand-by gas generators to prowde service ~n the event
of an ~ntermpt~on ~n electric service ~n facilities where gas service ~s not otherwise
prowded will reimburse TXU Gas D~stnbut~on for the actual cost of acqulnng and
~nstalhng the regulator, servme hne, and meter required to prowde gas servme for the
stand-by generators Gas service provided for the stand-by generators will be billed at
the apphcable commercml rate
2 8 Fthng of Rates TXU Gas shall file w~th Denton w~thln ten days of the effective date of
th~s ordinance tariffs conmstent w~th the rates authorized by th~s ordinance, which tariffs shall be
attached to and made a part of thru orthnance for all purposes The rates established thereby shall
be those under wl-nch TXU Gas shall be authorized to render gas services and collect charges
fi.om ~ts customers on and after July 21, 2001 All other rate rehefrequested by the Company ~s
hereby demed
SECTION 3 RESERVATION OF RIGHTS In order to ensure that rates and charges
assessed by TXU Gas in Denton are just and reasonable to both TXU Gas and its customers,
Denton reserves the right and privilege at any t~me to ~ncrease, decrease, alter change or amend
th~s Ordinance or the rates estabhshed here~n or to enact any ordinance or adopt any rates and
charges whmh would effectuate that purpose In thru connection, Denton further reserves the
right and pnwlege to exercise any authority and power granted to ~t under any applicable law,
ordinance or adm~mstrat~ve role or regulation
SECTION 4 REHEARING BY CITY COUNCIL If TXU Gas d~sputes all or any
port~on of th~s Ordinance, prior to filing an appeal w~th the Rmlroad Comm~smon of Texas, TXU
Gas shall file w~th the C~ty Secretary a request for reheanng on the merits by the C~ty Council
and shall comply w~th the procedures estabbshed for such a reheanng as set forth t~n th~s Sectmn
4 Upon mce~pt of a request for reheanng, the C~ty Councd will promptly prowde a forum
dunng a public heanng on an open meeting ~n order for TXU Gas to set forth the aspects of th~s
Ordinance which TXU disputes The C~ty Council shall have s~xty (60) calendar days following
the date of such reheanng to render a final dems~on Action of the C~ty Counml shall not be
considered final for purposes of appeal to the Railroad Commission of Texas until a final
dems~on on nay motion for reheanng has been rendered The prows~ons of th~s Ordinance shall
remmn m full rome and effect from and after ~ts adoption unless modffied by a subsequent
ordinance adopted by the C~ty Council as a result of a final decision following a reheanng
SECTION 5 SEVERABILITY If any port~on, section or part of a section of this
Ordinance ~s subsequently declared mvahd, ~noperat~ve or vmd for any reason by a court of
competent jurisdiction, the remmmng pomons, sections or parts of sections of th~s ordinance
shall be and remmn ~n full force and effect and shall not ~n any way be ~mpmred or affected by
such dems~on, op~mon or judgment
Page 8 of 9
SECTION 6 REPEALER That all conflicting sentences, clauses, paragraphs and
sections of Ordinance No 99-059 passed and approved by the C~ty Cotmcd on February 23,
1999, and any other conflmtmg ordinances and resolutions are hereby repealed to the extent of
that confhct
SECTION 7 Unless otherwise noted herein, other than TXU Gas (a named party), no
person or entity has been admitted as a party to tbas rate proceeding
SECTION 8 It ~s hereby found and detenmned that the meeting at whmh thru ordinance
was passed was open to the public, as reqmred by Texas law, and that advance pubhc not,ce of
the time, place and purpose of the meeting was g~ven
SECTION 9 EFFECTIVE DATE Thru ordinance shall take effect and be ~n full force
and effect from and after the date of its adoption The City Secretary is hereby d~rected to
dehver a certffied copy of th~s Ordinance to TXU Gas by sending the ordinance by U S Mml to
the Company's anthonzed representative, Autrey Warren, Regulatory Financial Manager, TXU
Business Services, 1601 Bryan Street, Dallas, Texas 75201-3411
PASSED AND APPROVED this the /7~__~ day of ~jT~ ,2001
RONI BEASLE~t~, fVI'AY0(R PRO TEM
ATTEST
JENNIFER WALTERS, CITY SECRETARY
APPROVED AS TO LEGAL FORM
HERBERT L PROUTY, CITY ATTORNEY
Page 9 of 9