HomeMy WebLinkAboutRes 96-21 Authorizing the Steering Committee of Lone Star Gas Service Area Cities to Retain Legal CounselTOWN OF WESTLAKE
RESOLUTION 96-21
A RESOLUTION AUTHORIZING THE STEERING COMMITTEE OF LONE
STAR GAS SERVICE AREA CITIES TO RETAIN LEGAL COUNSEL AND
CONSULTANTS; AUTHORIZING THE STEERING COMMITTEE TO
INTERVENE ON BEHALF OF THE TOWN OF WESTLAKE IN TEXAS
RAILROAD COMMISSION GAS UTILITIES DOCKETS 8647 AND 8664 AND
RELATED DOCKETS AND CASES INQUIRING INTO THE RATES AND
SERVICES AND OPERATIONS OF LONE STAR GAS COMPANY.
WHEREAS, the Texas Railroad Commission has initiated an inquiry into the
rates, services and operations of Lone Star Gas Company (GUD 8647); and
WHEREAS, Lone Star Gas Company has filed a city gate rate case (GUD
8664); and
WHEREAS, conditions have changed substantially in the gas industry since the
last Lone Star Gas gate rate case in 1982; and
WHEREAS, Texas Utilities Electric Company is purchasing Lone Star Gas
Company; and
WHEREAS, the rates determined in the above proceeding may have an impact
on the electric rates of Texas Utilities Electric Company customers; and
WHEREAS, the Town of Westlake, Texas, ("Town") is a regulatory authority
and whose citizens will be substantially affected by the rates established as a result of
such proceedings;
WHEREAS, the Steering Committee of Lone Star Gas Service Area Cities has
been formed to facilitate and coordinate the participation of cities in the service areas;
NOW, THEREFORE, BE IT RESOLVED by the Board of Aldermen of the
Town of Westlake, Texas that:
1. The Town hereby authorizes the Steering C ommittee of Lone Star Gas
Service Area Cities of which this Town is a member, to retain legal counsel and engage
consultants, and intervene on behalf of the Town in Texas Railroad Commission Gas
Utilities Docket Nos. 8647 and 8664 and related dockets and cases, including appeals.
2. The Town designates Paul C. Isham, Town Attorney, as its representative at
all meetings and to receive all notices at P. O. Box 534045, Grand Prairie, Texas 75053-
4045.
Resolution 96-21
Page 2
3. The Town authorizes payment to the Steering Committee of Lone Star Gas
Service Area Cities of five cents (.05) per capita based upon the latest Texas Municipal
League population figures for the Town.
4. The Town Secretary shall cause a copy of this resolution and appropriate
payment to be made to the Chair of the Steering Committee.
PASSED AND APPROVED by the Board of Aldermen of the Town of Westlake
this 9"' day of December, 1996, by a vote of 4 ayes and 0 nays.
Scott Bradley, Mayor
ATTEST:
roger 6rosswy, Town Sece ary
APPROVED AS TO FORM:
Paul C. Isham, Town Attorney
GtyofArhngtonTexas
iK •
Office of the City Attomey
TO: All Cities Served by Lone Star Gas Company
FROM: Jay B. Doege�C
SUBJECT: Lone Star Gas Gate Rate Case; Summary of Meeting
of Steering Committee Cities and Recommendations
j?n�Jem1�� r
1,9- 1996
Summary of Meeting of Steering Committee on November 15,
1996
Representatives of cities served by Lone Star Gas Company
met at the TML Conference in Corpus Christi to discuss how
to respond to the recently instituted inquiry of the Texas
Railroad Commission (GUD 8647) and the Lone Star Gas Company
filed gate rate case (GUD 8664). The meeting was held in
response to a letter I sent on November 4, 1996, describing
how a major group of TU Electric and Lone Star Gas cities
had met to discuss the manner in which they and other cities
would participate in these Lone Star Gas proceedings and the
vehicle to use to bring about such participation.
Presentations by Garland and Fredericksburg Groups
Those in attendance at the Corpus Christi meeting heard from
representatives of the City of Garland group, made up of
approximately seven cities, which had already intervened in
the case, hired rate attorneys Lloyd, Gosselink, Fowler,
Blevins and Mathews, and uo7isuli:.ants Recd-Stcac. The
Garland group proposed that the City of Garland would front
the cost of rate attorneys and consultants, and would later
assess up to a 5¢ per capita fee if the Railroad Commission
disallowed any of its participation expenses. Another group
from Fredericksburg, which consisted of approximately
thirteen small cities made a presentation through its rate
attorney Jim Boyle. This group had engaged Diversified
Utilities Consultants. It proposed to finance its
participation through either an agreement by Lone Star or an
order by the Commission to reimburse its cities a portion of
its expenses periodically through the duration of the case
with a true -up at the end. (There is no assurance Lone Star
or the Commission will do this.) The Fredericksburg and
200 West Abram Street • Box 231 • Arlington, Texas 76004-0231 • (817) 459-6878 • (Metro 817) 265-3311 • FAX (817) 459-6897
All Cities Served by Lone Star Gas Company
November 19, 1996
Page 2
Garland groups stated they were cooperating with each other
to divide up the case so that there would be no duplication.
These consultants, however, would not cover cost of gas,
affiliate transactions, merger and transfer, and competition
issues that would likely be major parts of the case. The
Fredericksburg group indicated they were trying to secure
additional consultants for this purpose.
Discussion by Steering Committee
Representatives of the cities attending the meeting who are
not part of the Garland or Fredericksburg group (Steering
Committee) expressed concern that neither group had given
them adequate opportunity to meet first to organize and
decide who the rate attorneys and consultants would be. The
risk, of course, with multiple representations is that if
there- are duplications of effort, expenses might be
disallowed.
Recommendation
After considerable discussion, a motion was unanimously
passed to engage on the Steering Committee's behalf the law
firm of Butler, Porter, Gay & Day to represent the cities.
The Steering Committee attorney would meet with attorneys
for the Garland and Fredericksburg groups to determine which
issues each group would cover, particularly with respect to
the cost of gas, affiliate transactions, competitive and
merger issues. The entire case was to be divided up among
the three separate groups so that there would be no
-4tte,� attorney
duplication of effort. he =C -
'
would also negotiate agreements with Steering Committee
consultants providing for substantial retainage and expense
caps. The attorney would also seek reimbursement of
periodic rate case expenses from the company or the Railroad
Commission as appropriate. Finally, the Steering front
Committee
recommended a 50 per capita assessment to pay p
for
participation costs. Reasonable attorneys and consultants
expenses are reimbursable to the cities.
Model Resolution Attached
A model participation resolution is attached for your city's
consideration. Every effort will be made to coordinate with
All Cities Served by Lone Star Gas Company
November 19, 1996
Page 3
the Garland and Fredericksburg groups in order to avoid any
duplication of efforts. Participation resolutions and
participation fees should be sent to the address indicated
at the bottom of the model resolution.
Please call if you have any questions.
j'BD/bk