07-05-21-Resolution-Participate Coalition of Cities Related to HB 1520 Financial Relief Gas Utilities-07/19/2021RESOLUTION NO. 07-05-21
RESOLUTION BY THE CITY OF SANGER ("CITY") AUTHORIZING
THE CITY TO PARTICIPATE AS PART OF A COALITION OF CITIES
IN PROCEEDINGS TO BE HELD BY THE RAILROAD COMMISSION
OF TEXAS RELATED TO IMPLEMENTATION OF HOUSE BILL 1520;
AUTHORIZING THE HIRING OF ATTORNEYS AND CONSULTANTS;
DIRECTING THE ACTIVITIES OF LAWYERS AND CONSULTANTS
REGARDING THE RAILROAD COMMISSION'S HB 1520
PROCEEDINGS; REQUIRING REIMBURSEMENT OF REASONABLE
LEGAL AND CONSULTANT EXPENSES TO THE EXTENT ALLOWED
BY LAW; FINDING THAT THE MEETING COMPLIES WITH THE
OPEN MEETINGS ACT; AND MAKING OTHER FINDINGS AND
PROVISIONS RELATED TO THE SUBJECT
WHEREAS, on June 16, 2021, Governor Greg Abbott signed House Bill 1520,
which directs the Railroad Commission of Texas and the Texas Public Finance Authority
to work together to issue bonds, the proceeds of which gas utilities would use to pay
providers of natural gas, for gas provided to gas utilities during the winter storm of
February, 2021; and
WHEREAS, HB 1520 provides financial relief to gas utilities that choose to apply
for the bonds by potentially providing a low-cost source of financing to fulfill
outstanding obligations to natural gas suppliers; and
WHEREAS, any bonds issued under the authority of HB 1520 are to be secured by a
mandatory charge on each gas -utility customer's bill and revenue from such mandatory
charge is to be dedicated to paying off the bonds; and
WHEREAS, the bonds would allow customers to pay over an extended period, rather
than potentially through a single billing statement, for the extraordinary cost of gas
consumed during the winter storm of February, 2021; and
WHEREAS, the amount of debt to be issued to pay the gas utilities and in turn the
natural-gas suppliers is estimated to be in the range of $4 billion to $5 billion; and
WHEREAS, on or after June 16, 2021, the Railroad Commission issued a "Notice to
Operators" to all gas utilities in the State directing all gas utilities that elect to participate
in the debt financing of their extraordinary costs for natural gas purchased during the
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winter storm of February, 2021, to submit their applications to the Railroad Commission
by July 30, 2021; and
WHEREAS, the information the gas utilities are expected to submit with their
respective applications will include a voluminous amount of data related to each gas
utility's costs of gas, its practices regarding the purchase of natural gas, including any
financial -hedging instruments and gas -storage practices the utility employs, the costs of
transportation of the natural gas; and
WHEREAS, after the Railroad Commission issues its order establishing the amount
of costs to be financed, it will direct the Texas Public Finance Authority to issue bonds
secured by mandatory charges imposed on each customer's gas -utility bill; and
WHEREAS, all costs related to the issuance of any bonds, including the cost of
natural gas and the underwriting costs for issuance of the bonds are to be recovered
through rates charged end -use customers, including the City; and
WHEREAS, pursuant to Utilities Code § 103.023(a) the City has standing in each
case before the Railroad Commission that relates to a gas utility's rates and services in
the municipality; and
WHEREAS, the City has the authority under Utilities Code § 103.023(a) to
participate in ratemaking proceedings and engage consultants and attorneys to advise and
represent the City and assist in litigation before a regulatory authority, or a court; and
WHEREAS, to the extent the Railroad Commission's proceeding(s) to implement
fM 1520 comprise a ratemaking proceeding, the gas utility shall reimburse the City for
the reasonable cost of the services of a person engaged under Utilities Code § 103.022 to
the extent the applicable regulatory authority determines is reasonable; and
WHEREAS, the Railroad Commission has indicated that it may address in a single,
consolidated proceeding all applications submitted by the gas utilities that elect to
participate in the debt financing of their extraordinary costs for natural gas purchased
during the winter storm of February, 2021, including Atmos Energy, CenterPoint Entex,
and Texas Gas Service; and
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WHEREAS, to maximize the efficient use of resources and expertise in reviewing,
analyzing, and investigating a gas utility's application to change its rates and/or impose
charges on ratepayers, the City has in the past joined with other local regulatory
authorities to form the Atmos Texas Municipalities ("ATM") and hereby continues its
participation in ATM;
NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE
CITY OF SANGER THAT:
Section 1. The findings set out in the preamble are in all things approved and
incorporated herein as if fully set forth.
Section 2. The City continues its participation with other cities in a coalition of cities
known as the Atmos Texas Municipalities ("ATM") with the understanding that the
Steering Committee of ATM is to provide direction and guidance to Special Counsel
representing said cities.
Section 3. The City authorizes participation and intervention in proceedings at the
Railroad Commission of Texas and the Texas Public Finance Authority related to
proceedings to implement House Bill 1520, as well as appeals taken, if any, from those
state agencies' actions and decisions.
Section 4. The City directs Herrera Law & Associates, PLLC as Special Counsel to
represent the City with regard to proceedings to implement House Bill 1520 and related
proceedings before local and state regulatory authorities and any court of law and
authorizes Special Counsel to engage such experts as may be reasonably necessary for
review and evaluation of applications submitted by a gas utility, including Atmos Energy,
CenterPoint Entex, and Texas Gas Service, related to House Bill 1520.
Section 5. To the extent the Railroad Commission's proceedings to implement House
Bill 1520 comprise a ratemaking proceeding, Atmos Energy shall reimburse the City on a
monthly basis, for the reasonable costs of attorneys and consultants and expenses related
thereto, upon the presentation of invoices reviewed by the ATM's Steering Committee.
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Section 6. A copy of this resolution shall be sent to Mr. Alfred R. Herrera, Herrera
Law Associates, PLLC, 4524 Burnet Road, Austin, Texas 78756.
Section 7. The meeting at which this resolution was approved was in all things
conducted in strict compliance with the Texas Open Meetings Act, Texas Government
Code, Chapter 551.
Section 8. This resolution shall become effective from and after its passage.
PASSED AND APPROVED THIS 19TH DAY OF DULY, 2021.
Thomas E. Muir, Mayor
ATTEST: +SAA/0 ,,r,
Kell Ed ds, City Secretary
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