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05-96-Ordinance-Adding a Service Adjustment Clause for Lone Star Gas-04/15/1996AN ORDINANCE MODIFYING THE COST OF SERVICE ADJUSTMENT CLAUSE FOR RESIDENTIAL AND COMMERCIAL CONSUMERS IN THE CITY OF SANGER, DENTON COUNTY, TEXAS: MODIFYING THE MAIN LINE EXTENSION RATE AND PROPOSING A WEATHER NORMALIZATION ADJUSTMENT CLAUSE. BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF SANGER, TEXAS: SECTION 1. The residential and commercial rates established by Ordinance dated June 3, 1985 shall be adjusted for increases or decreases in the cost per customer of providing gas service according to Item A in the Attachment hereto which is incorporated herein. SECTION 2. The mainline extension rate established by Ordinance dated June 3, 1985 shall be amended to read in accordance with Item B in the Attachment hereto which is incorporated herein. SECTION 3. The residential and commercial rates established by Ordinance dated June 3, 1985 shall be adjusted upward or downward for variations in the heating degree days according to Item C in the Attachment hereto which is incorporated herein. SECTION 4. The rates set forth in this ordinance may be changed and. amended by either the City or Company in the manner provided by law. Service hereunder is subject to the orders of regulatory bodies having jurisdiction, and to the Company's Rules and Regulations currently on file in the Company's office. SECTION 5. This ordinance is effective with bills rendered on and after the date of final passage of this ordinance. SECTION 6. It is hereby found and determined that said meeting at which this ordinance was passed was open to the public, as required by Texas law, and that advance public notice of the time, place and purpose of said meeting was given. PASSED AND APPROVED on this the 15tnday of April , A. D., ATTEST: SeKIA ;.. � � •,icy . �3•e s � 0 J X A , >'/'/", /,' �� Mayor Nel A trong City of Sanger, Texas ATTACHMENT TO ORDINANCE NO. 05-96 CITY OF SANGER, TEXAS LONE STAR GAS COMPANY TARIFFS & SCHEDULES ITEM A. COST OF SERVICE ADJUSTMENT The cost of service adjustment clause authorized in the rate ordinance dated June 3, 1985 will continue in effect as adjusted to reflect the application of the limitation factor based on changes in the Implicit Price Deflator of the Gross Domestic Product to both increases and decreases in the cost of service per customer and the carry forward of any increase or decrease in excess of the amount allowed by the operation of the limitation factor to the next year, with the total adjustment for the next year subject to the limitation factor. The customer charge portion of each monthly bill for residential and commercial gas service shall be adjusted according to the terms of the revised cost of service adjustment clause as follows: (1) Effective with bills rendered for the month of May 1996 and annually effective each May thereafter, the residential and commercial monthly rate shall be adjusted for increases or decreases in the cost per customer of providing gas service (including depreciation but excluding cost of gas, gross receipts taxes, income taxes, and return) for the previous year ended December 31 above or below such cost incurred in the second prior calendar year. These annual adjustments shall be cumulative. The operating expenses used in calculating the adjustments shall be for the applicable distribution system as reported to the Railroad Commission of Texas in the annual report of Lone Star Gas Company, a Division of ENSERCH Corporation. Should the percentage change in cost of service per customer of providing gas service plus or minus the effect of a carry forward from the prior year exceed the rate of change in the Implicit Price Deflator of the Gross Domestic Product over the same period of time, the adjustment will be limited to a maximum change computed by multiplying the cost of service per customer of providing gas service in the second prior calendar year ended December 31 by the rate of change in the Implicit Price Deflator of the Gross Domestic Product. Any change in the cost of service per customer of providing gas service subject to the above limitation shall be included in the determination of the cost of service adjustment to be effective in the succeeding May billing month, however the maximum percentage change for the succeeding 1 year will continue to be limited to the percentage change in the Implicit Price Deflator of the Gross Domestic Product. The adjustment per bill shall be rounded to the nearest whole cent. (2) The adjustment determined by (1) above shall be multiplied by a tax factor to include street and alley rental and state occupation tax due to the increasing or decreasing Company revenues under this cost of service adjustment provision. ITEM B. MAIN LINE EXTENSION RATE The charge for extending mains beyond the free limit established by Franchise for residential, commercial, and industrial customers shall be based on the actual cost per foot of the extension. ITEM C. Weather Normalization Adjustment: Effective with bills rendered during the October 1996 through May 1997 billing months, and annually thereafter for the October through May billing months, the above residential and commercial consumption rates for gas service, as adjusted, shall be subject to a weather normalization adjustment each billing cycle to reflect the impact of variations in the actual heating degree days during the period included in the billing cycle from the normal level of heating degree days during the period included in the billing cycle. The weather normalization adjustment will be implemented on a per Mcf basis and will be applicable to the heating load of each customer during the period included in the billing cycle. It will be determined separately for residential and commercial customers based on heating degree data recorded by the D/FW Airport weather station. The adjustment to be made for each billing cycle will be calculated according to the following formula: NDD-ADD WNA = x M x AHL ADD Where: WNA = Weather normalization adjustment NDD = Normal heating degree days during the period covered by the billing cycle ADD = Actual heating degree days during the period covered by the billing cycle M = Weighted average margin per Mcf included in the commodity portion of the rates effective during the October through May billing months K AHL = Actual heating load per customer The heating load to which the weather normalization adjustment is to be applied for residential and commercial customers is determined by subtracting the base load for the customer from the total volume being billed to the customer. The base load of a customer is the average level of nonheating consumption. The weather normalization adjustment is subject to a 50% limitation factor based on temperatures being fifty percent warmer or colder than normal. The weather normalization adjustment will be calculated to the nearest $.0001 per Mcf. 3