RAILROAD COMMISSION OF TEXAS GAS SERVICES DIVISION ) ) ) )

Transcription

1 RAILROAD COMMISSION OF TEXAS GAS SERVICES DIVISION STATEMENT OF INTENT OF WEST TEXAS GAS, INC. TO INCREASE GAS DISTRIBUTION RATES IN THE UNINCORPORATED AREAS OF TEXAS GUD NO. STATEMENT OF INTENT OF WEST TEXAS GAS, INC. TO INCREASE GAS DISTRIBUTION RATES IN THE UNINCORPORATED AREAS OF TEXAS TO THE HONORABLE RAILROAD COMMISSION OF TEXAS: WEST TEXAS GAS, INC. ( WTG or the Company, a natural gas public utility, under TEX. UTIL. CODE (7 files this Statement of Intent to increase gas utility rates in the unincorporated areas of Texas with the Railroad Commission of Texas (the Commission pursuant to the provisions of Subchapter C of Section 104 of Texas Utility Code and the rules of the Gas Services Division of the Railroad Commission of Texas. The Company requests that the revised rate schedules, included in the proposed Tariff as APPENDIX A to the Statement of Intent and incorporated herein by reference, become effective for meters read on and after February 28, 2013, which is 35 days from the date of this filing, and in support thereof would respectfully show the Commission as follows: I. JURISDICTION WTG is a gas utility under TEX. UTIL. CODE (7, and the Commission has exclusive original jurisdiction to set the rates requested for the domestic and non-domestic customers in the unincorporated areas of Texas served by WTG under TEX. UTIL. CODE (a. Consistent with such jurisdiction, the proposed rates are applicable to the Company s natural gas sales and service within the unincorporated areas of Texas served by the Company. The proposed rates are not Special Rates as defined in 16 T.A.C (33. 1

2 II. BACKGROUND On September 27-28, 2012, WTG filed Statements of Intent with twenty-seven cities seeking an identical increase in rates. Fifteen (15 cities approved a settlement granting WTG approximately 50% of the requested increase in revenues. Twelve (12 cities suspended operation of the proposed rate schedules for ninety (90 days to evaluate the rate request. The ninety (90 day suspension period authorized by TEX. UTIL. CODE (a(1 ends February 4, The municipalities of Somerset, Eden, Miami, Devine and Kermit have denied WTG s request in its entirety and WTG expects other cities will act in a similar fashion. WTG intends to appeal the actions of cities denying WTG s request to change rates and ask the Commission to consolidate the appeals with this proceeding. WTG also serves a few customers in the City of Lubbock, but WTG has not filed a Statement of Intent to change rates in Lubbock. Most gas customers in Lubbock are served by Atmos Energy Corp. ( Atmos. The City has requested that WTG establish the same rates for gas service in Lubbock as are approved for Atmos. Therefore, WTG will file a separate Statement of Intent with the City of Lubbock. WTG expects the request filed with Lubbock will be approved by the City of Lubbock and no appeal will be filed with the Commission. III. SUMMARY OF PROPOSED CHANGES, EXPECTED REVENUE CHANGE, AND RELIEF REQUESTED WTG has calculated the revenue requirement for this filing using the system-wide cost of providing service to all regulated customers served by WTG in Texas. For the twelve (12 month period ending June 30, 2012, WTG s adjusted revenues for its Texas unincorporated areas totaled approximately $ 2,848,461. The rates proposed for all customers affected by this filing will increase the Company's annual revenues by $1,166,779, which represents a 78.86% increase in company revenues, excluding gas cost, or a 40.96% increase including gas costs (based on test year average cost of gas. Consequently, the proposed change in rates is a major change as defined by TEX. UTIL. CODE , because it will exceed 2.5% of WTG s existing revenues. These rates will not exceed 115% of the average of all rates for similar services in the municipalities served by WTG within the same counties. See. TEX. UTIL. CODE

3 The proposed rate schedules are located at pages 8-9 in the proposed Tariff, APPENDIX A to the Statement of Intent, and evidence the rate changes proposed by the Company. APPENDIX A is made part hereof for all purposes. The Company proposes to eliminate the Farwell Gas Cost Zone and transfer certain Parmer County customers into the Company s North Gas Cost Zone. The benefit of having a separate gas cost zone for the City of Farwell and certain Parmer County customers was lost when discounted transport rates were eliminated by El Paso Natural Gas as part of a 2007 Federal Energy Regulatory Commission rate ruling. Including the Farwell Zone as part of the North Gas Cost Zone will have a de minimis affect on the cost of gas within the North Gas Cost Zone and little known affect on Farwell customers. The Company seeks approval of its reformatted Tariff, APPENDIX A. The reformatted Tariff does not include any changes to existing fees and deposits, existing terms of service, or the Company s Cost of Gas Adjustment Clause, except for the elimination of the Farwell Gas Cost Zone. WTG is requesting the Commission make all findings of fact and conclusions of law necessary to allow WTG to make interim rate adjustments for changes in investment in service for gas utility services pursuant to TEX. UTIL. CODE As provided by law, the Company is requesting that the Commission approve the recovery of the reasonable rate case expenses associated with this filing through a surcharge on rates. The exact amount will not be known until the case is complete. WTG s Statement of Intent is supported by the direct testimony and exhibits of the following witnesses: Mr. Richard D. Hatchett, WTG Executive Vice-President; Ms. Barbara E. Geffken, WTG Controller; Mr. Jack.J. (JJ King, WTG Manager of Gas Marketing; Mr. James B. (Bart Bean, WTG Manager of Operations; Mr. Carson Watt, WTG Gas Supply Manager; Mr. Dane Watson, Alliance Consulting Services; Mr. Bruce H. Fairchild, Financial Concepts and Application, Inc.; Mr. William R. (Rodney Pennington, Consultant Pendulum Energy; and, Mr. John Randolph (Randy Underwood, Consultant, Pendulum Energy. 3

4 A. Test Year The Company s proposed cost of service for the unincorporated areas served by WTG in Texas as set forth in the Statement of Intent and the rate filing package is based on the twelve-month period ending June, 30, 2012, updated for known and measurable changes. B. Proposed Rate Change WTG s current rates for all customers in the unincorporated areas of the sixty-eight (68 Texas counties are as follows: Domestic Non-Domestic Customer Charge $ 9.00 $12.00 All Consumption $ 2.42 per Mcf $ 2.27 per Mcf WTG s proposed rate schedule for all customers in the incorporated areas of the sixty-eight (68 Texas counties are as follows. Domestic Non-Domestic Customer Charge $17.78 $13.70 All Consumption $4.78 per Mcf $2.59 per Mcf The proposed rates will be subject to all current adjustment provisions in Section 3 of WTG s Tariff. Except for merging the Farwell Gas Cost Zone into the North Gas Cost Zone in Section 3.1 of the Gas Cost Adjustment Clause, no substantive changes are sought in the gas cost adjustment provisions of the existing tariff. No changes are requested to the Miscellaneous Fees and Deposits found in Section 4 of WTG s currently approved tariff. The tariff has been reformatted for ease of revision and reference. If approved by the Commission, WTG s proposed changes in its Domestic and Non-Domestic customer rates are projected to increase annual company revenues within areas under the Commission jurisdiction by $1,166, per year or by 78.86% (excluding gas costs or by 40.96% (including gas costs. Based on the proposed rate design, the average monthly bill for a Domestic customer using 6 Mcf and a Non-Domestic customer using 30 Mcf is shown in the table below. Proposed Increase W/O Increase With Customer Class Current Bill* Bill* Difference Gas Cost Gas Cost Domestic $44.10 $67.04 $ % 52.02% Non-Domestic $ $ $ % 6.17% * Includes Test Year Average Cost of Gas of $3.43 per Mcf 4

5 IV. RATE CASE EXPENSES Pursuant to TEX. UTIL. CODE , and the Commission s Substantive Rule , WTG requests recovery of all rate case expenses determined by the Commission to be reasonable. WTG proposes that after the hearing on the merits in this matter has concluded, a short proceeding be convened to take testimony and present evidence from all interested parties on the issue of rate case expenses. WTG further requests approval of a surcharge to its final approved rates to collect reasonable rate case expenses. V. PUBLIC NOTICE WTG will request, by motion, that the Commission approve WTG s proposed notice prior to publication. Thereafter, WTG will promptly undertake to notify the public of the proposed changes in its rates for gas service. The public notice that WTG will provide regarding the proposed change in rates for the unincorporated areas served by WTG in Texas is attached as APPENDIX B to the Statement of Intent and made a part hereof for all purposes. Additional copies of the Company s proposal are available from the undersigned Company representatives. WTG will submit proof of notice to the Commission promptly upon completion thereof. WTG s authorized representatives are: VI. COMPANY REPRESENTATIVES FOR NOTIFICATION Richard D. Hatchett Executive Vice President J.J. King Gas Marketing Manager West Texas Gas, Inc. West Texas Gas, Inc. 211 N. Colorado 211 N. Colorado Midland, Texas Midland, Texas Telephone: ( Telephone: ( Facsimile: ( Facsimile: ( rhatchett@westtexasgas.com jking@westtexasgas.com G. William Fowler Robert A. Rima 3800 E. 42 nd Street, Suite N. MoPac Expy., Suite 160 Odessa, Texas Austin, Texas Telephone: ( Telephone: ( Facsimile: ( Facsimile: ( gwf@texol.net bob.rima@rimalaw.com 5

6 WTG requests that all pleadings, motions, orders and other documents filed in this proceeding be served on all of WTG s authorized representatives. VII. CONCLUSION WTG requests that the Commission grant it the authority to charge the proposed rates for the unincorporated areas served by WTG in Texas as set forth herein, with such rates becoming effective for meters read on and after February 22, WTG requests that the Commission approve WTG s proposed tariff, including the elimination of the Farwell Gas Cost Zone, and make the findings of fact and conclusions of law necessary to support interim adjustments by WTG for changes in investment in service for gas utility services pursuant to TEX. UTIL. CODE Finally, WTG requests such further relief to which it may be justly entitled. Respectfully submitted, G. WILLIAM FOWLER, P.C E. 42 nd Street, Suite 600 Odessa, Texas Telephone: ( Facsimile: ( gwf@texol.net By: G. WILLIAM FOWLER State Bar No LAW OFFICE OF ROBERT A. RIMA 7200 N. MoPac Expy., Suite 160 Austin, Texas Telephone: ( Facsimile: ( bob.rima@rimalaw.com By: Robert A. Rima State Bar No ATTORNEYS FOR WEST TEXAS GAS, INC. 6

7 STATE OF TEXAS COUNTY OF MIDLAND BEFORE ME, the undersigned authority, on this day personally appeared RICHARD D. HATCHETT, who, after being duly sworn by me, upon his oath stated as follows: I am RICHARD D. HATCHETT, Executive Vice-President, Natural Gas Operations of West Texas Gas, Inc. I am personally knowledgeable about the everyday business operations of West Texas Gas, Inc. and hereby state that all the statements in the foregoing Statement of Intent to Change Rates are true and correct to the best of my knowledge, information and belief after reasonable inquiry. SIGNED this day of January, Richard D. Hatchett SUBSCRIBED AND SWORN TO before me by the said RICHARD D. HATCHETT, on this the day of January, Notary Public in and for State of Texas 7