Resolution - City Manager: Consider a resolution to suspend for forty-five (45) days, the effective date proposed by West Texas Gas Utility, LLC, to increase rates under the Gas Reliability Infrastructure Program (GRIP).
Item Summary
Under section 104.301 of the Gas Utility Regulatory Act (GURA), a gas utility is allowed to request increases in its rates to recover a return on investments it makes between general rate cases. This section of GURA is commonly referred to as the "GRIP" statute, that is, the "Gas Reliability Infrastructure Program".
Under a decision by the Supreme Court of Texas, the Court concluded that a filing made under the GRIP statute permitted gas utilities the opportunity to recover return on capital expenditures made during the interim period between general rate cases, by applying for an interim rate adjustment, and that proceedings under the GRIP statute did not contemplate either adjudicative hearings or substantive review of utilities' filings for interim rate adjustments. Instead, the Court concluded, the GRIP statute provides for a ministerial review of the utility's filings to ensure compliance with the GRIP statute and the Railroad Commission's rules, and that it is within the Railroad Commission's authority to preclude cities from intervening and obtaining a hearing before the Railroad Commission.
On or about February 15, 2023, West Texas Gas Utility, LLC ("WTG") filed for an increase in gas utility rates under the GRIP, resulting in a requested increase in the monthly customer charge (without gas cost) from $19.99 to $20.62 for domestic customers and from $36.38 to $37.69 for non-domestic customers. In light of the Texas Supreme Court's opinion, the City's ability to review and effectuate a change in WTG's requested increase is limited at best. Nonetheless, to allow for a limited review of WTG's GRIP application, it is recommended that the City suspend WTG's proposed effective date of April 16, 2023, for forty-five (45) days, to May 31, 2023, as allowed by state law, so that the City may evaluate whether the data and calculations in WTG's rate application are correctly done. A copy of the full GRIP filing may be requested from the City Secretary's Office.
Fiscal Impact
Fiscal impact is based on customer class as stated in the item summary above.