Resolution - City Manager: Consider a resolution authorizing the intervention of the City of Lubbock through the Atmos Texas Municipalities, comprised of Amarillo, Channing, Dalhart, and Lubbock, in proceedings to be held by the Railroad Commission of Texas related to implementation of House Bill 1520 and retain the law firm of Herrera Law & Associates, PLLC to represent the City's interest in such matters.
Item Summary
The Texas Legislature passed HB 1520 in the regular 87th Legislature. HB 1520 allows gas utilities impacted by Winter Storm Uri to 'securitize' the exceptional gas costs incurred during the event. Securitizing these costs is beneficial to ratepayers by spreading the total cost owed over an extended period time. Estimates of amounts owed across the various gas utilities in Texas vary, but could be in the neighborhood of $5 billion dollars (statewide).
HB 1520 provides a mechanism for the gas utilities to present costs to the Texas Railroad Commission (RRC). The RRC will work through a process similar to a ratemaking procedure with the final output being the amount owed by customers that will be securitized through long-term bonds. Doing so will spread the cost to individual consumers over a potential period of twenty or more years, rather than a few short years in the absence of the authority granted by HB 1520.
City management recommends that Lubbock partner with Amarillo, Dalhart and Channing, which are the other three cities in our Atmos rate division, to intervene in this proceeding in order to have access and input regarding the ultimate amount assigned to our ratepayers and the mechanism under which it is calculated. The firm of Herrera Law and Associates has offered a not-to-exceed fee of $12,000 to provide these services. The proceeding will be filed on July 30, 2021, with RRC action to follow.
It is important to note that staff fully supports HB 1520 and its potential benefits to our ratepayers. Intervening in the case provides the ability to participate in the process, should any of the details require local input.
Adoption of this resolution will establish Lubbock as an intervenor, as described above, and approve the agreement with Herrera Law and Associates.
