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HomeMy WebLinkAboutMinutes - City Council - Public Hearing - 9/13/1978F r F PUBLIC HEARINGS OF CITY COUNCIL ON THE PROPOSED INDUSTRIAL GAS RATE INCREASE BY PIONEER NATURAL GAS RATE INCREASE 1 43C SEP 13 11 78-37-43OA--1189 *NOTICE OF PUBLIC HEARING ON PAGE 430C. PUBLIC HEARING OF CITY COUNCIL ON THE PROPOSED INDUSTRIAL GAS RATE INCREASE BY PIONEER NATURAL GAS COMPANY September 13, 1978 In accordance with the Notice of City Council to continue the above referenced hearing on this date, said Notice being posted September 5, 1978, the above referenced hearing was called to order at 9:00 A.M. by Mayor Pro Tem Alan Henry, presiding. Council members present were: Mayor Pro Tem Henry, Councilman Bill McAlister, Councilwoman Carolyn Jordan, Councilman M. J. Aderton, City Manager Larry Cunningham, City Attorney John C. Ross, Jr., and City Secretary - Treasurer Evelyn Gaffga. Mayor Dirk West abstained from participating in this hearing. Also present, representing Pioneer Natural Gas.Co., was Mr. Thomas Stephens, Attorney for Pioneer Natural Gas Co., Associates, Inc., Dallas, and M. D. LaGrone, Vice President, Pioneer Natural Gas Co. The opening remarks by Mayor Pro Tem Henry reflected the procedures to be followed pursuant to the Public Utility Commission were as follows: The opening statement by Pioneer Natural Gas Co., and the presentation of evidence and testimony was held August 24, 1978; Cross-examination by City Staft members, which commenced on August 24, 1978, would be continued on this date; Opening statement by City staff members, and presentation of evidence and testimony; Cross-examination by Pioneer personnel; Closing statement by Pioneer personnel; Closing statement by City staff members; Comments or appearances by citizens interested in or affected by this matter. Mr. Stephens indicated they had a couple of housekeeping matters to be completed before the cross-examination of Mr. Gillmore by City Staff members continued, to wit: (a). He requested that the record show that on August 24, 1978, Pioneer Exhibits Nos. 1, 2, and 3, as itemized in the Minutes of the Council meeting of that date, were submitted in that order and constitute the evidence and testimony of Pioneer; (b). They hrere and now submit Exhibit No. 4 entitled: Pioneer Natural Gas Company Lubbock Distribution System Total Cost of Service Twelve Months Ended December 31, 1977, As Adjusted as part of their evidence and testimony in this matter. Mr. Gillmore then commented on various line items appearing in Exhibit No. 4 Mr. Ross requested each exhibit be identified by title for the benefit of the record, and proceeded to read these titles into the record. Following no further comments, City Attorney John Ross proceeded with the cross-examination of Mr. Gillmore. 1 Mr. Ross began a lengthy cross-examination of Mr. Gillmore with respect to various aspects of Pioneer Exhibit No. 3 and the various items used in "adjusted" computations; with respect to the facts used in arriving at a "reasonable balance" between the original cost and the current cost; with respect to their reliance on the Alvin case and the Supreme Court decision of 1950 and the relationship of that decision to the Public Utility Regulatory Act of 1975; with respect to the determination of facts whereby they arrived at the 60-40% split; with respect to the k discretionary tacts to be considered by the Council in their deliberations. During this exchange of dialogue, Mr. Ross submitted into evidence City Exhibit No. 1 entitled: ! Texas Public Utility Regulatory Act of 1975 (Art. 1446c of the Texas Ann. Civil Statutes) . At the request of Mr. Ross, Mayor Pro Tem called for a ten minutes recess. The hearing recessed at 10:30 A.M., and reconvened at 10:47 A.M. Mr. Ross continued his cross-examination of Mr. Gillmore, with direct emphasis on various facts used in his report --Pioneer Exhibit No. 3, Industrial Cost of Service --but not supported by any evidence. During this session, Mr. Ross requested additional computations from Mr. Gillmore to support his statements and figures in his report, requesting that additional information be submitted to the Council when the hearing reconvened after lunch. At this point Mr. Gillmore and Mr. LaGrone took exception to Mr. Ross's request, indicating that this information would take about three or four hours to assemble. Mr. Gillmore indicated that this was staff members work, and he was not willing to take his lunch hour to assemble same, and requested permission to file this information as an amended exhibit. Mr. Ross indicated the amended exhibit was to consist of a concise statement reflecting the three categories which apparently compose the current costs on which the rate base is weighted, i.e., 12'k% for age and condition of equipment 50 % for land accounts ?? Por the value of transportation equipment as determined by I the N.A.D.A. used car guide. The meeting recessed for lunch, to reconvene at 1:30 P.M. E30B 1 3' 1976 Upon reconvening at 1:30 P.M. Mr. Ross continued the cross-examination of Mr. Gillmore, during which he submitted into evidence City Exhibit No. 2 entitled: Pioneer Corporation Form 10-K December 31, 1977 The session again recessed at 2:50 P.M. for ten minutes. Upon recovening, Mr. LaGrone requested permission to respond toethe reference of Mr. Ross with respect to the City Exhibit No. 2 - the Form 10-K - reading from Page F-18 of this exhibit with respect to the matter of accumulated depreciation, replacement costs, etc. and indicated these statements had nothing to do with rate making, but were necessary to comply with SEC request. Presentation of charts, etc. by City staff members were utilized in this segment of the cross- examination of Mr. Gillmore. Mr. Ross completing his cross-examination, queries from Council members, with responses from both Mr. Gillmore and Mr. LaGrone, were exchanged. By consensus,the hearing was continued to Tuesday, September 26, 1978 at 9:00 A.M. The Pioneer personnel were agin requested by Mayor Pro Tem Henry to submit their amended exhibits, of which there were tww, by the following week. These two exhibits consist of: computations reflect cost of service to affiliates; computations supporting $414,088.00 reflected as total costs for construction work in progress in the transmission system. A verbatim record of this portion of the hearing is on tape, which is on file in the office of the City Secretary -Treasurer. The hearing adjourned at 3:45 p.m. Attest: oo _0_'JA'V VELYN GA City Secretary -Treasurer Mayof Pro Tem Alan He 1 01 EI 430t 7 78-37-43OA-1189 r r r NOTICE OF PUBLIC HEARING OF CITY COUNCIL NOTICE is hereby given that on September 13, 1978 at 9:00 A.M. in the City Council Chamber on the Second Floor of the City Hall, Lubbock, Texas, a public hearing will be continued, allowing appearances by any interested or affected parties, and receiving testimony and evidence from company officials of Pioneer Natural Gas Company and City Staff members, concerning rates for industrial natural gas service to determine if existing rates are just and reasonable, and to determine if such rates should be increased or decreased. I HEREBY CERTIFY that this notice was posted this lst day of September, 1978 at 5:00 P.M. 4EVLYftGA�FFA City Secretary -Treasurer F3OD I