HomeMy WebLinkAboutResolution - 2020-R0435 - Approval of Rate Increase for West Texas Gas, Inc.Resolution No. 2020-R0435
Item No. 7.17
December 15, 2020
RESOLUTION NO. 2020-R0435
A RESOLUTIOIN OF THE CITY OF LUBBOCK APPROVING A RATE
INCREASE FOR GAS -UTILITY SERVICES PROVIDED BY WEST
TEXAS GAS, INC. ("WTG") IN RELATION TO THE COMPANY'S
STATEMENT OF INTENT TO CHANGE GAS RATES FILED WITH
THE CITY ON ABOUT AUGUST 7, 2020; ADOPTING TARIFFS THAT
REFLECT RATE ADJUSTMENTS CONSISTENT WITH A INCREASE
IN WTG'S NON -GAS REVENUE REQUIREMENT AND FINDING THE
RATES TO BE SET BY THE ATTACHED TARIFFS TO BE JUST AND
REASONABLE; FINDING RATE CASE EXPENSES ATTENDANT TO
WTG'S STATEMENT OF INTENT TO BE REASONABLE; DIRECTING
WTG TO REIMBURSE THE CITY ITS REASONABLE RATE CASE
EXPENSES; DETERMINING THAT THIS RESOLUTION WAS PASSED
IN ACCORDANCE WITH THE REQUIREMENTS OF THE TEXAS
OPEN MEETING ACT; DECLARING AN EFFECTIVE DATE; AND
REPEALING ANY PRIOR RESOLUTIONS OR ORDINANCES
INCONSISTENT WITH THIS RESOLUTION
WHEREAS, pursuant to Texas Utilities Code § 103.001, the City of Lubbock, Texas
("City") has exclusive original jurisdiction as a regulatory authority over West Texas Gas, Inc.
("WTG" or "Company") rates, operations, and services within the City; and
WHEREAS, the City is also a gas utility customer of WTG, and has an interest in WTG's
rates and charges; and
WHEREAS, WTG filed a Statement of Intent with the City on about August 7, 2020 to
increase its system -wide annual revenue requirement by approximately $4.1 million, which
represents an increase in rates of approximately 53%; and
WHEREAS, WTG requested approval to recover its and the cities' reasonable rate case
expenses; and
WHEREAS, the City previously took action to suspend the effective date by the
maximum extent allowable by law to allow the City's special counsel and rate consultants to
review WTG's application to increase rates; and
WHEREAS, the City coordinated its review of WTG's filing with other similarly
situated municipalities through a coalition of cities known as the Alliance of West Texas Gas
Municipalities ("AWM"); and
PAGE 1 of 7
WHEREAS, one of AWM's goals is to minimize rate -case expenses to the extent
reasonable, that otherwise would result from lengthy, contested rate -case proceedings before the
Railroad Commission of Texas and, if and where necessary, through the appellate process in the
courts for the pending rate case; and
WHEREAS, as part of AWM's review of WTG's filing, AWM authorized its attorneys
and experts to formulate and review reasonable non -litigated outcomes to resolve WTG's
pending request to increase rates; and
WHEREAS, AWM's special counsel and rate consultants met numerous times with the
WTG's representatives to resolve WTG's filing without the need for protracted litigation; and
WHEREAS, after extensive review and analysis, AWM's special counsel and rate
consultants found that WTG's proposed increase in revenue and its proposed rates are
unreasonable; and
WHEREAS, WTG, AWM, and Commission Staff, agreed that an increase of $2,187,500
in WTG's current non -gas revenue is reasonable, without agreeing to any particular ratemaking
methodology, all as set forth in the attached Settlement Agreement; and
WHEREAS, AWM's special counsel and rate consultants, having evaluated a likely
outcome from a fully -litigated proceeding at the Railroad Commission of Texas, are of the
opinion that an increase of approximately $2.19 million in WTG's current non -gas revenue and
approval of the surcharges related to Rate -Case Expenses, compares favorably with a likely
outcome from a fully -litigated proceeding at the Railroad Commission of Texas; and
WHEREAS, for future Interim Rate Adjustments ("IRA") that WTG submits under the
Texas Utilities Code § 104.301, sometimes referred to as Gas Reliability Infrastructure Program
(GRIP) applications, baseline plant amounts and certain local- and state -tax elements must be
established, and allocation factors to allocate among the classes of customers, changes in rates
related to future GRIP filings; and
WHEREAS, to allow WTG to maintain accurate plant -account balances and related
accumulated depreciation, depreciation rates must be established; and
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WHEREAS, WTG will continue to amortize its Excess Deferred Income Tax (EDIT),
including any gross -up taxes, in compliance with Accounting Order in GUD 10695 and guidance
from the Internal Revenue Service; and
WHEREAS, WTG, in further implementation of the effects of the Tax Cut and Jobs Act
of 2017, has committed to making a one-time refund of $587,300.00, which results in a one-time
credit to customers' bills in the following amounts: Residential $28.06, Commercial $63.06,
Public Authority $63.05, and Non -Profit $63.05, such credits to be made in bills issued in April
2021; and
WHEREAS, WTG, in further implementation of the effects of the Tax Cut and Jobs Act
of 2017, has committed to making a separate compliance filing with Commission Staff no later
than sixty (60) days of issuing the EDIT credit; and
WHEREAS, WTG will issue a one-time credit to its customers in the amount of
$103,438 associated with a reduction in WTG's capital investment, which shall be refunded to
Jurisdictional customers in the form of a one-time bill credit of $5.18 for Residential customers,
and $11.40 for Commercial, Public Authority, and Non -Profit customers; and
WHEREAS, after extensive review and analysis, AWM's special counsel and rate
consultants found WTG's proposed increase of $4,059,829 and corresponding rates to be
unreasonable; and
WHEREAS, after extensive review and analysis, AWM's special counsel and rate
consultants found that the negotiated increase of $2,187,500 in non -gas revenue; the Rate -Case
Expense surcharges; the one-time EDIT refund of $587,300.00; the one-time IRA Refund of
$103,438.00; the agreed plant balances to be used in future GRIP filings; and WTG's
depreciation rates to be reasonable; and
WHEREAS, AWM's special counsel and rate consultants recommend that the City
approve the attached Settlement Agreement; and
WHEREAS, under the Texas Utilities Code § 103.022, the City has a right to
reimbursement of its reasonable rate -case expenses and WTG has an obligation to reimburse the
City's reasonable rate -case expenses; and
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WHEREAS, the attached tariffs implementing new rates are just, reasonable, and in the
public interest, and the Settlement Agreement as a whole is in the public interest;
NOW THEREFORE, BE IT RESOLVIED BY THE CITY COUNCIL OF THE CITY OF
LUBBOCK, TEXAS THAT:
Section 1. The findings set out in the preamble are in all things approved and incorporated
herein as if fully set forth.
Section 2. That the City Council finds that:
A. The Settlement Agreement, incorporated as Attachment A (the "Settlement Agreement") to
this Resolution, along with all exhibits to Attachment A, and the increase of $2,187,500 in
WTG's non -gas current revenue, are just and reasonable and in the public interest;
B. The rates set forth in Exhibit A to the Settlement Agreement are just and reasonable and in
the public interest;
C. The rates set forth in Exhibit A to the Settlement Agreement produce an increase in rates of
$2,187,500 in WTG's non -gas current revenue, as illustrated in the proof of revenues attached
as Exhibit B to the Settlement Agreement;
D. The following Jurisdictional customer class allocation for base rates is reasonable:
Allocation
Residential
77%
Commercial/Public Authority/Non-Profit
23%
Total Allocation
100%
E. The depreciation rates as shown on Exhibit C to the Settlement Agreement are reasonable;
F. Rate case expenses not to exceed the following amounts are reasonable:
Actual
Actual Litigation
Invoices Due
Total
Regulatory
Expenses
and Est. to
Recoverable
Expenses
Completion
Expenses
WTG
$191,387.26
$160.489.18
$25,000
$376,876.44
AWM
$0,00
$84,380.55
$15,000
$99,380.55
G. Rate case expenses (1) shall be recovered through a surcharge calculated on a system -wide
basis and applicable to all WTG customers; (2) the recovery period for the applicable
surcharge to recover rate case expenses shall be a period of approximately 48 months; and
(3) the surcharge shall be volume based. WTG shall reimburse AWM the amount of rate
PAGE 4 of 7
case expenses set forth above within 30 days of the effective date of this Resolution. WTG
and AWM shall recover estimated rate case expenses only to the extent they are actually
incurred.
H. The beginning plant balance of $136,092,406 to be used in future Interim Rate Adjustments
filings set forth in the Settlement Agreement is reasonable;
I. Future Interim Rate Adjustments filings will include a 36.75% allocation to Jurisdictional
Customers and the allocation factor to be used for Jurisdictional and Non -Jurisdictional
Customers will be analyzed further in WTG's next rate case;
J. The base rate revenue allocation factors to spread any change in IRA increase/decrease to the
appropriate customer classes are as follows:
Allocation
Residential
77%
Commercial/Public Authority/Non-Profit
23%
Total Allocation
100%
K. For purposes of future Interim Rate Adjustments filings, WTG shall use the following capital
structure and weighted cost of capital, including the pre-tax return shown below:
Weighted
Cost of
Pre-tax
Class of Capital
Percent
Cost
Capital
Return
Long -Term Debt
41.00%
4.18%
1.71 %
1.71 %
Common Equity
59.00%
9.50%
5.61 %
7.09%
Weighted Average Cost
of Capital
7.32%
8.80%
Section 3. That WTG's existing rates are found unreasonable upon the implementation of
the rates set forth in the Settlement Agreement.
Section 4. That the revenue and resulting rates set forth in the Settlement Agreement and
schedule of rates and tariffs for utility service provided by WTG are just and reasonable, and are
hereby adopted effective upon approval of the Settlement Agreement by the Railroad
Commission of Texas and to be implemented no earlier than bills rendered on and after April 1,
2021.
PAGE 5 of 7
Section 5. That to the extent any resolution or ordinance previously adopted by the Council
is inconsistent with this Resolution, it is hereby repealed.
Section 6. That the meeting at which this Resolution was approved was in all things
conducted in strict compliance with the Texas Open Meetings Act, Texas Government Code,
Chapter 551.
Section 7. That if any one or more sections or clauses of this Resolution is adjudged to be
unconstitutional or invalid, such judgment shall not affect, impair or invalidate the remaining
provision of this Resolution and the remaining provisions of the Resolution shall be interpreted
as if the offending section or clause never existed.
Section 8. That this Resolution shall become effective from and after its passage.
Section 9. As a courtesy, the City Secretary or other appropriate city official shall notify
WTG of this Resolution by sending a copy of the Resolution to J.J. King, West Texas Gas,
Inc. 211 N. Colorado, Midland, Texas, 79701; and AWM shall be notified by sending a copy
of this Resolution to Mr. Alfred R. Herrera, Herrera Law & Associates, PLLC, 4524 Burnet
Road, Austin, Texas 78756.
PASSED AND APPROVED this 15th day of December , 2020.
ATTEST:
- 't &0.� a X
Re a ca Garza, City Secr t
DANIEL M. POPE, MAYOR
PAGE 6 of 7
APPROVED AS TO CONTENT:
W. Jarre Atkinson, City Manager
APPROVED AS TO FORM:
•, �--'t,
PAGE 7 of 7
Resolution No. 2020-RO435
OS-20-00004347
STATEMENT OF INTENT OF WEST § BEFORE THE
TEXAS GAS, INC. TO INCREASE GAS §
UTILITY RATES WITHIN THE § RAILROAD COMMISSION
UNINCORPORATED AREAS OF §
TEXAS § OF TEXAS
UNANIMOUS SETTLEMENT AGREEMENT
This Unanimous Settlement Agreement is entered into by and between West Texas Gas,
Inc. ("WTG" or the "Company"), Staff of the Railroad Commission of Texas ("Staff'), and the
Alliance of WTG Municipalities ("AWM")t (collectively, the "Signatories").
WHEREAS, on August 7, 2020, WTG filed a Statement of Intent to Change Rates with the
Railroad Commission of Texas ("Commission") within the unincorporated areas it serves in the
State of Texas2 and filed a Statement of Intent with the cities of Balmorhea, Cactus, Canadian,
Canyon, Claude, Dalhart, Darrouzett, Devine, Eden, Farwell, Follett, Groom, Higgins, Junction,
Kermit, La Vernia, Lubbock, Menard, Miami, Mobeetie, Natalia, Paint Rock, Shamrock,
Somerset, Sonora, Stratford, Texhoma, Texline, Wheeler and White Deer, Texas; and
WHEREAS, the Commission docketed the rate request as OS-20-00004347; and
WHEREAS, Staff and AWM sought intervention and were granted party status in OS-20-
00004347; and
WHEREAS, the Commission suspended the implementation of the Company's rate request
until February 8, 2021, and WTG agreed to extend the jurisdictional deadline further to February 9,
2021; and
WHEREAS, WTG filed direct testimony and errata to its Statement of Intent; and
WHEREAS, WTG provided public notice by direct mail on September 14, 2020, to all
affected customers in the form approved by the Examiners; and
WHEREAS, certain cities WTG serves, including the AWM Cities, suspended the
implementation of the Company's rate request until December 10, 2020; and
' The Alliance of WTG Municipalities includes the cities of Cactus, Canadian, Canyon, Claude, Dalhai% Eden, Follett,
Groom, Kermit, Lubbock, Miami, Natalia, Shamrock, Stratford, Texhoma, Texline, Wheeler, and White Deer, Texas
(collectively, "AWM" or "AWM Cities").
Z WTG serves unincorporated areas within Andrews, Archer, Armstrong, Atascosa, Bailey, Bexar, Brewster, Briscoe,
Brown, Carson, Castro, Cochran, Coleman, Collingsworth, Concho, Crosby, Culberson, Dallam, Dawson, Deaf
Smith, Dimmit, Donley, Floyd, Frio, Gaines, Gray, Hale, Hall, Hanford, Hartley, Hemphill, Hockley, Hutchinson,
Jeff Davis, Kimble, Kinney, La Salle, Lamb, Lipscomb, Lubbock, Lynn, McCulloch, Martin, Mason, Maverick,
Medina, Menard, Moore, Ochiltree, Oldham, Partner, Pecos, Potter, Presidio, Randall, Reeves, Roberts, Runnels,
Sherman, Sutton, Swisher, Terry, Tom Green, Uvalde, Val Verde, Wheeler, Wilson, Winkler, Yoakum, and Zavala
Counties.
WHEREAS, the cities served by WTG have denied the Company's proposed rate increase
as initially filed on August 7, 2020; and
WHEREAS, WTG has sought or will seek consolidation of all municipal appeals with OS-
20-00004347; and
Wl iEREAS, direct testimony of AWM was due on October 27, 2020, and Staff direct
testimony was due on November 2, 2020, but AWM and Staff did not file direct testimony in
reliance on this Unanimous Settlement Agreement; and
WHEREAS, the parties have engaged in significant discovery regarding the issues in
dispute; and
WHEREAS, the Signatories agree that resolution of this docket by unanimous settlement
agreement will significantly reduce the amount of reimbursable rate case expenses associated with
this docket; and
NOW, THEREFORE, in consideration of the mutual agreements and covenants established
herein, the Signatories, through their undersigned representatives, agree to and recommend for
approval by the Commission and the AWM Cities the following Settlement Terms:
Settlement Terms
1. The Signatories agree to the rates, terms and conditions reflected in the rate schedules
attached to this Unanimous Settlement Agreement as Exhibit A. The rate schedules
attached as Exhibit A replace and supersede the WTG rate schedules currently in effect for
Jurisdictional customers. These tariffs represent an increase of an additional $2,187,500
in annual revenues as illustrated in the proof of revenues attached as Exhibit B to this
Unanimous Settlement Agreement. Except as specifically provided herein, the Signatories
agree that the revenue increase amount is not tied to any specific expense or methodology
in WTG's underlying cost of service. The Signatories further agree that the rates, terms
and conditions reflected in Exhibit A to this Unanimous Settlement Agreement comply
with the rate -setting requirements of Chapter 104 of the Texas Utilities Code. The gas
rates, terms and conditions established by this Unanimous Settlement Agreement shall,
subject to approval of the Commission and the AWM, be effective for bills rendered on or
after April 1, 2021.
2. The Signatories agree to the following customer and consumption charges, which are
reflected in the rate schedules attached as Exhibit A.
Customer Charge
Consumption Charge(per MCF
Residential
$17.00
$4.84
Commercial
$30.00
$2.69
Public Authority
$30.00
$2.69
Non -Profit
$30.00
$2.69
3. The Signatories agree that the depreciation rates as shown on Exhibit C are reasonable.
Fa
4. The Signatories agree that the Company's capital investment booked to plant through
December 31, 2019, including investment identified in the Company's Interim Rate
Adjustment ("IRA") filings, in the amount of $136,092,406 is prudent and reflects an
adjustment which decreases net plant by $504,796.71.
5. The Signatories agree that WTG shall refund a total of $103,438 attributable to an
adjustment which decreases capital investment amounts included in past IRA filings to
Jurisdictional customers in the form of a one-time bill credit in April 2021, in the amounts
listed below. Confirmation of a refund will be provided to the Commission's Oversight
and Safety Division immediately upon completion.
Refund per customer
Total
Residential
$5.18
$78,685.29
Commercial
$11.40
$15 897.81
Public Authority
$11.40
$7,418.98
Non -Profit
$11.40
$1,435.93
6. The Signatories agree to and propose inclusion of the following Findings of Fact and
Ordering Paragraphs in the Final Order in this case:
• Finding of Fact: It is reasonable that a refund associated with an adjustment which
decreases capital investment amounts included in past Interim Rate Adjustment
("IRA") filings be applied to Jurisdictional customer bills in the following amounts
per customer: Residential, $5.18; Commercial, $11.40; Public Authority, $11.40;
and Non -Profit, $11.40. It is reasonable that this refund shall be made on a one-
time, per bill basis in April 2021.
• Finding of Fact: It is reasonable that WTG file a one-time IRA Refund Compliance
Filing with Staff within forty-five (45) days of issuing the IRA refund.
• Ordering Paragraph: IT IS FURTHER ORDERED that the one-time bill refund for
an IRA refund in Finding of Fact No. __ shall be made to customers in April 2021.
• Ordering Paragraph: IT IS FURTHER ORDERED that WTG file an IRA Refund
Compliance Filing with Staff detailing refund of amounts as described in Finding
of Fact No.
7. The Signatories agree to the following capital structure and weighted cost of capital,
including the pre-tax return, as shown below:
Capital
Structure
Debt/Equity
Cost
Weighted Cost
of Capital
Pre -Tax
Return
Long -Term Debt
41 %
4.18%
1.71 %
1.71 %
Common Equity
59%
1 9.50%
1 5.61%
1 7.09%
Rate of Return
100%
7.32%
8.800;0
8. The Signatories agree that any IRA filing
§ 104.301 shall use the following factor
proceeding:
[•
s
WTG makes pursuant to Texas Utilities Code
until changed by a subsequent general rate
• The capital structure and related components shall be as shown above in Item 7.
• For the initial IRA filing and for all subsequent IRA filings, the depreciation rate for
each account shall be as shown in Exhibit C.
• For the initial IRA filings, the beginning balance of net plant in service amount shall
be $136,092,406.
• For the initial IRA filings, the customer and commodity charges as noted in Item 2
above will be the starting rates to which any IRA adjustment is applied. IRA increases
will be recovered through the customer charge, consistent with current practice.
• Federal income taxes will be calculated using a 21% rate, unless the federal income
tax rate is changed, in which case the new rate will be applied.
• IRA filings will include a 36.75% allocation to Jurisdictional Customers. The
allocation factor to be used for Jurisdictional and Non -Jurisdictional Customers will
be analyzed further in WTG's next rate case.
• The base rate revenue allocation factors to spread any change in IRA increase/decrease
to the appropriate customer classes are as follows:
Allocation
Residential
77%
Commercial/Public Authority/Non-Profit
23%
Total Allocation
100%
The Signatories agree that the following Jurisdictional customer class allocation for base
rates is reasonable and should be approved:
Allocation
Residential
77%
Commercial/Public Authority/Non-Profit
23%
Total Allocation
100%
10. The Signatories agree that $1,805,179, net of gas cost, related to services provided by
affiliates to WTG that are included in the revenue requirement are reasonable and necessary
and recoverable consistent with the provisions in Section 104.055 of the Gas Utility
Regulatory Act.
11. On February 27, 2018, the Commission issued an Accounting Order in GUD No. 10695
that reflects the Commission's directives regarding changes to utility rates to account for
the change in the federal corporate income tax rate due to the Federal Tax Cut and Jobs
Act of 2017 ("Act"). The Signatories agree that WTG has complied with the requirements
in the Accounting Order and that its related filings were reasonable and accurate, subject
to Items 12 and 13.
4
12. The Signatories agree that the cost of service reflected in Item 1 includes amortization of
WTG's Excess Accumulated Deferred Income Tax ("EDIT") and that WTG will continue
to amortize its EDIT, including any associated gross -up in taxes, in compliance with the
Accounting Order in GUD No. 10695 and guidance from the Internal Revenue Service.
13. The Signatories agree that Rate Schedules EDIT Credit -ENV and EDIT Credit-INC are
reasonable and should reflect a one-time EDIT refund of $587,300 to Jurisdictional
customers for past amortization amounts, which includes the income tax gross -up
component. The Signatories further agree to and propose the inclusion of the following
Findings of Fact and Ordering Paragraphs in the Final Order in this case:
• Finding of Fact: It is reasonable that WTG has an Excess Accumulated Deferred
Income Tax ("EDIT") liability, including associated gross -up for income taxes,
attributable to the Tax Cut and Jobs Act of 2017, which it will continue to
amortize through 2045 in compliance with the Accounting Order in GUD
No. 10695 and guidance from the Internal Revenue Service.
• Finding of Fact: It is reasonable that a one-time EDIT refund be applied to
Jurisdictional customer bills in the following amounts per customer:
Residential, $28.06; Commercial, $63.06; Public Authority, $63.05; and Non -
Profit, $63.05 customers. It is reasonable that this refund shall be made on a
one-time, per bill basis in April 2021.
• Finding of Fact: It is reasonable that WTG file a one-time EDIT Compliance
Filing with Staff within sixty (60) days of issuing the EDIT credit in compliance
with Rate Schedules EDIT Credit -ENV and EDIT Credit-INC.
• Ordering Paragraph: IT IS FURTHER ORDERED that the one-time bill refund
for an EDIT credit in Finding of Fact No. shall be made to customers in April
2021.
• Ordering Paragraph: IT IS FURTHER ORDERED that WTG file an EDIT
Compliance Filing with Staff detailing refund of amounts in compliance with
Rate Schedules EDIT Credit -ENV and EDIT Credit-INC and as described in
Finding of Fact No.
• Ordering Paragraph: IT IS FURTHER ORDERED that WTG will continue to
amortize the EDIT liability, including associated gross -up for income taxes,
described in Finding of Fact No. _ in compliance with the Accounting Order
in GUD No. 10695 and guidance from the Internal Revenue Service.
14. The Signatories agree it is reasonable for WTG to create a Meals and Travel Policy and
submit the policy to Staff in a compliance filing within 45 days of the date of the Final
Order in this case. The Signatories further agree to and propose the inclusion of the
following Finding of Fact and Ordering Paragraph in the Final Order in this case:
5
• Finding of Fact: It is reasonable that WTG create a Meals and Travel Policy
and submit the policy to Staff in a Meals and Travel Policy Compliance Filing
within forty-five (45) days of the date of the Final Order in this case.
• Ordering Paragraph: IT IS FURTHER ORDERED that WTG, within forty-five
(45) days of the date of this Order, shall create and submit a Meals and Travel
Policy Compliance Filing with Staff.
15. WTG and AWM represent that their reasonable rate case expenses incurred through
November 13, 2020, and estimated rate case expenses incurred through completion of this
case, are as follows:
Actual
Actual
Invoices Due
Total
Regulatory
Litigation
and Est. to
Recoverable
Expenses
Expenses
Completion
Expenses
WTG
$191,387.26
$160,489.18
$25,000
$376,876.44
AWM
$0
$84,380.55
$15,000
$99,380.55
16. WTG and AWM attach, as Exhibit E, affidavits and invoices in support of the rate case
expense amounts and will supplement with additional invoices as they are processed.
Signatories agree that the amounts represented above are reasonable and recoverable
pursuant to Texas Utilities Code § 103.022. Signatories agree that the recovery period for
the applicable surcharge to recover rate case expenses shall be a period of approximately
48 months and that the surcharge shall be volume based. WTG agrees to reimburse AWM
the amount of rate case expenses set forth above within 30 days of the issuance of an order
authorizing recovery of those expenses. WTG and AWM shall recover estimated rate case
expenses only to the extent they are actually incurred. The Signatories intend and advocate
that the Commission and cities authorize recovery of the rate case expenses recited above
in the same proceeding and at the same time as they approve this Unanimous Settlement
Agreement.
17. The Signatories agree that equal recovery of rate case expenses on a system -wide basis
from incorporated and unincorporated Jurisdictional customers is appropriate and
reasonable and that good cause exists to support equal recovery of rate case expenses from
all customers on a system -wide basis for the following reasons:
a. WTG Litigation and Estimated expenses: Good cause exists to recover WTG
Litigation and Estimated expenses equally from all incorporated and unincorporated
Jurisdictional customers. The intent of Commission Rule 7.5530(e) is to allocate rate
case expenses to the participating parties according to which party caused the expenses
to be incurred, therefore it is reasonable to seek recovery of rate case expenses from all
customers who benefit from the settlement agreement in this case, which includes all
WTG Jurisdictional customers in the incorporated and unincorporated areas WTG
serves in Texas. Recovery of these expenses is also necessary in the interest of justice.
b. AWM Litigation and Estimated expenses: Good cause exists to recover AWM
Litigation and Estimated expenses equally from all Jurisdictional customers, including
T
Jurisdictional customers within the incorporated and unincorporated areas WTG serves
in Texas because AWM's participation in OS-20-0004347 resulted in this Unanimous
Settlement Agreement, which benefits all such customers, and doing so is necessary in
the interest of justice.
18. WTG shall file annually, due on or before April 1, a Rate Case Expense Compliance Filing
with the Railroad Commission of Texas, Oversight and Safety Division, referencing OS-
20-0004347. The compliance filing shall include the volumes used by month by customer
class during the applicable period, the amount of rate case expense recovered by month,
and the outstanding balance by month as set out in the approved Rate Schedule RCE-ENV
and Rate Schedule RCE. The Signatories agree to and propose the inclusion of the
following Findings of Fact and Ordering Paragraph in the Final Order in this case:
Finding of Fact: It is reasonable that WTG and AWM submit to Staff invoices
reflecting actual rate case expenses with sufficient detail so that Staff can accurately
audit such invoices for the purposes of reconciling estimated rate case expenses to
actual rate case expenses. In no case shall the total actual expenses exceed the actual
expenses submitted to the Commission as of November 2020, plus the approved
estimated expenses of $40,000.
• Finding of Fact: It is reasonable that WTG file an annual Rate Case Expense
Compliance Filing with Staff detailing the balance of actual plus estimated rate case
expenses at the beginning of the annual period, the amount collected by customer
class, and the ending or remaining balance within ninety (90) days after each
calendar year end until and including the calendar year end in which the rate case
expenses are fully recovered.
• Ordering Paragraph: IT IS THEREFORE ORDERED that WTG file an annual Rate
Case Expense Compliance Filing with Staff detailing recovery of rate case expenses
as described in Finding of Fact _ within ninety (90) days after each calendar year
end until and including the calendar year end in which the rate case expenses are
fully recovered.
19. The Signatories agree to and propose the inclusion of the following Ordering Paragraphs
in the Final Order in this case:
• Ordering Paragraph: IT IS FURTHER ORDERED that within thirty (30) days of
this Final Order, in accordance with 16 Tex. Admin. Code § 7.315, WTG SHALL
electronically file its rate schedules in proper form that accurately reflect the rates
in Exhibit A approved in this Final Order.
• Ordering Paragraph: IT IS FURTHER ORDERED that any incremental change in
rates approved by this Final Order and implemented by WTG shall be subject to
refund unless and until WTG's tariffs are electronically filed and accepted by the
Gas Services Department in accordance with 16 Tex. Admin. Code § 7.315.
20. The Signatories agree that WTG collect the Pipeline Safety and Regulatory Program Fee
surcharge pursuant to 16 Tex. Admin. Code § 8.201 as an annual fee. The Signatories
7
further agree to and propose the inclusion of the following Findings of Fact and Ordering
Paragraph in the Final Order in this case:
• Finding of Fact: It is reasonable that WTG collect the Pipeline Safety and
Regulatory Program Fee surcharge pursuant to 16 Tex. Admin. Code § 8.201 as an
annual fee.
• Finding of Fact: It is reasonable that WTG file an annual Pipeline Safety and
Regulatory Program Compliance Filing with Staff no later than ninety (90) days
after the last billing cycle in which the Pipeline Safety and Regulatory Program Fee
is billed to customers.
• Ordering Paragraph: IT IS FURTHER ORDERED that WTG file an annual
Pipeline Safety and Regulatory Program Compliance Filing with Staff no later than
ninety (90) days after the last billing cycle in which the Pipeline Safety and
Regulatory Program Fee is billed to customers.
21. The Signatories agree to support and seek approval by the Commission and the cities WTG
serves, including the AWM Cities, of this Unanimous Settlement Agreement. AWM
agrees to make every effort to present its cities with this Unanimous Settlement Agreement
at city council meetings that will allow for implementation of new rates for bills rendered
on or after April 1, 2021.
22. The Signatories agree that all negotiations, discussions, and conferences related to the
Unanimous Settlement Agreement are privileged, inadmissible, and not relevant to prove
any issues associated with the Statement of Intent filed on August 7, 2020.
23. The Signatories agree that neither this Unanimous Settlement Agreement nor any oral or
written statements made during the course of settlement negotiations may be used for any
purpose other than as necessary to support the entry by the Commission of an order
approving this Unanimous Settlement Agreement.
24. The Signatories agree that the terms of the Unanimous Settlement Agreement are
interdependent and indivisible, and that if the Commission intends to enter an order that is
inconsistent with this Unanimous Settlement Agreement, then any Signatory may
withdraw without being deemed to have waived any procedural right or to have taken any
substantive position on any fact or issue by virtue of that Signatory's entry into the
Unanimous Settlement Agreement or its subsequent withdrawal.
25. The Signatories agree that this Unanimous Settlement Agreement is binding on each
Signatory only for the purposes of settling the issues set forth herein and for no other
purposes, and except to the extent the Unanimous Settlement Agreement governs a
Signatory's rights and obligations for future periods, this Unanimous Settlement
Agreement shall not be binding or precedential upon a Signatory outside this proceeding.
26. No Signatory is under any obligation to take the same positions as set out in this Unanimous
Settlement Agreement in other cases, dockets or jurisdictions, regardless of whether other
cases or dockets present the same or a different set of circumstances, except as otherwise
8
may be explicitly provided by this Unanimous Settlement Agreement. Agreement by the
Signatories to any provision in this Unanimous Settlement Agreement will not be used
against any Signatory in any future proceeding with respect to different positions that may
be taken by that Signatory.
27. The Signatories agree that this Unanimous Settlement Agreement may be executed in
multiple counterparts and may be filed with facsimile signatures.
n
Agreed to this 17th day of November 2020.
WEST TEXAS GAS, INC.
By:J.J. King
Vice President of Gas Marketing for West Texas Gas, Inc.
STAFF OF THE RAILROAD COMMISSION OF TEXAS
By: — -- -- - - —
Natalie Dubiel
Attorney for Staff of the Railroad Commission of Texas
ALLIANCE OF WTG MUNICIPALITIES
Alfred R. Herr& 41
Attorney for Alliance of WTG Municipalities
Agreed in principle, subject to approval of the AWM City Councils
10
EXHIBIT A - RATES & TARIFFS
WEST TEXAS GAS INC. RATE SCHEDULE
Page 1 of 1 R-INC
Effective: April 1, 2021
RESIDENTIAL SERVICE RATE — INCORPORATED
APPLICABILITY
Applicable to a residential customer or builder in a single dwelling, or in a dwelling unit of a
multiple dwelling or residential apartment, for domestic purposes in an incorporated area or city
served by West Texas Gas, Inc. ("WTG"). A residential consumer includes an individually -
metered residential unit or dwelling and builders prior to sale or re -sale of a property for domestic
purposes. This rate is only available to full requirements customers of WTG.
COST OF SERVICE RATE
During each monthly billing period:
Subject to applicable rate adjustment provisions listed below, the following rates are applicable to
Residential consumers per meter billing cycle or for any part of a billing cycle for which gas
service is available at the same location.
Customer Charge $17.00
All Consumption @ $4.84 per Mcf
The due date of the bill for utility service shall not be less than 15 days after issuance, or such other
period of time as may be provided by order of the regulatory authority. A bill for utility service is
delinquent if unpaid by the due date.
OTHER FEES
Cost of Gas Component: The basic rates for cost of service set forth above shall be increased by
the amount of the Cost of Gas Component for the billing month computed in accordance with the
provisions of Rate Schedule Gas Cost Adjustment-INC.
Rate Case Expense Rider: Adjustments in accordance with provisions of the Rate Case Expense
Surcharge Rider, Rate Schedule RCE- INC.
Taxes: Plus applicable taxes and fees related to above.
Pipeline Safety and Regulatory Program Fee: Adjustments in accordance with the provisions of
Rate Schedule Pipeline Safety Fee- INC.
Miscellaneous Fees and Deposits: Adjustments in accordance with the provisions of Rate
Schedule MISCFEE- INC.
Other Surcharges: Adjustments in accordance with the provisions of the Other Surcharges Rate
Schedule OS- INC.
EDIT Credit: A one-time credit for Excess Deferred Income Taxes in accordance with the
provisions of Rate Schedule EDIT Credit- INC.
EXHIBIT A - RATES & TARIFFS
WEST TEXAS GAS INC. RATE SCHEDULE
Page 1 of 1 C-INC
Effective: April 1, 2021
COMMERCIAL SERVICE RATE - INCORPORATED
APPLICABILITY
Applicable to all commercial customers and to customers not otherwise specifically provided for
under any other rate schedule or served under a contract in an incorporated area or city served by
West Texas Gas, Inc. ("WTG"). This rate is only available to full requirements customers of
WTG.
COST OF SERVICE RATE
During each monthly billing period:
Subject to applicable rate adjustment provisions listed below, the following rates are applicable to
Commercial consumers and to consumers not otherwise specifically provided for under any other
rate schedule or served under a contract per meter billing cycle or for any part of a billing cycle
for which gas service is available at the same location.
Customer Charge $30.00
All Consumption (a; $2.69 per Mcf
The due date of the bill for utility service shall not be less than 15 days after issuance, or such other
period of time as may be provided by order of the regulatory authority. A bill for utility service is
delinquent if unpaid by the due date.
OTHER FEES
Cost of Gas Component: The basic rates for cost of service set forth above shall be increased by
the amount of the Cost of Gas Component for the billing month computed in accordance with the
provisions of Rate Schedule Gas Cost Adjustment- INC.
Rate Case Expense Rider: Adjustments in accordance with provisions of the Rate Case Expense
Surcharge Rider, Rate Schedule RCE- INC.
Taxes: Plus applicable taxes and fees related to above.
Pipeline Safety and Regulatory Program Fee: Adjustments in accordance with the provisions of
Rate Schedule Pipeline Safety Fee- INC.
Miscellaneous Fees and Deposits: Adjustments in accordance with the provision of Rate Schedule
MISCFEES- INC.
Other Surcharges: Adjustments in accordance with the provisions of the Other Surcharges Rate
Schedule OS-INC.
EDIT Credit: A one-time credit for Excess Deferred Income Taxes in accordance with the
provisions of Rate Schedule EDIT Credit- INC.
EXHIBIT A - RATES & TARIFFS
WEST TEXAS GAS INC. RATE SCHEDULE
Page 1 of 1 PA-INC
Effective: April 1, 2021
PUBLIC AUTHORITY SERVICE RATE - INCORPORATED
APPLICABILITY
Applicable to all public authority customers.
COST OF SERVICE RATE
During each monthly billing period:
Subject to applicable rate adjustment provisions listed below, the following rates are applicable to
Public Authority consumers.
Customer Charge $30.00
All Consumption @ $2.69 per Mcf
The due date of the bill for utility service shall not be less than 15 days after issuance, or such other
period of time as may be provided by order of the regulatory authority. A bill for utility service is
delinquent if unpaid by the due date.
OTHER FEES
Cost of Gas Component: The basic rates for cost of service set forth above shall be increased by
the amount of the Cost of Gas Component for the billing month computed in accordance with the
provisions of Rate Schedule Gas Cost Adjustment-INC.
Rate Case Expense Rider: Adjustments in accordance with provisions of the Rate Case Expense
Surcharge Rider, Rate Schedule RCE-INC.
Taxes: Plus applicable taxes and fees related to above.
Pipeline Safety and Regulatory Program Fee: Adjustments in accordance with the provisions of
Rate Schedule Pipeline Safety Fee-INC.
Miscellaneous Fees and Deposits: Adjustments in accordance with the provision of Rate Schedule
MISCFEE-INC.
Other Surcharges: Adjustments in accordance with the provisions of the Other Surcharges Rate
Schedule OS-INC.
EDIT Credit: A one-time credit for Excess Deferred Income Taxes in accordance with the
provisions of Rate Schedule EDIT Credit- INC.
EXHIBIT A - RATES & TARIFFS
WEST TEXAS GAS INC.
Page 1 of 1
Effective: April 1, 2021
NON-PROFIT INCORPORATED
SERVICE RATE
APPLICABILITY
Applicable to all non-profit customers.
COST OF SERVICE RATE
During each monthly billing period:
RATESCHEDULE
NP-INC
Subject to applicable rate adjustment provisions listed below, the following rates are applicable to
Non -Profit consumers.
Customer Charge $30.00
All Consumption @ $2.69 per Mcf
The due date of the bill for utility service shall not be less than 15 days after issuance, or such other
period of time as may be provided by order of the regulatory authority. A bill for utility service is
delinquent if unpaid by the due date.
OTHER FEES
Cost of Gas Component: The basic rates for cost of service set forth above shall be increased by
the amount of the Cost of Gas Component for the billing month computed in accordance with the
provisions of Rate Schedule Gas Cost Adjustment-INC.
Rate Case Expense Rider: Adjustments in accordance with provisions of the Rate Case Expense
Surcharge Rider, Rate Schedule RCE-INC.
Taxes: Plus applicable taxes and fees related to above.
Pipeline Safety and Regulatory Program Fee: Adjustments in accordance with the provisions of
Rate Schedule Pipeline Safety Fee-INC.
Miscellaneous Fees and Deposits: Adjustments in accordance with the provision of Rate Schedule
MISCFEES-INC.
Other Surcharges: Adjustments in accordance with the provisions of the Other Surcharges Rate
Schedule OS-INC.
EDIT Credit: A one-time credit for Excess Deferred Income Taxes in accordance with the
provisions of Rate Schedule EDIT Credit- INC.
EXHIBIT A - RATES & TARIFFS
WEST TEXAS GAS INC.
Page 1 of 6
Effective: April 1, 2021
Applicability
RATESCHEDULE
GAS COST ADJUSTMENT-INC
GAS COST ADJUSTMENT - INCORPORATED
This clause shall apply to all customers served by WTG, except for customers purchasing gas at
contract rates. Each customer's gas costs will be determined by the costs incurred in the applicable
Gas Cost Zone. For purposes of determining gas purchase costs, all customers will be located in
one of three Gas Cost Zones: North, South, and West. Each Gas Cost Zone consists of the
following systems or geographic areas:
NORTH GAS COST ZONE:
Incorporated areas of the Cities of Cactus, Canadian, Canyon, Claude, Dalhart, Darrouzett,
Farwell, Follett, Groom, Higgins, Miami, Mobeetie, Shamrock, Stratford, Texhoma, Texline,
Wheeler and White Deer.
SOUTH GAS COST ZONE:
Incorporated areas of the Cities of Devine, Eden, Junction, La Vernia, Menard, Natalia, Paint
Rock, Somerset and Sonora.
WEST GAS COST ZONE:
Incorporated areas of the Cities of Balmorhea, Kermit and Lubbock.
Intent
This clause is intended to allow collection of West Texas Gas, Inc.'s ("WTG") gas purchase costs
in a manner that will lessen monthly fluctuations in the gas cost factor and ensure that all amounts
billed to customers are fully reconciled with actual costs incurred, subject to limitations for
excessive lost and unaccounted for gas.
Definitions
Gas Cost Zones - North, South, and West, as defined in the "Applicability" section below.
Interest - The percentage of interest shall be the interest rate established by the Public Utility
Commission, or such other agency or manner as determined by the Commission, under Chapter
183 of the Texas Utilities Code.
Lost and Unaccounted For Gas - Lost and Unaccounted for Gas (LUG) shall represent volumes
of gas metered into the distribution system and volumes of gas metered out of the distribution
system at 14.65 p.s.i.a., which shall include distribution and non -distribution volumes. WTG
Transmission LUG shall not be included in these volumes.
Purchased Gas Costs -The total cost of Purchase Volumes, as received into the Company's
distribution systems within each Gas Cost Zone.
EXHIBIT A - RATES & TARIFFS
WEST TEXAS GAS INC. RATE SCHEDULE
Page 2 of 6 GAS COST ADJUSTMENT-INC
Effective: April 1, 2021
Purchased Gas Factor ("PGF") - A factor on each customer's monthly bill, expressed in dollars
per Mcf, to reflect the Purchase Gas Costs, all as more specifically described herein.
Purchase/Sales Ratio -- A ratio determined by dividing the Company's Purchase Volumes
metered into the distribution system during the twelve-month period ending June 30 of each year
by the sum of the Company's Sales Volumes metered out of the distribution system, volumes of
metered Company used gas, and losses of gas from the Company's systems within each Gas Cost
Zone that have been billed to third parties during the same period. Such ratio as determined shall
in no event exceed 1.0526 i.e. 111(1-.05) unless expressly authorized by the applicable regulatory
authority.
Purchase Volumes The volumes of gas, expressed in Mcf's and stated at 14.65 psia, received
by the Company's distribution system from all sources within each Gas Cost Zone, including
monthly purchases and withdrawals from storage, if any, for use by general service customers.
This quantity of gas shall not include LUG attributable to the WTG Transmission System or
transmission function.
Reconciliation Amount - The net of any monthly imbalances by Gas Cost Zone during the period
covered by the Reconciliation Review.
Reconciliation Component - The monthly amount to be refunded or passed through to customers
within each Gas Cost Zone, consisting of one -twelfth of the Reconciliation Amount.
Reconciliation Factor - A factor, expressed as a cost per Mcf on customer bills within each Gas
Cost Zone, reflecting the customer's share of the Reconciliation Component applicable to the
period covered by the bill.
Reconciliation Review An annual review of the Company's records covering each 12-month
period ending June 30 to determine any imbalances between the Purchase Gas Cost and the Sales
Amount as applied to each Gas Cost Zone during that period.
Sales Amount - Sales Volumes, volumes of metered Company used gas, and losses of gas from
the Company's system within each Gas Cost Zone that have been billed to third parties, multiplied
by the Purchased Gas Factor.
Sales Volumes -- The volumes of gas metered to general service customers within each Gas Cost
Zone expressed in Mcf s and stated at 14.65 psia.
Weighted Average Cost of Gas -- The Purchase Gas Costs invoiced by third parties divided by
the Purchase Volumes, calculated on a monthly basis for each Gas Cost Zone
Purchase Gas Cost Component (PGC)
The Purchase Gas Cost for each Gas Cost Zone shall be computed utilizing the following
components for the distribution system customers:
EXHIBIT A - RATES & TARIFFS
WEST TEXAS GAS INC.
Page 3 of 6
Effective: April 1, 2021
• Cost of gas purchased
• Credits, Refunds or Out of Period adjustments
• Cost of gas withdrawn from storage
RATESCHEDULE
GAS COST ADJUSTMENT-INC
• Interest on storage gas withdrawn
• Upstream Gathering and Transportation Charges
• Storage Deliverability Charges
• Storage Capacity Charges
• New taxes on the purchased gas or the purchase transaction and not reflected on elsewhere
on customer bills
WTG shall keep accurate records of all storage gas purchases, including the date, quantity, cost,
and associated expenses. WTG shall account for storage gas purchases and withdrawals using a
weighted average cost basis.
Purchased Gas Factor (PGF) Calculation
Each customer bill shall include a Purchased Gas Factor reflecting the estimated Weighted
Average Cost of Gas, plus additional elements described in this section, during the period covered
by the bill for each Gas Cost Zone. The PGF shall be determined to the nearest $0.001 per Mcf,
and the following provisions shall apply:
• In addition to the estimated weighted average cost of gas for the current month's billing
period, the PGF may include a pro rata portion of an amount reflecting the difference
between the estimated Weighted Average Cost of Gas and the actual Weighted Average
Cost of Gas during the previous billing period for each Gas Cost Zone
• The PGF shall also include a "Reconciliation Factor," an amount reflecting the customer's
share of any gas cost imbalances in the preceding reconciliation period for each Gas Cost
Zone.
• The PGF factor may also include an amount reflecting any new taxes or levies specifically
applied to gas costs or purchases and not otherwise reflected on the customer bill for each
Gas Cost Zone.
The Purchased Gas Factor is expressed as a formula as follows:
Where:
(A+/-B)+C+D==E
A = Estimated WACOG C = Reconciliation Factor
B = Est. WACOG/Act. WACOG Difference D = New Taxes
E = Total PGF
Gas Cost Reconciliation (GCR)
WTG shall keep accurate books and records of the Reconciliation Review, monthly Purchased Gas
Factor reports to the Railroad Commission of Texas, and shall account for the Reconciliation
Component and the Reconciliation Factors for each Gas Cost Zone.
EXHIBIT A - RATES & TARIFFS
WEST TEXAS GAS INC. RATE SCHEDULE
Page 4 of 6 GAS COST ADJUSTMENT-INC
Effective: April 1, 2021
A Reconciliation Review and calculation shall first determine whether the lost and unaccounted
for gas is more or less than 5% of that metered into the system. The sales volumes shall be
converted to the same pressure base as the purchase volumes. Calculations of the sales volumes
furnished to its gas sales customers (from meters not corrected for pressure and/or temperature)
shall be calculated utilizing the following service pressures (psia):
Incorporated areas of the Cities of:
Balmorhea
13.48
Junction
14.18
Cactus
13.28
Kermit
13.68
Canadian
13.88
La Vemia
14.68
Canyon
13.45
Lubbock
13.45
Claude
13.38
Menard
14.08
Dalhart
13.07
Miami
13.68
Darrouzett
13.78
Mobeetie
13.78
Devine
14.68
Natalia
14.68
Eden
14.08
Paint Rock
14.28
Farwell
13.18
Shamrock
13.88
Follett
13.68
Somerset
14.68
Groom
13.38
Sonora
13.98
Higgins
13.78
Stratford
13.18
Texhoma
13.38
Texline
12.98
Wheeler
13.78
White Deer
13.38
If the Reconciliation Review indicates a gas loss or gas gain of less than 5% of that metered into
the system, the following methodology shall apply:
• WTG shall calculate the imbalance between its Net Jurisdictional Cost of Gas and amount
collected through the PGA billed on a monthly basis for said Gas Cost Zone. The Net
Jurisdictional Cost of Gas shall be calculated by multiplying the Total Jurisdictional Sales
Volumes by the Actual P/S Ratio to arrive at the Calculated Purchased Volume. The
Calculated Purchased Volume is then multiplied by the WACOG to arrive at the Net
Jurisdictional Cost of Gas.
• Interest shall be applied to each monthly imbalance for said Gas Cost Zone and shall accrue
for each month of the review period.
• The interest rate shall be the same rate as determined by the Public Utility Commission of
Texas for refunds on customer deposits and in effect during the last month of the audit
period (June).
• The sum of the monthly imbalances, plus interest, for each Gas Cost Zone for the period
under review shall be the Reconciliation Amount, the total amount to be
refunded/surcharged in said Gas Cost Zone.
If the Reconciliation Review indicates a gas loss or gas gain of greater than 5% of that metered
into the system, the following methodology shall apply:
EXHIBIT A - RATES & TARIFFS
WEST TEXAS GAS INC. RATE SCHEDULE
Page 5 of 6 GAS COST ADJUSTMENT-INC
Effective: April 1, 2021
• WTG shall calculate the imbalance between its Purchase Gas Cost and Sales Amount on a
monthly basis for said Gas Cost Zones Purchase Gas Cost amounts in excess of the 1.0526
ratio shall be disallowed by:
1) Dividing total Purchase Volumes for the 12-month review period by the total Sales
Volumes for the same period in said Gas Cost Zone.
2) Subtracting that result from 1, which when expressed as a percentage, becomes said
Gas Cost Zones "Actual P/S Ratio."
3) Subtracting 5.26% from said Gas Cost Zones Actual P/S Ratio, results in a
"Disallowance Factor" for the review period.
4) Multiplying the Disallowance Factor by the Purchase Volumes for each month and by
the Weighted Average Cost of Gas for each month, for said Gas Cost Zone will result
in an amount to be disallowed each month.
5) The Net Jurisdictional Cost of Gas shall be calculated by multiplying the Total
Jurisdictional Sales Volume by the Actual P/S Ratio to arrive at the Calculated
Purchased Volume. The Calculated Purchased Volume is then multiplied by the
WACOG to arrive at the Jurisdictional Cost of Gas. The Net Jurisdictional Cost of Gas
is calculated by subtracting the Disallowed Amount calculated above.
• Interest shall be applied to each monthly imbalance for said Gas Cost Zone and shall accrue
for each month of the review period.
• The interest rate shall be the rate in effect during the last month of the audit period (June).
• The sum of the monthly imbalances, plus interest, for the period under review shall be the
Reconciliation Amount for said Gas Cost Zone or the total amount to be
refunded/surcharged.
Reconciliation Factor Calculation (RFC)
The Reconciliation Amount for each Gas Cost Zone shall be divided by 12, resulting in the
Reconciliation Component.
The Reconciliation Component shall be reflected in a refund or surcharge on each customer bill,
according to Gas Cost Zone, over a twelve-month period beginning with the first billing cycle in
September following the period covered by the review.
The Reconciliation Component for each month of the reconciliation period shall be calculated by
dividing the Reconciliation Amount by the estimated Sales Volumes for the applicable billing
period. The result will be a monthly Reconciliation Factor, expressed in Mcf for each Gas Cost
Zone. Any under or over collection from the prior month may be factored in subsequent months'
Reconciliation Component.
EXHIBIT A - RATES & TARIFFS
WEST TEXAS GAS INC. RATE SCHEDULE
Page 6 of 6 GAS COST ADJUSTMENT-INC
Effective: April 1, 2021
Each month during the reconciliation period, the PGF for each Gas Cost Zone on customer bills
shall be increased or reduced by the product of the number of Mcf billed to the customer and the
monthly Reconciliation Factor, as indicated in the section of PGF calculations. Any under or over
collections remaining at the end of the gas reconciliation period will be carried forward to the next
gas reconciliation period.
EXHIBIT A - RATES & TARIFFS
WEST TEXAS GAS, INC. RATE SCHEDULE
Page 1 of 1 TAX-INC
Effective: April 1, 2021
TAX ADJUSTMENT — INCORPORATED
REVENUE RELATED TAX ADJUSTMENT
Each monthly bill for a jurisdictional customer, as adjusted, shall also be adjusted by an amount
equivalent to the various revenue related taxes, franchise fees, rentals, or other fees and charges
imposed by regulatory or governmental authorities. This includes, but not limited to, Gross
Receipts Taxes, Municipal Taxes, Fees, or any other governmental imposition, rental fee or charge
levied that is based on any portion of revenues billed by West Texas Gas, Inc.
EXHIBIT A - RATES & TARIFFS
WEST TEXAS GAS INC. RATE SCHEDULE
Page 1 of 2 EDIT CREDIT-INC
Effective: April 1, 2021
EXCESS DEFERRED INCOME TAX CREDIT
APPLICABILITY
This Excess Deferred Income Tax Credit applies to all Jurisdictional customer rate schedules of
West Texas Gas, Inc. ("Company") currently in force in the areas in Texas served by the Company.
CALCULATION OF CREDIT
The regulatory liability in the amount of $587,300 for certain excess deferred income taxes
resulting from the Tax Cuts and Jobs Act of 2017 and in compliance with GUD No. 10695, will
be credited to customers on a one-time, per bill basis in April of 2021 and will show as a separate
line item on the customer's bill.
TRUE -UP ADJUSTMENT -- The Excess Deferred Income Tax credit shall be trued -up one time
through the Company's Gas Cost Adjustment rate schedule, specifically in the consideration of
credits or refunds included in the computation of the Purchase Gas Cost Component. The True -
Up Adjustment will be the difference between the amount of the total EDIT credit and the amount
actually credited to customers.
EDIT CREDIT PER CUSTOMER --- The EDIT credit per customer will be determined by
allocating the regulatory liability amount of $587,300 among the Jurisdictional customer classes
utilizing the same class revenue allocation as approved in the most recent general rate case, and
then by dividing each class's portion by the number of customers in that class.
EDIT CREDIT PER CUSTOMER
Residential:
$ 28.06
Commercial:
$ 63.05
Public Authority:
$ 63.05
Non -Profit:
$ 63.05
OTHER ADJUSTMENTS
Taxes: Plus applicable taxes and fees (including franchise fees) related to above.
FILING
The Company shall make a Compliance Filing with the Gas Services Department of the
Commission at GUD Compliance{a;rrc.texas.gov within 60 days of issuing the EDIT credit that
includes the following information:
a. the total dollar amount of the EDIT credit;
b. the total dollar amount actually credited to customers; and
C. the true -up amount, if any, due to the difference between items a. and b., above.
EXHIBIT A - RATES & TARIFFS
WEST TEXAS GAS INC. RATE SCHEDULE
Page 2 of 2 EDIT CREDIT-INC
Effective: April 1, 2021
CONDITIONS
Subject to all applicable laws and orders, and the Company's rules and regulations on file with the
regulatory authority.
EXHIBIT A - RATES & TARIFFS
WEST TEXAS GAS, INC. RATE SCHEDULE
Page 1 of 4 MISCFEES-INC
Effective: April 1, 2021
MISCELLANEOUS FEES AND DEPOSITS - INCORPORATED
APPLICABILITY
Applicable to Residential, Commercial, Industrial, and any other jurisdictional customers of West
Texas Gas, Inc. ("WTG") who are in an incorporated area or city served by WTG.
FEES
Initiation of Service:
a) Connection Charge
The following connection charges apply:
Schedule
Charge
Business Hours (8AM to 5PM, Monday - Friday, except holidays) $50.00
After Hours (All Hours not associated with Business Hours) $70.00
A connect fee will be charged to any applicant for the cost involved in initiation of
service. This fee shall be charged when a meter is set and/or gas turned on.
b) Read -In for Change Charge
A read -in fee of $20.00 will be charged to any applicant for the cost involved in
initiation of service. This fee shall be charged when only a meter reading is
required.
c) After Hours & Special Handling
In addition to initiation of service fee above, a fee shall be charged to any applicant
whose request to initiate service cannot be completed during normal business hours
or requires special handling. Applicant shall be advised that an additional fee will
be charged and must agree to pay such charge. Any fees assessed will reflect actual
time incurred at $20 per hour during business hours and $30 per hour for after hours,
plus the actual cost of materials and any incidental (third party) expenses. A third
party is any person or entity, including an affiliate of the Company.
(i) Special Handling: West Texas Gas, Inc. ("WTG") may, at customer's
request, provide special handling in order to meet the Customer's
requirements for a fee based on the rates indicated in (c) above. Special
handling may include such assistance as calling the customer in advance or
making other special arrangements (such as A.M. or P.M. scheduling) for
access to the customer's premises.
EXHIBIT A - RATES & TARIFFS
WEST TEXAS GAS, INC. RATE SCHEDULE
Page 2 of 4 MISCFEES-INC
Effective: April 1, 2021
(ii) Expedited Service: If the customer requires that the order be worked after
hours for their convenience or if the customer requires expedited service,
the charge shall be based on the rates indicated in (c) above for after-hours
service work on customer premises. The Customer's request for expedited
service may then be scheduled at any time to fit WTG's work schedule but
the after-hours charge shall be collected as long as any other work is done
on overtime.
(iii) Special Call Out: If the initiation of service order requires special call out,
the customer shall be charged based on the rates indicated in (c) above for
after-hours service work on customer's premises.
Customer Requested Meter Test
Whenever WTG is requested by a customer to have a meter test performed, and the result
of that meter test indicates that the meter is within 2% accuracy and the meter has been
tested within a four year period from the time the customer made the request the customer
will be charged according to the following fee schedule.
Positive Displacement
Charge
275 cubic feet per hour or less
$25.00
276 to 1500 cubic feet per hour
$30.00
1501 to 3000 cubic feet per hour
$35.00
3001 to 5000 cubic feet per hour
$45.00
over 5000 cubic feet per hour
$60.00
Orifice Meters
All sizes $40.00
The meter test fees schedule above will not apply when the test results indicate the meter
is outside of the allowed 2% accuracy range.
Returned Check/Bank Draft Charges
Accounts for which payment is made using checks or electronic drafts which are returned
or denied by a bank for any reason may be charged a fee for each occurrence of $25.00.
Collection Fee
A fee of $20.00 will be charged to any customer whose failure to respond to a termination
notice necessitates the dispatch of a Company representative who attempts collection of
payment from customer.
EXHIBIT A - RATES & TARIFFS
WEST TEXAS GAS, INC. RATE SCHEDULE
Page 3 of 4 MISCFEES-INC
Effective: April 1, 2021
Reconnect Fees
The following reconnection fees will be charged to any customer whose service is
terminated and then re -initiated unless terminated in error by WTG.
Schedule Charge
Business Hours (8AM to 5PM, Monday - Friday, except holidays) $50.00
After Hours (All Hours not associated with Business Hours) $70.00
Temporary Service
Customers will be charged the actual cost of installation and removal of pipe and metering
facilities. The actual cost will be calculated in accordance with the rates specified in
Section 4.1.1 (c) above. This service does not include extension of mains.
Special Read
Customer requested reading of a meter for any purpose other than initiation of service will
be charged $20.00
No Access
A fee of $20.00 will be charged to customer who schedules an appointment but fails to
appear or Company personnel cannot access property to perform the service requested.
Tampering
Customers who tamper with their meters will be assessed a charge of $150.00 plus the
actual cost of any estimated volumes of gas illegally consumed or improperly measured
based on such tampering, and the actual cost of time and materials to repair meters or other
company equipment. The actual costs will be based on the labor rates and costs specified
in Section 4.1.1 (c) above. This charge is not intended to duplicate any charge that may be
imposed by the Texas Penal Code.
Extension Fee
In the event the cost of extending mains in an incorporated area exceeds the free limit
established by the Franchise Agreement for domestic and non -domestic customers in the
area, customers shall pay the actual cost of the extension, based on costs calculated in
accordance with the rates specified in Section 4.1.1 (c) above, less the free limit. In the
event the Franchise Agreement does not establish a free limit, and in all unincorporated
areas, the customers shall pay the actual cost of the extension, less a $150.00 credit, based
on costs calculated in accordance with the rates specified in Section 4.1.1 (c) above.
EXHIBIT A - RATES & TARIFFS
WEST TEXAS GAS, INC. RATE SCHEDULE
Page 4 of 4 MISCFEES-INC
Effective: April 1, 2021
DEPOSITS
Customer Deposits
Deposits will be based on 1/6 of the customers estimated annual usage. For any customer
who pays bills by electronic transfer to WTG, these deposits will be based on 1/12 of the
customers estimated annual usage.
EXHIBIT A - RATES & TARIFFS
WEST TEXAS GAS, INC. PIPELINE SAFETY FEE-INC
Page 1 of 1
Effective: April 1, 2021
PIPELINE SAFETY AND REGULATORY PROGRAM
RATE SCHEDULE
Pipeline Safety and Regulatory Program Rate Schedule.
Applicability
Fee. Once annually, West Texas Gas. ("WTG") shall remit to the Commission the fee required in 16
TEX. ADMIN. CODE Section 8.201.
Surcharge. During the next billing cycle following WTG remittance to the Commission of the fee,
WTG shall include on its customers' bills a Pipeline Safety and Regulatory Program Surcharge, to the
extent authorized in 16 TEX. ADMIN. CODE Section 8.201.
Formula. The Rule 8.201 surcharge is calculated in accordance with the following formula:
Rule 8.201(b) fee assessed by the Commission on WTG
Divided by
Number of meters billed
Equals
Rule 8.201(b)(3) surcharge, applied per customer meter, once aruivally.
In this formula, the number of meters billed refers to the number of meters billed during the billing
month that precedes the month the Rule 8.201(b)(3) surcharge is included on customer bills.
The pipeline safety fee for 2020 was a one-time fee of $1.00 per bill for each bill issued in April 2020.
Compliance Report.
The Company shall file an annual pipeline safety fee (PSF) report no later than 90 days after the last
billing cycle in which the pipeline safety and regulatory program fee surcharge is billed to customers.
The Company shall file the report with the Railroad Commission of Texas addressed to the Director of
Oversight and Safety Division, Gas Services Department, referencing Gas Utilities Docket
No. OS-20-0004347, and titling the report "Pipeline Safety Fee Recovery Report". The report shall
include the following:
a) the pipeline safety fee -amount paid to the Commission;
b) the unit rate and total amount of the surcharge billed to each customer;
c) the date or dates the surcharge was billed to customers; and
d) the total amount collected from customers from the surcharge.
Reports for the Commission should be filed electronically at GUD_Compliance@rrc.texas.gov or at
the following address:
Compliance Filing
Director of Oversight and Safety Division
Gas Services Dept.
Railroad Commission of Texas
P.O. Box 12967
Austin, TX 78711-2967
EXHIBIT A - RATES & TARIFFS
WEST TEXAS GAS, INC. RATE SCHEDULE
Page 1 of 1 OS-INC
Effective: April 1, 2021
OTHER SURCHARGES — INCORPORATED
West Texas Gas, Inc. will recover other surcharges from jurisdictional customers as authorized by
federal, state and local regulatory authorities in accordance with applicable statutes, laws,
regulations, ordinances, orders, rules, contracts or agreements.
EXHIBIT A - RATES & TARIFFS
WEST TEXAS GAS, INC. RATE SCHEDULE
Page 1 of 1 RCE-INC
Effective: April 1, 2021
RATE CASE EXPENSE SURCHARGE — INCORPORATED
APPLICABILITY
All jurisdictional customers in the incorporated areas or cities in West Texas Gas, Inc.'s ("WTG")
Texas Service Area.
RCE RATE
Pursuant to City ordinances or an order of the Railroad Commission of Texas in Case No. OS-20-
00004347, WTG is authorized to recover a total not to exceed $476,256.99 in rate case expenses
from Case No. OS-20-00004347 jurisdictional customers by a surcharge applicable to all
jurisdictional customers in incorporated and unincorporated areas at the rate of $0.074/Mcf for a
period of approximately 48 months commencing April 1, 2021.
COMPLIANCE
WTG shall file an Annual Compliance Report with the Cities identified above annually, due on or
before the 31 st of each March commencing in 2022. The report shall detail the monthly collections
for the rate case expense surcharge and show the outstanding balance. The Compliance Report
shall be addressed to the City Manager.
EXHIBIT A - RATES & TARIFFS
WEST TEXAS GAS INC. RATE SCHEDULE
Page 1 of 12 QSR-INC
Effective: April 1, 2021
INCORPORATED
QUALITY OF SERVICE RULES
RATESCHEDULE
RULE §7.45 Quality of Service
For gas utility service to residential and small commercial customers, the following minimum service
standards shall be applicable in unincorporated areas. In addition, each gas distribution utility is ordered to
amend its service rules to include said minimum service standards within the utility service rules applicable
to residential and small commercial customers within incorporated areas, but only to the extent that said
minimum service standards do not conflict with standards lawfully established within a particular
municipality for a gas distribution utility. Said gas distribution utility shall file service rules incorporating
said minimum service standards with the Railroad Commission and with the municipalities in the manner
prescribed by law.
(1) Continuity of service.
(A) Service interruptions.
(i) Every gas utility shall make all reasonable efforts to prevent interruptions of service. When
interruptions occur, the utility shall reestablish service within the shortest possible time consistent with
prudent operating principles so that the smallest number of customers are affected.
(ii) Each utility shall make reasonable provisions to meet emergencies resulting from failure of service,
and each utility shall issue instructions to its employees covering procedures to be followed in the event of
an emergency in order to prevent or mitigate interruption or impairment of service.
(iii) In the event of national emergency or local disaster resulting in disruption of normal service, the
utility may, in the public interest, interrupt service to other customers to provide necessary service to civil
defense or other emergency service agencies on a temporary basis until normal service to these agencies
can be restored.
(B) Record of interruption. Except for momentary interruptions which do not cause a major disruption
of service, each utility shall keep a complete record of all interruptions, both emergency and scheduled.
This record shall show the cause of interruptions, date, time duration, location, approximate number of
customers affected, and, in cases of emergency interruptions, the remedy and steps taken to prevent
recurrence.
(C) Report to commission. The commission shall be notified in writing within 48 hours of interruptions
in service affecting the entire system or any major division thereof lasting more than four hours. The notice
shall also state the cause of such interruptions. If any service interruption is reported to the commission
otherwise (for example, as a curtailment report or safety report), such other report is sufficient to comply
with the terms of this paragraph.
EXHIBIT A - RATES & TARIFFS
WEST TEXAS GAS INC. RATE SCHEDULE
Page 2 of 12 QSR-INC
Effective: April 1, 2021
(2) Customer relations.
(A) Information to customers. Each utility shall:
(i) maintain a current set of maps showing the physical locations of its facilities. All distribution
facilities shall be labeled to indicate the size or any pertinent information which will accurately describe
the utility's facilities. These maps, or such other maps as may be required by the regulatory authority, shall
be kept by the utility in a central location and will be available for inspection by the regulatory authority
during normal working hours. Each business office or service center shall have available up-to-date maps,
plans, or records of its immediate area, with such other information as may be necessary to enable the utility
to advise applicants and others entitled to the information as to the facilities available for serving that
locality;
(ii) assist the customer or applicant in selecting the most economical rate schedule;
(iii) in compliance with applicable law or regulations, notify customers affected by a change in rates
or schedule or classification;
(iv) post a notice in a conspicuous place in each business office of the utility where applications for
service are received informing the public that copies of the rate schedules and rules relating to the service
of the utility as filed with the commission are available for inspection;
(v) upon request inform its customers as to the method of reading meters;
(vi) provide to new customers, at the time service is initiated or as an insert in the first billing, a
pamphlet or information packet containing the following information. This information shall be provided
in English and Spanish as necessary to adequately inform the customers; provided, however, the regulatory
authority upon application and a showing of good cause may exempt the utility from the requirement that
the information be provided in Spanish:
(I) the customer's right to information concerning rates and services and the customer's right to inspect
or obtain at reproduction cost a copy of the applicable tariffs and service rules;
(II) the customer's right to have his or her meter checked without charge under paragraph (7) of this
section, if applicable;
(III) the time allowed to pay outstanding bills;
(IV) grounds for termination of service;
(V) the steps the utility must take before terminating service;
(VI) how the customer can resolve billing disputes with the utility and how disputes and health
emergencies may affect termination of service;
(VII) information on alternative payment plans offered by the utility;
(VIII) the steps necessary to have service reconnected after involuntary termination;
EXHIBIT A - RATES & TARIFFS
WEST TEXAS GAS INC. RATE SCHEDULE
Page 3 of 12 QSR-INC
Effective: April 1, 2021
(IX) the appropriate regulatory authority with whom to register a complaint and how to contact such
authority;
(X) the hours, addresses, and telephone numbers of utility offices where bills may be paid and
information may be obtained; and
(XI) the customer's right to be instructed by the utility how to read his or her meter;
(vii) at least once each calendar year, notify customers that information is available upon request, at no
charge to the customer, concerning the items listed in clause (vi)(I) - (XI) of this subparagraph. This notice
may be accomplished by use of a billing insert or a printed statement upon the bill itself.
(B) Customer complaints. Upon complaint to the utility by residential or small commercial customers
either at its office, by letter, or by telephone, the utility shall promptly make a suitable investigation and
advise the complainant of the results thereof. If shall keep a record of all complaints which shall show the
name and address of the complainant, the date and nature of the complaint, and the adjustment or disposition
thereof for a period of one year subsequent to the final disposition of the complaint.
(C) Utility response. Upon receipt of a complaint, either by letter or by telephone, from the regulatory
authority on behalf of a customer, the utility shall make a suitable investigation and advise the regulatory
authority and complainant of the results thereof. An initial response must be made by the next working day.
The utility must make a final and complete response within 15 days from the date of the complaint, unless
additional time is granted within the 15-day period. The commission encourages all customer complaints
to be made in writing to assist the regulatory authority in maintaining records of the quality of service of
each utility; however, telephone communications will be acceptable.
(D) Deferred payment plan. The utility is encouraged to offer a deferred payment plan for delinquent
residential accounts. If such a plan is offered, it shall conform to the following guidelines:
(i) Every deferred payment plan entered into due to the customer's inability to pay the outstanding bill
in full must provide that service will not be discontinued if the customer pays current bills and a reasonable
amount of the outstanding bill and agrees to pay the balance in reasonable installments until the bill is paid.
(ii) For purposes of determining reasonableness under these rules, the following shall be considered:
size of delinquent account; customer's ability to pay; customer's payment history; time that the debt has
been outstanding; reasons why debt has been outstanding; and other relevant factors concerning the
circumstances of the customer.
(iii) A deferred payment plan, if reduced to writing, offered by a utility shall state, immediately preceding
the space provided for the customer's signature and in bold -face print at least two sizes larger than any other
used, that: "If you are not satisfied with this agreement, do not sign. If you are satisfied with this agreement,
you give up your right to dispute the amount due under the agreement except for the utility's failure or
refusal to comply with the terms of this agreement."
(iv) A deferred payment plan may include a one-time 5.0% penalty for late payment on the original
amount of the outstanding bill with no prompt payment discount allowed except in cases where the
EXHIBIT A - RATES & TARIFFS
WEST TEXAS GAS INC.
Page 4 of 12
Effective: April 1, 2021
RATESCHEDULE
QSR-INC
outstanding bill is unusually high as a result of the utility's error (such as an inaccurately estimated bill or
an incorrectly read meter). A deferred payment plan shall not include a finance charge.
(v) If a customer for utility service has not fulfilled terms of a deferred payment agreement or refuses to
sign the same if it is reduced to writing, the utility shall have the right to disconnect pursuant to
disconnection rules herein and, under such circumstances, it shall not be required to offer a subsequent
negotiation of a deferred payment agreement prior to disconnection.
(vi) Any utility which institutes a deferred payment plan shall not refuse a customer participation in such
a program on the basis of race, color, creed, sex, marital status, age, or any other form of discrimination
prohibited by law.
(E) Delayed payment of bills by elderly persons.
(i) Applicability. This subparagraph applies only to:
(I) a utility that assesses late payment charges on residential customers and that suspends service before
the 26th day after the date of the bill for which collection action is taken;
(II) utility bills issued on or after August 30, 1993; and
(III) an elderly person, as defined in clause (ii) of this subparagraph, who is a residential customer
and who occupies the entire premises for which a delay is requested.
(ii) Definitions.
(1) Elderly person --A person who is 60 years of age or older.
(II) Utility --A gas utility or municipally owned utility, as defined in Texas Utilities Code,
§§101.003(7), 101.003(8), and 121.001 - 121.006.
(iii) An elderly person may request that the utility implement the delay for either the most recent utility
bill or for the most recent utility bill and each subsequent utility bill.
(iv) On request of an elderly person, a utility shall delay without penalty the payment date of a bill for
providing utility services to that person until the 25th day after the date on which the bill is issued.
(v) The utility may require the requesting person to present reasonable proof that the person is 60 years
of age or older.
(vi) Every utility shall notify its customers of this delayed payment option no less often than yearly. A
utility may include this notice with other information provided pursuant to subparagraph (A) of this
paragraph.
(3) Refusal of service.
(A) Compliance by applicant. Any utility may decline to serve an applicant for whom service is available
from previously installed facilities until such applicant has complied with the state and municipal
EXHIBIT A - RATES & TARIFFS
WEST TEXAS GAS INC. RATE SCHEDULE
Page 5 of 12 QSR-INC
Effective: April 1, 2021
regulations and approved rules and regulations of the utility on file with the commission governing the
service applied for or for the following reasons.
(i) Applicant's facilities inadequate. If the applicant's installation or equipment is known to be
hazardous or of such character that satisfactory service cannot be given.
(ii) For indebtedness. If the applicant is indebted to any utility for the same kind of service as that
applied for; provided, however, that in the event the indebtedness of the applicant for service is in dispute,
the applicant shall be served upon complying with the applicable deposit requirement.
(iii) Refusal to make deposit. For refusal to make a deposit if applicant is required to make a deposit
under these rules.
(B) Applicant's recourse. In the event that the utility shall refuse to serve an applicant under the
provisions of these rules, the utility must inform the applicant of the basis of its refusal and that the applicant
may file a complaint with the municipal regulatory authority or commission, whichever is appropriate.
(C) Insufficient grounds for refusal to serve. The following shall not constitute sufficient cause for
refusal of service to a present customer or applicant:
(i) delinquency in payment for service by a previous occupant of the premises to be served;
(ii) failure to pay for merchandise or charges for nonutility service purchased from the utility;
(iii) failure to pay a bill to correct previous underbilling due to misapplication of rates more than six
months prior to the date of application;
(iv) violation of the utility's rules pertaining to operation of nonstandard equipment or unauthorized
attachments which interfere with the service of others unless the customer has first been notified and been
afforded reasonable opportunity to comply with these rules;
(v) failure to pay a bill of another customer as guarantor thereof unless the guarantee was made in
writing to the utility as a condition precedent to service; and
(vi) failure to pay the bill of another customer at the same address except where the change of customer
identity is made to avoid or evade payment of a utility bill.
(4) Discontinuance of service.
(A) The due date of the bill for utility service shall not be less than 15 days after issuance, or such other
period of time as may be provided by order of the regulatory authority. A bill for utility service is delinquent
if unpaid by the due date.
(B) A utility may offer an inducement for prompt payment of bills by allowing a discount in the amount
of 5.0% for payment of bills within 10 days after their issuance. This provision shall not apply where it
conflicts with existing orders or ordinances of the appropriate regulatory authority.
EXHIBIT A - RATES & TARIFFS
WEST TEXAS GAS INC. RATE SCHEDULE
Page 6 of 12 QSR-INC
Effective: April 1, 2021
(C) A customer's utility service may be disconnected if the bill has not been paid or a deferred payment
plan pursuant to paragraph (2)(D) of this section has not been entered into within five working days after
the bill has become delinquent and proper notice has been given. Proper notice consists of a deposit in the
United States mail, postage prepaid, or hand delivery to the customer at least five working days prior to the
stated date of disconnection, with the words "Termination Notice" or similar language prominently
displayed on the notice. The notice shall be provided in English and Spanish as necessary to adequately
inform the customer, and shall include the date of termination, the hours, address, and telephone number
where payment may be made, and a statement that if a health or other emergency exists, the utility may be
contacted concerning the nature of the emergency and the relief available, if any, to meet such emergency.
(D) Utility service may be disconnected for any of the following reasons:
(i) failure to pay a delinquent account or failure to comply with the terms of a deferred payment plan
for installment payment of a delinquent account;
(ii) violation of the utility's rules pertaining to the use of service in a manner which interferes with the
service of others or the operation of nonstandard equipment, if a reasonable attempt has been made to notify
the customer and the customer is provided with a reasonable opportunity to remedy the situation;
(iii) failure to comply with deposit or guarantee arrangements where required by paragraph (5) of this
section;
(iv) without notice where a known dangerous condition exists for as long as the condition exists;
(v) tampering with the utility company's meter or equipment or bypassing the same.
(E) Utility service may not be disconnected for any of the following reasons:
(i) delinquency in payment for service by a previous occupant of the premises;
(ii) failure to pay for merchandise or charges for nonutility service by the utility;
(iii) failure to pay for a different type or class of utility service unless fee for such service is included
on the same bill;
(iv) failure to pay the account of another customer as guarantor thereof, unless the utility has in writing
the guarantee as a condition precedent to service;
(v) failure to pay charges arising from an underbilling occurring due to any misapplication of rates
more than six months prior to the current billings;
(vi) failure to pay charges arising from an underbilling due to any faulty metering, unless the meter has
been tampered with or unless such underbilling charges are due;
(vii) failure to pay an estimated bill other than a bill rendered pursuant to an approved meter reading
plan, unless the utility is unable to read the meter due to circumstances beyond its control.
EXHIBIT A - RATES & TARIFFS
WEST TEXAS GAS INC.
Page 7 of 12
Effective: April 1, 2021
RATESCHEDULE
QSR-INC
(F) Unless a dangerous condition exists, or unless the customer requests disconnection, service shall not
be disconnected on a day, or on a day immediately preceding a day, when personnel of the utility are not
available to the public for the purpose of making collections and reconnecting service.
(G) No utility may abandon a customer without written approval from the regulatory authority.
(H) No utility may discontinue service to a delinquent residential customer permanently residing in an
individually metered dwelling unit when that customer establishes that discontinuance of service will result
in some person residing at that residence becoming seriously ill or more seriously ill if the service is
discontinued. Any customer seeking to avoid termination of service under this section must make a written
request supported by a written statement from a licensed physician. Both the request and the statement must
be received by the utility not more than five working days after the date of delinquency of the bill. The
prohibition against service termination provided by this section shall last 20 days from the date of receipt
by the utility of the request and statement or such lesser period as may be agreed upon by the utility and the
customer. The customer who makes such request shall sign an installment agreement which provides for
payment of such service along with timely payments for subsequent monthly billings.
(5) Applicant deposit.
(A) Establishment of credit for residential applicants. Each utility may require a residential applicant for
service to satisfactorily establish credit but such establishment of credit shall not relieve the customer from
complying with rules for prompt payment of bills. Subject to these rules, a residential applicant shall not
be required to pay a deposit:
(i) if the residential applicant has been a customer of any utility for the same kind of service within the
last two years and is not delinquent in payment of any such utility service account and during the last 12
consecutive months of service did not have more than one occasion in which a bill for such utility service
was paid after becoming delinquent and never had service disconnected for nonpayment;
(ii) if the residential applicant furnishes in writing a satisfactory guarantee to secure payment of bills
for the service required; or
(iii) if the residential applicant furnishes in writing a satisfactory credit rating by appropriate means,
including, but not limited to, the production of generally acceptable credit cards, letters of credit reference,
the names of credit references which may be quickly and inexpensively contacted by the utility, or
ownership of substantial equity.
(B) Reestablishment of credit. Every applicant who has previously been a customer of the utility and
whose service has been discontinued for nonpayment of bills shall be required before service is rendered to
pay all his amounts due the utility or execute a written deferred payment agreement, if offered, and
reestablish credit as provided in subparagraph (A) of this paragraph.
(C) Amount of deposit and interest for residential service, and exemption from deposit.
(i) Each gas utility shall waive any deposit requirement for residential service for an applicant who has
been determined to be a victim of family violence as defined in Texas Family Code, §71.004, by a family
EXHIBIT A - RATES & TARIFFS
WEST TEXAS GAS INC.
Page 8 of 12
Effective: April 1, 2021
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QSR-INC
violence center, by treating medical personnel, by law enforcement agency personnel, or by a designee of
the Attorney General in the Crime Victim Services Division of the Office of the Attorney General. This
determination shall be evidenced by the applicant's submission of a certification letter developed by the
Texas Council on Family Violence and made available on its web site.
(ii) The required deposit shall not exceed an amount equivalent to one -sixth of the estimated annual
billings. If actual use is at least twice the amount of the estimated billings, a new deposit requirement may
be calculated and an additional deposit may be required within two days. If such additional deposit is not
made, the utility may disconnect service under the standard disconnection procedure for failure to comply
with deposit requirements.
(iii) All applicants for residential service who are 65 years of age or older will be considered as having
established credit if such applicant does not have an outstanding account balance with the utility or another
utility for the same utility service which accrued within the last two years. No cash deposit shall be required
of such applicant under these conditions.
(iv) Each utility which requires deposits to be made by its customers shall pay a minimum interest on
such deposits according to the rate as established by law. If refund of deposit is made within 30 days of
receipt of deposit, no interest payment is required. If the utility retains the deposit more than 30 days,
payment of interest shall be made retroactive to the date of deposit.
(I) Payment of interest to the customer shall be annually or at the time the deposit is returned or credited
to the customer's account.
(II) The deposit shall cease to draw interest on the date it is returned or credited to the customer's
account.
(D) Deposits for temporary or seasonal service and for weekend or seasonal residences. The utility may
require a deposit sufficient to reasonably protect it against the assumed risk, provided such a policy is
applied in a uniform and nondiscriminatory manner.
(E) Records of deposits.
(i) The utility shall keep records to show:
(I) the name and address of each depositor;
(II) the amount and date of the deposit; and
(III) each transaction concerning the deposit.
(ii) The utility shall issue a receipt of deposit to each applicant from whom a deposit is received and
shall provide means whereby a depositor may establish claim if the receipt is lost.
(iii) A record of each unclaimed deposit must be maintained for at least four years, during which time
the utility shall make a reasonable effort to return the deposit.
EXHIBIT A - RATES & TARIFFS
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Page 9 of 12
Effective: April 1, 2021
(F) Refund of deposit.
RATESCHEDULE
QSR-INC
(i) If service is not connected or after disconnection of service, the utility shall promptly and
automatically refund the customer's deposit plus accrued interest on the balance, if any, in excess of the
unpaid bills for service furnished. The transfer of service from one premise to another within the service
area of the utility shall not be deemed a disconnection within the meaning of these rules, and no additional
deposit may be demanded unless permitted by these rules.
(ii) When the customer has paid bills for service for 12 consecutive residential bills without having
service disconnected for nonpayment of bill and without having more than two occasions in which a bill
was delinquent and when the customer is not delinquent in the payment of the current bills, the utility shall
promptly and automatically refund the deposit plus accrued interest to the customer in the form of cash or
credit to a customer's account.
(G) Upon sale or transfer of utility or company. Upon the sale or transfer of any public utility or operating
units thereof, the seller shall file with the commission under oath, in addition to other information, a list
showing the names and addresses of all customers served by such utility or unit who have to their credit a
deposit, the date such deposit was made, the amount thereof, and the unpaid interest thereon.
(H) Complaint by applicant or customer. Each utility shall direct its personnel engaged in initial contact
with an applicant or customer for service seeking to establish or reestablish credit under the provisions of
these rules to inform the customer, if dissatisfaction is expressed with the utility's decision, of the customer's
right to file a complaint with the regulatory authority thereon.
(6) Billing.
(A) Bills for gas service shall be rendered monthly, unless otherwise authorized or unless service is
rendered for a period less than a month. Bills shall be rendered as promptly as possible following the reading
of meters.
(B) The customer's bill must show all the following information. The information must be arranged and
displayed in such a manner as to allow the customer to compute his bill with the applicable rate schedule.
The applicable rate schedule must be mailed to the customer on request of the customer. A utility may
exhaust its present stock of nonconforming bill forms before compliance is required by this section:
(i) if the meter is read by the utility, the date and reading of the meter at the beginning and end of the
period for which rendered;
(ii) the number and kind of units billed;
(iii) the applicable rate schedule title or code;
(iv) the total base bill;
(v) the total of any adjustments to the base bill and the amount of adjustments per billing unit;
(vi) the date by which the customer must pay the bill to get prompt payment discount;
EXHIBIT A - RATES & TARIFFS
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(vii) the total amount due before and after any discount for prompt payment within a designated period;
(viii) a distinct marking to identify an estimated bill.
(C) Where there is good reason for doing so, estimated bills may be submitted, provided that an actual
meter reading is taken at least every six months. For the second consecutive month in which the meter
reader is unable to gain access to the premises to read the meter on regular meter reading trips, or in months
where meters are not read otherwise, the utility must provide the customer with a postcard and request that
the customer read the meter and return the card to the utility if the meter is of a type that can be read by the
customer without significant inconvenience or special tools or equipment. If such a postcard is not received
by the utility in time for billing, the utility may estimate the meter reading and render the bill accordingly.
(D) Disputed bills.
(i) In the event of a dispute between the customer and the utility regarding the bill, the utility must
forthwith make such investigation as is required by the particular case and report the results thereof to the
customer. If the customer wishes to obtain the benefits of clause (ii) of this subparagraph, notification of
the dispute must be given to the utility prior to the date the bill becomes delinquent. In the event the dispute
is not resolved, the utility shall inform the customer of the complaint procedures of the appropriate
regulatory authority.
(ii) Notwithstanding any other subsection of this section, the customer shall not be required to pay the
disputed portion of the bill which exceeds the amount of that customer's average usage for the billing period
at current rates until the earlier of the following: resolution of the dispute or the expiration of the 60-day
period beginning on the day the disputed bill is issued. For purposes of this section only, the customer's
average usage for the billing period shall be the average of the customer's usage for the same billing period
during the preceding two years. Where no previous usage history exists, the average usage shall be
estimated on the basis of usage levels of similar customers and under similar conditions.
(7) Meters.
(A) Meter requirements.
(i) Use of meter. All gas sold by a utility must be charged for by meter measurements, except where
otherwise provided for by applicable law, regulation of the regulatory authority, or tariff.
(ii) Installation by utility. Unless otherwise authorized by the regulatory authority, each utility must
provide and install and will continue to own and maintain all meters necessary for measurement of gas
delivered to its customers.
(iii) Standard type. No utility may furnish, set up, or put in use any meter which is not reliable and of
a standard type which meets generally accepted industry standards; provided, however, special meters not
necessarily conforming to such standard types may be used for investigation, testing, or experimental
purposes.
(B) Meter records. Each utility must keep the following records:
EXHIBIT A - RATES & TARIFFS
WEST TEXAS GAS INC.
Page 11 of 12
Effective: April 1, 2021
RATE SCHEDULE
QSR-INC
(i) Meter equipment records. Each utility must keep a record of all its meters, showing the customer's
address and date of the last test.
(ii) Records of meter tests. All meter tests must be properly referenced to the meter record provided for
therein. The record of each test made on request of a customer must show the identifying number and
constants of the meter, the standard meter and other measuring devices used, the date and kind of test made,
by whom made, the error (or percentage of accuracy) at each load tested, and sufficient data to permit
verification of all calculations.
(iii) Meter readings --meter unit location. In general, each meter must indicate clearly the units of
service for which charge is made to the customer.
(iv) Meter tests on request of customer.
(I) Each utility must, upon request of a customer, make a test of the accuracy of the meter serving
that customer. The utility must inform the customer of the time and place of the test and permit the customer
or his authorized representative to be present if the customer so desires. If no such test has been performed
within the previous four years for the same customer at the same location, the test is to be performed without
charge. If such a test has been performed for the same customer at the same location within the previous
four years, the utility is entitled to charge a fee for the test not to exceed $15 or such other fee for the testing
of meters as may be set forth in the utility's tariff properly on file with the regulatory authority. The customer
must be properly informed of the result of any test on a meter that serves him.
(II) Notwithstanding subclause (1) of this clause, if the meter is found to be more than nominally
defective, to either the customer's or the utility's disadvantage, any fee charged for a meter test must be
refunded to the customer. More than nominally defective means a deviation of more than 2.0% from
accurate registration.
(v) Bill adjustments due to meter error.
(I) If any meter test reveals a meter to be more than nominally defective, the utility must correct
previous readings consistent with the inaccuracy found in the meter for the period of either:
(-a-) the last six months; or
(-b-) the last test of the meter, whichever is shorter. Any resulting underbillings or overbillings are
to be corrected in subsequent bills, unless service is terminated, in which event a monetary adjustment is to
be made. This requirement for a correction may be foregone by the utility if the error is to the utility's
disadvantage.
(II) If a meter is found not to register for any period of time, the utility may make a charge for units
used but not metered for a period not to exceed three months previous to the time the meter is found not to
be registering. The determination of amounts used but not metered is to be based on consumption during
other like periods by the same customer at the same location, when available, and on consumption under
similar conditions at the same location or of other similarly situated customers, when not available.
EXHIBIT A - RATES & TARIFFS
WEST TEXAS GAS INC. RATE SCHEDULE
Page 12 of 12 QSR-INC
Effective: April 1, 2021
(8) New construction.
(A) Standards of construction. Each utility is to construct, install, operate, and maintain its plant,
structures, equipment, and lines in accordance with the provisions of such codes and standards as are
generally accepted by the industry, as modified by rule or regulation of the regulatory authority or otherwise
by law, and in such manner to best accommodate the public and to prevent interference with service
furnished by other public utilities insofar as practical.
(B) Line extension and construction charges. Every utility must file its extension policy. The policy must
be consistent, nondiscriminatory, and is subject to the approval of the regulatory authority. No contribution
in aid of construction may be required of any customer except as provided for in extension policy.
(C) Response to request for service. Every gas utility must serve each qualified applicant for service
within its service area as rapidly as practical. As a general policy, those applications not involving line
extensions or new facilities should be filled within seven working days. Those applications for individual
residential service requiring line extensions should be filled within 90 days unless unavailability of
materials or other causes beyond the control of the utility result in unavoidable delays. In the event that
residential service is delayed in excess of 90 days after an applicant has met credit requirements and made
satisfactory arrangements for payment of any required construction charges, a report must be made to the
regulatory authority listing the name of the applicant, location, and cause for delay. Unless such delays are
due to causes which are reasonably beyond the control of the utility, a delay in excess of 90 days may be
found to constitute a refusal to serve.
SETTLEM ENTAGREEMENT- EXHIBIT B
Settlement Terms:
Dollar Increase
Domestic/Non-Domestic Customer Split
Monthy Customer Charge
Domestic
Non -Domestic
Calculation of Rates:
Current Revenues
Dollar Increase
Settlement Revenues (a)
Customer Charge Revenue
Number of Customers X 12 (b)
Monthly Customer Charge
Customer Charge Revenue
Volumetric Charge
Settlement Revenues
Customer Charge Revenues
Volumetric Charge Revenues
Volumes — Mcf (c)
Consumption Charge/Mcf
PROOF OF REVENUES
2,187,500
77.00% 23.00%
$ 17.00
$ 30.00
Total Domestic
8,357,137
2,187,500
10,544,637
77.00% 8,119,370
191,052
$ 17.00
8,119,370
(3,247,884)
4,871,486
1,006,829
$ 4.84
3,247,884
Non -Domestic
23.00% 2,425,266
26,748
$ 30.00
802,440
2,425,266
(802,440)
1,622,826
602,941
$ 2.69
(a) Includes reduction for amortization of excess accumulated deferred income taxes attributable to the Tax Cut and Jobs Act of 2017
(annual amortization of $532,708 times 36.75%jurisdictional allocation factor).
(b) At September 30, 2020—15,921 Domestic and 2,229 Non -Domestic customers.
(c) Number of customers at September 30, 2020 times average weather -adjusted use per customer during the 2019 test year.
SETTLEMENT AGREEMENT- EXHIBIT C -DEPRECIATION RATES
WEST TEXAS GAS, INC.
DEPRECIATION RATES
FERC Account
Description
Depreciation Rate
Intaniale Plant
301.0
Organization
0.00%
302.0
Franchises and Consents
0.00%
303.0
Rights of Way
0.00% Note 1
Gatherina Plant
332.0
Field Lines
0.00% Note 1
334.0
Field M&R Station Equipment
0.00% Note 1
Transmission Plant
365.0
Land and Rights -of -Way
2.21 %
367.0
Mains
2.54%
368.0
Compressor Station Equipment
0.00%
369.0
M&R Station Equipment
2.61%
369.1
Meters
2.54%
371.0
Other Equipment
4.85%
Distribution Plant
376.0
Mains
2.61%
377.0
Compressors
0.00%
378.0
M&RStation Equipment
2.61%
387.0
Other Equipment
3.81 %
General Plant
389.0
Rights -of -Way
2.01 %
390.0
Office Buildings
4.24%
391.0
Office Furniture and Equipment
5.00%
391.1
Computer Equipment
20.00%
392.0
Transportation Equip
10.66%
394.0
Tools, Shop & Garage
4.00%
397.0
Communication Equip
6.67%
398.0
Miscellaneous Equip
6.67%
Contributions in Aid of Construction
332.0
Field Lines
2.22%
367.0
Mains
2.54%
376.0
Mains
2.61%
Note 1
Existing investment is fully depreciated. Company
should apply a Whole Life rate as follows for
Account 303 5.88% (1/17)
Account 332 2.22% (1/45)
Account 334 2.78% (1/36)