Subject/Recommendation: |
A Resolution of the City of Kyle, Texas suspending the proposed Gas Reliability Infrastructure Program Interim Rate Adjustment of Texas Gas Service Company, a Division of One Gas, Inc.; finding that the meeting complies with the open meetings act; declaring an effective date and requiring delivery of this resolution to the company’s legal counsel. ~ Jerry Hendrix, Chief of Staff |
Other Information: |
Texas Gas Service (TGS) will submit two filings regarding rates this spring.
The first one is their interim rate adjustment request, commonly known as a “GRIP,” or Gas Reliability Infrastructure Program. State law allows the gas utilities to file interim rate adjustments that allow them to recover costs associated with upgrading and maintaining their infrastructure.
Additionally, TGS will submit a special, one-time voluntary filing to reduce rates resulting from the eduction to the federal corporate tax rate from 35% to 21%. Their plan is to net out these two filings and make one change to customers’ bills in June when both become effective.
For the GRIP, the new rates would go into effect 60 days from March 2, or May 1ST, unless the City suspends the implementation for 45 days. State law provides cities with an option to suspend (delay) the implementation of the new rates for an additional 45 days. This resolution will satisfy the requirements to suspend the increase.
Assuming Kyle approves the resolution to suspend, rates will be implemented on the 105th day, or June 15th.
The second filing, scheduled for Mar. 28th, is a voluntary filing to reduce rates, and is a result of the decrease in corporate tax rate. There is no council action required for the rate decrease to go into effect.
When the reduction in rates is netted against the requested GRIP increase, it will result in a decrease in rates that will take effect June 28. In addition, there will be a one-time credit for the period Jan. 1 – June 28. This credit will appear in the July bills.
The GRIP will result in an $0.88 increase in the average residential bill, while the voluntary rate reduction associated with tax reform will result in a $1.41 decrease in the average residential bill. fThe net decrease will be $0.53 per month for the average residential customer.
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