If a city denies a proposed rate increase and it is appealed to the Railroad Commission or district court, what expenses will the city and its ratepayers face?
The governing body of any municipality participating in or conducting ratemaking proceedings may select and engage rate consultants, accountants, auditors, attorneys, and/or engineers to advise and represent the municipality with litigation or natural gas utility ratemaking proceedings before any regulatory authority or in court. The natural gas utility engaged in those proceedings is required to reimburse the governing body for the costs of those services only to the extent that the costs are found reasonable by the applicable regulatory authority. The natural gas utility commonly recoups these costs along with its own reasonable rate case expenses by applying a surcharge, which is determined by the regulatory authority, to its utility rates for that particular municipality. This surcharge usually is applied on a per customer or per Mcf basis and is typically spread out over a period of time to reduce its impact on ratepayers. The regulatory authority typically monitors the amount of
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