Eagle Pass City Council Approves Natural Gas Franchise to Texas State Natural Gas, Inc. for 20 Years

By: Miguel Munoz, Eagle Pass Business Journal, Inc., Copyright 2018

The City of Eagle Pass, Texas City Council unanimously approved to award locally-owned Texas State Natural Gas, Inc. a 20 year extension of the City’s natural gas franchise at its regular meeting held on Tuesday, March 6, 2018.

Texas State Natural Gas, Inc. currently holds the City’s franchise for natural gas, but its franchise was set to expire this year.  Texas State Natural Gas, Inc. is owned by the Libson Family of Eagle Pass with Javier Libson serving as its President and other Libson family members participating and/or owning it.  The Libson Family also owns the natural gas franchise in the City of Piedras Negras, Coahuila, Mexico, Eagle Pass’s Mexican sister city on the United States-Mexico border, which is headed by Morris Libson, Chairman of the City of Eagle Pass Business and Economic Development Committee and longtime resident of this community.

According to the Ordinance approved by the Eagle Pass City Council, the term of the City franchise for natural gas is for 20 years (extension) and the City of Eagle Pass receives in exchange for the franchise fee the “total aggregate sum of money equal to the higher of (1) $ 2,000 or three (3%) percent of of the Grantee’s (Texas State Natural Gas, Inc.) Gross Receipts for the term of this Franchise Ordinance….”

For purposes of this natural gas Franchise Ordinance, “Gross Receipts” shall be defined in accordance with [Texas State Natural Gas, Inc.] approved tariffs as (1) all revenues received by [Texas State Natural Gas, Inc.] from gas sales, and/or services to all classes of customers within the City Limits of Eagle Pass; (2) all revenues received by [Texas State Natural Gas, Inc.] from the transportation of gas through [Texas State Natural Gas, Inc.] System Facilities within the City to customers located within the City; (3) leases of [Texas State Natural Gas, Inc.] facilities within the City ; and (4) the value of gas transported by [Texas State Natural Gas, Inc.] for transport customers (“transport gas”) through [Texas State Natural Gas, Inc.] System Facilities with the City (“third party sales”) with the value of such gas to be established by utilizing [Texas State Natural Gas, Inc.] monthly weighted average of gas charged to industrial customers in Maverick County as reasonably near the time as the transportation service is performed….”

The Eagle Pass Franchise Ordinance also states that “Such Franchise Fees shall be based on receipts for each calendar month.  The Franchise Fees shall be semiannually to the City (1) on or before July 31, for Gross Receipts collected by Grantee from January 1 through June 30 and (2) on or before January 31, for the Gross Receipts collected by [Texas State Natural Gas, Inc.] from July 1 through December 31….”

The Ordinance further states that “the Franchise Ordinance shall not take effect until thirty (30) days after its final passage; and pending such time, the full text of this Franchise Ordinance shall be published once each week for two consecutive weeks in a newspaper of general circulation in the City of Eagle Pass and the expense of such publication shall be borne by [Texas State Natural Gas, Inc.]….”

The Eagle Pass City Council approved the first of two readings of this Natural Gas Franchise Ordinance at its March 6, 2018 regular meeting and is expected to approve it at the second reading in the next regular or special meeting in the near future.