Nearing the one-year anniversary of last year’s freeze in February, the City of Fort Stockton came to an agreement with West Texas Gas Marketing LLC for a utility rate spike that left the city with a $754,091.30 bill from last year’s catastrophic weather occurrence.

The City of Fort Stockton City Council officially settled with West Texas Gas LLC and formed a new agreement as a result at their regular meeting on Jan. 10. The information was acquired by the Pioneer as a result of an open records request last month.

City attorney Puja Boinpally said the negations took nearly a year due to language in their previous contract and the formation of the new contract agreement.

“It was a settlement. It was negotiating the entire time. Northern Gas assessed a penalty onto West Texas Gas, who then passed on the penalty to their client (City of Fort Stockton),” she said.

Negotiations ended with an agreement of a one-time payment of $358,000, which was taken from the city’s general fund.

Fort Stockton City Manager Frank Rodriguez explained that city council could have passed the expense to gas customers in the city, but instead decided to pay the bill and accept an agreement that could prevent such expense in the future.

“The potential was there for the city to pass that rate to the customers, but our city council decided not to do that. They were not going to allow citizens to take this rate based on what West Texas Gas set,” he said. “Our council decided to take on this burden and not pass it on to our citizens.”

The new agreement with West Texas Gas Marketing LLC is a five-year contract that should remain until Dec. 31, 2026. The contract features a clause that allows the city to change their gas provider if they can find a lower rate and allow their current seller to match the price, which is not obligated.

According to the contract, if the City of Fort Stockton obtains a bona fide written offer to acquire gas from an alternate supplier at a price lower than the current seller, and the seller decides not to match the price, the contract may be terminated at the end of the calendar year by delivering a written notice of termination to the other party prior to the first day of December of such calendar year.

The contract also states that if during any calendar month the seller (West Texas Gas) becomes aware that the average price per MMBtu of gas will increase by more than 300% as compared to the previous month, the seller will promptly notify the buyer (City of Fort Stockton) of such increase.

The buyer will then promptly respond to the seller regarding any reductions in gas quantity that that the buyer desires.