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Home My Public Portal AboutOrdinance No. 1052-06 04-25-2006 ORDINANCE NO. 1052-06 AN ORDINANCE FINDING THAT THE EXISTING NATURAL GAS DISTRIBUTION RATES OF ATMOS MID-TEX SHOULD BE REDUCED; ORDERING ATMOS ENERGY CORP., MID-TEX DIVISION, TO REDUCE ITS EXISTING RATES WITHIN THE CITY; ADOPTING SPECIFIC NEW RATES R, T & C AND ORDERING ALL RATES, SERVICE CHARGES AND TARIFF LANGUAGE NOT INCONSISTENT WITH ATTACHMENT 1 TO REMAIN OPERATIVE EXCEPT 'THAT ALL GRIP SURCHARGES SHALL IMMEDIATELY CEASE; ORDERING ATMOS MID-TEX TO REIMBURSE THE CITY FOR ITS REASONABLE COSTS INCURRED IN THIS SHOW CAUSE AND ANY RELATED RATEMAKING PROCEEDINGS OR APPEALS OF SAID PROCEEDINGS; AUTHORIZING THE ATMOS CITIES STEERING COMMITTEE TO ACT ON BEHALF OF CITY AND INTERVENE IN ANY PROCEEDINGS BEFORE ADMINISTRATIVE OR JUDICIAL BODIES; REQUIRING DELIVERY OF THIS RESOLUTION TO THE COMPANY AND LEGAL COUNSEL; AND ORDAINING OTHEK PROVISIONS RELATED TO THE SUBJECT MATTER HEREOF. WHEREAS, the City of Richland Hills, Texas (City is a regulatory authority under the Gas Utility Regulatory Act ("GURA") and has original jurisdiction over the gas utility rates of Atmos Energy Corp., Mid-Tex Division (the "Company"); and WHEREAS, the City has the authority under 103.001 and 104.151, GURA, to initiate a proceeding to determine whether the existing rates of a gas utility are unreasonable or in any way in violation of any provision of law; and WHEREAS, the City previously authorized participation with the Atmos Cities Steering Committee (ACSC); and WHEREAS, on October 25, 2005, the City ordered the Company to show cause regarding the reasonableness of its existing natural gas distribution rates within the City; and WHEREAS, the Company filed its rate filing package with the City an or about December 31, 2005; and 1668V 4\Rate Ord\ord060330kpd Rate Ord 1 • WHEREAS, the City's representatives obtained additional information from the Company through written requests for information; and WHEREAS, the City's consultants and representatives through cooperative efforts under the direction of the ACSC have reviewed the rate filing package and responses to information requests and have made a recommendation to the City regarding the rates to be charged by the Company within the City; and WHEREAS, on April 25, 2006, a public hearing was held, at which time the Company was given an opportunity to address the City Council regarding its current rates; and WHEREAS, GURA § 104.151(a) provides that if a regulatory authority, on its own motion or on complaint by an affected person, after reasonable notice and hearing, finds that the. existing rates of a gas utility for a service are unreasonable or in violation of law, the regulatory • authority shall enter an order establishing the just and reasonable rates to be observed thereafter, and serve a copy of the order on the gas utility; and WHEREAS, GURA § 104.151(b) provides that the rates trius ordered by the regulatory authority constitute the legal rates of the gas utility until changed as provided by GURA; and WHEREAS, after affording reasonable notice and hearing to the Company, it is the City's opinion that the Company's current rates are not reasonable; and WHEREAS, based upon such hearing, the briefing of staff; and the consultants' findings, the City has made a determination of the reasonableness of the existing rates of the Company, and has determined just and reasonable rates to be hereafter observed and enforced for all services of the Company within the City; 1668\14\Rate Ord\ord060330kpd Rate Ord 2 • NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF RICHLAND HILLS, TEXAS: SF,CTION 1. That the Company was given reasonable notice of the hearing held on April 25, 2006, and the Company had a reasonable opportunity to show to the City that its rates were just and reasonable. SECTION 2. That the Company failed to shave that its existing rates are just or reasonable. SECTION 3. That the rates set forth on Attachment "A" to this Ordinance, which attachment shall be incorporated herein as if it were fully set forth herein, are just and reasonable rates: a. The rates set forth in Attachment "A" establish the Company's overall revenues at an amount that will permit the Company a reasonable opportunity to earn a reasonable • return on its invested capital used and useful in providing service to the public in excess of the Company's reasonable and necessary operating expenses, in compliance with GURA § 104.051; and b. The rates set forth in Attachment "A" do not yield more than a fair return on the adjusted value of invested capital used and useful in providing service to the public, in compliance with GURA § 104.052. SECTION 4. That the Company shall immediately begin charging the rates set forth on Attachment "A" hereto, and shall, pursuant to GURA § 104.301, immediately cease the imposition and collection of all Gas Reliability Infrastructure Program ("GRIP") surcharges. SECTION 5. That the existing rates, service charges and tariff language not inconsistent with Section 4 and Attachment 1 shall remain operative. 1668\14\Rate Ord\ord060330kpd Rate Ord 3 • SECTION 6. That the City is authorized to intervene in any appeal of the City's action filed at the Railroad Commission of Texas and to otherwise participate m any litigation associated with the Company's rates charged in the City, in conjunction with the ACSC. SECTION 7. That the Company shall promptly reimburse ACSC for ratemaking costs associated with the City's activities related to the show cause proceeding, including appeals to the Railroad Commission or Courts, in accordance with GURA § 103.022. SECTION 8. That a copy of this Ordinance shall be sent to the Company, care of Richard T. Reis, at Atmos Energy Corporation, 5420 LBJ Freeway, Suite 1800, Dallas, Texas 75240, and to Geoffrey Gay, legal counsel to ACSC, at Lloyd Gosselink, P.O. Box 1725, Austin, Texas 78767-1725. SECTION 9. That this Ordinance shall become effective immediately from and after its passage, as the law and charter in such cases provide. • SECTION 10. That it is hereby officially found and determined that the meeting at which this Ordinance is passed is open to the public as required by law and that public notice of the time, place and purpose of said meeting was given as required. DULY PASSED and approved by the City Council of the City of Richland Hills, Texas, on this the 25th day of Apri12006. APPROVED: \~,ttuuunn,,,~~ Qk I Ne a S. Stroder, Mayor ~ =~j ( ATTES . ~'~%~~,,,,II~~I,,,,~~~~"~ im utter, City Secretary 1668\14\Rate Ord\ord060330kpd Rate Ord 4 • APPROVED S O FORM: Tim G. Sralla, City Attorney • 1668\14\Rate Ord\ord060330kpd Rate Ord 5 • Attachment A Atmos Energy Corp., Mid-Tex Division Ordered Rates Line Ordered No. Rate R -Summary Rates 1 Customer Charge $ 7.50 2 3 Block 1 Commodity Rate (0-3 Mcf) $ 1.1915 per Mcf 4 Block 2 Commodity Rate (over 3 Mcf) 0.9415 per Mcf 5 6 Average Monthly Bill (6 Mcf without Gas Cost) $ 14.72 per Month 7 8 Average Monthly Bill (6 Mcf with Gas Cost) $ 34.75 per Month 9 10 11 Ordered 12 Rate C -Summary Rates 13 • 14 Customer Charge $ 12.50 15 16 Block 1 Commodity Rate (0-30 Mcf) $ 0.7417 per Mcf 17 Block 2 Commodity Rate (30-350 Mcf) $ 0.4917 per Mcf 18 Block 3 Commodity Rate (Over 350 Mcf) $ 0.2417 per Mcf 19 20 Average Monthly Bill (30 Mcf without Gas Cost) $ 36.78 per Month 21 22 Average Monthly Bill (30 Mcf with Gas Cost) $ 136.78 per Month 23 24 25 Ordered 26 Rate T -Summary Rates 27 28 Customer Charge $ 300.00 29 30 Block 1 Commodity Rate (0-1,500 MMBtu) $ 0.4977 per MMBtu 31 Block 2 Commodity Rate (Next 3,500 MMBtu) $ 0.3477 per MMBtu 32 Block 3 Commodity Rate (Next 45,000 MMBtu) $ 0.1977 per MMBtu 33 Block 4 Commodity Rate (Over 50,000 MMBtu) $ 0.0477 per MMBtu 34 35 Average Monthly Bill (300 MMBtu without gas cost) $ 475.07 per Month 36 37 Average Monthly Bill (300 MMBtu with gas cost) $ 1,474.93 per Month 1668\(4\Rate Ord\ord060330kpd Rate Ord 6