HomeMy Public PortalAboutOrdinance No. 1126-08 09-23-2008 ORDINANCE NO. 1126-08
ANRQc~i1aN~G)~lOF THE CITY COUNCIL OF THE CITY
OF ,TEXAS, ("CITY") APPROVING A
NEGOTIATED RESOLUTION BETWEEN THE ATMOS
CITIES STEERING COMMITTEE AND ATMOS ENERGY
CORP., MID-TEX DIVISION ("ATMOS MID-TEX" OR
"THE COMPANY") REGARDING THE COMPANY'S
RATE REVIEW MECHANISM FILING IN ALL CITIES
EXERCISING ORIGINAL JURISDICTION; DECLARING
EXISTING RATES TO BE UNREASONABLE; ADOPTING
TARIFFS THAT REFLECT RATE ADJUSTMENTS
CONSISTENT WITH THE NEGOTIATED SETTLEMENT
AND FINDING THE RATES TO BE SET BY THE
ATTACHED TARIFFS TO BE JUST AND REASONABLE;
APPROVING ATMOS' PROOF OF REVENUES;
ADOPTING A SAVINGS CLAUSE; DETERMINING THAT
THIS ORDINANCE WAS PASSED IN ACCORDANCE
WITH THE REQUIREMENTS OF THE TEXAS OPEN
MEETINGS ACT; DECLARING AN EFFECTIVE DATE;
AND REQUIRING DELIVERY OF THIS ORDINANCE TO
THE COMPANY AND LEGAL COUNSEL.
WHEREAS, the City of Richland Hills ~ Texas ("City") is a gas utility customer
of Atmos Energy Corp., Mid-Tex Division ("Atmos Mid-Tex" or "the Company"), and a
regulatory authority with an interest in the rates and charges of Atmos Mid-Tex; and
WHEREAS, the City is a member of the Atmos Cities Steering Committee ("ACSC"), a
coalition of more than 150 similarly situated cities served by Atmos Mid-Tex that have joined
together to facilitate the review and response to natural gas issues affecting rates charged in the
Atmos Mid-Tex service area (such participating cities are referred to herein as "ACSC Cities");
and
WHEREAS, Atmos and ACSC Cities have been in continuing disagreement, dispute, and
litigation over the implementation of GRIP surcharges pursuant to Section 104.301 of the Texas
Utilities Code; and
Atmos RRM Ordinance 1
WHEREAS, as part of the negotiations to resolve Atmos' 2007 rate case, ACSC Cities
and the Company worked collaboratively to develop the Rate Review Mechanism ("RRM") tariff
that allows for an expedited rate review process controlled by Cities as a substitute to the current
GRIP process instituted by the Legislature; and
WHEREAS, the City took action earlier this year to approve a Settlement Agreement
with Atmos Mid-Tex resolving the Company's 2007 rate case and authorizing the RRM Tariff;
and
WHEREAS, on or about April 14, 2008, Atmos Mid-Tex filed with the City its first
application pursuant to the RRM tariff to increase natural gas rates by approximately $33.5
million, such increase to be effective in every municipality that has adopted the RRM tariff
within its Mid-Tex Division; and
WHEREAS, ACSC Cities coordinated its review of Atmos' RRM filing and designated a
Negotiation Committee made up of ACSC representatives and assisted by ACSC attorneys and
consultants to resolve issues identified by ACSC in the Company's RRM filing; and
WHEREAS, the Company has filed evidence that existing rates are unreasonable and
should be changed; and
WHEREAS, independent analysis by ACSC's rate expert concluded that Atmos is able to
justify a rate increase of $19.8 million; and
WHEREAS, the ACSC Executive Committee, as well as ACSC lawyers and consultants,
recommends ACSC members approve the attached rate tariffs ("Attachment A" to this
Ordinance) that will increase the Company's revenue requirement by $20 million; and
WHEREAS, the attached tariffs implementing new rates and Atmos' Proof of Revenues
("Attachment B" to this Ordinance) are consistent with the negotiated resolution reached by
Atmos RRM Ordinance 2
ACSC Cities (including but not limited to a reduction of the residential customer monthly charge
to $7.00 per month) and are just, reasonable, and in the public interest; and
WHEREAS, it is the intention of the parties that ACSC Cities receive the benefit of any
Settlement Agreement that Atmos enters into with other entities arising out of its RRM or any
associated appeals of a decision entered by the Railroad Commission regarding the Company's
request to increase rates. The ACSC Cities' acknowledge that the exercise of this right is
conditioned upon the ACSC Cities' acceptance of all rates, revenues, terms and conditions of any
other Settlement Agreement or associated appeals arising out of the Company's RRM filing in
toto; and
WHEREAS, the negotiated resolution of the Company's RRM filing and the resulting
rates are, as a whole, is in the public interest.
NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY
Richland Hills
OF ,TEXAS:
Section 1. That the findings set forth in this Ordinance are hereby in all things approved.
Section 2. That the City Council finds that the existing rates for natural gas service
provided by Atmos Mid-Tex are unreasonable and new tariffs and Atmos' proof of revenues,
which are attached hereto and incorporated herein as Attachments A and B, are just and
reasonable and are hereby adopted.
Section 3. That to the extent any resolution or ordinance previously adopted by the
Council is inconsistent with this Ordinance, it is hereby repealed.
Section 4. That the meeting at which this Ordinance was approved was in all things
conducted in strict compliance with the Texas Open Meetings Act, Texas Government Code,
Chapter 551.
Atmos RRM Ordinance 3
Section 5. That if any one or more sections or clauses of this Ordinance is adjudged to be
unconstitutional or invalid, such judgment shall not affect, impair or invalidate the remaining
provisions of this Ordinance and the remaining provisions of the Ordinance shall be interpreted
as if the offending section or clause never existed.
Section 6. That if ACSC Cities determine any rates, revenues, terms and conditions, or
benefits resulting from a Final Order or subsequent negotiated settlement approved in any
proceeding addressing the issues raised in Atmos' RRM filing would be more beneficial to the
ACSC Cities than the terms of the attached tariff, then the more favorable rates, revenues, terms
and conditions, or benefits shall additionally accrue to the ACSC Cities. Exercise of this right is
conditioned upon ACSC Cities' acceptance of all rates, revenues, ternls and conditions of any
other Settlement Agreement or associated appeals arising out of the Company's RRM filing in
toto.
Section 8. That this Ordinance shall become effective from and after its passage with
rates authorized by attached Tariffs to be effective for customer bills delivered on or after
October 1, 2008.
Section 9. That a copy of this Ordinance shall be sent to Atmos Mid-Tex, care of David
Park, Vice President Rates and Regulatory Affairs, at Atmos Energy Corporation, 5420 LBJ
Freeway, Suite 1800, Dallas, Texas 75240, and to Geoffrey Gay, General Counsel to ACSC, at
Lloyd Gosselink Rochelle & Townsend, P.C., P.O. Box 1725, Austin, Texas 78767-1725.
PASSED AND APPROVED this 23rd. day of September 2008.
. CIO y.,,
ayor _ lam';
ATTEST; - F' Jm'
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Atmos RRM Ordinance 4 \\\\A\\\`.~`~
rty Secretary
APPROVE AS FO
City A orney
Atmos RRM Ordinance 5