HomeMy Public PortalAboutOrdinance No. 1209-11 08-09-2011ORDINANCE NO. 1209-11
AN OR I ANCE OF THE CITY COUNCIL OF THE CITY
OF '~~S , TEXAS, ("CITY") APPROVING A
NEGOTIATED RESOLUTION BETWEEN THE ATMOS
CITIES STEERING COMMITTEE ("ACSC" OR
"STEERING COMMITTEE") AND ATMOS ENERGY
CORP., MID-TEX DIVISION ("ATMOS MID-TEX" OR
"COMPANY") REGARDING THE COMPANY'S FOURTH
ANNUAL RATE REVIEW MECHANISM ("RRM") 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; REQUIRING THE COMPANY TO
REIMBURSE CITIES' REASONABLE RATEMAKING
EXPENSES; REPEALING CONFLICTING RESOLUTIONS
OR ORDINANCES; DETERMINING THAT THIS
ORDINANCE WAS PASSED IN ACCORDANCE WITH
THE REQUIREMENTS OF THE TEXAS OPEN MEETINGS
ACT; ADOPTING A SAVINGS CLAUSE; DECLARING AN
EFFECTIVE DATE; AND REQUIRING DELIVERY OF
THIS ORDINANCE TO THE COMPANY AND THE
STEERING COMMITTEE'S LEGAL COUNSEL.
WHEREAS, the City of ~~c~~R,~~p ;115 ,Texas ("City") is a gas utility customer
of Atmos Energy Corp., Mid-Tex Division ("Atmos Mid-Tex" or "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" or
"Steering Committee"), a coalition of approximately 154 similarly situated cities served by
Atmos Mid-Tex that have joined together to facilitate the review of 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, pursuant to the terms of the agreement settling the Company's 2007
Statement of Intent to increase rates, ACSC Cities and the Company worked collaboratively to
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develop a Rate Review Mechanism ("RRM") tariff that allows for an expedited rate review
process controlled in a three-year experiment by ACSC Cities as a substitute to the current GRIP
process instituted by the Legislature; and
WHEREAS, the City took action in 2008 to approve a Settlement Agreement with Atmos
Mid-Tex resolving the Company's 2007 rate case and authorizing the RRM Tariff; and
WHEREAS, the 2008 Settlement Agreement contemplates reimbursement of ACSC
Cities' reasonable expenses associated with RRM applications; and
WHEREAS, the Steering Committee and Atmos Mid-Tex agreed to extend the RRM
process in reaching a settlement in 2010 on the third RRM filing; and
WHEREAS, on or about April 1, 2011, the Company filed with the city its fourth annual
RRM filing, requesting to increase natural gas base rates by $15.7 million; and
WHEREAS, ACSC coordinated its review of Atmos Mid-Tex's RRM filing by
designating a Settlement Committee made up of ACSC representatives, assisted by ACSC
attorneys and consultants, to resolve issues identified by ACSC in the Company's RRM filing;
and
WHEREAS, independent analysis by ACSC's rate expert concluded that Atmos Mid-Tex
is unable to justify an increase over current rates except for undisputed costs of $6.6 million to
cover the steel service line replacement program initiated in 2010; and
WHEREAS, the ACSC Settlement Committee, as well as ACSC lawyers and consultants,
recommend that ACSC Cities approve the attached rate tariffs ("Attachment A" to this
Ordinance), which will increase the Company's revenue requirement by $6.6 million to extend
current recovery of incremental direct costs of the steel service line replacement program
authorized by ACSC Cities in ordinances passed in 2010; and
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WHEREAS, the attached tariffs implementing new rates are consistent with the
negotiated resolution reached by ACSC Cities and are just, reasonable, and in the public interest.
NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY
OF ' ~„1n1 ' II.~TEXAS:
Section 1. That the findings set forth in this Ordinance are hereby in all things approved.
Section 2. That the City Council finds the existing rates for natural gas service provided
by Atmos Mid-Tex are unreasonable and new tariffs which are attached hereto and incorporated
herein as Attachment A, are just and reasonable and are hereby adopted.
Section 3. That Atmos Mid-Tex shall reimburse the reasonable ratemaking expenses of
the ACSC Cities in processing the Company's rate application.
Section 4. That to the extent any resolution or ordinance previously adopted by the
Council is inconsistent with this Ordinance, it is hereby repealed.
Section 5. 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.
Section 6. 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 7. That this Ordinance shall become effective from and after its passage with
rates authorized by attached Tariffs to be effective for bills rendered on or after September 1,
2011.
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Section 8. 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 1862, 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 ~_ day of S~ , 2011.
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City Secretary
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City A orney
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