R-3081-5-12RESOLUTION NO. 3081-5-12(R)
' A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ALLEN, COLLIN
COUNTY, TEXAS, DENYING ATMOS ENERGY CORP., MID-TEX DIVISION'S
("ATMOS Mm-TEX") REQUESTED RATE CHANGE; REQUIRING THE
COMPANY TO REIMBURSE THE CITY'S REASONABLE RATEMAKING
EXPENSES; FINDING THAT THE MEETING AT WHICH THIS RESOLUTION IS
PASSED IS OPEN TO THE PUBLIC AS REQUIRED BY LAW; REQUIRING
NOTICE OF THIS RESOLUTION TO THE COMPANY AND ACSC'S LEGAL
COUNSEL; AND PROVIDING AN EFFECTIVE DATE.
WHEREAS, the City of Allen, Texas ("City") is a gas utility customer of Atmos Energy Corp., Mid -Tex
Division ("Atmos Mid -Tex" or "Company"), and is a regulatory authority under the Gas Utility Regulatory
Act ("GURA") and under Chapter 104, § 104.001 et seq. of GURA, has exclusive original jurisdiction over
Atmos Mid-Tex's rates, operations, and services within the City; and;
WHEREAS, the City is a member of the Atmos Cities Steering Committee ("ACSC"), a coalition of over
150 similarly situated cities served by the Company that have joined together to facilitate the review and
response to natural gas issues affecting rates charged in the Atmos Mid -Tex Division; and;
WHEREAS, pursuant to the terns of the agreement settling the Company's 2007 Statement of Intent to
increase rates, ACSC and the Company worked collectively to develop a Rate Review Mechanism ("RRM")
tariff that allows for an expedited rate review process controlled in a three-year experiment by ACSC as a
' substitute to the current GRIP process instituted by he Legislature; and;
WHEREAS, ACSC and the Company agreed to extend the RRM process in reaching a settlement in 2010 on
the third RRM filing; and;
WHEREAS, in 2011, ACSC and the Company engaged in good faith negotiations regarding the continuation
of the RRM process, but were unable to come to ultimate agreement; and;
WHEREAS, on or about January 31, 2012, the Company filed a Statement of Intent with the cities retaining
original jurisdiction within its Mid -Tex service division to increase rates by approximately $49 million; and;
WHEREAS, Atmos Mid -Tex proposed March 6, 2012, as the effective date for its requested increase in
rates; and;
WHEREAS, the City suspended the effective date of Atmos Mid-Tex's proposed rate increase for the
maximum period allowed by law and thus extended the City's jurisdiction until June 4, 2012; and;
WHEREAS, on April 25, 2012, the Company extended the effective date for its proposed rates by one week,
which similarly extended the City's jurisdiction until June 11, 2012; and;
WHEREAS, the ACSC Executive Committee hired and directed legal counsel and consultants to prepare a
common response to the Company's requested rate increase and to negotiate with the Company and direct any
necessary litigation; and;
' WHEREAS, ACSC's consultants conducted a review of the Company's requested rate increase and found
justification that the Company's rates should be decreased; and;
WHEREAS, ACSC and the Company have engaged in settlement discussions but will be unable according to
Company representations to reach settlement in sufficient time for cities to act before June 11, 2012; and;
' WHEREAS, failure by ACSC members to take action before Jane 11, 2012 would allow the Company the
right to impose its full request on residents of said ACSC members; and;
WHEREAS, the ACSC Settlement Committee recommends denial of the Company's proposed rate increase
in order to continue settlement discussions pending the Company's appeal of cities' denials to the Railroad
Commission of Texas; and;
WHEREAS, the GURA § 103.022 provides that costs incurred by cities in ratemaking activities are to be
reimbursed by the regulated utility.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF ALLEN,
COLLIN COUNTY, TEXAS, THAT:
SECTION 1. The rates proposed by Atmos Mid -Tex to be recovered through its gas rates charged to
customers located within the City limits, are hereby found to be unreasonable and shall be denied.
SECTION 2. The Company shall continue to charge its existing rates to customers within the City and that
said existing rates are reasonable.
SECTION 3. The City's reasonable rate case expenses shall be reimbursed by the Company
SECTION 4. It is hereby officially found and determined that the meeting at which this Resolution is
passed is open to the public as required by law and the public notice of the time, place, and purpose of said
meeting was given as required.
SECTION 5. A copy of this Resolution shall be sent to Armes Mid -Tex, care of David Park, Vice President
Rates & Regulatory Affairs, at Armes Energy Corporation, Mid -Tex Division, 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.
SECTION 6. This Resolution shall become effective immediately from and after its passage.
DULY PASSED AND APPROVED BY THE CITY COUNCIL OF THE CITY OF ALLEN, COLLIN
COUNTY, TEXAS, ON THIS THE 0 DAY OF MAY, 2012.
APPROVED:
4--k
Stephen T%rrell, MAYOR
ATTEST:
' Shelley C, CITY SE18RETARY
Resolution No. 3081-5-12(R), Page 2