HomeMy WebLinkAboutO-2847-8-09ORDINANCE NO. 2847-8-09
' AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF ALLEN, COLLIN
COUNTY, TEXAS ("CITY"), APPROVING A NEGOTIATED RESOLUTION
BETWEEN THE ATMOS CITIES STEERING COMMITTEE ("ACSC" OR
"STEERING COMMITTEE") AND ATMOS ENERGY CORP., Mm-TEX DIVISION
(11ATMOS MID-TEX" OR "COMPANY") REGARDING THE COMPANY'S RATE
REVIEW MECHANISM FILING IN ALL CITIES EXERCISING ORIGINAL
JURISDICTION; DECLARING EXISTING RATES TO BE UNREASONABLE;
REQUIRING THE COMPANY TO REIMBURSE CITIES' REASONABLE
RATEMAKING EXPENSES; 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; REQUIRING DELIVERY OF THIS ORDINANCE TO THE
COMPANY AND THE STEERING COMMITTEE'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 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 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, 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 develop the 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, on or about March 6, 2009, Atmos Mid -Tex filed with the City its second application pursuant
to the RRM tariff to increase natural gas rates by approximately $20.2 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 Settlement
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 Mid -Tex is able to justify a
slight rate increase over current rates; and,
' WHEREAS, the Steering Committee has advocated in other proceedings that Atmos Mid -Tex hedge natural
gas futures in order to mitigate the volatility of natural gas prices, which are a flow through to customers; and,
WHEREAS, the ACSC Executive Committee, as well as ACSC lawyers and consultants, recommend that
ACSC members approve the attached rate tariffs ("Attachment A" to this Ordinance), which will increase the
Company's revenue requirement by $2.6 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 ACSC Cities and arejust, reasonable,
and in the public interest and,
WHEREAS, it is the intention of the parties that if the City determines 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 the Company's RRM filing would be more beneficial to the City
than the terms of the attached tariff, then the more favorable rates, revenues, terms and conditions, or benefits
shall additionally accrue to the City; and,
WHEREAS, the negotiated resolution of the Company's RRM filing and the resulting rates are, as a whole,
in the public interest.
NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF ALLEN,
COLLIN COUNTY, TEXAS, THAT:
' SECTION 1. The findings set forth in this Ordinance are hereby in all things approved.
SECTION 2. 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. Atmos Mid -Tex shall reimburse the reasonable rate making expenses of the ACSC Cities in
processing the Company's rate application.
SECTION 4. All ordinances and resolutions in conflict with this ordinance are hereby repealed.
SECTION 5. 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. 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. If the City determines 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
the Company's RRM filing would be more beneficial to the City than the terms of the attached tariff, then the
more favorable rates, revenues, terms and conditions, or benefits shall additionally accrue to the City.
' SECTION 8. The Company's Gas Cost Recovery tariff is revised to permit recovery of certain costs
associated with hedging natural gas futures.
Ordinance No. 2847-8-09, Page 2
SECTION 9. 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 LB] 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.
SECTION 10. 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 August 1, 2009.
DULY PASSED AND APPROVED BY THE CITY COUNCIL OF THE CITY OF ALLEN, COLLIN
COUNTY, TEXAS, ON THIS THE lira DAY OF AUGUST, 2009.
APPROVED:
U
I
Steph n Terrell, MAYOR
APPROVED AS TO FORM: ATTEST:
Peter G. Smitlal CITY ATTORNEY She ey B. Georg C, CITY SE T Y
Ordinance No. 2847-8-09, Page 3