O-3020-8-11ORDINANCE NO.3020.8-11
' 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., MID-TEX DIVISION
("ATMOS MID-TEX" OR "COMPANY") REGARDING THE COMPANY'S
FOURTH ANNUAL RATE REVIEW MECHANISM ("RRM'J 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; 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 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 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 REM 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 rete 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,
WHEREAS, the attached tariffs implementing new rates are consistent with the negotiated resolution reached
by ACSC Cities and arejust, reasonable, and 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 arehereby in all things approved.
SECTION 2. 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. Atmos Mid -Tex shall reimburse the reasonable ratemaking expenses of the ACSC Cities in
processing the Company's rate application.
SECTION 4. To the extent any resolution or ordinance previously adopted by the Council is inconsistent
with this Ordinance, it is 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. 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 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.
SECTION 7. 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.
Ordinance No. 3020-8-11, Page 2
DULY PASSED AND APPROVED BY THE CITY COUNCIL OF THE CITY OF ALLEN, COLLIN
COUNTY, TEXAS, ON THIS THE 9" DAY OF AUGUST, 2011.
APPROVED:
Aga.i: =
Stephd Terrell, MAYOR
APPROVED AS TO FORM: ATTEST:
Peter G. Smith, C4TY ATTORNEY Shelley B. Geo RMC, CTT ECRETARY