O-2454-11-05ORDINANCE NO. 2454-11-05
' AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF ALLEN, COLLIN
COUNTY, TEXAS, DENYING THE REQUEST OF ATMOS ENERGY CORP., MID-
TEX DIVISION, FOR AN ANNUAL GAS RELIABILITY INFRASTRUCTURE
PROGRAM (GRIP) RATE INCREASE IN THIS MUNICIPALITY, AS A PART OF
THE COMPANY'S STATEWIDE GAS UTILITY DISTRIBUTION SYSTEM;
APPROVING COOPERATION WITH OTHER CITIES WITHIN THE ATMOS
ENERGY CORP., MID-TEX DIVISION DISTRIBUTION SYSTEM AS PART OF
THE ATMOS CITIES STEERING COMMITTEE (ACSC); AUTHORIZING ACSC
TO HIRE LEGAL AND CONSULTING SERVICES AND TO NEGOTIATE WITH
THE COMPANY AND DIRECT ANY NECESSARY LITIGATION; AUTHORIZING
INTERVENTION AS PART OF ACSC IN ANY APPEAL OF THE CITY'S ACTION
TO THE RAILROAD COMMISSION; PROVIDING A REQUIREMENT FOR A
PROMPT REIMBURSEMENT OF COSTS INCURRED BY THE CITY, FINDING
THAT THE MEETING AT WHICH THIS ORDINANCE IS PASSED IS OPEN TO
THE PUBLIC AS REQUIRED BY LAW; PROVIDING FOR NOTICE OF THIS
ORDINANCE TO ATMOS ENERGY CORP., MID-TEX DIVISION; AND
PROVIDING AN EFFECTIVE DATE.
WHEREAS, on or about September 17, 2005, Atmos Energy Corp., Mid -Tex Division, (the "Company")
' filed with the City of Allen ("City"), a request for an annual gas reliability infrastructure program (GRIP) rate
increase for customers on the Company's statewide gas utility system to be effective November 19, 2005;
and,
WHEREAS, the City has exclusive original jurisdiction to evaluate the Company's request as it pertains to
the distribution facilities located within the City, pursuant to Texas Utilities Code §§ 102.00l(b) and 103.001;
and,
WHEREAS, it is reasonable for the City of Allen to cooperate with other cities in a coalition of cities in
opposition to the Company's filing at the Railroad Commission ("Commission"), said coalition being known
as Atmos Cities Steering Committee ("ACSC"), in any appeal of the cities' actions to the Commission; and,
WHEREAS, the Gas Utility Regulatory Act grants local regulatory authorities the right to intervene in rate
proceedings filed at the Railroad Commission; and,
WHEREAS, the Texas Utilities Code § 103.022 provides that costs incurred by the City in ratemaking
activities are to be reimbursed by the regulated utility; and,
WHEREAS, counsel for ACSC, upon review of the Company's filing and upon consultation with various
consultants, recommends finding that the Company's proposal is unjustified and unreasonable; and,
WHEREAS, the Company has publicly stated that it will receive substantial profit in 2005 and that its
expenses are substantially below those on which the GUD No. 9400 rates it is charging were based; and,
' WHEREAS, the Company's GRIP request fails to account for growth in numbers of customers, thereby
undercounting the revenues it will receive from its proposed GRIP rate increase; and,
WHEREAS, the Company's GRIP request fails to recognize that GUD No. 9400 rates included profit based
on TXU Corporation's capital structure rather than Atmos Energy Corp.'s current capital structure, which
' justifies a lower rate of return.
NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF ALLEN,
COLLIN COUNTY, TEXAS, THAT:
SECTION 1. The Company's GRIP rate increase request is found to be unreasonable and is therefore
denied in all respects.
SECTION 2. The City is authorized to cooperate with other Cities within the Company's Distribution
System that have formed ACSC to hire and direct legal counsel and consultants, negotiate with the Company,
make recommendations to the City regarding reasonable rates and to direct any necessary litigation associated
with an appeal of a rate ordinance and the rate case filed at the Commission.
SECTION 3. The costs incurred by the City in reviewing the Company's GRIP request shall be promptly
reimbursed by the Company.
SECTION 4. The City is authorized to intervene in any appeal of the city's action filed at the Commission,
and to participate in any such appeal as a member of ACSC.
SECTION 5. It is hereby officially found and determined that the meeting at which this Ordinance is
passed is open to the public as required by law and that public notice of the time, place and purpose of said
meeting was given as required.
SECTION 6. A copy of this ordinance, constituting final action on the Company's application, be
forwarded to the appropriate designated representative of the Company within 10 days as follows: Richard T.
Reis, Atmos Energy Corporation, 5420 LBJ Freeway, Suite 1800, Dallas, Texas 75240, and to Geoffrey Gay,
legal counsel to the coalition of cities, at Lloyd Gosselinly P.O. Box 1725, Austin, Texas 78767-1725.
SECTION 7. This Ordinance shall become effective immediately from and after its passage, as the law and
charter in such cases provide.
DULY PASSED AND APPROVED BY THE CITY COUNCIL OF THE CITY OF ALLEN, COLLIN
COUNTY, TEXAS, ON THIS THE 8"r DAY OF NOVEMBER, 2005.
APPROVED:
APPROVED AS TO FORM:
Stephed4MAYOR--AA
ATTEST:
'
PWer G. Smith, C1fY ATTORNEY Shelley B. George, TRW, CITY SECRETARY
Ordinance No. 245411-05, Page 2