R-2364-1-05RESOLUTION NO. 2364-1-05(R)
' A RESOLUTION BY THE CITY COUNCIL OF THE CITY OF ALLEN, COLLIN
COUNTY, TEXAS, SUSPENDING THE PROPOSAL BY ATMOS ENERGY CORP.
TO IMPLEMENT INTERIM GRIP RATE ADJUSTMENTS FOR GAS UTILITY
INVESTMENT IN 2003; AUTHORIZING PARTICIPATION WITH OTHER CITIES
SERVED BY ATMOS ENERGY CORP., MID-TEX DIVISION, IN A REVIEW AND
INQUIRY INTO THE BASIS AND REASONABLENESS OF THE PROPOSED RATE
ADJUSTMENTS; AUTHORIZING INTERVENTION IN ADMINISTRATIVE AND
COURT PROCEEDINGS INVOLVING THE PROPOSED GRIP RATE
ADJUSTMENTS; DESIGNATING A REPRESENTATIVE OF THE CITY TO SERVE
ON A STEERING COMMITTEE; REQUIRING REIMBURSEMENT OF
REASONABLE LEGAL AND CONSULTANT EXPENSES; AND PROVIDING AN
EFFECTIVE DATE.
WHEREAS, the City of Allen, Collin County, Texas ("City") is a gas utility customer of Atmos Energy
Corp., Mid -Tex Division, ("Atmos Mid -Tex" or "the Company") and a regulatory authority with an interest in
the rates and charges of Alums Mid -Tex; and,
WHEREAS, Atmos Mid -Tex made filings with the City and the Railroad Commission of Texas ("Railroad
Commission') in December 2004, proposing to implement interim rate adjustments ("GRIP Rate Increases")
pursuant to Texas Utilities Code § 104.301 on all customers served by Atmos Mid -Tex; and,
' WHEREAS, Atmos Energy Corporation has reported a twenty percent increase in profits for its fiscal year
ended September 30, 2004, and projects further increases in profits in 2005; and,
WHEREAS, in May 2004, the Railroad Commission entered its Final Order in GUD No. 9400 authorizing a
rate increase that will produce additional annual revenues of $11.5 million for Atmos Mid -Tex; and,
WHEREAS, Atmos Mid -Tex has projected that it will experience annual cost savings of at least $40 million
over the costs included in rates approved in GUD No. 9400 and said savings are likely to greatly exceed the
annual revenue requirement associated with any reasonable increases in invested capital that form the basis of
the proposed GRIP rate increases; and,
WHEREAS, ratepayers of Atmos Mid -Tex, including the City and its residents, will be adversely impacted
by the proposed GRIP Rate Increases; and,
WHEREAS, the City and its residents could benefit from coordination with other cities served by Atmos
Mid -Tex ("Cities") in a review of the reasonableness of the proposed GRIP Rate Increases and joint
participation in any proceedings at the Railroad Commission related to the proposed GRIP Rate ]nemeses;
and,
WHEREAS, the reasonable costs associated with the participation of Cities in this rate proceeding are
reimbursable from Atmos Mid -Tex.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF ALLEN,
' COLLIN COUNTY, TEXAS, THAT:
SECTION 1. The February 15, 2005, effective date of the GRIP Rate Increases proposed by Atmos Mid -
Tex is hereby suspended to permit adequate time to review the proposed increases, analyze all necessary
information, and take appropriate action related to the proposed increases.
SECTION 1. The City is authorized to cooperate with other Cities to create and participate in a Steering
' Committee to hire and direct legal counsel and consultants, to negotiate with the Company, to make
recommendations to the City regarding the proposed GRIP Rate Increases, and to direct any administrative
proceedings or litigation associated with the proposed GRIP Rate Increases.
SECTION 3. The City is authorized to intervene in any administrative proceedings or litigation associated
with the proposed GRIP Rate Increases, including GUD No. 9560, the Company's proposed GRIP rate
increase for its pipeline system filed at the Railroad Commission.
SECTION 4. The City hereby designates Assistant City Manager Shelli Siemer as a representative to a
Cities' Steering Committee that shall direct the efforts of counsel and consultants.
SECTION S. Atmos Mid -Tex shall promptly reimburse the City's reasonable costs associated with the
City's activities related to the proposed GRIP Rate Increases.
SECTION 6. This resolution shall take effect immediately upon its passage.
DULY PASSED AND APPROVED BY THE CITY COUNCIL OF THE CITY OF ALLEN, COLLIN
COUNTY, TEXAS, ON THIS THE 25'm DAY OF JANUARY, 2005.
APPROVED: (^/r\^/,
1-+ —Q
Stephen Terrell, MAYOR
ATTEST:
Shelley B. George, 11RMC, CITY SECRETARY
Resolution No. 2364-1-05(R), Page 2