HomeMy WebLinkAbout2009-O-13 - ATMOS CITIES STEERING COMMITTEE (2) ORDINANCE NO. 2009-13
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF STEPHENVILLE, 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 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; DETERMINING THAT THIS ORDINANCE WAS
PASSED IN ACCORDANCE WITH THE REQUIREMENTS OF THE TEXAS OPEN MEETINGS ACT; DECLARING
AN EFFECTIVE DATE; AND REQUIRING DELIVERY OF THIS ORDINANCE TO THE COMPANY AND THE
STEERING COMMITTEE'S LEGAL COUNSEL.
WHEREAS,the City of Stephenville,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'
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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
Atmos RRM Ordinance 1
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 are just, 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 STEPHENVILLE,
TEXAS:
Section 1. That the findings set forth in this Ordinance are hereby in all things approved.
Section 2. That 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. That Atmos Mid-Tex shall reimburse the reasonable rate making expenses of the
ACSC Cities in processing the Company's rate application.
Section 4. That to the extent any resolution or ordinance previously adopted by the Council is
inconsistent with this Ordinance, it is hereby repealed.
Section 5. That 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.
Atmos RRM Ordinance 2
Section 7. 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.
Section 8. That the Company's Gas Cost Recovery tariff is revised to permit recovery of certain
costs associated with hedging natural gas futures.
Section 9. That 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.
Section 10. 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 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.
PASSED AND APPROVED this 4th day of August, 2009.
.ncy A. Hunter, Mayor
ATTEST:
Cindy L. St ord, City Secre031/
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Reviewed by Mark:1/47:aiser,
City Administrator
Randy Thomas, City Attorney
Approved as to form legality
Atmos RRM Ordinance 3