HomeMy WebLinkAboutCity Council Resolutions (R-14-3745)-05/06/2014 RESOLUTION R-14-3745
A RESOLUTION DENYING THE RATE INCREASE REQUESTED BY
ATMOS ENERGY CORP., MID-TEX DIVISION UNDER THE COMPANY'S
2014 ANNUAL RATE REVIEW MECHANISM FILING
WHEREAS, the City of Colleyville, 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"), a coalition of approximately 164 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; 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 Gas Reliability
Infrastructure Program ("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 in 2013, ACSC
and the Company negotiated a renewal of the RRM tariff
process for an additional five years; and
WHEREAS, the City passed an ordinance renewing the RRM tariff process
for the City for an additional five years; and
WHEREAS, on or about February 28, 2014, the Company filed with the City
its second annual RRM filing under the renewed RRM tariff,
requesting to in_ crease natural gas base rates by $45.7 million;
and
WHEREAS, ACSC coordinated its review of Atmos Mid-Tex's RRM filing
through its Executive Committee, assisted by ACSC attorneys
and consultants, to investigate issues identified by ACSC in the
Company's RRM filing; and
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•
WHEREAS, ACSC attorneys and consultants have concluded the Company
is unable to justify a rate increase of the magnitude requested
in the RRM filing;• and
WHEREAS, ACSC's consultants determined the Company is only entitled to
a $19 million increase, approximately 42% of the Company's
request under the 2014 RRM filing, and the Company would
only be entitled to approximately $31 million if it had a GRIP
case; and
WHEREAS, the Company's levels of operating and maintenance expense
have dramatically risen without sufficient justification, the
Company has awarded its executives and upper management
increasing and unreasonable levels of incentives and bonuses,
expenses, which should be borne by shareholders who received
a 23% total return on investment in 2013; and
WHEREAS, the Company requested a drastically high level of medical
expense that is unreasonable and speculatively based upon
estimates; and
WHEREAS, ACSC and the Company were unable to reach a compromise on
the amount of additional revenues the Company should recover
under the 2014 RRM filing; and
WHEREAS, the ACSC Executive Committee, as well as ACSC's counsel and
consultants, recommend that ACSC Cities deny the requested
rate increase; and
WHEREAS, the Company's current rates are determined to be just,
reasonable, and in the public interest.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE
CITY OF COLLEYVILLE, TEXAS:
Sec. 1. THAT the findings set forth in this Resolution are hereby in all
things approved.
Sec. 2. THAT the City Council finds Atmos Mid-Tex was unable to
justify the appropriateness or the need for the increased
revenues requested in the 2014 RRM filing, and existing rates
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for natural gas service provided by Atmos Mid-Tex are just and
reasonable.
Sec. 3. THAT Atmos Mid-Tex shall reimburse the reasonable
ratemaking expenses of the ACSC Cities in processing the
Company's RRM application.
Sec. 4. THAT in the event the Company files an appeal of this denial of
rate increase to the Railroad Commission of Texas, the City is
hereby authorized to intervene in such appeal, and shall
participate in such appeal in conjunction with the ACSC
membership. Further, in such event, Atmos Mid-Tex shall
reimburse the reasonable expenses of the ACSC Cities in
participating in the appeal of this, and other ACSC City rate
actions resulting from the 2014 RRM filing.
Sec. 6. THAT if any one or more sections or clauses of this resolution is
adjudged to be unconstitutional or invalid, such judgment shall
not affect, impair, or invalidate the remaining provisions of this
resolution and the remaining provisions shall be interpreted as
if the offending section or clause never existed.
Sec. 7. THAT a copy of this resolution shall be sent to Atmos Mid-Tex,
care of Chris Felan, Manager of 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.
AND IT IS SO RESOLVED. //--
APPROVED BY A VOTE OF Co AYES, 0 NAYS, AND 0 ABSTENTIONS
ON THIS THE 6TH DAY OF MAY 2014.
=_ A TEST: CITY OF COLLEYVILLE
J MD � y ,
Amy 'tl elley, TR 4 David Kelly
-City Secretary Mayor