HomeMy WebLinkAboutCity Council Resolutions (R-05-2623)-11/15/2005
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RESOLUTION R-05-2623
A RESOLUTION BY THE CITY COUNCIL OF THE CITY OF COLLEYVILLE,
TEXAS ORDERING ATMOS ENERGY, MID-TEX DIVISION TO SHOW CAUSE
REGARDING THE REASONABLENESS OF ITS EXISTING NATURAL GAS
DISTRIBUTION RATES WITHIN THE CITY; REQUIRING ATMOS ENERGY,
MID-TEX DIVISION TO SUBMIT A RATE PACKAGE BASED ON A RATE
YEAR ENDING JUNE 30, 2005; DIRECTING THAT SUCH FILING SHALL BE
MADE BY DECEMBER 31, 2005; REQUIRING REIMBURSEMENT OF
REASONABLE LEGAL AND CONSULTANT EXPENSES; AND REQUIRING
DELIVERY OF THIS RESOLUTION TO THE COMPANY AND LEGAL
COUNSEL
WHEREAS, the City is a regulatory authority under the Gas Utility Regulatory Act
("GURA") and has original jurisdiction over the gas utility rates of Atmos
Mid-Tex; and
WHEREAS, the City has the authority under 99 103.001 and 104.151, GURA, to
initiate a proceeding to determine whether the existing rates of a gas utility
are unreasonable or in any way in violation of any provision of law; and
WHEREAS, upon making a finding of unreasonableness, the City may determine the
just and reasonable rates to be charged by Atmos Mid- Tex; and
WHEREAS, Atmos Energy Corporation, the parent company of Atmos Mid-Tex has
recently experienced system-wide cost reductions due to the doubling of
its nationwide customer base with the acquisition of the assets of TXU
Gas, and has reported to its investors that it has experienced a significant
increase in profits related to its Texas divisions; and
WHEREAS, Atmos Mid-Tex is charging rates approved based on the higher expenses
and equity-to-debt ratio of TXU Gas, rather than rates that would be
justified based on Atmos' lower expenses and equity-to-debt ratio; and
WHEREAS, ratepayers of Atmos Mid-Tex, including the City and its residents, will
suffer further unreasonable adverse impact from the GRIP rate increases
approved by the Texas Railroad Commission and the second GRIP filing
recently made by Atmos Mid-Tex; and
WHEREAS, the Commission's failure to consider testimony and argument offered by
Cities during its consideration of the Company's piecemeal GRIP rate
applications leaves Cities no functional choice but to exercise its statutory
right to exercise original jurisdiction over Atmos' base rates and compel a
comprehensive rate review; and
Resolution R-05-2623
Page 2 of 3
the City has reason to believe that Atmos Mid-Tex is over-earning and that
its rates are excessive; and
Cities and their residents are about to experience unprecedented
increases in the cost of natural gas during the heating season and
protection of the public interest requires a comprehensive review of
Atmos' cost of service to determine whether rates and services are just
and reasonable; and
HEREAS, Atmos Mid-Tex should be required to justify its rates on a system-wide
basis; and
HEREAS, the coalition of cities formed to review Atmos' GRIP filings (the Atmos
Cities Steering Committee, or "ACSC") can most efficiently review the
Atmos filing on behalf of the City; and
HEREAS, the reasonable costs associated with the City's review of the Company's
rates are reimbursable from Atmos Mid-Tex;
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF
COLLEYVILLE, TEXAS, THAT:
Sec. 1.
Sec. 2.
Sec. 3.
THAT Atmos Mid-Tex is hereby directed to show cause regarding the
reasonableness of its existing natural gas distribution rates within the City.
Atmos shall file with the City information sufficient to determine the
Company's rate base, expenses, investment, and rate of return. Such
filing shall be on a system-wide basis and shall be based upon a rate year
ending June 30, 2005. Atmos Mid-Tex is directed to file its rate filing
package to comply, at a minimum, with the regulations and requirements
of the Railroad Commission. The filing shall be made with the City on or
before December 31,2005. An electronic copy of the filing shall be made
with the City simultaneously with the written filing on December 31, 2005.
This filing shall be the same filing as made with the first coalition city to
pass the same or similar Show Cause Resolution.
THAT city's designated representatives shall have the right to obtain
additional information from Atmos through the filing of written requests for
information, to each of which Atmos shall respond in writing within
fourteen (14) calendar days from the receipt of each such request for
information.
THAT a public hearing shall be conducted by the City. Based upon such
hearing, the briefing of staff, and the consultants' findings, a determination
Resolution R-05-2623
Page 3 of 3
of the reasonableness of the existing rates of Atmos shall be made by the
City and, if necessary, just and reasonable rates shall be determined to be
thereafter observed and enforced for all services of Atmos within the City.
Sec. 5.
THAT the City may, from time to time, amend this procedural schedule
and the filing requirements, and enter additional orders as may be
necessary in the public interest and to enforce the provisions hereof.
THAT Atmos Mid-Tex shall promptly reimburse the City's reasonable
monthly costs associated with the City's activities related to the rate
review.
Sec. 4.
Sec. 6.
THAT a copy of this Resolution shall be sent to Atmos Mid-Tex, care of
Richard T. Reis, at Atmos Energy Corporation, 5420 LBJ Freeway, Suite
1800, Dallas, Texas 75240, and to Geoffrey Gay, legal counsel to the
coalition of cities, at Lloyd Gosselink, P.O. Box 1725, Austin, Texas
78767 -1725.
AND IT IS SO RESOLVED.
PASSED BY A VOTE OF ..5 AYES, 0 NAYS AND 0 ABSTENTIONS
ON THIS THE ,5w, DAY OF r~ 2005.
ATTEST:
CITY OF COLLEYVILLE
Cynthia Singleton, TRMC
City Secretary
ib~
David Kelly
Mayor