HomeMy WebLinkAboutCity Council Resolutions (R-06-2714)-06/20/2006
RESOLUTION R-06-2714
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF COLLEYVILLE, 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 A TMOS 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 RESOLUTION IS PASSED IS OPEN TO THE
PUBLIC AS REQUIRED BY LAW; AND PROVIDING FOR NOTICE OF THIS
RESOLUTION TO ATMOS ENERGY CORP., MID-TEX DIVISION
WHEREAS, on or about March 30, 2006, Atmos Energy Corp., Mid-Tex Division, (the
"Company") filed with the 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 May 30, 2006; 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 SS 102.001 (b) and 103.001; and
WHEREAS, it is reasonable for the City 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 S 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
Resolution R-06-2714
Page 2 of 3
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; and
WHEREAS, under the provisions of S 104.301 of GURA, the interim rate adjustment is
subject to true-up in a general rate case filed within five years of the
effective date of the interim rate surcharge; and
WHEREAS, the Company has, on May 31,2006, filed a Statement of Intent to increase
its distribution rates on a system-wide basis, using calendar year ending
December 31,2005, as its test year; and
WHEREAS, the capital investment made by Atmos during 2005 will be reviewed in the
Statement of Intent filing, making the 2005 GRIP filing duplicative and
unnecessary.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF
COLLEYVILLE, TEXAS:
Sec. 1.
Sec. 2.
Sec. 3.
Sec. 4.
Sec. 5.
THAT the Company's GRIP rate increase request is found to be
unreasonable and is therefore denied in all respects.
THAT 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 resolution and the
rate case filed at the Commission.
THAT the costs incurred by the City in reviewing the Company's GRIP
request shall be promptly reimbursed by the Company.
THAT 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.
THAT pursuant to Section 3.13 of the City Charter, this Resolution serves
as an order of the City as provided for by Chapter 102 of the Utilities
Code. This Resolution shall become effective immediately from and after
its passage, as the law and charter in such cases provide.
Resolution R-06-2714
Page 3 of 3
Sec. 6.
THAT it is hereby officially found and determined that the meeting at which
this Resolution 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.
Sec. 7.
THAT a copy of this Resolution, 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
Lloyd Gosselink Blevins Rochelle & Townsend, 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 ? ~~~ ~O NAYS AND
ON THIS THEJo~ DAY OF r-=-=--2006.
o ABSTENTIONS
~~~~
Cynthia Singleton, TRMC
City Secretary
CITY OF COLLEYVILLE
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David Kelly ()
Mayor