HomeMy WebLinkAboutORD 2007-79 - Denying ATMOS Rate IncreaseA1:11r_fkius] :8 ilkc.
WHEREAS, Atmos Energy Corporation — Mid -Tex Division ("Atmos") filed a
Statement of Intent with the City of Georgetown, Texas ("City") on September 20, 2007, to
increase its system -wide, annual revenue requirement, by approximately $51.9 million; and,
WHEREAS, the City is a regulatory authority under the Gas Utility Regulatory Act
CGURK) and under § 103.001 of GURA has exclusive original jurisdiction over Atmos' rates,
operations, and services of a gas utility within the municipality; and,
and,
WHEREAS, Atmos has provided very limited explanation for its increase in rates;
WHEREAS, Atmos is seeking to significantly increase rates for low -use
residential customers by raising the customer charge and by lowering the charge for the
consumption of gas; and,
WHEREAS, Atmos has had five rate increases in the last three years and Atmos
just finished its last general rate case on August 14, 2007, at the Railroad Commission of
Texas; and,
WHEREAS, Atmos is seeking to increase rates for many of the cost items which
were recently rejected by the Commission; and,
WHEREAS, in order to maximize the efficient use of resources and expertise in
reviewing, analyzing and investigating Atmos Energy's request for a $51.9 million increase in
rates it makes sense to coordinate the City's efforts with a coalition of similarly situated
municipalities; and,
WHEREAS, a coalition of municipalities, known as the Atmos Texas
Municipalities ("ATM") has been active in gas utility ratemaking proceedings; and,
WHEREAS, the City will join with other cities participating in ATM and, through a
steering committee, coordinate the hiring and direction of legal counsel and consultants working
on behalf of ATM and the City; NOW, THEREFORE,
BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF GEORGETOWN,
TEXAS:
Section 1. That the statements set out in the preamble to this ordinance are hereby
in all things approved and adopted. The City Council hereby finds that this Ordinance
implements the Utility Policy Statement 11.00 of the Century Plan - Policy Plan Element, which
states: "City owned, sponsored or managed utilities are competitively priced and provide safe,
adequate and reliable services to all customers. " and further finds that the adoption of this
Ordinance is not inconsistent or in conflict with any other Century Plan Policies, as required by
Section 2.03 of
the Administrative Chapter of the Policy Plan.
Section 2. That the City hereby denies Atmos' request to increase rates and in
support thereof finds that:
a) Atmos
is requesting an
increase in rates, in part, based
upon adjustments
to its
cost of service
which were recently rejected
by the Railroad
Commission of Texas;
b) the Statement of Intent fails to provide sufficient information to justify the
requested increase in rates;
C) the requested increase in rates puts more of the cost for the base rate
increase on low -use residential customers who often are in the worst
position to absorb such cost increases; and,
d) the request asks that a rate mechanism to be implemented which
provides a disincentive to reducing costs and becoming more productive
or efficient.
Section 3. That the City is authorized to join with other cities in a coalition of cities
known as the Atmos Texas Municipalities ("ATM") with the understanding that the steering
committee of ATM provide direction and guidance to the lawyers and consultants who are
representing said cities.
Section 4. That the City employs Jim Boyle and Alfred Herrera as special counsel to
represent
the City with regard
to the
requested increase in
rates by
Atmos before local
and state
regulatory
authorities and any
court
of law, and authorizes
special
counsel to employ
such rate
experts as are recommended by the ATM Steering Committee.
Section 5. That the City hereby authorizes that Special Counsel take such actions as
are appropriate, whether in court or before any regulatory authority, to prohibit Atmos from
charging for expenses which are not reasonable and necessary, or capital expenditures which
have not been prudently incurred, or rates which are not just and reasonable.
Section 6. That the City, in coordination with the Steering Committee, shall review
the invoices of the lawyers and rate experts for reasonableness before submitting the invoices
to Atmos Energy for reimbursement.
Section 7. That Atmos Energy shall reimburse the City, through the designated city
representative for the Steering Committee, for the reasonable costs of attorneys and
consultants and expenses related thereto, upon the presentation of invoices reviewed by the
Steering Committee.
Section 8. That the City Secretary shall notify Atmos Energy of this resolution by
sending a copy of same to Ms. Barbara Myers, Atmos Energy Corporation, 5420 LBJ Freeway,
Suite 1824, Dallas, Texas 75240 and ATM shall be notified by sending a copy of this resolution
to Mr. Jim Finley, City Attorney for the City of Longview by fax to 903.239.5539.
Section 9. 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 1. That this ordinance shall become effective from and after its passage.
PASSED AND APPROVED ON FIRST READING on the �j day of October, 2007,
PASSED AND APPROVED ON SECOND READING on the
ATTEST:
ndra Lee, City
my
APPROVED AS TO FORM:
Patricia E. Carls
Carls, McDonald & Dalrymple, L.L.P
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