HomeMy WebLinkAboutOrdinance No. 05-1621
ORIGINAL
CITY OF THE COLONY I
ORDINANCE NO. 05- , lo;l.
AN ORDINANCE OF THE CITY OF THE COLONY, 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 ATMOS CITIES STEERING COMMITTEE (ACSC);
AUTHORIZING ACSC TO IDRE LEGAL AND CONSUL TING
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 ORDINANCE IS PASSED IS OPEN TO
THE PUBLIC AS REQUIRED BY LAW; AND PROVIDING FOR
NOTICE OF THIS ORDINANCE TO ATMOS ENERGY CORP., MID-
TEX DIVISION.
WHEREAS, on or about September 17, 2005, Atrnos Energy Corp., Mid-Tex
Division, (the "Company") filed with the City of The Colony ("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 November 19,2005; 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 ~~ 102.001(b) and 103.001; and
WHEREAS, it is reasonable for the City of The Colony 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 ~ 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
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;
NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE
CITY OF THE COLONY, TEXAS:
SECTION 1. That the Company's GRIP rate increase request is found to be
unreasonable and is therefore denied in all respects.
SECTION 2. 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 ordinance and the rate case filed at the Commission.
SECTION 3. That the costs incurred by the City in reviewing the Company's
GRIP request shall be promptly reimbursed by the Company.
SECTION 4. That the City is authorized to intervene in any appeal ofthe city's action
filed at the Commission, and to participate in any such appeal as a member of ACSC.
SECTION 5. This Ordinance shall become effective immediately from and after its
passage, as the law and charter in such cases provide.
SECTION 6. That it is hereby officially found and determined that the meeting at
which this Ordinance 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.
SECTION 7. A copy of this ordinance, 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 Geoffrey Gay, legal counsel to the coalition of cities, at
Lloyd Gosselink, P.O. Box 1725, Austin, Texas 78767-1725.
DULY PASSED and approved by the City Council of the City of The Colony,
Texas, on this the 7th day of November, 2005.
ATTEST:
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Christie Wilson, City Secretary
Bob Hager, City
City of The Colony