HomeMy WebLinkAboutOrdinance No. 15_011 Atmos Negotiated SettlementORDINANCE NO. 15/011
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF UNIVERSITY PARK, TEXAS, APPROVING A NEGOTIATED SETTLEMENT BETWEEN THE ATMOS CITIES STEERING COMMITTEE (“ACSC”) AND
ATMOS ENERGY CORP., MID-TEX DIVISION REGARDING THE COMPANY’S 2014 AND 2015 RATE REVIEW MECHANISM FILINGS; APPROVING A SETTLEMENT AGREEMENT WITH ATTACHED RATE TARIFFS AND PROOF OF REVENUES;
DECLARING EXISTING RATES TO BE UNREASONABLE; ADOPTING TARIFFS THAT REFLECT RATE ADJUSTMENTS CONSISTENT WITH THE NEGOTIATED SETTLEMENT; FINDING THE RATES TO BE SET BY THE SETTLEMENT TARIFFS
TO BE JUST AND REASONABLE AND IN THE PUBLIC INTEREST; REQUIRING THE COMPANY TO REIMBURSE ACSC’S REASONABLE RATEMAKING EXPENSES; DETERMINING THAT THIS ORDINANCE WAS PASSED IN ACCORDANCE
WITH THE REQUIREMENTS OF THE TEXAS OPEN MEETINGS ACT; ADOPTING A SAVINGS CLAUSE; DECLARING AN EFFECTIVE DATE; AND REQUIRING DELIVERY OF THIS ORDINANCE TO THE COMPANY AND THE ACSC’S LEGAL
COUNSEL.
WHEREAS, the City of University Park, 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; and
WHEREAS, the City is a member of the Atmos Cities Steering Committee (“ACSC”), a coalition of similarly-situated cities served
by Atmos Mid-Tex (“ACSC Cities”) 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, ACSC and the Company worked collaboratively to develop a new Rate Review Mechanism (“RRM”) tariff that allows for an expedited rate review process by ACSC Cities as a substitute
to the Gas Reliability Infrastructure Program (“GRIP”) process instituted by
the Legislature, and that will establish rates for the ACSC Cities based on the system-wide cost of serving the Atmos Mid-Tex Division; and
WHEREAS, the initial RRM Tariff was in effect
for four (4) years; and
WHEREAS, ACSC Cities and Atmos Mid-Tex entered into another settlement agreement and revised the RRM Tariff; and
WHEREAS, ACSC Cities and Atmos Mid-Tex compromised
and reached agreements on the amount of the rate increases to be in effect for the RRM Tariff filings for 2012 and 2013; and
WHEREAS, ACSC Cities and Atmos Mid-Tex were unable to reach
an agreement on the 2014 RRM Tariff filing, resulting in the ACSC Cities’ rejection of the 2014 RRM filing; and
WHEREAS, Atmos Mid-Tex appealed the ACSC Cities’ actions rejecting its
2014 RRM filing to the Railroad Commission of Texas (“Commission”), pursuant to the provisions of the RRM Tariff; and
WHEREAS, Atmos Mid-Tex and ACSC litigated the appeal of the 2014
RRM filing at the Commission; and
WHEREAS, on February 27, 2015, Atmos Mid-Tex filed its 2015 RRM Tariff filing, requesting to increase natural gas base rates system-wide by $28.762
million; and
WHEREAS, ACSC coordinated its review of Atmos Mid-Tex RRM filing through its Executive Committee, assisted by ACSC’s attorneys and consultants, to resolve issues identified
in the Company’s RRM filing; and
WHEREAS, Atmos Mid-Tex has agreed to withdraw its appeal of ACSC’s rejection of its 2014 RRM Tariff rate increase; and
WHEREAS, the Executive Committee,
as well as ACSC’s counsel and consultants, recommend that ACSC Cities approve the attached Settlement Agreement (Attachment A to this
Ordinance) as well as the tariffs attached thereto, resolving both the 2014 and the 2015 RRM Tariff filings, which together will increase the Company’s revenues by $65.7 million over
the amount allowed under City-approved rates set in 2013; and
WHEREAS, the attached tariffs implementing new rates are consistent with the negotiated Settlement Agreement and are just,
reasonable, and in the public interest; and
WHEREAS, the RRM Tariff should be renewed for a period of time commencing in 2016 and continuing until the RRM Tariff is suspended by ordinance
of the City; and
WHEREAS, the RRM Tariff contemplates reimbursement of ACSC’s reasonable expenses associated with RRM applications;
NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL
OF THE CITY OF UNIVERSITY PARK, TEXAS:
Section 1. That the findings set forth in this Ordinance are hereby in all things approved.
Section 2. That the City Council finds that the Settlement
Agreement (Attachment A to this Ordinance) represents a comprehensive settlement of gas utility rate issues affecting the rates, operations, and services offered by Atmos Mid-Tex within
the municipal limits arising from Atmos Mid-Tex’s 2014 and 2015 RRM filings, is in the public interest, and is consistent with the City’s authority under Section 103.001 of the Texas
Utilities Code.
Section 3. That the existing rates for natural gas service provided by Atmos Mid-Tex are unreasonable. The new tariffs attached hereto and incorporated herein as Exhibit
A, are just and reasonable, and are designed to allow Atmos Mid-Tex to recover annually an additional $65.7 million in revenue over the amount allowed under currently approved rates,
or $21 million over currently-billed rates, as shown in the Proof of Revenues attached hereto and incorporated herein as Exhibit B; such tariffs are hereby adopted.
Section 4. That the ratemaking treatment for pensions and other post-employment benefits in Atmos’ next RRM filing shall be as set forth on Attachment D, attached hereto and incorporated
herein.
Section 5. That in an effort to streamline the regulatory review process, the Atmos Mid-Tex RRM Tariff is renewed for a period commencing with the Company’s March 1, 2016 RRM
filing for calendar year 2015, effective June 1, 2016, and continuing thereafter until such time as the City adopts an ordinance suspending operation of the RRM Tariff.
Section 6. That
Atmos Mid-Tex shall reimburse the reasonable ratemaking expenses of the ACSC in processing the Company’s RRM application.
Section 7. That to the extent any resolution or ordinance previously
adopted by the Council is inconsistent with this Ordinance, it is hereby repealed.
Section 8. 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 9. That if any one or more sections or clauses of this Ordinance is adjudged to be unconstitutional
or invalid, such judgment shall not affect, impair or invalidate the remaining provisions of this Ordinance and the remaining provisions of the Ordinance shall be interpreted as if the
offending section or clause never existed.
Section 10. That consistent with the City Ordinance that established the RRM process, this Ordinance shall become effective from and after
its passage with rates authorized by attached tariffs to be effective for bills rendered on or after June 1, 2015.
Section 11. That a copy of this Ordinance shall be sent to Atmos Mid-Tex,
care of Chris Felan, Vice President of Rates and Regulatory Affairs Mid-Tex Division, Atmos Energy
Corporation, 5420 LJB Freeway, Suite 1862, Dallas, Texas 75240, and to Geoffrey Gay, General Counsel to ACSC, at Lloyd Gosselink Rochelle & Townsend, P.C., 816 Congress Avenue, Suite 1900,
Austin, Texas 78701.
PASSED AND APPROVED this 19th day of May, 2015.
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Mayor
ATTEST: APPROVED AS TO FORM:
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City Secretary City Attorney