HomeMy WebLinkAboutOrdinance No. 15_011 Atmos Rate SettlementORDINANCE NO. 15/011
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF
UNIVERSITY PARK, TEXAS, APPROVING A NEGOTIATED
SETTLEMENT BETWEEN THE A TMOS 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
RA TEMAKING 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 Tariffwas 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
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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.
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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 l, 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
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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 ofMay, 2015.
Mayor
ATTEST: APPROVED AS TO FORM:
City Secretary
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City Attorney
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