HomeMy WebLinkAboutResolution No. 05-22 ATMOS Show Cause
RESOLUTION NO. 05-22
A RESOLUTION BY THE CITY OF UNIVERSITY PARK, TEXAS,
ORDERING ATMOS ENERGY, MID-TEX DIVISION TO SHOW CAUSE
REGARDING THE REASONABLENESS OF ITS EXISTING NATURAL
GAS DISTRIBUTION RATES WITHIN THE CITY; REQUIRING ATMOS
ENERGY, MID-TEX DIVISION TO SUBMIT A RATE PACKAGE BASED
ON A RATE YEAR ENDING JUNE 30, 2005; DIRECTING THAT SUCH
FILING SHALL BE MADE BY DECEMBER 31, 2005; REQUIRING
REIMBURSEMENT OF REASONABLE LEGAL AND CONSULTANT
EXPENSES; AND REQUIRING DELIVERY OF THIS RESOLUTION TO
THE COMPANY AND LEGAL COUNSEL.
WHEREAS, the City is a regulatory authority under the Gas Utility Regulatory Act
("GURA") and has original jurisdiction over the gas utility rates of Atmos Mid- Tex; and
WHEREAS, the City has the authority under SS 103.001 and 104.151, GURA, to initiate
a proceeding to determine whether the existing rates of a gas utility are umeasonable or in any
way in violation of any provision of law; and
WHEREAS, upon making a finding of umeasonab1eness, the City may determine the just
and reasonable rates to be charged by Atmos Mid- Tex; and
WHEREAS, Atmos Energy Corporation, the parent company of Atmos Mid- Tex has
recently experienced system-wide cost reductions due to the doubling of its nationwide customer
base with the acquisition of the assets of TXU Gas, and has reported to its investors that it has
experienced a significant increase in profits related to its Texas divisions; and
WHEREAS, Atmos Mid-Tex is charging rates approved based on the higher expenses
and equity-to-debt ratio of TXU Gas, rather than rates that would be justified based on Atmos'
lower expenses and equity-to-debt ratio; and
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WHEREAS, ratepayers of Atmos Mid- Tex, including the City and its residents, will
suffer further unreasonable adverse impact from the GRIP rate increases approved by the Texas
Railroad Commission and the second GRIP filing recently made by Atmos Mid- Tex; and
WHEREAS, the Commission's failure to consider testimony and argument offered by
Cities during its consideration of the Company's piecemeal GRIP rate applications leaves Cities
no functional choice but to exercise its statutory right to exercise original jurisdiction over
Atmos' base rates and compel a comprehensive rate review; and
WHEREAS, the City has reason to believe that Atmos Mid- Tex is over-earning and that
its rates are excessive; and
WHEREAS, Cities and their residents are about to experience unprecedented increases in
the cost of natural gas during the heating season and protection of the public interest requires a
comprehensive review of Atmos' cost of service to determine whether rates and services are just
and reasonable; and
WHEREAS, Atmos Mid-Tex should be required to justify its rates on a system-wide
basis; and
WHEREAS, the coalition of cities formed to review Atmos' GRIP filings (the Atmos
Cities Steering Committee, or "ACSC") can most efficiently review the Atmos filing on behalf
of the City; and
WHEREAS, the reasonable costs associated with the City's review of the Company's
rates are reimbursable from Atmos Mid- Tex;
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY
OF UNIVERSITY PARK, TEXAS, THAT:
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1. That Atmos Mid- Tex is hereby directed to show cause regarding the
reasonableness of its existing natural gas distribution rates within the City. Atmos shall file with
the City information sufficient to determine the Company's rate base, expenses, investment, and
rate of return. Such filing shall be on a system-wide basis and shall be based upon a rate year
ending June 30, 2005. Atmos Mid-Tex is directed to file its rate filing package to comply, at a
minimum, with the regulations and requirements of the Railroad Commission. The filing shall
be made with the City on or before December 31,2005. An electronic copy of the filing shall be
made with the City simultaneously with the written filing on December 31, 2005. This filing
shall be the same filing as made with the first coalition city to pass the same or similar Show
Cause Resolution.
2. City's designated representatives shall have the right to obtain additional
information from Atmos through the filing of written requests for information, to each of which
Atmos shall respond in writing within fourteen (14) calendar days from the receipt of each such
request for information.
3. A public hearing shall be conducted by the City. Based upon such hearing, the
briefing of staff, and the consultants' findings, a determination of the reasonableness of the
existing rates of Atmos shall be made by the City and, if necessary, just and reasonable rates
shall be determined to be thereafter observed and enforced for all services of Atmos within the
City.
4. The City may, from time to time, amend this procedural schedule and the filing
requirements, and enter additional orders as may be necessary in the public interest and to
enforce the provisions hereof.
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5. Atmos Mid-Tex shall promptly reimburse the City's reasonable monthly costs
associated with the City's activities related to the rate review.
6. A copy of this Resolution shall be sent to Atmos Mid- Tex, care of Richard T.
Reis, at 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 ofthe City of University Park, Texas,
on this the 8th day of November, 2005.
APPROVED:
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OR
ATTEST:
APPROVED AS TO FORM:
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City Attorney
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