HomeMy WebLinkAboutOrdinance No. 19-022 approving the Atmos Energy Corporation Negotiated Rate Settlement1
ORDINANCE NO. 19-022
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 2019 RATE REVIEW
MECHANISM FILING; 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
ATTACHED SETTLEMENT TARIFFS TO BE JUST AND
REASONABLE AND IN THE PUBLIC INTEREST; APPROVING
AN ATTACHED EXHIBIT ESTABLISHING A BENCHMARK FOR
PENSIONS AND RETIREE MEDICAL BENEFITS; APPROVING
AN ATTACHED EXHIBIT REGARDING AMORTIZATION OF
REGULATORY LIABILITY; 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 Mid-Tex; 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
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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 current RRM tariff was adopted by the City in a rate ordinance in
2018; and
WHEREAS, on about April 1, 2019, Atmos Mid-Tex filed its 2019 RRM rate request with
ACSC Cities based on a test year ending December 31, 2018; and
WHEREAS, ACSC coordinated its review of the Atmos Mid-Tex 2019 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, the Executive Committee, as well as ACSC’s counsel and consultants,
recommend that ACSC Cities approve an increase in base rates for Atmos Mid-Tex of $35.4
million applicable to ACSC Cities; and
WHEREAS, the attached tariffs (Exhibit A) implementing new rates are consistent with
the recommendation of the ACSC Executive Committee, are agreed to by the Company, and are
just, reasonable, and in the public interest; and
WHEREAS, the settlement agreement sets a new benchmark for pensions and retiree
medical benefits (Exhibit B); and
WHEREAS, the settlement agreement establishes an amortization schedule for regulatory
liability (Exhibit C); 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:
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Section 1. That the findings set forth in this Ordinance are hereby in all things approved.
Section 2. That, without prejudice to future litigation of any issue identified by ACSC,
the City Council finds that the settled amount of an increase in revenues of $35.4 million for ACSC
Cities 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 2019 RRM filing, 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 $35.4
million from customers in ACSC Cities, over the amount allowed under currently approved rates.
Such tariffs are hereby adopted.
Section 4. That the ratemaking treatment for pensions and retiree medical benefits in
Atmos Mid-Tex’s next RRM filing shall be as set forth on Exhibit B, attached hereto and
incorporated herein.
Section 5. That amortization of regulatory liability shall be consistent with the schedule
found in attached Exhibit C attached hereto and incorporated herein.
Section 6. That Atmos Mid-Tex shall reimburse the reasonable ratemaking expenses of
the ACSC in processing the Company’s 2019 RRM filing.
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 anyone 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 October 1,2019.
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 17th day of September,2019.
Mayor
ATTEST:APPROVED AS TO FORM:
~~(Mf~City Secretary
2557/3117897503
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