HomeMy WebLinkAboutRES 2005-054 RESOLUTION NO. 2005-54
A RESOLUTION BY THE CITY OF GRAPEVINE, 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 AND PROVIDING
AN EFFECTIVE DATE
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 §§ 103.001 and 104.151, GURA, to
initiate a proceeding to determine whether the existing rates of a gas utility are
unreasonable or in any way in violation of any provision of law; and
WHEREAS, upon making a finding of unreasonableness, 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
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 GRAPEVINE, TEXAS:
Section 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.
Section 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.
Section 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.
RES. NO. 2005-54 2
Section 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.
Section 5. Atmos Mid-Tex shall promptly reimburse the City's reasonable
monthly costs associated with the City's activities related to the rate review.
Section 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.
Section 7. That this resolution shall take effect from and after the date of its
passage.
PASSED AND APPROVED BY THE CITY COUNCIL OF THE CITY OF
GRAPEVINE, TEXAS on this the 15th day of November, 2005.
APPROVED:
Ted R. W re
._ Mayor Pro Tem
ATTEST:
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City Secretary
APPROVED AS TO FORM:
John F. Boyle, Jr.
City Attorney
RES. NO. 2005-54 3