10-42-07-Ordinance-Denying Atmos Rate Increase-10/15/2007ORDINANCENO. #10-42-07
AN ORDINANCE DENYING THE RATE INCREASE
PROPOSED BY THE ATMOS ENERGY CORPORATION;
MID-TEX DIVISION; AUTHORIZING PARTICIPATION
IN A COALITION OF CITIES KNOWN AS ATMOS TEXAS
MUNICIPALITIES ("ATM"); AUTHORIZING THE
HIRING OF LAWYERS AND RATE EXPERTS;
REQUIRING THE REIMBURSEMENT OF MUNICIPAL
RATE CASE EXPENSES; FINDING THAT THE MEETING
COMPLIED WITH THE OPEN MEETINGS ACT; MAKING
OTHER FINDINGS AND PROVISIONS RELATED TO THE
SUBJECT; AND DECLARING AN EFFECTIVE DATE
WHEREAS, Atmos Energy Corporation — Mid -Tex Division ("Atmos") filed a
Statement of Intent with the City of Sanger Texas ("City' ) on
September 20, 2007 to increase its system -wide, annual revenue requirement, by approximately
$51.9 million; and
WHEREAS, the City is a regulatory authority under the Gas Utility Regulatory Act
("GURA") and under § 103.001 of GURA has exclusive original jurisdiction over Atmos' rates,
operations, and services of a gas utility within the municipality; and
WHEREAS, Atmos has provided very limited explanation for its increase in rates; and
WHEREAS, Atmos is seeking to significantly increase rates for low -use residential
customers by raising the customer charge and by lowering the charge for the consumption of gas;
and
WHEREAS, Atmos has had five rate increases in the last three years and Atmos just
finished its last general rate case on August 14, 2007 at the Railroad Commission of Texas; and
WHEREAS, Atmos is seeking to increase rates for many of the cost items which were
recently rejected by the Commission; and
WHEREAS, in order to maximize the efficient use of resources and expertise in
reviewing, analyzing and investigating Atmos Energy's request for a $51.9 million increase in
rates it makes sense to coordinate the City's efforts with a coalition of similarly situated
municipalities; and
WHEREAS, a coalition of municipalities, known as the Atmos Texas Municipalities
("ATM") has been active in gas utility ratemaking proceedings; and
WHEREAS, the City will join with other cities participating in ATM in a steering
committee in order to coordinate the hiring and direction of legal counsel and consultants
working on behalf of ATM and the City.
NOW THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE
CITY OF SANGER THAT:
Section 1. That the statements set out in the preamble to this ordinance are hereby in
all things approved and adopted.
Section 2. The City hereby denies Atmos' request to increase rates and in support
thereof finds that:
a) Atmos is requesting an increase in rates, in part, based upon adjustments to its
cost of service which were recently rejected by the Railroad Commission of
Texas;
b) The Statement of Intent fails to provide sufficient information to justify the
requested increase in rates;
c) The requested increase in rates puts more of the cost for the base rate increase on
low -use residential customers who often are in the worst position to absorb such
cost increases; and
d) The request asks that a rate mechanism to be implemented which provides a
disincentive to reducing costs and becoming more productive or efficient.
Section 3. The City is authorized to join with other cities in a coalition of cities
known as the Atmos Texas Municipalities ("ATM") with the understanding that the steering
committee of ATM to provide direction and guidance to the lawyers who are representing said
cities.
Section 4. The City employs Jim Boyle and Alfred Herrera as special counsel to
represent the City with regard to the requested increase in rates by Atmos before local and state
regulatory authorities and any court of law and authorizes special counsel to employ such rate
experts as are recommended by the ATM Steering Committee.
Section 5. The City hereby authorizes that Special Counsel take such actions as are
appropriate, whether in court or before any regulatory authority, to prohibit Atmos from charging
for expenses which are not reasonable and necessary, or capital expenditures which have not
been prudently incurred, or rates which are not just and reasonable.
Section 6. The City, in coordination with the Steering Committee, shall review the
invoices of the lawyers and rate experts for reasonableness before submitting the invoices to
Atmos Energy for reimbursement.
Section 7. Atmos Energy shall reimburse the City, through the designated city
representative for the Steering Committee, for the reasonable costs of attorneys and consultants
and expenses related thereto, upon the presentation of invoices reviewed by the Steering
Committee.
Section 8. The City Secretary shall notify Atmos Energy of this resolution by
sending a copy of same to Ms. Barbara Myers, Atmos Energy Corporation, 5420 LBJ Freeway,
Suite 1824, Dallas, Texas 75240 and ATM shall be notified by sending a copy of this resolution
to Mr. Jim Finley, City Attorney for the City of Longview by fax to (903) 239-5539.
Section 9. 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 10. This resolution shall become effective from and after its passage.
PASSED AND APPROVED this day of ,&bcr— 2007.
ATTEST:
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