03-01-18-Resolution-Approving a Reduction in Atmos Rates-03/19/2018RESOLUTION NO. 03-01-18
A RESOLUTION BY THE CITY OF SANGER, TEXAS
("CITY"), APPROVING A REDUCTION IN RATES
CHARGED BY ATMOS ENERGY CORPORATION, MID -
EX DIVISION ("ATMOS") AND AUTHORIZING CONSENT
TO A REDUCTION IN RATES CHARGED BY ATMOS
PIPELINE TEXAS ("APT"), ALL RELATED TO THE
REDUCTION IN THE FEDERAL CORPORATE TAX RATE,
FINDING THE REDUCTION IN ATMOS' RATES TO BE
JUST AND REASONABLE, FINDING THAT THE MEETING
COMPLIED WITH THE OPEN MEETINGS ACT;
DECLARING AN EFFECTIVE DATE; AND REQUIRING
DELIVERY OF THE RESOLUTION TO THE COMPANY
AND SPECIAL COUNSEL.
WHEREAS, the City of Sanger, Texas ("City") is a regulatory authority under the
Gas Utility Regulatory Act "GURA") and under § 103.001 of GURA has exclusive original
jurisdiction over Atmos Energy Corporation — Mid -Tex Division ("Atmos") rates,
operations, and service of a gas utility within the municipality; and
WHEREAS, the City has participated in prior cases regarding Atmos as part of a
coalition of cities known as the Atmos Texas Municipalities ("ATM"); and
WHEREAS, pursuant to the Rate Review Mechanism ("RRM") for 2017 filed with
the City on or around March 1, 2017, the City approved an increase in annual revenue of
about $48 million; and
WHEREAS, the City, as part of ATM participated in APT's general rate case at the
Railroad Commission of Texas in Gas Utility Docket No. 10580 ("GUD No. 10580"); and
WHEREAS, the corporate tax rate on federal income included in Atmos' current
rates and made part of the $48 million increase in revenue approved via the RRM, was
based on afederal-income-tax rate of 35%; and
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WHEREAS, the corporate tax rate on federal income included in APT's current
rates and approved by the Railroad Commission of Texas in GUD No. 10580, was based
on afederal-income-tax rate of 359/o; and
and
WHEREAS, effective January 1, 2018, the corporate tax rate on income is 219/o;
WHEREAS, Atmos seeks administrative approval under Utilities Code § 104.111
to reduce its annual revenue by approximately $29 million; and
WHEREAS, APT seeks the City's consent to a decrease in rates for APT's rates
to be approved by the Railroad Commission of Texas, which decrease would reduce
APT's annual revenue by about $29 million; and
WHEREAS, ATM's Special Counsel and consultants engaged to review Atmos'
and APT's calculation of the effect of the reduction in the corporate federal -income-tax
rate from 35% to 21 %has on Atmos' and APT's rates, have confirmed Atmos' and APT's
calculation of the reduction in Atmos' and APT's revenue is mathematically accurate; and
WHEREAS, the reduction in Atmos' annual revenue is limited to the tax expense
related to the change in the corporate tax rate from 35% to 21 %relative to the revenue
requirement established in Atmos' RRM in 2017, and to the revenue requirement
established in in GUD No. 10580 for APT, and thus will need to be adjusted further in a
future proceeding to account for excess deferred income taxes resulting from the Tax Cut
and Jobs Act of 2017; and
WHEREAS, by approving the reduction in Atmos' rates, and consenting to the
reduction in APT's rates, the City, in future proceedings or in other jurisdictions, is under
no obligation to take the same positions with regard to the methodology resulting in a
reduction in rates, as the methodology underlying the reduction proposed by Atmos or
APT, nor shall the City's approval of the reduction in Atmos' rates or its consent to the
reduction in APT's rates, be used against City in any future proceeding with respect to
different positions the City may take with regard to setting Atmos' or APT's rates.
NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF
BANGER, TEXAS THAT:
Section 1. The findings set forth in this Resolution are hereby in all things
approved and incorporated herein.
Section 2. Atmos shall submit to the City within fourteen days from the effective
date of this Resolution, amended tariffs reflecting the reduction in revenue noted above.
Section 3. The City's Special Counsel, Mr. Alfred R. Herrera, Herrera Law &
Associates, PLLC, is hereby authorized to consent on behalf of the City as part of ATM
in proceedings before the Railroad Commission of Texas, to the reduction in APT's
revenue noted above.
Section 4. To the extent any Resolution previously adopted by the City Council is
inconsistent with this Resolution, it is hereby superseded.
Section 5. The meeting at which this Resolution was approved was in all things
conducted in strict compliance with the Texas Open Meetings Act, Texas Government
Code, Chapter 551.
Section 6. If any one or more sections or clauses of this Resolution is judged to
be unconstitutional or invalid, such judgment shall not affect, impair or invalidate the
remaining provisions of this Resolution and the remaining provisions of the Resolution
shall be interpreted as if the offending section or clause never existed.
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Section in This Resolution shall become effective from and after its passage.
Section 8. A copy of this Resolution shall be sent to Atmos Mid -Tex, care of
Christopher Felan, Vice President of Rates and Regulatory Affairs, Atmos Energy
Corporation, 5420 LBJ Freeway, Suite 1600, Dallas, Texas 75240 and to Mr. Alfred R.
Herrera Herrera Law &Associates, PLLC, 816 Congress Avenue, Suite 950, Austin,
Texas 78701.
PASSED /AND AP
ATTEST:
F
Cheryl �ri�� City Secretary
D this 19th day of March, 2018.
Thomas E Muir, Mayor