05-04-14-Resolution-Denying Atmos Energy Rate Increase-05/05/2014I:7 Mali Qi Y
A RESOLUTION BY THE CITY OF SANGER, TEXAS DENYING AN
INCREASE IN RATES REQUESTED BY ATMOS ENERGY
CORPORATION — MIDTEX DIVISION, SUBMITTED ON OR ABOUT
FEBRUARY 28, 2014 UNDER THE RATE REVIEW MECHANISM;
FINDING ATMOS' REQUEST UNREASONABLE; DIRECTING ATMOS
ENERGY TO REIMBURSE THE CITY'S RATE -CASE EXPENSES;
AUTHORIZING THE CITY'S PARTICIPATION IN APPEALS ATMOS
MAY TAKE DENYING ITS REQUESTED INCREASE; REQUIRING
DELIVERY OF THE RESOLUTION TO THE COMPANY AND THE
CITY'S SPECIAL COUNSEL; FINDING THAT THE MEETING
COMPLIED WITH THE OPEN MEETINGS ACT, DECLARING AN
EFFECTIVE DATE; AND MAKING OTHER FINDINGS AND
PROVISIONS RELATED TO THE SUBJECT,
WHEREAS, Atmos Energy Corporation-MidTex Division ("Atmos" or "Company")
filed a request with the City of Sanger, Texas ("City") on or about February 28, 2014, thereby
initiating a ratemaking proceeding to increase its revenue and change its rates within the
corporate limits of the City, and specifically to increase its system -wide, annual revenue
requirement by approximately $45.7 million, which is an increase in base rates exclusive of the
cost of gas of approximately 9.2%; and
WHEREAS, the City is a regulatory authority under Utilities Code § 103.001 (more
commonly referred to as the Gas Utility Regulatory Act ("GURA")) and has exclusive original
jurisdiction over Atmos' rates, operations, and services within the City; and
WHEREAS, Section 103.021 of GURA authorizes the City to obtain information from
Atmos as necessary to make a determination of the basis for the Atmos' proposed increase in
rates in the City; and
WHEREAS, Section 103.022 of GURA provides that Atmos shall reimburse the City its
reasonable cost of engaging personnel to assist it in reviewing Atmos' application; 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, Atmos submitted its application to increase rates under the Rate Review
Mechanism (luuvl ); and
WHEREAS, Special Counsel and experts representing ATM have analyzed the data
furnished by Atmos, sought and obtained additional data, and have interviewed Atmos'
management regarding Atmos' request to increase rates; and
WHEREAS, the City's Special Counsel and rate experts concluded that Atmos' request
to increase rates by $45.7 million is unreasonably high; and
WHEREAS, the City's Special Counsel and rate experts' conclusion that Atmos' request
to increase rates by $45.7 million is unreasonably high is based on numerous elements in Atmos'
request that are inconsistent with sound rate -setting and regulatory principles; and
WHEREAS, the City's Special Counsel and rate experts participated in discussions with
Atmos to attempt to resolve Atmos' proposed change in rates and increase in revenue through
negotiations but were unable to reach agreement; and
WHEREAS, it is anticipated that Atmos will appeal the City's denial of its request to
increase rates to the Railroad Commission of Texas and possibly to the courts, thus requiring the
continued assistance of Special Counsel and rate experts in those proceedings.
NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF
SANGER, TEXAS THAT:
Section 1. The findings set forth in this Resolution are hereby in all things approved.
Section 2. Atmos Energy Corporation-MidTex Division's request to change its rates and
to increase its revenue by approximately $45.7 million is hereby DENIED.
Section 3. Pursuant to Utilities Code § 103.022 and under the terms of the Rate Review
Mechanism, Atmos is hereby directed to reimburse the City's rate case expenses, as participants
in the coalition of cities known as the Atmos Texas Municipalities, for engaging counsel, rate
consultants, and other personnel in assisting the City in its investigation of Atmos' proposed
increase in rates, and is further directed to reimburse the City's rate case expenses on a monthly
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basis for the City's participation in any appeal Atmos seeks of the City's denial of its request to
increase rates.
Section 4. This Resolution supersedes any Resolution or Ordinance previously adopted
by the City Council to the extent such previously adopted Resolution or Ordinance is
inconsistent with this Resolution.
Section 5. The meeting at which this Resolution was approved was in all things
conducted in 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.
Section 7. This Resolution shall become effective from and after its passage.
Section 8. A copy of this Resolution shall be sent to Atmos Energy -Mid -Tex Division,
care of Christopher Felan, Vice President of Rates and Regulatory Affairs, Atmos Energy
Corporation, 5420 LBJ Freeway, Suite 1600, Dallas, Texas 75240, and to Special Counsel, Mr.
Alfred R. Herrera, Herrera & Boyle, PLLC, 816 Congress Avenue, Suite 1250, Austin, Texas
78701.
PASSED AND APPROVED this
ATTEST:
Tami Taber, City Secretary
day of May, 2014.
Thomas Muir, Mayor