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09-08-10-Resolution-Approving Atmos Energy Tariffs-09/20/2010RESOLUTION 09-08-10 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ?l_lq, TEXAS, ("CITY") APPROVING A CHANGE SIN THE TARIFFS OF ATMOS ENERGY CORPORATION, MID-TEX DIVISION ("ATMOS"), AS A RESULT OF A SETTLEMENT BETWEEN ATMOS AND THE ATMOS TEXAS MUNICIPALITIES ("ATM"); FINDING THE RATES SET BY THE ATTACHED TARIFFS TO BE JUST AND REASONABLE, FINDING THAT THE ADDITIONAL COST FOR REPLACING STEEL SERVICE LINES IS APPROPRIATE AND IS APPROVED SUBJECT TO A PRUDENCE REVIEW: FINDING THAT THE CONTINUATION OF THE RATE REVIEW MECHANISM ("RRM"), AS AMENDED, FOR TWO YEARS IS REASONABLE; REQUIRING DELIVERY OF THE RESOLUTION TO THE COMPANY AND LEGAL COUNSEL; DETERMINING THAT THE MEETING AT WHICH THIS RESOLUTION WAS APPROVED COMPLIED WITH THE OPEN MEETINGS ACT; MAKING OTHER FINDINGS AND PROVISIONS RELATED TO THE SUBJECT; AND DECLARING AN EFFECTIVE DATE. ism°°lba Copy WIiEREAS, 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 Energy Corporation —Mid-Tex Division ("Atmos") rates, operations, and services as a gas utility within. the municipality; and, WHEREAS, the City has participated in prior cases regarding Atmos as part of a coalition of citiesknown as the Atmos Texas Municipalities ("ATM"), and, WHEREAS, on or about April 15, 2010 Atmos filed for an increase in rates, pursuant to the Rate Review Mechanism ("RRM"), of approximately $70 million; and, WHEREAS, almost one-half of the increase for RRM this year is the result of the J rate of return true -up component.of RRM; and. WHEREAS, the rate of return true -up component of RRM has been controversial and difficult to apply; and WHEREAS, over the past few years there have been explosions of Atmos' steel service lines in the Mid -Tex Division which have caused serious property damage and loss of life; and two years; and WHEREAS, the most at -risk steel service lines need to be replaced over the next WHEREAS, after months of negotiations and after months of reviewing Atmos' books and records by ATM's experts , a settlement was agreed to by Counsel for ATM, acting on behalf of ATM's Executive Committee, with Atmos, which provides for: (1) the replacement of the most at -risk steel service lines, to be paid for with a small increase in the customer charge for residential and commercial customers; (2) a reduction of 61 % of Atmos' requested increase in rates for 2010; (3) the continuation of RRM for two more years but without the rate of return trge-up and (4) the filing of a general rate case by Atmos on or before June 1, 2013; and WIIEREAS, the Executive Committee of ATM and its lawyers recommend that Council .approve the attached settlement as set forth in Attachment A along with the attached tariffs which are set forth as Attachment B. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF �n�I� ,TEXAS THAT: v Section 1. That the findings set out in the preamble to this resolution are hereby in all things approved and adopted. Section 2. That the 'settlement agreement, Attachment A, on balance is in the public interest and is approved. Section 3. The rates contained in the attached tariffs, Attachment B, are just and reasonable 'and are hereby approved subject fo a prudence review of the steel pipe replacement ' , expenditures in the next general rate proceeding. Section 4. That a copy of this Resolution shall be sent to Mr. David Park, Vice President for Rates and Regulation; Mid -Tex Division, Atmos Energy Corporation, 5420 LBJ Freeway, Suite 1800, Dallas, Texas 75204, and to Jim Boyle, Counsel for ATM, at Herrera & Boyle, PLLC, 816 Congress Avenue, Suite 1250, Austin, TX 7$701. Section 6. That 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. its passage. Section 7. That this resolution shall beeome effective immediately from and after PASSED and APPROVED this `w`day of September, 2010. ``4 ` i1114liiilalveese ` c: . %r nGt.Q--' • '"t - . 0E SqG`` =Mayor V 3 ZF AS City Secretary