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.
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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
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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:
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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.
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0E SqG`` =Mayor
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ZF AS
City Secretary