HomeMy WebLinkAboutR06-166RESOLUTION NO. R06-166
A RESOLUTION BY PLAINVIEW, TEXAS ORDERING ATMOS ENERGY,
WEST TEXAS DIVISION TO SHOW CAUSE REGARDING THE
REASONABLENESS OF ITS EXISTING NATURAL GAS DISTRIBUTION
RATES WITHIN THE CITY; REQUIRING ATMOS ENERGY, WEST
TEXAS DIVISION TO SUBMIT A RATE PACKAGE BASED ON A RATE
YEAR ENDING MARCH 31, 2006; DIRECTING THAT SUCH FILING
SHALL BE MADE BY SEPTEMBER 15, 2006; REQUIRING
REIMBURSEMENT OF REASONABLE LEGAL AND CONSULTANT
EXPENSES; AND REQUIRING DELIVERY OF THIS RESOLUTION TO
THE COMPANY AND LEGAL COUNSEL.
WHEREAS, the City is a regulatory authority under the Gas Utility Regulatory Act
("GURA") and has original jurisdiction over the gas utility rates of Atmos West Texas;
and
WHEREAS, the City has the authority under §§ 103.001 and 104.151, GURA, to
initiate a proceeding to determine whether the existing rates of a gas utility are
unreasonable or in any way in violation of any provision of law; and
WHEREAS, upon making a finding of unreasonableness, the City may determine
the just and reasonable rates to be charged by Atmos West Texas; and
WHEREAS, Atmos Energy Corporation, the parent company of Atmos West
Texas has recently experienced system-wide cost reductions due to the doubling of its
nationwide customer base with the acquisition of the assets of TXU Gas, and has
reported to its investors that it has experienced a significant increase in profits related to
its Texas divisions; and
WHEREAS, Atmos West Texas is charging rates that are not reflective of the
change in capital structure and cost of debt as a result of the acquisition of TXU Gas
and increase in service territory; and
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WHEREAS, ratepayers of Atmos West Texas, including the City and its
residents, will suffer further unreasonable adverse impact from the GRIP rate increases
approved by the Texas Railroad Commission and the second GRIP filing expected to be
made by Atmos West Texas in September, 2006; and
WHEREAS, the Company's piecemeal GRIP rate application leaves cities no
functional choice to review Atmos' underlying costs and expenses but to exercise its
statutory right to exercise original jurisdiction over Atmos' base rates and compel a
comprehensive rate review; and
WHEREAS, the City has reason to believe that Atmos West Texas is over-
earning and that its rates are excessive; and
WHEREAS, cities and their residents have experienced unprecedented
increases in the cost of natural gas during the heating season and protection of the
public interest requires a comprehensive review of Atmos' cost of service to determine
whether rates and services are just and reasonable; and
WHEREAS, Atmos West Texas should be required to justify its rates on a
system-wide basis; and
WHEREAS, the coalition of cities formed to review Atmos' GRIP filings (the West
Texas Gas Steering Committee or "WTGSC") can most efficiently review the Atmos
filing on behalf of the City; and
WHEREAS, the reasonable costs associated with the City's review of the
Company's rates are reimbursable from Atmos West Texas;
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY
OF PLAINVIEW, TEXAS, THAT:
Resolution R06-166 Page 2 of 4
1. That Atmos West Texas is hereby directed to show cause regarding the
reasonableness of its existing natural gas distribution rates within the City. Atmos shall
file with the City information sufficient to determine the Company's rate base, expenses,
investment, and rate of return. Such filing shall be on a system-wide basis and shall be
based upon a rate year ending March 31, 2006. Atmos West Texas is directed to file its
rate filing package to comply, at a minimum, with the regulations and requirements of
the Railroad Commission. The filing shall be made with the City on or before
September 15, 2006. An electronic copy of the filing shall be made with the City
simultaneously with the written filing on September 15, 2006. This filing shall be the
same filing as made with the first coalition city to pass the same or similar Show Cause
Resolution.
2. City's designated representatives shall have the right to obtain additional
information from Atmos through the filing of written requests for information, to each of
which Atmos shall respond in writing within fourteen (14) calendar days from the receipt
of each such request for information.
3. A public hearing shall be conducted by the City. Based upon such
hearing, the briefing of staff, and the consultants' findings, a determination of the
reasonableness of the existing rates of Atmos shall be made by the City and, if
necessary, just and reasonable rates shall be determined to be thereafter observed and
enforced for all services of Atmos within the City.
4. The City may, from time to time, amend this procedural schedule and the
filing requirements, and enter additional orders as may be necessary in the public
interest and to enforce the provisions hereof.
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5. Atmos West Texas shall promptly reimburse the City's reasonable monthly
costs associated with the City's activities related to the rate review.
6. A copy of this Resolution shall be sent to Atmos West Texas, care of Bill
Guy, at Atmos Energy Corporation, 5110 80th Street, Lubbock, Texas 79424-3016, and
to Geoffrey Gay, legal counsel to the coalition of cities, at Lloyd Gosselink, P.O. Box
1725, Austin, Texas 78767-1725.
DULY PASSED and approved by the City Council of the City of Plainview, Texas,
on this the 27th day of June, 2006.
APPROVED:
1
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hn C. Anderson,
ATTEST:
Belinda Hinojosa, City Secretary
APPROVED AS TO FORM:
Leslie Pearce, City Attorney
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