HomeMy WebLinkAbout09-3515 ord~,~~ S
ORDINANCE NO. 09-3515
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF
PLAINVIEW, TEXAS, ("CITY") APPROVING A NEGOTIATED
RESOLUTION BETWEEN THE ATMOS WEST TEXAS CITIES
STEERING COMMITTEE ("STEERING COMMITTEE") AND ATMOS
ENERGY CORP., WEST TEXAS DIVISION ("ATMOS WEST TEXAS" OR
"COMPANY") REGARDING THE COMPANY'S SECOND ANNUAL RATE
REVIEW MECHANISM FILING IN ALL CITIES EXERCISING ORIGINAL
JURISDICTION; DECLARING EXISTING RATES TO BE
UNREASONABLE; REQUIRING THE COMPANY TO REIMBURSE
CITIES' REASONABLE RATEMAKING EXPENSES; ADOPTING
TARIFFS THAT REFLECT RATE ADJUSTMENTS CONSISTENT WITH
THE NEGOTIATED SETTLEMENT AND FINDING THE RATES TO BE
SET BY THE ATTACHED TARIFFS TO BE JUST AND REASONABLE;
APPROVING ATMOS' PROOF OF REVENUES; ADOPTING A SAVINGS
CLAUSE; DETERMINING THAT THIS ORDINANCE WAS PASSED IN
ACCORDANCE WITH THE REQUIREMENTS OF THE TEXAS OPEN
MEETINGS ACT; DECLARING AN EFFECTIVE DATE; AND REQUIRING
DELIVERY OF THIS ORDINANCE TO THE COMPANY AND THE
STEERING COMMITTEE'S LEGAL COUNSEL.
WH~'REAS, the City of Plainview, Texas ("City") is a gas utility customer of
Atmos Energy Corp., West Texas Division ("Atmos West Texas" or "Company"), and a
regulatory authority with an interest in the rates and charges of Atmos West Texas; and
WHEREAS, the City and similarly situated municipalities working together as the
Steering Committee of Cities Served by Atmos West Texas ("Steering Committee")
were previously in continuing disagreement, dispute, and litigation with the Company
over the application of Section 104.301 of the Texas Utilities Code and the interim rate
adjustments ("GRIP rate increases") established by the Railroad Commission of Texas
("RRC" or the "Commission"); and
WHEREAS, pursuant to the terms of the November 15, 2007 stipulation settling
the Company's GRIP rate increase application filed July 25, 2007, the Steering
Committee and the Company collaboratively developed the Rate Review Mechanism
("RRM") tariff, ultimately authorized by the City in 2008, that allows for an expedited rate
review process controlled in a three year experiment by Steering Committee Cities as a
substitute to the current GRIP process;
WHEREAS, on or after April 1, 2009, Atmos West Texas filed with the City its
second application pursuant to the RRM tariff to increase natural gas rates by
approximately $15.4 million, such increase to be effective in every municipality within
its West Texas Division; and
Atmos West Texas RRM Ordinance
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WHEREAS, the Steering Committee, assisted by its attorneys and consultants,
coordinated the review of the Atmos West Texas RRM filing and designated the
Executive Committee to resolve issues regarding the Company's RRM filing; and
WHEREAS, the Company has filed evidence that existing rates are
unreasonable and should be changed; and
WHEREAS, independent analysis by the Steering Committee's rate expert
concluded that Atmos West Texas is able to justify a rate increase of up to $12.23
million; and
WHEREAS, after negotiation and review, Atmos West Texas representatives and
the Executive Committee were able to reach agreement that a $12.23 million increase
in the Company's revenue requirement is reasonable; and
WHEREAS, the Steering Committee supports efforts to hedge natural gas
futures in order to mitigate the volatility of natural gas prices, which are apass-through
to customers; and
WHEREAS, the stipulation contemplates reimbursement of the Steering
Committee's reasonable expenses associated with RRM applications; and
WHEREAS, the Executive Committee, as well as Steering Committee lawyers
and consultants, recommend that Steering Committee members approve the attached
rate tariffs ("Attachment A" to this Ordinance), which will increase the Company's
revenue requirement by $12.23 million consistent with the negotiated resolution; and
WHEREAS, the attached tariffs implementing new rates and the Atmos West
Texas Proof of Revenues ("Attachment B" to this Ordinance) are consistent with the
negotiated resolution reached by the Steering Committee and are just, reasonable, and
in the public interest; and
WHEREAS, it is the intention of the parties that if the City determines any rates,
revenues, terms and conditions, or benefits resulting from a Final Order or subsequent
negotiated settlement approved in any proceeding addressing the issues raised in the
Company's RRM filing would be more beneficial to the City than the terms of the
attached tariffs, then the more favorable rates, revenues, terms and conditions, or
benefits shall additionally accrue to the City;
WHEREAS, the negotiated resolution of the Company's RRM filing and the
resulting rates are, as a whole, in the public interest.
NOW, THEREFORE, The City of Plainview Hereby Ordains that:
Atmos West Texas RRM Ordinance
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SECTION I
The findings set forth in this Ordinance are hereby in all things approved.
SECTION II
The City Council finds that the existing rates for natural gas service provided by
Atmos West Texas are unreasonable and new tariffs and the Atmos West Texas Proof
of Revenues, which are attached hereto and incorporated herein as Attachments A and
B, are just and reasonable and are hereby adopted.
SECTION III
Atmos West Texas shall reimburse the reasonable rate making expenses of the
Steering Committee Cities in processing the Company's rate application.
SECTION IV
To the extent any resolution or ordinance previously adopted by the Council is
inconsistent with this Ordinance, it is hereby repealed.
SECTION V
The meeting at which this Ordinance was approved was in all things conducted
in strict compliance with the Texas Open Meetings Act, Texas Government Code,
Chapter 551.
SECTION VI
If any one or more sections or clauses of this Ordinance is adjudged to be
unconstitutional or invalid, such judgment shall not affect, impair or invalidate the
remaining provisions of this Ordinance and the remaining provisions of the Ordinance
shall be interpreted as if the offending section or clause never existed.
SECTION VII
If the City determines any rates, revenues, terms and conditions, or benefits
resulting from a Final Order or subsequent negotiated settlement approved in any
proceeding addressing the issues raised in the Company's RRM filing would be more
beneficial to the City than the terms of the attached tariffs, then the more favorable
rates, revenues, terms and conditions, or benefits shall additionally accrue to the City.
SECTION VIII
The Company's Gas Cost Recovery tariff is revised to permit recovery of certain
costs associated with hedging natural gas futures.
Atmos West Texas RRM Ordinance
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SECTION IX
This Ordinance shall become effective from and after its passage with rates
authorized by attached tariffs to be effective for bills rendered on or after August 1,
2009.
SECTION X
A copy of this Ordinance shall be sent to Atmos West Texas, care of C. W. "Bill"
Guy, at Atmos Energy Corporation, 5110 80th Street, Lubbock, Texas 79424 and to
Geoffrey Gay, Steering Committee Counsel, at Lloyd Gosselink Rochelle & Townsend,
P.C., P.O. Box 1725, Austin, Texas 78767-1725.
PASSED AND APPROVED on first reading this 28th day of July, 2009.
PASSED AND APPROVED on second reading this 1'):~day of August, 2009.
~ y ~ ~A~
n C. Anderson,
ATTF~T:
~/
Belinda Hinojosa, City
APPROVED,A,S TO, CON
G
APPROVED AS TO FORM:
Leslie Spear Pear e, City Attorney
Atmos West Texas RRM Ordinance
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