HomeMy WebLinkAboutOrdinance 20087-03-2012ORDINANCE NO. 20087 -03 -2012
AN ORDINANCE SUSPENDING IMPLEMENTATION OF THE RATE
SCHEDULE PROPOSED BY ATMOS ENERGY CORPORATION, MID -TEX
DIVISION, AS REFLECTED IN THE "STATEMENT OF INTENT TO
INCREASE GAS UTILITY RATES" FILED BY ATMOS ENERGY
CORPORATION, MID -TEX DIVISION ON JANUARY 31, 2012, UNTIL THE
LATER OF JUNE 4, 2012, OR THE LATEST DATE PERMITTED BY LAW, OR
UNTIL THE DATE OF EFFECTIVENESS OF A RATE ORDER ADOPTED BY
THE CITY COUNCIL; ESTABLISHING RATES TO BE CHARGED BY ATMOS
ENERGY CORPORATION, MID -TEX DIVISION DURING THE PERIOD OF
SUSPENSION; ADOPTING DECLARATIONS AND FINDINGS IN THE
PREAMBLE HEREOF; PROVIDING A SEVERABILITY CLAUSE; AND
PROVIDING FOR AN EFFECTIVE DATE.
WHEREAS, on January 31, 2012, Atmos Energy Corporation, Mid -Tex Division ( "Atmos ")
filed with the City a "Statement of Intent to Increase Gas Utility Rates" ( "Rate Filing ") under which
proposed increased rates charged by Atmos would go into effect in the City on March 6, 2012; and
WHEREAS, the rates proposed in Atmos's Rate Filing with the City would result in an increase
in rates imposed by Atmos in the City of 4.36 %, including gas costs, or 11.94 %, excluding gas costs,
which increase equates to approximately $49 million in additional revenue per year for Atmos; and
WHEREAS, pursuant to Chapters 103 and 104 of the Texas Utilities Code, the City Council is
required to (i) analyze Atmos's Rate Filing; (ii) conduct a public hearing in order to determine the
propriety of the proposed rate increase; and (iii) make a reasonable determination of Atmos's rate base,
expenses, investment and rate of return in the City; and
WHEREAS, in its filing, Atmos requested that the City suspend the effective date until June 4
in accordance with state law to allow affected cities time to review the Rate Filing and work with Atmos
towards achieving an agreed resolution; and
WHEREAS, Atmos has agreed to retrain from imposing the new rates on March 6 to allow
cities additional time in which to adopt a suspension ordinance; and
WHEREAS, in order to have time to analyze the Rate Filing thoroughly prior to the public
hcaring oil this matter, it is ueccssary that, as allowed by and iu accc�rdancc with Section 1()4.1()7 oi the
Texas Utilities Code, the City suspend implementation of Atmos's proposed rate schedule from March 6,
2012 until the later of June 4, 2012, or the latest date permitted by law, or until the date of effectiveness
of a rate order adopted by the City Council in response to the Rate Filing; and
WHEREAS, the City has previously delivered to Atmos a written statement of the City's
reasons for its suspending implementation of Atmos's proposed rate schedule.
NOW, THEREFORE BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF
FORT WORTH, TEXAS THAT:
SECTION 1.
Implementation of the rate schedule outlined in Atmos's January 31, 2012 Rate Filing with the
City is hereby suspended until the later of June 4, 2012 or the latest date permitted by law, pending and
subject to a public hearing on the merits, a determination by the City Council as to the propriety of the
Rate Filing and adoption of a rate order by the City Council that establishes the rates that Atmos may
charge in the City. Until the later of June 4, 2012 or the latest date permitted by law for suspension of
implementation of the rate schedule outlined in Atmos's January 31, 2012 Rate Filing, or until the date of
effectiveness of a rate order adopted by the City Council that establishes the rates that Atmos may charge
in the City, Atmos shall charge the same rates in the City as those that were in effect on January 31,
2012.
SECTION 2.
All of the declarations and findings contained in the preamble of this Ordinance are made a part
hereof and shall be fully effective as part of the ordained subject matter of this Ordinance.
Ordinance No. 20087 -03 -2012
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SECTION 3.
If any portion, section or part of a section of this Ordinance is subsequently declared invalid,
inoperative or void for any reason by a court of competent jurisdiction, the remaining portions, sections
or parts of sections of this Ordinance shall be and remain in full force and effect and shall not in any way
be impaired or affected by such decision, opinion or judgment.
SECTION 4.
This Ordinance shall take effect and be in full force and effect from and after the date of its
adoption. The City Secretary is hereby directed to deliver a certified copy of this Ordinance to Atmos,
care of David J. Park, Vice - President, Rates & Regulatory Affairs at Atmos Energy Corporation, 5420
LBJ Freeway, Suite 1800, Dallas, Texas 75240.
AND IT IS SO ORDAINED.
ADOPTED AND EFFECTIVE: March 6, 2012
APPROVED AS TO FORM AND LEGALITY:
Denis (31 McE
Assistant City
M &C: G -17536
Ordinance No. 20087 -03 -2012
Page 3 of 3
City of Fort Worth, Texas
Mayor and Council Communication
RECOMMENDATION:
It is recommended that the City Council:
1. Adopt the attached ordinance, which suspends implementation of a rate increase filed with the City by
Atmos Energy Corporation, Mid -Tex Division on January 31, 2012; and
2. Authorize cooperation with the Atmos Cities Steering Committee to hire and direct legal counsel and
consultants, negotiate with Atmos, make recommendations to the City regarding reasonable rates, and
direct any administrative proceedings or litigation associated with the Rate Increase filed with the City or
with the Railroad Commission.
DISCUSSION:
On January 31, 2012, Atmos Energy Corporation, Mid -Tex Division ( Atmos), filed with the City of Fort
Worth (City) its "Statement of Intent to Increase Gas Utility Rates within All Incorporated Areas Served by
the Mid -Tex Division, with the Exception of the City of Dallas" (Rate Increase). The Company is
requesting an increase in rates of 11.94 percent, excluding the cost of gas. According to Atmos's filing, the
proposed Rate Increase would produce an estimated $49,000,000.00 in additional revenue per year for
the company.
Under state law, the City Council has exclusive original jurisdiction over the rates, operations, and
services of any gas utility operating in the City. When such a gas utility requests a rate change that
constitutes a major change over the rates currently in effect, the City Council is required to conduct a
public hearing in order to determine the propriety of the proposed rates. In order to have sufficient time to
analyze the rate filing, the City Council is authorized to suspend the effectiveness of the proposed rate
schedule for up to 90 days from the date proposed by the gas utility for implementation of the new rates.
During this suspension period, the City Council may establish temporary rates or allow the current rates to
continue in effect. Following a public hearing on this matter, the City Council will be asked to adopt an
order that establishes the rates that Atmos may charge in the City. This order must comply with and be
based on rate computation standards that are established by state laws and regulations.
The earliest effective date for the new rates would be March 6, 2012, which is 35 days after the filing.
However, in its filing, Atmos requested that the City suspend the effective date until June 4, 2012 in
accordance with state law to allow affected cities time to review the filing and work with Atmos towards
achieving an agreed resolution. In addition, Atmos agreed to refrain from imposing the new rates on
March 6, 2012 and allow cities additional time in which to adopt a suspension ordinance.
Logname: 12ATMOS RATE INCREASE 2012 Page 1 of 2
City Staff recommends that the City Council adopt the attached ordinance, which (i) suspends the Rate
Increase until the later of June 4, 2012, or the latest date permitted by law and (ii) requires Atmos to
continue charging current rates while consideration of the proposed Rate Increase is pending.
City Staff is also recommending that the City Council authorize cooperation with the Atmos Cities Steering
Committee (Steering Committee) in evaluating the proposed Rate Increase. The City has been part of the
Steering Committee since 2006. The Steering Committee is a coalition of municipalities in the service area
of Atmos that participate in the regulatory process to ensure that natural gas rates are fair and
reasonable. On December 13, 2011, the City Council approved M &C G- 17467, which authorized the
City's continued participation in the Steering Committee for 2012.
City Staff recommends that the City cooperate with the Steering Committee to hire and direct legal
counsel and consultants, negotiate with Atmos, make recommendations to the City regarding reasonable
rates, and to direct any necessary litigation associated with the Rate Increase filed with the City or with the
Railroad Commission. Expenses incurred will initially be paid by the Steering Committee. Member cities
will seek reimbursement of reasonable rate case expenses from Atmos.
FISCAL INFORMATION / CERTIFICATION:
The Financial Management Services Director certifies that this action will have no material effect on City
Funds.
FUND CENTERS:
TO Fund /Account/Centers
CERTIFICATIONS:
Submitted for City Manager's Office by:
Originating Department Head:
Additional Information Contact:
Logname: 12ATMOS RATE INCREASE 2012
FROM Fund /Account/Centers
Charles Daniels (6199)
Sarah Fullenwider (7606)
Bridgette Garrett (8518)
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