HomeMy WebLinkAboutOrdinance 17828-10-2007r
ORDINANCE NO.17828-10-2007
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 SEPTEMBER 20, 2007,
UNTIL THG LATER OF JANUARY 23, 2008 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.
WIIEREAS, on September 20, 2007, 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 October 25, 2007; and
WHEREAS, the rates proposed in Atmos's Rate Filing with the City would result in
approximately an 13.49% increase in gas rates imposed by Atmos in the City and approximately
$52 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 order to have time to analyze the Rate Filing thoroughly prior to the
public hearing on this matter, it is necessary that, as allowed by and in accordance with Section
104.107 of the Texas Utilities Code, the City suspend implementation of Atmos's proposed rate
schedule from October 25, 2007 until the later of January 23, 2008 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 ORIIAINEI) BY THE CITY COITNCII. OF THE
CITY OF FORT WORTH, TEXAS THAT:
SECTION 1.
Implementation of the rate schedule outlined in Atmos's September 20, 2007 Rate Filing
with the City is hereby suspended until the later of January 23, 2008 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 January 23, 2008 or the
latest date permitted by law for suspension of implementation of the rate schedule outlined in
Atmos's September 20, 2007 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 September 20, 2007.
SECTION 2.
All of the declarations and findings contained in the preamble of this Ordinance are made
apart hereof and shall be fully effective as part of the ordained subject matter of this Ordinance.
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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 Joe T. Christian, Director of Rates, at Atmos Energy Corporation, 5420 LBJ
Freeway, Suite 1800, Dallas, Texas 75240.
AND IT IS SO ORDAINED.
ADOPTED AND EFFECTIVE: October 9, 2007
APPROVED AS TO FORM AND LEGALITY:
By:
Peter Vaky
Assistant City Attorney
M&C: G-15915
3
City of Fort Worth, Texas
Mayor and Council Communication
COUNCIL ACTION: Approved on 10/9/2007 -Ordinance No. 17828-10-2007
DATE: Tuesday, October 09, 2007
LOG NAME: 03ATMOS RATES REFERENCE NO.: G-15915
SUBJECT:
Adopt Ordinance Suspending Rate Adjustments Proposed by Atmos Energy Corporation, Mid-Tex
Division and Retention of Consultants to Study Propriety of Proposed Rate Adjustment
RECOMMENDATION:
It is recommended that the City Council adopt the attached ordinance which:
1. Suspends the implementation of the Rate Adjustments filed with the City by Atmos Energy Corporation
on September 20, 2007; and
2. Authorizes the City Manager to cooperate with other cities in the Atmos Cities Steering Committee to hire
and direct legal counsel and consultants, negotiate with the Company, make recommendations to the City
regarding reasonable rates, and direct any administrative proceedings or litigation associated with the Rate
Adjustments filed with the City or with the Railroad Commission.
DISCUSSION:
On September 20, 2007, Atmos Energy Corporation, Mid-Tex Division (Atmos Energy), filed with the City of
Fort Worth ("City") its Statement Of Intent To Increase Gas Utility Rates Within The Incorporated Areas
Served By The Mid-Tex Division. The proposed effective date for the new rates is October 25, 2007, 35
days after the filing. The Company is requesting an increase in rates of 13.49 percent excluding the cost of
gas. The Company's application requests new rates that would produce an estimated $51,946,000 in
additional revenue per year.
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 TXU Gas 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.
On May 16, 2006, the City Council authorized participation with other cities in the Atmos Energy service
area to form a standing steering committee with the authority to act on behalf of its members in any
proceeding relating to gas utility regulation (M&C G-15202).This committee is known as the Atmos Cities
Steering Committee (ACSC). Member cities may opt out of any proposed rate case action.
City staff recommends that the City cooperate with ACSC to hire and direct legal counsel and consultants,
negotiate with the Company, make recommendations to the City regarding reasonable rates and to direct
Logname: 03ATMOS RATES Page 1 of 2
any necessary litigation associated with the Rate Adjustments filed with the City or with the Railroad
Commission. Expenses incurred will initially be paid by ACSC. ACSC will seek reimbursement of
reasonable rate case expenses from the Company.
FISCAL INFORMATION/CERTIFICATION:
The Finance Director certifies that this action will have no material effect on City Funds.
TO Fund/Account/Centers
FROM Fund/Account/Centers
Submitted for City Manager's Office bk
Originating Department Head:
Additional Information Contact:
Karen Montgomery (6222)
Bridgette Garrett (8518)
Danny Reed (6145)
Logname: 03ATMOS RATES Page 2 of 2