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HomeMy WebLinkAboutOrdinance 16944-05-2006ORDINANCE NO. 16944-05-2006 AN ORDINANCE SUSPENDING IMPLEMENTATION OF THE RATE ADJUSTMENTS PROPOSED BY ATMOS ENERGY CORP., MID-TEX DIVISION, AS REFLECTED IN THE "ANNUAL GAS RELIABILITY INFRASTRUCTURE RATE ADJUSTMENT" FILED BY ATMOS ENERGY CORP., MID-TEX DIVISION ON MARCH 31, 2006; AUTHORIZING THE PARTICIPATION IN A STEERING COMMITTEE OF OTHER CITIES ANALYZING SIMILAR RATE ADJUSTMENT FILINGS BY ATMOS ENERGY CORP., MID-TEX DIVISION AND THE HIRING OF CONSULTANTS AND ATTORNEYS THEREWITH; DIRECTING THAT ATMOS ENERGY CORP., MTD-TEX DIVISION REIMBURSE THE CITY FOR ALL SUCH REASONABLE EXPENSES; ADOPTING DECLARATIONS AND FINDINGS IN THE PREAMBLE; PROVIDING A SEVERABILITY CLAUSE; PROVIDING FOR AN EFFECTIVE DATE; AND DIRECTING THAT CERTIFIED COPIES OF THIS ORDINANCE BE DELIVERED TO ATMOS ENERGY CORP., MID- TEX DIVISION FOLLOWING ITS ADOPTION. WHEREAS, an March 31, 2006 Atmas Energy Carp., Mid-Tex Division ("Atmos") filed with. the City Secretary an "Annual Gas Reliability Infrastructure Rate Adjustment" ("Rate Adjustment Filing") pursuant to Section 104.301 of the Texas Utilities Code, under which adjusted rates of Atmos would go into effect in the City on May 30, 2006; and WHEREAS, the adjusted rates proposed in Atmos's Rate Adjustment Filing with the City would result in an increase in gas prices charged by Atmas in the City; and WHEREAS, under Texas law, the City has exclusive original jurisdiction over the rates, operations and services of any gas utility operating within the City; and WHEREAS, in order to have ti.e to analyze the Rate Adjustment Filing thoroughly, it is necessary that the City Council suspend implementation of Atmos's proposed rate adjustment for a period of up to forty-five (45) days, as specifically allowed by and in accordance with Section 104.301 0£ the Texas Utilities Code, until the earlier of January 3, 2006 or the date on which City Council adopts final order or decision in response to the Rate Adjustment Filing; NOW, THEREFORE BE IT ORDAINED BY TIKE CITY COUNCIL OF THE CITY OF FORT WORTH, TEXAS THAT: SECTION 1. Implementation of the rate adjustments outlined in Atmos's March 31, 2006 Rate Adjustment Filing with the City is hereby suspended for the lesser of (i) the maximum period allowed by law, as specifically allowed by and in accordance with Section 104.301 of the Texas Utilities Code, or (ii} the date on which the City Council adopts a final order or decision in response to the Rate Adjustment Filing following a public hearing on the merits and a determination by the City Council as to the propriety of the Rate Adjustment piling. Until such time, Atmos shall charge the same rates in the City as those that were in effect on March 31, 2006, without the adjustments requested in the Rate Adjustment Filing. SECTION 2. The City Manager or his authorized designee is hereby authorized to cooperate with other participating municipalities to create and participate in a steering committee to hire and direct legal counsel and consultants to make recommendations to participating municipalities, including the City, regarding the Rate Adjustment Filing and to ,direct any administrative proceedings or litigation associated with the Rate Adjustment Filing, subject to the City's right to terminate such participation at any time by written notice to the steering committee and to act independently in the exercise of its regulatory authority. 2 SECTION 3. In accordance with Section 103.022(b} of the Texas Utilities Cade, Atzxaas is hereby directed to reimburse the City for all reasonable costs and expenses of any rate consultants, accountants, auditors, attorneys and engineers retained by the City ar a steering conunittee of which the City is a member and incurred in the course of the Ciry's andlor the steering committee's review of Atmos's Rate Adjustment Filing. SECTION 4. All of the declarations and f ndings contained in the preamble of this Ordinance are made apart hereof and shall be fully effective as part of the ordained subject zx~atter of this Ordinance. SECTION 5. If any portion, section ar 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 partians, sections or parts of sections of this Ordinance shall be and remain in foil force and effect and shall not in any way be unpaired or affected by such decision, opinion or judgment. SECTION 60 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 certified copies of this Ordinance to Atmos as follows: Richard Reis, Atmas Energy Carp., Mid-Tex Division, 5420 LBJ Freeway, Suite 1800, Dallas, TX 75240. 3 AND I'I' I~ SO ORDAINED. ADOPTED AND E~'~'ECTZVE: May 16, 2006 APPROVED A~ TO FORM AND LEGALITY: By: Peter Vaky Assistant City Attorney M&C: G-15203 qty ®f F®-~ YV®rt~, T~~r~.~ rand ~ncil rnu~n~atin COUNCIL ACTION: Approved o~ 5f'1612006 -Ordinance No. 'IG944-05-2006 ©ATE: Tuesday, May 16, 2006 LOG NAME: 03GRIP03 REFERENCE NO.: G-'95203 SUBJECT: Adopt Ordinance Suspending Interim Rate Adjustments Proposed by Atmos Energy and Retention of Consultants to Study Propriety of Proposed Rate Adjustment RECOMMENDATION: 1t is recommended tha# the City Council adopt the attached ordinance that: 1. Suspends the implementation of the Interim Rate Adjustments filed with the City by Atmas Energy Corporation nn March 31, 2006; and 2. Authorizes the City Manager to cooperate with other cities in the Atmos Energy Gas Distribufion System and the Gas Standing 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 Interim Rate Adjustments filed with the City or with the Railroad Commission. DISCUSSION. On March 31, 2006, Atmos Energy Corporation (Atmas Energy), formerly known as TXU Gas Company, filed with the City of Fort Worth ("City") the third Gas Reliability Infrastrucfure Program Rate Adjustment (G.R.I.P) within the last twelve months. The first G.R.I.P. adjustment filed December 19, 2004 was denied by the City Council nn July 26, 2005, (M&C G-14875, Ordinance No. 16524}. It was later granted by the Railroad Commission. The second G.R.I.P adjustment filed September 19, 2005 was denied by the City Council on November 15, 2005, (M&C G-15002, Ordinance No. 16712}. It, also, was granted by the Railroad Commission. G.R.I.P. filings are a departure from traditions! rate cases in that they are adjustments to existing rates to allow a utility to recover additional invested capital without considering increased revenues or decreased expenses that may be associated with that investment. A utility may apply for these adjustments only if it has filed a rate case in the last two years and it has new invested capital that is naf considered in its present rates. As TXU Gas, the Company filed its last rate case on May 23, 2003. The Railroad Commission issued a Final Order on May 25, 2004. Under state law, the City has exclusive original jurisdiction aver the rates, operations and services of any gas utility operating in the City. When such a gas utility reques#s a rate increase that constitutes a major change aver the rates currently in effect, the City 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 is allowed to suspend the proposed rate schedule up to 45 days. During this suspension period, the gas utility's current rates will continue in effect. Fnllawing the public hearing on this matter, the City Council will be asked to adopt an order that establishes the rates thafi Atmos Energy may charge in the City. This order must, of course, comply with and be based on rate computation standards that are established by state laws and regulations. La~narne: 03GRIP03 Page t of 2 Pursuanf to State law the City, as a regulatory authority, may retain consultants and other professionals to advise and represent the City and to assist the City in any litigation or ratemaking proceeding, and any gas utility in a ratemaking proceeding must reimburse the City for the reasonable costs of these services. City staff recommends that the City cooperate with other cities in the Atmos Energy Gas Distribution System and participate in the Gas Standing Steering Committee to hire and direct legal counsel and cnnsultants, negotiate with the Company, make recommendations to the City regarding reasnnable rates and to direct any necessary litigation assaciated with the Interim Rate Adjustments filed with the City or with the Railroad Commission. FISCAL INIi=ORMATIONICIWRTIFICATION; The Finance Director certifies that this action will have no material effect on City funds. TO l = u ndlAccn u ntr'Ge me rs FROM FundlAccountlCenters Submitted tar Cit Mena er's Office b Richard Zavala (Acting) (6222} Ori inatin De artment Head: Bridgette Garrett (8598) Additional lntormation Contact: Danny Reed (6945) La~narne: 03GRIP03 Page 2 of 2