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HomeMy WebLinkAboutOrdinance 16276-01-2005®RDINANCE N®. ~ ~6-~~~~~ AN ®RDIliYANCE SUSPENDING IMPLEMENTATION OF TI-IE RATE ADJUSTMENTS PROPOSED DY ATMOS ENERGY CORP., l1~IID-TEX DIVISION, AS REFLECTED IN TIME "ANNUAL GAS RELIADILITY INFRASTRUCTURE RATE AJD~IUSTMENT" FILED BY ATMOS ENERGY CORP., MID-TEX DIVISION ON DECEMEEl2 17, 2004; AUTHORIZING THE PARTICIP.~.TION IN A STEERING COMMITTEE OF OTIIER CITIES ANALYZING SIMILAR RATE AD.IUSTMENT FILINGS IBY ATMOS ENERGY CORP., 1VIID-TEX DIVISION AND THE HIRING OF CONSULTANTS AllTD ATTORNEYS T~IEREWIT~I; DIRECTING TIIAT ATMOS ENERGY CORP., MID-TEX DIVISION REIMBURSE THE CITY FOR ALL SUCH REASONAI6LE EXPENSES; ADOPTING DECLAI3.ATIONS AND FINDINGS IN TIIIE PREAMBLE; PROVIDING A SEVERABILITY CLAUSE; PROVIDING FOR AN EF;E~ECTIVE DATE; ANII DIRECTING THAT CERTIFIED COPIES OF THIS ORDINANCE )EiE DELIVERED TO ATMOS ENERGY CORP., MID- TEX. DIVISION FOLLOWING ITS AIDOP'I'IO1~'. WHEREAS, on December 17, 2004 Atmos Energy Cazp., Mid-Tex Division ("Atmos") filed with the City Secretary an "Annual Gas Reliability Infrastructure Rate Adjustment" ("Rate Fiiit~g") pursuant to Section 104.301 of the Texas Utilities Code, under which adjusted rates of Atmos would go into effect in the City on February I5, 2005; and WHEREAS, the rates proposed in Atos's Rate Filing with the City would result in an increase in gas rates charged by Atmos 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 time to analyze the Rate Filing thoroughly prior to a public hearing and final decision by the City Council on this rr~atter, it is necessary that the City Council suspend iarnplezx~entation of Atmos's proposed rate adjustment, as specifically allowed by and in accordance with Section 104.301 of the Texas Utilities Code, until the City Council adopts a rate order or final decision in response to the Rate Filing; NO'VV, THEREFORE BE IT ORDAINED BY THE CITY COIJNCII. OF THE CI'1CY OF FORT FORTH, TEXAS THAT: SECTI®N 1. hnplementation of the rate adjustments outlined in Atmos's December 17, 2004 Rate Filing with the City is hereby suspended, pending a public hearing on the merits, a determination by the City Council as to the propriety of the Rate Filing and the adoption of a final order or decision in this matter. Until the date that a rate order or final decision of the City Council in dais matter is served on Atmos, Atmos shall charge the same rates in the City as those that were in effect on December 17, 2004. 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 recamnaendations to participating municipalities, including the City, regarding the Rate Filing and to direct any administrative proceedings or litigation associated with the Rate Filing, subject to the City's right to terminate such participation at any tune by written notice to the steering committee and to act independently in the exercise of its regulatory authority. 2 SECT1f~N 3. In accordance with Section 103.022(b} of the Texas Utilities Code, Atmos is hereby directed to reimburse the City for all reasonable casts and expenses of any rate consultants, accountants, auditors, attorneys and engineers retained by the City or a steering committee of which the City is a rzaember and incurred in the course of the City's andlor the steering coxnmittee's review of Atmos's Rate Filing. ~~.~~~nt~r a All of the declarations and findings cantained 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. SEC"I'~®1®1 S. 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 oat in any way be impaired or affected by such decision, opinion or judgment. SECT`i®N 6. This Ordinance sha11 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 Atrnos as follows: {i) Richard Reis, Atmns Energy Corp., Mid-Tex Division, 300 S. St. Paul St., 8th p'loor, Dallas, TX 75201, and (ii) Douglas C. Walther, At~x~os Energy Corporation, 5340 LBO Freeway, Suite 1800, Dallas, TX 75240-2b01. 3 AID IT ~~ SO ORDA~l~E~3. ADOPTED AND EFFECTNE: ~'- I - D5~ APPR®VED AS T® ~`ORM AND LEOAL~TY: By: Peter Vaky Assistant City Attorney Mayor and Council Communication COUNCIL ACTION: Approved on 21112AA5 - Ordinarnce No. 9fi27'6 ®ATE: Tuesday, February 09, 2005 LOG NAME: 03GRIP REFERENCE N®.: **G-14G62 SUBJECT: Adopt Ordinance Suspending Rate Adjustments Proposed by Atmos Energy and Authorize Retention of Consultants and Attorneys to Study Propriety of Proposed Rate Adjustments RECOMMENDATION: It is recommended that the City Council adopt the attached ard'€nance which: 1. Suspends the implementation of the Interim Rate Adjustments filed with the City of Fort Worth by Atmas Energy Corporation, formerly known as TXU Gas Distribution, an December 17, 2004; and 2. Authorizes the City Manager #o cooperate with other cities in the Atmos Energy Gas ©istribution System to create a 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 December 17, 2004, Atmas Energy Corporation (Company), formerly known as TXU Gas Company, filed with the City of t=ort Worth (City) the Company's Annual Gas Reliability Infrastructure Program Rate Adjustment (G.R.I.P). The proposed adjustment will produce approximately $$.5 million per year in additional revenue far the Company. The proposed increases in distribution rates are: Residential - $0.39 per month; Commercial - $0.84 per month; and Industrial _ $26.85 per month. During the same week, the Company filed G.R.I.P. adjustments for its Pipeline Division with the Railroad Commission, now docketed as GUD 9560. City staff has not yet determined the impact of the filing at the Railroad Commission on local rates. The effective date of the new rates is February 15, 2085. These filings are a departure from previous rate cases in that they are adjustments to existing rates fo allow a utility to recover additional invested capital without filing a full rate case. 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 not 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, 2084. Under state law, the City has exclusive original jurisdiction over the rates, operations and services of any. gas utility operating in the City. In order to have sufficient time to analyze the rate filing, the City is allowed to suspend the proposed rate schedule. ^uring this suspension period, the gas utility's current rates will continue in effect. Following a subsequent public hearing an this matter, the City Council will be asked #o adopt a final order ar a decision in this rate case_ Pursuant 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. Lo~name: 03GRIt' Pane 1 of 7. City staff recommends that the City participate with other cities served by the Customer's Distribution Systerr3 to create a Steering Committee to hire and direct legal counsel and consultants, negotiate with the Company, make recommendations to the City regarding reasonable rates and to direct any necessary litigation associated with the Company's Rate Adjustments fled with the City or with the Railroad Commission. This acfiion affects all COUNCIL. ©lSTRlCTS. FISCAL [NFORMATiONICERTIFICATION: The Finance Director certifies that this action will have no material effect on City funds. TO FundlAccountlCenters FROM FundlAccountlCenters Submitted for City Manager`s Office b~ Richard Zavala (Acting} {6222} Ori inatin ®e artment Head: Bridgette Garrett (8518) Additional Information Contact: Danny Reed (6145) La~name: 03GRIP Page 2 of 2