HomeMy WebLinkAboutOrdinance 17020-06-2006ORDINANCE NO 17020-06-2006
AN ORDINANCE DENYING ATMOS ENERGY CORP MID-TEX
DIVISION'S STATEMENT OF INTENT TO CHANGE RATES, AS FILED
BY ATMOS ENERGY CORP MID-TEX DIVISION ON MAY 31 2006,
ADOPTING DECLARATIONS AND FINDINGS RELATED TO RATES
AND CHARGES ASSESSED TO RESIDENTIAL, COMMERCIAL AND
INDUSTRIAL CUSTOMERS IN THE CITY OF FORT WORTH BY
ATMOS ENERGY CORD MID-TEX DIVISION ESTABLISHING
MAXIMUM PERMITTED RATES AND CHARGES THAT ATMOS
ENERGY CORP MID-TEX DIVISION MAY ASSESS RESIDENTIAL,
COMMERCIAL AND INDUSTRIAL CUSTOMERS IN THE CITY OF
FORT WORTH, AUTHORIZING THE CONTINUED PARTICIPATION
IN THE ATMOS CITIES STEERING COMMITTEE AND THE HIRING
OF CONSULTANTS AND ATTORNEYS BY SUCH COMMITTEE IN
RESPONDING TO ANY LITIGATION OR APPEAL TO THE RAILROAD
COMMISSION OF TEXAS, APPROVING COSTS INCURRED BY THE
COMMITTEE THUS FAR AS REASONABLE AND DIRECTING THAT
ATMOS ENERGY CORP MID-TEX DIVISION REIMBURSE THE CITY
FOR ALL PAST AND FUTURE REASONABLE EXPENSES, MERGING
THE RATEMAKING PROCEEDING INITIATED BY ATMOS ENERGY
CORP MID-TEX DIVISION'S MAY 31 2006 STATEMENT OF INTENT
TO CHANGE RATES WITH THE RATEMAHING PROCEEDING
INITIATED PURSUANT TO ORDINANCE NO 16713-112005
REPEALING ALL PROVISIONS AND CONDITIONS OF PREVIOUS
ORDINANCES IN DIRECT CONFLICT WITH THE PROVSIONS AND
CONDITIONS OF THIS ORDINANCE 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, 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, the City has participated m a steenng committee (the Atmos Cities Steering
Committee, hereinafter referred to as the `Steering Committee"), which has hired and direct
legal counsel and consultants to make recommendations to participating mumcipalrties, including
the City regarding the Rate Filing and to direct any administrative proceedings or litigation
associated with the Rate Filing; and
Atmos Gas Rate Ordinance
WHEREAS on November 15 2005 the City Council adopted Ordinance No 16713 11
2005 imtiatmg a ratemakmg proceeding against Atmos Energy Corp Mid-Tex Division
("Atmos") and ordering Atmos to file with the City on or before December 31 2005
information, if any that showed cause why the City Council should not order a reduction to
natural gas rates m the City charged by Atmos, and
WHEREAS, in response to Ordinance No 16713 11 2005 Atmos filed a rate package
with the City on or about December 30 2005 which generated requests by the City through
consultants and counsel for the Steering Committee, for additional information from Atmos, and
WHEREAS, after reviewing the rate package filed by Atmos on or about December 30
2005 and all additional information provided by Atmos, on March 3 2006 consultants for the
Steering Committee issued findings and recommended rates that should be charged by Atmos,
and
WHEREAS, the rates recommended by the Steering Committee consultants would cause
the majority of rates currently charged m the Crty by Atmos to be reduced, and
WHEREAS m anticipation that most, if not all, member cities of the Steering
Committee would adopt rate orders that complied with the Steering Committee consultants
recommendations and that a majority of the rates charged by Atmos would accordingly be
reduced, on May 1 2006 the Steering Committee and Atmos entered into that certain Agreement
to Consolidate and Synchromze Commission Proceedings (the `Procedural Agreement") and
WHEREAS, the purpose of the Procedural Agreement is to consolidate all appeals to the
Railroad Commission of Texas (the `Commission") by Atmos of the various rate orders adopted
by the member cities of the Steering Committee, thereby simplifying the hearings process, saving
considerable time and expense for the Commission and all participants and enabling Atmos to
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Atmos Gas Rate Ordinance
implement the Commission s final decision at a single point m time for all distribution service
areas and customers on Atmos s Mid-Tex system, including the City and
WHEREAS, pursuant to the Procedural Agreement, Atmos agreed to file with the
Commission and each city served by rts Mid Tex Division, including the City a Statement of
Intent to Change Rates on May 31 2006 thereby initiating a full ratemalcmg proceeding m the
City and obviating the need for the City Council to pursue the ratemakmg proceeding mrtiated on
November 15 2005 by Ordinance No 16713 11 2005 and
WHEREAS, in accordance with the Procedural Agreement, on May 31 2006 Atmos
filed with the City a Statement of Intent to Change Rates (the `Rate Filing"), under which
higher rates charged by Atmos would go into effect m the City on July 5 2006 and
WHEREAS, pursuant to Chapters 103 and 104 of the Texas Utilities Code, the City is
required to (i) analyze Atmos s Rate Filing; (ii) conduct a public hearing m order to determine
the propriety of the rates proposed in the Rate Filing (the `Public Hearing") and (iii) make a
reasonable determination of Atmos s rate base, expenses, investment and rate of return m the
City and
WHEREAS, the Public Heanng was conducted on June 20 2006 at which all interested
parties were given a full opportunity to comment on the Rate Filing;
NOW THEREFORE BE IT ORDAINED BY THE CITY COUNCIL OF THE
CITY OF FORT WORTH, TEXAS THAT
Page 3
Atmos Gas Rate Ordinance
Section 1.
FINDINGS.
The City Council, pursuant to its exclusive original jurisdictional authority over the rates,
operations and services of Atmos within the City and m the exercise of its sound legislative
discretion, makes the following findings of fact based on alh information before rt:
1.1. The statements set forth to the recitals above are true and correct.
1.2. Atmos was given reasonable notice of the Public Hearing and had a reasonable
opportunity to demonstrate to the City Council that the rates proposed m Atmos s
Rate filing are dust and reasonable.
1.3. Atmos s distribution properties used and useful m serving residential, commercial
and mdustnal consumers m its Mid-Tex Division, including the Crty comprise a
Rate Base of $812,850 618
1 4 Atmos is entitled to a 7.276% Rate of Return on its Rate Base. This Rate of
Return is fair reasonable and dust under the facts and circumstances evident from
the circumstances presented.
1.5. Atmos requires an annual net operating income of $59 143 011 on revenues from
annual residential, commercial and industrial operating revenues from its Mid-Tex
Division s consumers of $875 672,407 to achieve the Rate of Return.
1.6. Based on the above facts, the Crty Council finds that rates for residential,
commercial and mdustnal customers m the City as requested by Atmos m its
Rate Filing, are unreasonable
1.7 Based on the above facts and m compliance with Section 104 051 of the Texas
Utilities Code, the rates set forth m Attachment A ,which is hereby made a part
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Atmos Gas Rate Ordinance
of this Ordinance for all purposes, establish Atmos s overall revenues at an
amount that will permit Atmos a reasonable opportunity to earn a reasonable
return on its invested capital used and useful m providing service to the public m
excess of Atmos s reasonable and necessary operating expenses.
1.8. Based on the above facts and m compliance with Section 104 052 of the Texas
Tax Code, the rates set forth m Attachment A do not yield more than a fair
return on the adjusted value of invested capital used and useful m providing
service to the public.
Section 2.
RATES AND CHARGES ORDERED
That based on the findings of fact set forth m Section 1 of this Ordinance, effective as of
May 31 2006 Atmos is hereby authorized to assess those maximum permitted rates and charges
set forth in Attachment A for customers m the City which rates and charges the City Council
hereby determines to be fair dust and reasonable.
Section 3.
CONTINUED PARTICIPATION IN THE STEERING COMMITTEE.
The Crty Manager or lus authorized designee is hereby authorized to continue to
cooperate with other participating municipalities m the Steering Committee to hire and direct
legal counsel and consultants to make recommendations 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
Page 5
Atmos Gas Rate Ordinance
participation at any time by written notice to the steering committee and to act independently m
the exercise of its regulatory authority
Section 4.
REIMBURSEMENT OF EXPENSES.
Expenses incurred by the Steering Committee, of which the City is a member are
reasonable, have been necessary and should be reimbursed by Atmos. In accordance with
Section 103 022(b) of the Texas Utilities Code, Atmos is hereby directed to reimburse the City
for these expenses and all future reasonable costs and expenses of any rate consultants,
accountants, auditors, attorneys and engineers retained by the City or a steering committee of
which the Crty is a member including the Steering Committee, and incurred m the course of the
City's and/or the Steering Committee s involvement m any review of the Rate Filing as well as
any litigation and any appeal to the Commission of the maximum rates established by this
Ordinance. The City is hereby authorized to intervene m any such litigation or appeal before the
Commission.
Section 5.
MERGER WITH RATEMAHING PROCEEDING INITIATED BY
ORDINANCE NO 16713-11 2005.
Because the Rate Filing initiated a ratemakmg proceeding, it is no longer necessary to
conduct a separate ratemaking proceeding, as initiated by the City Council on November 15
2005 pursuant to Ordinance No 16713 11 2005 Accordingly the Public Hearing conducted m
Page 6
Atmos Gas Rate Ordinance
response to the Rate Filing shall satisfy the requirements of the public hearing ordered pursuant
to Section 3 of Ordinance No 16713 11 2005
Section 6.
REPEAL OF ORDINANCES IN DIRECT CONFLICT
If any provisions or conditions of this Ordinance directly conflict with any provisions or
conditions of other Ordinances previously adopted by the City Council, the conflicting
provisions of such previously adopted Ordinances are hereby repealed.
Section 7
SEVERABILITY
If any portion, section or part of a section of this Ordinance is subsequently declared
mvahd, inoperative or void for any reason by a court of competent ~unsdiction, the remaining
portions, sections or parts of sections of this Ordinance shall be and remain m full force and
effect and shall not m any way be impaired or affected by such decision, opimon or~udgment.
Section 8.
EFFECTIVE DATE.
This Ordinance shall take effect and be m full force and effect from and after the date of
its adoption.
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Atmos Gas Rate Ordinance
Section 9
DELIVERY OF ORDINANCE TO ATMOS.
The City Secretary is hereby directed to deliver certified copies of this Ordinance to
Atmos as follows. Richard Reis, Manager Gas Regulation, Atmos Energy Corp Mid-Tex
Division, Lincoln Center II, 18th Floor 5420 LBJ Freeway Dallas, TX 75240
AND IT IS SO ORDAINED
ADOPTED AND EFFECTIVE June 20, 2006
APPROVED AS TO FORM AND LEGALITY
By~
Peter Vaky
Assistant City Attorney
M&C G 15255
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Atmos Gas Rate Ordinance
Attachment A
Atmos Energy Corp Mid Tex Division
Ordered Rates
Ordered
Line No. Rate R Summary Rates
1 Customer Charge $ 7 50
2
3 Block 1 Commodity Rate (0-3 Mcf) $ 1 1915 per Mcf
4 Block 2 Commodity Rate (over 3 Mcf) 0 9415 per Mcf
5
6 Average Monthly Bill (6 Mcf without Gas Cost) $ 14 72 per Month
7
8 Average Monthly Bill (6 Mcf with Gas Cost) $ 34 75 per Month
9
10
11
Ordered
12 Rate C Summary Rates
13
14 Customer Charge $ 12.50
15
16 Block 1 Commodity Rate (0-30 Mcf) $ 0 7417 per Mcf
17 Block 2 Commodity Rate (30-350 Mcf) $ 0 4917 per Mcf
18 Block 3 Commodity Rate (Over 350 Mcf) $ 0.2417 per Mcf
19
20 Average Monthly Bill (30 Mcf without Gas Cost) $ 36 76 per Month
21
22 Average Monthly Bill (30 Mcf with Gas Cost) $ 136 78 per Month
23
24
25
Ordered
26 Rate T Summary Rates
27
28 Customer Charge $ 300 00
29
30 Block 1 Commodity Rate (0-1 500 MMBtu) $ 0 4977 per MMBtu
31 Block 2 Commodity Rate (Next 3 500 MMBtu) $ 0 3477 per MMBtu
32 Block 3 Commodity Rate (Next 45 000 MMBtu) $ 0 1977 per MMBtu
33 Block 4 Commodity Rate (Over 50 000 MMBtu) $ 0 0477 per MMBtu
34
35 Average Monthly Bill.(300 MMBtu without gas cost) $ 475 07 per Month
36
37 Average Monthly Bill (300 MMBtu with gas cost) $ 1 474 93 per Month
Atmos Gas Rate Ordinance
City of Fort Worth, Texas
Mayor and Council Communication
COUNCIL ACTION Approved on 6/20/2006 Ordinance No 17020-06-2006
DATE Tuesday June 20 2006
LOG NAME 03RATES REFERENCE NO G 15255
SUBJECT
Adopt Ordinance Denying Atmos Energy Corporation Mid-Tex Division's Request to Increase Rates
on a Systemwide Basis and Ordering Rates to be Charged Effective May 31 2006
RECOMMENDATION
It is recommended that the City Council adopt the attached ordinance denying the rate adjustments
proposed by Atmos Energy Corporation Mid-Tex Division (Atmos) in the Statement of Intent to Change
Rates filed by Atmos on May 31 2006 and ordering rates to be charged by Atmos effective May 31 2006
DISCUSSION
Under state law the City Council has exclusive original jurisdiction over the rates, operations and services
of any gas utility operating in the City of Fort Worth On November 15 2005 (M&C G-15003 Ordinance
No 16713) the City Council initiated a proceeding to determine whether the existing rates of Atmos are just
and reasonable On December 31 2005 Atmos filed a rate filing package in response to the City's
order City consultants and representatives, through the Atmos Cities Steering Committee ("Steering
Committee') reviewed the information and recommended that the member cities of the Steering Committee
reduce the rates charged by Atmos.
As part of a May 1 2006 procedural agreement between the Steering Committee and Atmos natural gas
rates in the City are to be largely reduced effective May 31 2006 Atmos will continue to charge its existing
rates under bond, and Atmos has filed a Statement of Intent to increase the Gas Utility Rates within the City
effective July 5 2006
Based on information already reviewed by Steering Committee consultants counsel for the Steering
Committee recommends that Atmos proposed increase rates, as reflected in it's May 31 2006 Statement of
Intent to Change Rates, be denied and that the City Council order Atmos to charge the rates set forth in the
attached ordinance
When 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. Following a public hearing on this matter it is recommended that the City Council close the public
hearing and adopt the attached ordinance denying the rate changes requested by Atmos in its filing and
ordering that, effective May 31 2006 Atmos charge the rates set forth in the attached ordinance
FISCAL INFORMATION/CERTIFICATION
Logname 03RATES Page 1 of 2
The Finance Director certifies that this action will have no material effect on City funds
TO Fund/AccountlCenters
FROM Fund/AccountlCenters
Submitted for City Manager's Office b~
Originating Department Head.
Additional Information Contact:
Richard Zavala (Acting) (6222)
Bridgette Garrett (8518)
Danny Reed (6145)
Logname 03RATES Page 2 of 2