Loading...
HomeMy WebLinkAboutOrdinance 16713-11-2005ORDINANCE NO /x'713-11-a~- AN ORDINANCE INITIATING A RATEMAKING PROCEEDING AGAINST ATMOS ENERGY CORP MID-TEX DIVISION DIRECTING ATMOS ENERGY CORP MID-TEX DIVISION TO SHOW CAUSE REGARDING THE REASONABLENESS OF ITS EXISTING NATURAL GAS DISTRIBUTION RATES WITHIN THE CITY DIRECTING ATMOS ENERGY CORD MID-TEX DIVISION TO FILE CERTAIN INFORMATION WITH THE CITY SETTING A PROCEDURAL SCHEDULE FOR THE GATHERING AND REVIEW OF NECESSARY INFORMATION IN CONNECTION THEREWITH, RATIFYING THE RETENTION OF CONSULTANTS TO ASSIST THE CITY IN SUCH MATTER, RESERVING THE RIGHT TO REQUIRE THE REIMBURSEMENT OF THE CITY'S EXPENSES THEREFROM, AND DIRECTING THAT A CERTIFIED COPY OF THIS ORDINANCE BE DELIVERED TO ATMOS ENERGY CORP MID-TEX DIVISION FOLLOWING ITS ADOPTION WHEREAS, the City is a regulatory authonty under the Gas Utility Regulatory Act, codified at Title 3 of the Texas Utilities Code (the `Code"), and has onginal ~unsdiction over the rates of Atmos Energy Corp, Mid-Tex Division ("Atmos") to determine if such rates are dust and reasonable;. and WHEREAS, Section 103 021 of the Code requues the City on its own motion, to compel a gas utility to submit information as necessary in order for the City as a regulatory authonty to make a reasonable determination of rate base, expenses, investment and rate of return in the Crty by the gas utility and WHEREAS, the Crty has reason to believe that Atmos's existing natural gas distribution rates in the City are unjust and unreasonable; and WHEREAS, the Crty is a member of the Atmos Cities Steenng Committee (the `Steering Committee"), a consortium of mumcipahties served by Atmos, and 1 WHEREAS, the Steering Committee has unanimously recommended that each of rts members adopt an ordinance or resolution that requires Atmos to show cause why Atmos s existing natural gas distribution rates should not be reduced, and WHEREAS, the City Council desires, on rts own motion, to exercise rts authority under Section 103 021 of the Code to initiate a ratemaking proceeding against Atmos in order to determine whether Atmos s existing natural gas distribution rates in the City are dust and reasonable; and WHEREAS, a procedural schedule should be established for the filing of certain information by Atmos; NOW THEREFORE BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF FORT WORTH, TEXAS THAT Section 1 RATEMAKING PROCEEDING INITIATED This Ordinance constitutes notice of the City's intent to initiate a ratemaking proceeding against Atmos, the first step of which will involve an inquiy as to whether Atmos's existing natural gas distribution rates in the City are Just and reasonable. On or before December 31 2005 Atmos shall file with the Crty information, if any that shows good cause as to why Atmos s natural gas distribution rates in the Crty should not be reduced. Specifically Atmos shall file with the City system-wide infonnation for the test year beginning July 1 2004 and ending June 30 2005 Atmos s filing shall, at a minimum, comply with all requrrements of the Code and all rules and regulations of the Raikoad Commission of Texas. 2 Section 2. ADDITIONAL INFORMATION COMPELLED. The City's designated representatives shall have the nght to obtain additional information from Atmos through the filing of requests for information, which shall be responded to within fourteen (14) calendar days from the receipt of such request for information. Section 3. PUBLIC HEARING. Once the Crty the Steering Committee, and their legal counsel and consultants, have reviewed all such information, a public hearing shall be scheduled. At such hearing a representative of Atmos and a representative of the City will each be allowed to address the Crty Council and summarize previously filed reports for equal periods of time, as established by the presiding officer of the Crty Council. Based upon such hearing, a determination of the reasonableness of Atmos s existing natural gas distribution rates in the Crty shall be made by the Crty Council and, if necessary just and reasonable rates shall be determined to be thereafter observed and enforced. Section 4. AMENDMENTS TO PROCEDURAL SCHEDULE. The City Council may from tune to tune, amend this procedural schedule and enter additional orders as may be necessary in the public interest and to enforce the provisions hereof. 3 Section 5. CONTINUED PARTICIPATION IN THE STEERING COMMITTEE. The Crty Council, hereby authonzes the retention of rate consultants by the Steering Committee in order to assist the Steering Committee and the Crty's staff in reviewing and analyzing all information provided by Atmos pursuant to this Ordinance. Section 6. REIMBURSEMENT OF EXPENSES. The Crty Council hereby directs Atmos promptly to reunburse the Crty's reasonable monthly costs associated with this ratemaking proceeding, any related lrtigahon or appeals. Section 7 DELIVERY OF ORDINANCE TO ATMOS. This Ordinance shall take effect and be in full force and effect from and after the date of rts adoption. The Crty Secretary is hereby du-ected 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 ~pUem b~ 15, ~~ 4 APPROVED AS TO FORM AND LEGALITY By Peter Vaky Assistant City Attorney City of Fort Worth, Texas Mayor and Council Communication COUNCIL ACTION Approved on 11/15/2005 Ordinance No 16713-11 2005 DATE Tuesday November 15 2005 LOG NAME 03ATMSC REFERENCE NO *G-15003 SUBJECT Adopt Ordinance Initiating Ratemaking Proceeding in Order to Review Existing Natural Gas Distribution Rates of Atmos Energy Corp Mid-Tex Division RECOMMENDATION It is recommended that the City Council adopt the attached ordinance initiating a ratemaking proceeding against Atmos Energy Corp Mid-Tex Division (Atmos Energy) requiring Atmos Energy to show cause to justify its existing natural gas distribution rates, establishing a procedural schedule for the rate review process and hiring consultants to review Atmos Energy's rate information DISCUSSION On September 19 2005 Atmos Energy Corp Mid-Tex Division (Atmos Energy) filed its second Gas Reliability Infrastructure Program (G R.I P) rate adjustment within the last twelve months The first G.R.I P rate adjustment, filed on December 19 2004 was denied by the City Council on July 26 2005 (M&C G- 14785 Ordinance No 16542) and was appealed to the Railroad Commission On October 4 2005 the Railroad Commission granted Atmos Energy the full rate adjustment requested in that first filing In a separate action (M&C G-15002) the City staff has recommended that the City Council adopt an ordinance denying Atmos Energy's second G R.I P rate adjustment. City staff expects Atmos Energy to appeal this decision to the Railroad Commission However the issue on appeal will not center on whether existing base natural gas distribution rates are reasonable As a result, in addition to recommending that the City deny Atmos Energy's second G R I P rate adjustment and that it defend such action on .appeal the City staff also recommends that the City Council adopt the attached Ordinance initiating a full ratemaking proceeding so that staff and legal counsel and consultants for the Atmos Cities Steering Committee can analyze whether Atmos Energy's existing natural gas rates in the City are themselves reasonable In accordance with state law Atmos Energy is required to reimburse the City for all reasonable rate case expenses incurred by the City in this proceeding 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 by' Richard Zavala (Acting) (6222) Originating Department Head. Bridgette Garrett (8518) Additional Information Contact: Danny Reed (6145) Logname. 03ATMSC Page 1 of 1