HomeMy WebLinkAboutRes 2015-05-06_atmos_settllement.pdfRESOLUTION NO. 2015-05-06
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ANNA, TEXAS APPROVING A NEGOTIATED
SETTLEMENT BETWEEN THE ATOMS CITIES STEERING COMMITTEE ("ACSC") AND ATMOS ENERGY
CORP., MID-TEX DIVISION REGARING THE COMPANY'S 2014 AND 2015 RATE REVIEW MECHANISM
FILINGS; APPROVING A SETTLEMENT AGREEMETN WITH ATTACHED RATE TARIFFS AND PROOF OF
REVENUES; DECLARING EXISTING RATES TO BE UNREASONALBE; ADOPTOING TARIFFS THAT
REFLECT RATE ADJUSTMENTS CONSISTANT WITH THE NEGOTIATED SETTLEMENT; FINDING THE
RATES TO BE SET BY THE SETTLEMENT TARRIFS TO JUST AND REASONABLE ANDIN THE PUBLIC
INTEREST; REQUIRING THE COMPANY TO REIMBURSE ACSC's REASONABLE RATEMAKING
EXPENSES; DETERMING THAT THIS RESOLUTION WAS PASSED IN ACCORDANCE WITH THE
REQUIREMENTS OF THE TEXAS OPEN MEETINGS ACT; ADOPTING A SAVINGS CLAUSE; DECLARING
AN EFFECTIVE DATE; AND REQUIRING DELIVERY OF THIS RESOLUTION TO THE COMPANY AND THE
ACSC's LEGAL COUNSEL.
WHEREAS, the City of Anna, Texas ("City"), is a gas utility customer of Atmos Energy Corp., Mid -Tex
Division ("Atmos Mid -Tex" or "Company"), and a regulatory authority with an interest in the rates
and charges of Atmos; and
WHEREAS, the City is a member of the Atmos Cities Steering Committee ("ACSC"), a coalition of
similarly -situated cities served by Atmos Mid -Tex ("ACSC Cities") that have joined together to
facilitate the review of and response to natural gas issues affecting rates charged in the Atmos Mid -
Tex service area; and
WHEREAS, ACSC and the Company worked collaboratively to develop a new Rate Review Mechanism
("RRM") tariff that allows for an expedited rate review process by ACSC Cities as a substitute to the
Gas Reliability Infrastructure Program ("GRIP") process instituted by the Legislature, and that will
establish rates for the ACSC Cities based on the system -wide cost of serving the Atmos Mid -Tex
Division; and
WHEREAS, the initial RRM Tariff was in effect for four (4) years; and
WHEREAS, ACSC Cities and Atmos Mid -Tex entered into another settlement agreement and revised
the RRM Tariff; and
WHEREAS, ACSC Cities and Atmos Mid -Tex compromised and reached agreements on the amount of
the rate increases to be in effect for the RRM Tariff filings for 2012 and 2013; and
WHEREAS, ACSC Cities and Atmos Mid -Tex were unable to reach an agreement on the 2014 RRM
Tariff filing, resulting in the ACSC Cities' rejection of the 2014 RRM filing; and
WHEREAS, Atmos Mid -Tex appealed the ACSC Cities' actions rejecting its 2014 RRM filing to the
Railroad Commission of Texas ("Commission"), pursuant to the provisions of the RRM Tariff; and
CITY OF ANNA, TEXAS RESOLUTION NO. 2015-05-06 PAGE 1 OF 3
WHEREAS, Atmos Mid -Tex and ACSC litigated the appeal of the 2014 RRM filing at the Commission;
and
WHEREAS, on February 27, 2015, Atmos Mid -Tex filed its 2015 RRM Tariff filing, requesting to
increase natural gas base rates system -wide by $28.762 million; and
WHEREAS, ACSC coordinated its review of Atmos Mid -Tex RRM filing through its Executive
Committee, assisted by ACSC's attorneys and consultants, to resolve issues identified in the
Company's RRM filing; and
WHEREAS, Atmos Mid -Tex has agreed to withdraw its appeal of ACSC's rejection of its 2014 RRM
Tariff rate increase; and
WHEREAS, the Executive Committee, as well as ACSC's counsel and consultants, recommend that
ACSC Cities approve the attached Settlement Agreement (Attachment A to this Resolution) as well as
the tariffs attached thereto, resolving both the 2014 and the 2015 RRM Tariff filings, which together
will increase the Company's revenues by $65.7 million over the amount allowed under City -approved
rates set in 2013; and
WHEREAS, the attached tariffs implementing new rates are consistent with the negotiated
Settlement Agreement and are just, reasonable, and in the public interest; and
WHEREAS, the RRM Tariff should be renewed for a period of time commencing in 2016 and
continuing until the RRM Tariff is suspended by ordinance of the City; and
WHEREAS, the RRM Tariff contemplates reimbursement of ACSC's reasonable expenses associated
with RRM applications;
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF ANNA, TEXAS:
Section 1. That the findings set forth in this Resolution are hereby in all things approved.
Section 2. That the City Council finds that the Settlement Agreement (Attachment A to this
Resolution) represents a comprehensive settlement of gas utility rate issues affecting the rates,
operations, and services offered by Atmos Mid -Tex within the municipal limits arising from Atmos
Mid-Tex's 2014 and 2015 RRM filings, is in the public interest, and is consistent with the City's
authority under Section 103.001 of the Texas Utilities Code.
Section 3. That the existing rates for natural gas service provided by Atmos Mid -Tex are
unreasonable. The new tariffs attached hereto and incorporated herein as Attachment C, are just
and reasonable, and are designed to allow Atmos Mid -Tex to recover annually an additional $65.7
million in revenue over the amount allowed under currently approved rates, or $21 million over
currently -billed rates, as shown in the Proof of Revenues attached hereto and incorporated herein as
Attachment B; such tariffs are hereby adopted.
CITY OF ANNA, TEXAS RESOLUTION NO. 2015-05-06 PAGE 2 OF 3
Section 4. That the ratemaking treatment for pensions and other post -employment benefits in
Atmos' next RRM filing shall be as set forth on Attachment D, attached hereto and incorporated
herein.
Section 5. That in an effort to streamline the regulatory review process, the Atmos Mid -Tex RRM
Tariff is renewed for a period commencing with the Company's March 1, 2016 RRM filing for calendar
year 2015, effective June 1, 2016, and continuing thereafter until such time as the City adopts an
ordinance suspending operation of the RRM Tariff.
Section 6. That Atmos Mid -Tex shall reimburse the reasonable ratemaking expenses of the ACSC in
processing the Company's RRM application.
Section 7. That to the extent any resolution previously adopted by the Council is inconsistent with
this Resolution, it is hereby repealed.
Section 8. That the meeting at which this Resolution was approved was in all things conducted in
strict compliance with the Texas Open Meetings Act, Texas Government Code, Chapter 551.
Section 9. That if any one or more sections or clauses of this Resolution is adjudged to be
unconstitutional or invalid, such judgment shall not affect, impair or invalidate the remaining
provisions of this Resolution and the remaining provisions of the Resolution shall be interpreted as if
the offending section or clause never existed.
Section 10. That consistent with the City ordinance that established the RRM process, this Resolution
shall become effective from and after its passage with rates authorized by attached tariffs to be
effective for bills rendered on or after June 1, 2015.
Section 11. That a copy of this Resolution shall be sent to Atmos Mid -Tex, care of Chris Felan, Vice
President of Rates and Regulatory Affairs Mid -Tex Division, Atmos Energy Corporation, 5420 UB
Freeway, Suite 1862, Dallas, Texas 75240, and to Geoffrey Gay, General Counsel to ACSC, at Lloyd
Gosselink Rochelle & Townsend, P.C., 816 Congress Avenue, Suite 1900, Austin, Texas 78701.
PASSED AND APPROVED by the City Council of the City of Anna this 26th day of May, 2015.
ATTEST: APPROVED:
C
Mirenda McQuagge-Walden, Acting City Secretary Mike Crista; Mayor
CITY OF ANNA, TEXAS
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