Item 5Iutty of soutnmaice, i eras
MEMORANDUM
,tune 13, 2006
TO: Shana Yelverton, City Manager
FROM: Sharen Jackson, Finance Director
SUBJECT: Resolution No. 06 -040, Endorse the efforts of the Atmos Cities Steering
Committee to reduce rates of Atmos Energy Corporation denying Atmos Energy
Corporation Statement of Intent to increase the gas utility rates within the City
of Southlake
Action Requested: Approval of Resolution No. 06 -040
Background
Information: On March 21, 2006 City Council approved Resolution No. 06-015 to authorize
city staff to participate in the Gas Standing Steering Committee. The
establishment of the formal organizational structure enables cities to respond
quickly to frequent gas rate dings. The first rate case under the newly formed
Steering Committee was filed on May 31, 2006 by Atmos requesting a system-
wide rate increase. The resolution formally denies the rate increase. Action
must be taken before the proposed July 5, 2006 effective date or higher
rates may be imposed by Atmos.
According to information provided by the Company, this filing will increase
the Company's revenues by $61 million annually, or 3.6 %. The average
residential bill will increase 5.36 %, or by approximately $4.02 per month.
Commercial customers will see their average bill increase by 525 %, or by
approximately $17.16 per month,
Financial
Considerations: Gas Utility Regulatory Act §103.022 provides that costs incurred by the City
in ratemaking activities are to be reimbursed by the regulatory utility.
Citizen Input/
Board Review: None required
Legal Review: The steering committee attorney prepared the resolution.
Alternatives: Approve or deny,
Supporting
Documents: Resolution No. 06 -040
Staff
Recommendation: Approve Resolution No. 06040
RESOLUTION NO. 06 -040
A RESOLUTION OF THE CITY OF SOUTHLAKE ENDORSING THE
EFFORTS OF THE ATMOS CITIES STEERING COMMITTEE TO
REDUCE RATES OF ATMOS ENERGY CORP., MID -TEX DIVISION;
DENYING ATMOS ENERGY CORP., MID -TEX DIVISION'S
STATEMENT OF INTENT TO INCREASE THE GAS UTILITY RATES
WITHIN THE CITY; AUTHORIZING INTERVENTION IN ANY
NECESSARY PROCEEDINGS AFFECTING CITY'S INTERESTS
BEFORE ADMINISTRATIVE OR JUDICIAL BODIES AND
PARTICIPATION WITH THE ATMOS CITIES STEERING
COMMITTEE; REQUIRING REIMBURSEMENT OF REASONABLE
LEGAL AND CONSULTANT EXPENSES; FINDING THAT THE
MEETING AT WHICH THIS RESOLUTION IS ADOPTED IS OPEN TO
THE PUBLIC AS REQUIRED BY LAW; AND REQUIRING DELIVERY
OF THIS RESOLUTION TO THE COMPANY AND LEGAL COUNSEL.
WHEREAS, the City of Southlake ( "City ") is a regulatory authority under the Gas Utility
Regulatory Act ( "GURA ") and has original . jurisdiction over the gas utility rates of Atmos
Energy Corp, Mid -Tex Division (the "Company "); and
WHEREAS, at least 88 Texas municipalities served by the Company required the
Company to file rate filing packages with those cities to show cause regarding the reasonableness
of the Company's current rates in those cities (the "Show Cause Cities "); and
WHEREAS, at least 53 Show Cause Cities have adopted ordinances reducing the
Company's rates to be charged to all customers within those cities; and
WHEREAS, the Company has appealed those rate ordinances of the Show Cause Cities
to the Railroad Commission of Texas under the provisions of the Gas Utilities Regulatory Act;
and
WHEREAS, the Company filed with the City on or about May 31, 2006, its Statement of
Intent to increase gas utility rates within the City effective July 5, 2006; and
16681141res06060 1 Denial Res Non SC Cities 1
WHEREAS, the City has original ,jurisdiction to evaluate the Company's request as it
pertains to customers of the Company served from the distribution facilities located within the
City, pursuant to GURA §§ 102,001(b) and 103.001;
WHEREAS, the appeal of the Company's Statement of Intent to increase rates will be
consolidated with the appeals of the Show Cause Cities; and
WHEREAS, GURA § 103,022 provides that costs incurred by the City in ratemaking
activities are to be reimbursed by the regulated utility;
WHEREAS, the City wishes to participate with the Atmos Cities Steering Committee
( "ACSC ") and be represented by attorneys and consultants representing ACSC;
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE
CITY OF SOUTHLAKE, TEXAS:
SECTION 1. That the City endorses the efforts of ACSC to reduce the rates charged by
the Company within the boundaries of member cities.
SECTION 2. That the Company's Statement of Intent to increase gas utility rates within
the City, as part of the Company's statewide gas utility system, be denied in all respects.
SECTION 3. That it is in the best interests of the customers of the Company within the
City for the City to participate through the ACSC in the appeals filed by the Company to the
Railroad Commission of Texas, and the City's intervention in Railroad Commission proceedings
and any litigation associated with the Company's rates charged in the City is hereby authorized.
SECTION 4. That the Company shall promptly reimburse the City's reasonable costs
associated with the City's participation in ratemaking proceedings and associated litigation.
166MI4Ves060641 Denial Res Non SC Cities 2
SECTION 5, That it is hereby officially found and determined that the meeting at which
this Resolution is adopted is open to the public as required by law and the public notice of the
time, place, and purpose of said meeting was given as required.
SECTION 6, A copy of this Resolution shall be sent to Atmos Mid -Tex, care of Richard
T. Reis, at Atmos Energy Corporation, 5420 LBJ Freeway, Suite 1800, Dallas, Texas 75240, and
to Geoffrey Gay, legal counsel to ACSC, at Lloyd Gosselink Blevins Rochelle & Townsend,
P.C., P,O. Box 1725, Austin, Texas 78767 -1725.
DULY PASSED and approved by the City Council of the City of ,
Texas, on this the day of 7 2006,
APPROVED:
ATTEST:
APPROVED AS TO FORM:
City Attorney
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