HomeMy WebLinkAboutOrdinance 2855
ORDINANCE NO. 2855
AN ORDINANCE OF THE CITY OF NORTH RICHLAND HILLS, TEXAS,
DENYING THE REQUEST OF ATMOS ENERGY CORP., MID-TEX
DIVISION, FOR AN ANNUAL GAS RELIABILITY INFRASTRUCTURE
PROGRAM (GRIP) RATE INCREASE IN THIS MUNICIPALITY, AS A
PART OF THE COMPANY'S STATEWIDE GAS UTILITY DISTRIBUTION
SYSTEM; APPROVING COOPERATION WITH OTHER CITIES WITHIN
THE ATMOS ENERGY CORP., MID-TEX DIVISION DISTRIBUTION
SYSTEM AS PART OF THE ATMOS CITIES STEERING COMMITTEE
(ACSC); AUTHORIZING ACSC TO HIRE LEGAL AND CONSULTING
SERVICES AND TO NEGOTIATE WITH THE COMPANY AND DIRECT
ANY NECESSARY LITIGATION; AUTHORIZING INTERVENTION AS
PART OF ACSC IN ANY APPEAL OF THE CITY'S ACTION TO THE
RAILROAD COMMISSION; PROVIDING A REQUIREMENT FOR A
PROMPT REIMBURSEMENT OF COSTS INCURRED BY THE CITY;
FINDING THAT THE MEETING AT WHICH THIS ORDINANCE IS
PASSED IS OPEN TO THE PUBLIC AS REUQIRED BY LAW; AND
PROVIDING FOR NOTICE OF THIS ORDINANCE TO ATMOS ENERGY
CORP., MID-TEX DIVISION.
WHEREAS, on or about September 17, 2005, Atmos Energy Corp., Mid-Tex
Division, (the "Company") filed with the City of North Richland Hills ("City"), a request for
an annual gas reliability infrastructure program (GRIP) rate increase for customers on
the Company's statewide gas utility system to be effective November 19, 2005; and
WHEREAS, the City has exclusive original jurisdiction to evaluate the Company's
request as it pertains to the distribution facilities located within the City, pursuant to
Texas Utilities Code §§ 102.001(b) and 103.001; and
WHEREAS, it is reasonable for the City of North Richland Hills to cooperate with
other cities in a coalition of cities in opposition to the Company's filing at the Railroad
Commission ("Commission"), said coalition being knows as Atmos Cities Steering
Committee ("ACSC"), in any appeal of the cities' actions to the Commission; and
WHEREAS, the Gas Utility Regulatory Act grants local regulatory authorities the
right to intervene in rate proceedings filed at the Railroad Commission; and
WHEREAS, the Texas Utilities Code § 103.022 provides that costs incurred by
the City in ratemaking activities are to be reimbursed by the regulated utility; and
WHEREAS, counsel for ACSC, upon review of the Company's filing and upon
consultation with various consultants, recommends finding that the Company's proposal
is unjustified, unreasonable; and
WHEREAS, the Company has publicly stated that it will receive substantial profit
in 2005 and that its expenses are substantially below those on which the GUD No. 9400
rates it is charging were based; and
WHEREAS, the Company's GRIP request fails to account for growth in numbers
of customers, thereby undercounting the revenues it will receive from its proposed GRIP
rate increase; and
WHEREAS, the Company's GRIP request fails to recognize that GUD No. 9400
rates included profit based on TXU Corporation's capital structure rather than Atmos
Energy Corp.'s current capital structure, which justifies a lower rate of return; and
NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY
OF NORTH RICHLAND HILLS, TEXAS:
SECTION 1. That the Company's GRIP rate increase request is found to be
unreasonable and is therefore denied in all respects.
SECTION 2. That the City is authorized to cooperate with other cities within the
Company's Distribution System that have formed ACSC 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 an
appeal of a rate ordinance and the rate case filed at the Commission.
SECTION 3. That the costs incurred by the City in reviewing the Company's
GRIP request shall be promptly reimbursed by the Company.
SECTION 4. That the City is authorized to intervene in any appeal of the City's
action filed at the Commission, and to participate in any such appeal as a member of
ACSC.
SECTION 5. That this Ordinance shall be come effective immediately from and
after its passage, as the law and charter in such cases provide.
SECTION 6. That it is hereby officially found and determined that the meeting at
which this Ordinance is passed is open to the public as required by law and that public
notice of the time, place and purpose of said meeting was given as required.
SECTION 7. That a copy of this ordinance, constituting final action on the
Company's application, be forwarded to the appropriate designated representative of
the Company within 10 days as follows: Richard T. Reis, Atmos Energy Corp., 5420
LBJ Freeway, Suite 1800, Dallas, Texas, 75240, and to Geoffrey Gay, legal counsel to
the coalition of cities, at Lloyd Gosselink, P.O. Box 1725, Austin, Texas 78767-1725.
Ordinance No. 2855
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DULY PASSED and approved by the City Council of the City of North Richland
Hills, Texas, on this the 24th day of October, 2005.
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Ordinance No. 2855
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