HomeMy WebLinkAboutOrdinance 2948
ORDINANCE NO. 2948
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; SUPPORTING STATUTORY REFORM OF
THE TEXAS GRIP STATUTE, FINDING THAT THE MEETING AT
WHICH THIS ORDINANCE IS PASSED IS OPEN TO THE PUBLIC; AND
PROVIDING FOR NOTICE OF THIS ORDINANCE TO A TMOS ENERGY
CORP., MID-TEX DIVISION AND THE CITY'S LEGISLATIVE
DELEGATION.
WHEREAS, the City of North Richland Hills, Texas ("City") is a gas utility customer of
Atmos Energy Corp., Mid-Tex Division ("Atmos Mid-Tex" or "the
Company"), and a regulatory authority with an interest in the rates and
charges of Atmos Mid-Tex; and
WHEREAS, Atmos Mid-Tex made filings with the City and the Railroad Commission of
Texas ("Railroad Commission") on or about May 31, 2007, proposing to
implement interim rate adjustments ("GRIP rate increases"), pursuant to
Texas Utilities Code § 104.301, on all customers served by Atmos Mid-
Tex, effective July 30, 2007; and
WHEREAS, the Gas Reliability Infrastructure Program (GRIP) statute approved in the
2003 Regular Session of the 78th Legislature changes 100 years of Texas
law and allows a natural gas utility to implement annual surcharges for
increases in investment without having to account for the offsetting
decreases in costs or increases in revenue experienced by the utility; and
WHEREAS, Texas is the only state out of the twelve states served by Atmos that has a
GRIP statute that allows for piecemeal recovery for any change to
invested capital; and
WHEREAS, Atmos has implemented four GRIP surcharges and collected more than
$20 million in GRIP surcharges from customers since the utility acquired
the TXU Gas system in 2004;
WHEREAS, the City supports the statutory reform of the GRIP statute to ensure
fairness to ratepayers and to eliminate piecemeal recovery for any change
to invested capital; and
WHEREAS, Atmos Mid-Tex was recently granted a rate increase as a result of its filing
in GUD No. 9670, in which the Final Order was only signed on March 29,
2007; and
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WHEREAS, in GUD No. 9670, it was determined that Atmos Mid-Tex had
inappropriately included certain expenditures in its prior GRIP rate
increases for rate years 2003, 2004, and 2005; and
WHEREAS, the City, as a regulatory authority, suspended the July 30, 2007, effective
date to examine this latest GRIP filing to determine its compliance with the
Texas Utilities Code and Railroad Commission final order in the most
recent Atmos Mid-Tex rate case; and
WHEREAS, the City has joined with other cities to review the Company's filing, said
coalition being known as Atmos Cities Steering Committee ("ACSC");
WHEREAS, the consultant hired by Steering Committee has reviewed the GRIP
surcharge application and has issued a final report finding that the
Company has included millions of dollars of expenses in the current GRIP
surcharge that are inconsistent with the Texas Utilities Code and Railroad
Commission final order in the most recent Atmos Mid-Tex rate case and
not related to ensuring the safety and reliability of the system;
WHEREAS, counsel for the Steering Committee, upon review of the Company's filing
and the consultant's report, recommends finding that the Company's
proposal is unjustified and unreasonable; and
WHEREAS, ratepayers of Atmos Mid-Tex, including the City and its residents, will be
adversely impacted by the proposed GRIP rate increases.
NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL, CITY OF NORTH
RICHLAND HILLS, TEXAS:
SECTION 1. That the Company's GRIP rate increase request is found to be
unreasonable and inconsistent with the Texas Utilities Code and Railroad
Commission final order in GUD 9670, Atmos Mid-Tex most recent rate
case, and is therefore denied in all respects.
SECTION 2. This Ordinance shall become effective immediately from and after its
passage, as the law and charter in such cases provide.
SECTION 3. That the City hereby advocates statutory reform of the Texas GRIP statute
to ensure fairness to ratepayers and to eliminate piecemeal recovery for
any change to invested recovery.
SECTION 4. That the City calls upon its state representatives and senator to support
legislation in the 81st Regular Session of the Texas Legislature that would
Ordinance No. 2948
Page 2 of 3
reform the Texas GRIP statute to ensure fairness for ratepayers and
eliminate piecemeal recovery for any changes to invested capital.
SECTION 5. 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 6. A copy of this Ordinance, constituting final action on the Company's
application, be forwarded to the following:
Charles R. Yarbrough, II
Atmos Energy Corporation
5420 LBJ Freeway, Suite 1800
Dallas, Texas 75240
Lloyd Gosselink, et. al.
c/o Geoffrey Gay
P.O. Box 1725
Austin, Texas 78767-1725
SECTION 7. A copy of the Ordinance shall be sent to the elected lawmakers
representing the City's interests in the Texas House and Senate.
PASSED AND APPROVED on this the 27th day of August, 2007.
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APPijÓVED AS TO CONTENT:
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Káren Bostic, Managing Director
Ordinance No. 2948
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