HomeMy WebLinkAboutResolution 2005-003
RESOLUTION NO. 2005-003
A RESOLUTION BY THE CITY OF NORTH RICHLAND HILLS, TEXAS
SUSPENDING THE PROPOSAL BY ATMOS ENERGY CORP. TO
IMPLEMENT INTERIM GRIP RATE ADJUSTMENTS FOR GAS UTILITY
INVESTMENT IN 2005; AUTHORIZING PARTICIPATION WITH OTHER
CITIES SERVED BY ATMOS ENERGY CORP., MID-TEX DIVISION, IN A
REVIEW AND INQUIRY INTO THE BASIS AND REASONABLENESS OF
THE PROPOSED RATE ADJUSTMENTS; AUTHORIZING
INTERVENTION IN ADMINISTRATIVE AND COURT PROCEEDINGS
INVOLVING THE PROPOSED GRIP RATE ADJUSTMENTS;
DESIGNATING A REPRESENTATIVE OF THE CITY TO SERVE ON A
STEERING COMMITTEE; REQUIRING REIMBURSEMENT OF
REASONABLE LEGAL AND CONSULTANT EXPENSES
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") in December, 2004, proposing to
implement interim rate adjustments ("GRIP Rate Increases") pursuant to Texas Utilities
code § 104.301 on all customers served by Atmos Mid-Tex; and
WHEREAS, Atmos Energy Corporation has reported a twenty percent increase
in profits for its fiscal year ended September 30, 2004, and projects further increases in
profits in 2005; and
WHEREAS, in May 2004, the Railroad Commission entered its Final Order in
GUD No. 9400 authorizing a rate increase that will produce additional annual revenues
of $11.5 million for Atmos Mid-Tex; and
WHEREAS, Atmos Mid-Tex has projected that it will experience annual cost
savings of at least $40 million over the costs included in rates approved in GUD No.
9400 and said savings are likely to greatly exceed the annual revenue requirement
associated with any reasonable increases in invested capital that form the basis of the
proposed GRIP rate increases; and
WHEREAS, ratepayers of Atmos Mid-Tex, including the City and its residents,
will be adversely impacted by the proposed GRIP Rate Increases; and
WHEREAS, the City and its residents could benefit from coordination with other
cities served by Atmos Mid-Tex ("Cities") in a review of the reasonableness of the
proposed GRIP Rate Increases and joint participation in any proceedings at the
Railroad Commission related to the proposed GRIP Rate Increases; and
WHEREAS, the reasonable costs associated with the participation of Cities in
this rate proceeding are reimbursable from Atmos Mid-Tex.
THEREFORE BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF
NORTH RICHLAND HILLS, TEXAS, that:
1. The February 15, 2005 effective date of the GRIP Rate Increases
proposed by Atmos mid-Tex is hereby suspended to permit adequate time to review the
proposed increases, analyze all necessary information, and take appropriate action
related to the proposed increases.
2. The City is authorized to cooperate with other Cities to create and
participate in a Steering Committee to hire and direct legal counsel and consultants, to
negotiate with the Company, to make recommendations to the City regarding the
proposed GRIP Rate Increases, and to direct any administrative proceedings or
litigation associated with the proposed GRIP Rate Increases.
3. The City is authorized to intervene in any administrative proceedings or
litigation associated with the proposed GRIP Rate Increases, including GUD No. 9560,
the Company's proposed GRIP rate increase for its pipeline system filed at the Railroad
Commission.
4. The City hereby designates Karen Bostic as a
representative to a Cities' Steering Committee that shall direct the efforts of counsel and
consultants.
5. Atmos Mid-Tex shall promptly reimburse the City's reasonable costs
associated with the City's activities related to the proposed GRIP Rate Increases.
PASSED AND APPROVED this 10th day of January 2005.
Resolution No. 2005-003
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APPROVE AS TO FORM AND LEGALITY:
APPROVED AS TO CONTENT:
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Karen Bostic, Managing Director Administrative/Fiscal Services
Resolution No. 2005-003
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