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<br />reduction from both the montWy customer charge and the commodity rate established in GUD No. <br />9400. <br /> <br />DESCRIPTION: Explanation of "Be It Ordained" Paraeraphs: <br /> <br />1. A public hearing on the proposed rate ordinance was held on April 24, 2006. At that <br />time, Atmos and interested members ofthe public were given the opportunity to address the Council <br />on the proposed rate ordinance. <br /> <br />2. Atmos' filing and its responses to requests for additional information, as analyzed <br />by the cities' consultants, failed to show that its existing rates were just or reasonable, thus <br />triggering the need for the City to take action to ensure that the regulated utility's rates are just and <br />reasonable. <br /> <br />3. The rates in Attachment "A" are those rates recommended by the Cities' consultants <br />that will meet the requirements of the Gas Utility Regulatory Act ("GURA"). That is, the rates will <br />produce revenues for Atmos that will permit Atmos a reasonable opportunity to earn a reasonable <br />return on its invested capital, but will not yield more than a fair return. <br /> <br />4. The rates ordered by the City will be effective immediately. GRIP surcharges will <br />cease immediately. The GRIP statute contemplates that the investment associated with such <br />surcharges will be reviewed for reasonableness and prudence in subsequent rate cases, and the <br />surcharges will cease thereafter. <br /> <br />5. It is expected that Atmos will appeal the rate ordinance to the Railroad Commission. <br />The City will intervene in that appeal in conjunction with the Atmos Cities Steering Committee. <br />A full hearing on the merits of Atmos' appeal will be held at the Commission. It is expected that <br />the hearing will take place later this year. <br /> <br />6. GURA requires the utility to reimburse the City for its reasonable costs associated <br />with the City's activities related to the show cause proceeding. <br /> <br />STAFF CONTACT: Director of Finance Gene Anderson and City manager Tony Williams <br /> <br />COUNCIL DATE: To be considered at City Council Regular Meeting on Monday, April 24, 2006. <br />