06-C Denying Atmos request for GRIP rate increase

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WHEREAS, counsel for ACSC, upon review ofthe Company's filing and upon consultation with various consultants, recommends finding that the Company's proposal is unjustified and 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 WHEREAS, under the provisions of 9 104.301 of GURA, the interim rate adjustment is subject to true-up in a general rate case filed within five years of the effective date of the interim rate surcharge; and WHEREAS, the Company has, on May 31, 2006, filed a Statement ofIntent to increase its distribution rates on a system-wide basis, using calendar year ending December 31,2005, as its test year; and WHEREAS, the capital investment made by Atmos during 2005 will be reviewed in the Statement ofIntent filing, making the 2005 GRIP filing superfluous, duplicative, and unnecessary; NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF PARIS, PARIS, TEXAS: Section 1. That the findings set out in the preamble to this ordinance are hereby in all things approved. Section 2. That the Company's GRIP rate increase request is found to be unreasonable, superfluous, duplicative, and unnecessary, and is therefore denied in all respects. Section 3. 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 4. That the costs incurred by the City in reviewing the Company's GRIP request shall be promptly reimbursed by the Company.