09-A Suspending Atmost Requested Rate Increase

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STAFF REPORT The Railroad Commission issued a Final Order approving new system-wide rates for customers of Atmos Energy's Mid- Tex Division in May. Residential rates were increased by $10 million annually. Also in May, Atmos Mid-Tex filed its application for its fourth GRIP surcharge in four years, seeking to increase the rates of all customers by $12 million annually. Despite both of these recent actions to increase customers' rates, Atmos Mid- Tex has filed an application with cities retaining original jurisdiction over rates and services to increase system- wide rates by another $52 million. The Company's application was filed with the City on September 20, 2007. Atmos asks the City to approve an 8.27% increase in residential rates, a 22.72% increases in commercial rates, and a 38.95% increase in industrial and transportation rates. Purpose of the Resolution: The resolution suspends the effective date of the Company's rate increase for the maximum period permitted by law to allow the City time to evaluate the filing, determine whether the filing complies with law, and if lawful, to determine what further strategy, including settlement, to pursue. The law provides that a rate request made by a natural gas utility cannot become effective until 35 days following the filing of the application to change rates. The law permits the City to suspend the effective date for 90 days. If the City does not take action to suspend the filing, Atmos Mid- Tex may begin charging increased rates after October 25, 2007. According to Atmos, annual rates would increase by approximately $20 for residential customers. The City has participated in prior Atmos Gas rate matters with a coalition of cities now known as Atmos Cities Steering Committee (ACSC). ACSC is a permanent standing committee with 99 members who have passed resolutions authorizing ACSC to intervene on behalf of the city in natural gas matters pending before the Railroad Commission, the Courts or the Legislature. There are currently 141 cities participating with ACSC, including cities that are participating with ACSC on an ad hoc basis. A list of the current members and participants is attached. EXDlanation of "Be It Resolved" Para!!raphs: Section 1. The city is authorized to suspend the effective date for 90 days for any legitimate purpose. Time to study and investigate the application is always a legitimate purpose. Please note that the resolution refers to the suspension period as "the maximum period allowed by law" rather than ending by a specific date. This is because the Company controls the effective date and can extend the deadline for final city action to increase the time that the City retains jurisdiction if necessary to reach settlement on the case. If the suspension period is not increased by the Company, the City must take final action on Atmos' request to raise rates by January 24,2007. - -~'_"__".~...~_.. . "",u" _""" "-"--'__'_'__.__w,._., ~ ._.. "__"'~"_