09-D Atmos Energy Interv - Laserfiche WebLink

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AGENDA INFORMATION SHEET PROJECT: Ratification ofIntervention in Railroad Commission GUD No. 9530 BACKGROUND: . Pursuant to Gas Utilities Docket No. 8664, dated November 25, 1997, Atmos/TXU Gas was ordered by the Railroad Commission of Texas to file a prudence review every three years to demonstrate that its gas costs are reasonable and necessary. . Atmos/TXU Gas made a filing at the Railroad Commission of Texas on or about September 24,2004, now docketed as GUD No. 9530, for a gas cost prudence review of $2.2 billion in previously incurred and billed gas costs. Atmos completed its purchase ofTXU's gas utility operations on October 1, 2004. . These costs are twice the cost of gas purchases included in TXU's filing for the previous three-year period. This is despite the fact that one of the representations made by TXU to settle the last prudence review was that it had renegotiated a gas purchase contract for an expected benefit to ratepayers of over $20 million. Testimony included with this filing indicates that over half of all gas supply purchases during this three-year period were made on the spot market. . When TXU made its last three-year prudence review filing many of the same cities who participated in GUD No. 9400 intervened in that docket jointly and were ultimately successful in achieving a settlement of all issues with TXU. TXU also reimbursed the cities' expenses. . An effort was made recently to negotiate a resolution of the gas prudence docket, as well as other outstanding regulatory issues with Atmos/TXU Gas. Atmos/TXU Gas rejected that settlement offer. . A December 10, 2004 intervention deadline was established by the examiners; however, later intervention is permissible. An intervention was filed on behalf of the Steering Committee and the City of Arlington. DESCRIPTION: The attached resolution will ratify the intervention filed on behalf of the City of Arlington, appoint as the City's representative on a Cities' Steering Committee, and require Atmos/TXU Gas to reimburse the City reasonable costs associated with the City's participation in GUD No. 9530 or any subsequent proceeding. RECOMMENDA TION: Approve a resolution ratifying the City's intervention before the Railroad Commission of Texas regarding the filing of a gas cost prudence review by Atmos Energy Corporation, formerly TXU Gas Company (Atmos/TXU Gas); designating a representative of the City to serve on a steering committee; and requiring reimbursement of reasonable legal and consultant expenses. STAFF CONTACT: City Manager Tony Williams, City Attorney Larry W. Schenk; City Finance Director Gene Anderson. ADDITIONAL MATERIALS: Resolution and other supporting materials are attached.