2005-057-ORD DENYING REQUEST OF ATMOS ENERGY CORP MID-TEX DIVISION FOR ANNUAL GAS RELIABILITY INFRASTRUCTURE PROGRAM (GRIP) RATE INCREASE IN COP
ORDINANCE NO. 2005-057
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF PARIS,
PARIS, TEXAS, DENYING THE REQUEST OF ATMOS ENERGY
CORP., MID-TEX DIVISION, FOR AN ANNUAL GAS RELIABILITY
INFRASTRUCTURE PROGRAM (GRIP) RATE INCREASE IN THE
CITY OF PARIS, AS A PART OF THE COMPANY'S STATEWIDE GAS
UTILITY DISTRIBUTION SYSTEM; APPROVING COOPERATION
WITH OTHER CITIES WITHIN THE ATMOS ENERGY CORP., MID-
TEX DIVISION DISTRIBUTION SYSTEM AS PART OF THE ATMOS
CITIES STEERING COMMITTEE (ACSC); AUTHORIZING ACSC TO
HIRE LEGAL AND CONSULTING SERVICES AND TO NEGOTIATE
WITH THE COMPANY AND DIRECT ANY NECESSARY LITIGATION;
AUTHORIZING INTERVENTION AS PART OF ACSC IN ANY APPEAL
OF THE CITY'~ ACTION TO THE RAILROAD COMMISSION;
PROVIDING A REQUIREMENT FOR A PROMPT REIMBURSEMENT
OF COSTS INCURRED BY THE CITY; FINDING THAT THE MEETING
AT WHICH THIS ORDINANCE IS PASSED IS OPEN TO THE PUBLIC
AS REQUIRED BY LAW; PROVIDING FOR NOTICE OF THIS
ORDINANCE TO ATMOS ENERGY CORP., MID-TEX DIVISION;
MAKING OTHER FINDINGS AND PROVISIONS RELATED TO THE
SUBJECT; AND DECLARING AN EFFECTIVE DATE.
WHEREAS, on or about September 17, 2005, Atmos Energy Corp., Mid-Tex Division,
(the "Company") filed with the City of Paris ("City"), a request for an annual gas reliability
infrastructure program (GRIP) rate increase for customers on the Company's statewide gas
utility system to be effective November 19, 2005; and
WHEREAS, the City has exclusive original jurisdiction to evaluate the Company's
request as it pertains to the distribution facilities located within the City, pursuant to Texas
Utilities Code ~~ 102.001 (b) and 103.001; and
WHEREAS, it is reasonable for the City of Paris to cooperate with other cities in a
coalition of cities in opposition to the Company's filing at the Railroad Commission
("Commission"), said coalition being known as Atmos Cities Steering Committee ("ACSC"), in
any appeal of the cities' actions to the Commission; and
WHEREAS, the Gas Utility Regulatory Act grants local regulatory authorities the right
to intervene in rate proceedings filed at the Railroad Commission; and
WHEREAS, the Texas Utilities Code ~ 103.022 provides that costs incurred by the City
in ratemaking activities are to be reimbursed by the regulated utility; and
WHEREAS, counsel for ACSC, upon review of the 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; 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
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.
Section 5. That the City is authorized to intervene in any appeal of the City's action filed
at the Commission, and to participate in any such appeal as a member of ACSC.
Section 6. That it is hereby officially found and determined that the meeting at which
this Ordinance is passed is open to the public as required by law and that public notice of the
time, place and purpose of said meeting was given as required.
Section 7. That a copy of this ordinance, constituting final action on the Company's
application, be forwarded to the appropriate designated representative of the Company within 10
days as follows: Richard T. Reis, Atmos Energy Corporation, 5420 LBJ Freeway, Suite 1800,
Dallas, Texas 75240, and to Geoffrey Gay, legal counsel to the coalition of cities, at Lloyd
Gosselink, P.O. Box 1725, Austin, Texas 78767-1725.
Section 8. That this Ordinance shall become effective immediately from and after its
passage, as the law and charter in such cases provide.
DULY PASSED AND APPROVED by the City Council of the City of Paris, Texas, on
this the 24th day of October, 2005.
~
Curtis Fendley, yor
ATTEST:
~~'Q fCQ~
. . ce Ellis, City Clerk