07-F Atmos GRIP filing
l:8JAction
CITY OF PARIS, TEXAS
CITY COUNCIL AGENDA REQUEST
MEETING DATE: I June 25, 2007
D Discussion Dlnformation DRefer to:
SUBMITTED BY:
I Gene Anderson, Director of Finance
DESCRIPTION:
Resolution suspending the fourth GRIP(Gas Reliability Infrastructure Program)
surcharge request filed by Atmos Energy Corporation Mid- T ex Division for a
minimum of 45 days past the proposed effective date of July 30,2007.
BACKGROUND INFORMATION:
The Gas Reliability Infrastructure Program (GRIP) was originally enacted by the
Texas Legislature in 2003 to allow gas utilities an opportunity to recover costs
associated with replacing aging portions of natural gas pipeline to enhance
reliability and public safety without the necessity of a full blown rate case.
However, Atmos-Mid Tex has tried to use the statute to recover any change in
invested capital. As a result, Atmos Mid-Tex has attempted to surcharge items not
related to system safety or reliability including furniture, artwork, computers, air
conditioners, new parking lots, first class airfare, hotels, meals, liquor, employee
gifts, limousine travel, and charitable contributions. The last GRIP review also
revealed that Atmos capitalized short lived items such as Kleenex, trash can liners,
staples, and other office supplies. The purpose of the suspension is to allow
additional time for an expert working for the Atmos Cities Steering Committee
(Paris is a member.) to review and analyze the surcharge application. Any findings
can then be presented to the Railroad Commission in an attempt to block any
inappropriate increase. The Atmos Cities Steering Committee will report back to its
member cities with recommendations for additional action prior to September 13th.
FISCAL AUTHORITY:
I Not applicable.
LEGAL REVIEW:
I
MANAGER'S RECOMMENDATION:
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DRAFT
F:A TTORNEY\RESWORK\CURRENTI A TMOS - Res Suspending Proposal - GRIP Rate Adj
June 15,2007
RESOLUTION NO.
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PARIS,
PARIS, TEXAS, SUSPENDING THE JULY 30, 2007 EFFECTIVE DATE OF
THE PROPOSAL BY ATMOS ENERGY, MID-TEX DIVISION TO
IMPLEMENT INTERIM GRIP RATE ADJUSTMENTS FOR GAS UTILITY
INVESTMENT IN 2006; AUTHORIZING PARTICIPATION WITH THE
ATMOS CITIES STEERING COMMITTEE ("ACSC") IN A REVIEW AND
INQUIRY INTO THE SUFFICIENCY OF THE FILING AND THE BASIS OF
THE PROPOSED RATE ADJUSTMENTS; AUTHORIZING
INTERVENTION IN ADMINISTRATIVE AND COURT PROCEEDINGS
INVOLVING THE PROPOSED GRIP RATE ADJUSTMENTS; REQUIRING
REIMBURSEMENT OF REASONABLE LEGAL AND CONSULTANT
RA TEMAKING COSTS; AND REQUIRING DELIVERY OF THIS
RESOLUTION TO THE COMPANY AND LEGAL COUNSEL; MAKING
OTHER FINDINGS AND PROVISIONS RELATED TO THE SUBJECT; AND
PROVIDING AN EFFECTIVE DATE.
WHEREAS, the City of Paris, Paris, Texas ("City:) is a gas utility customer of Atmos
Energy, Mid- Tex Division, ("Atmos Mid- Tex" or "the Company") and a regulatory authority with
an interest in the rates and charges of Atmos Mid-Tex; and,
WHEREAS, Atmos Mid- Tex made filings with the City and the Railroad Commission of
Texas ("Railroad Commission") on or about May 31, 2007, proposing to implement interim rate
adjustments ("GRIP Rate Increases") pursuant to Texas Utilities Code ~ 104.301 on all customers
served by Atmos Mid-Tex, effective July 30, 2007; and,
WHEREAS, Atmos Mid- Tex was recently granted a rate increase as a result of its filing in
GUD No. 9670, in which the Final Order was only signed on March 29,2007; and,
WHEREAS, in GUD No. 9670, it was determined that Atmos Mid- Tex had inappropriately
included certain expenditures in its prior GRIP rate increases for rate years 2003,2004, and 2005;
and,
WHEREAS, it is incumbent upon the City, as a regulatory authority, to examine this latest
GRIP filing to determine its compliance with the Texas Utilities Code; and,
WHEREAS, ratepayers of Atmos Mid- Tex, including the City and its residents, will be
adversely impacted by the proposed GRIP Rate Increases; and
WHEREAS, it is advantageous for the City and its citizens to coordinate the City's response
to Atmos' filing with similarly situated municipalities; and,
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WHEREAS, the City has benefitted from prior participation with the Atmos Cities Steering
Committee ("ACSC"); and,
WHEREAS, it is efficient and cost beneficial for the City to again coordinate review of the
reasonableness of the proposed GRIP rate increases and joint participation in any proceedings at the
Railroad Commission related to the proposed GRIP rate increases; and,
WHEREAS, the Executive Committee of ACSC has recommended suspension and
established a budget for evaluation of the Atmos filing; and,
WHEREAS, a GRIP proceeding involves rate making, entitling cities to reimbursement of
reasonable rate case expenses;
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY
OF PARIS, TEXAS:
Section 1. That the findings set out in the preamble to this resolution are hereby in all things
approved.
Section 2. That the July 30, 2007, effective date of the GRIP Rate Increases proposed by
Atmos Mid-Tex is hereby suspended for the maximum period allowed by law to permit adequate
time to investigate the sufficiency of the GRIP rate increase filing, review the proposed increases,
analyze all necessary information, and take appropriate action related to the proposed increases.
Section 3. That the City is authorized to cooperate with other Cities to create and participate
in a Steering Committee to hire and direct legal counsel and consultants, to negotiate with the
Company, to make recommendations to the City regarding the proposed GRIP Rate Increases, and
to direct any administrative proceedings or litigation associated with the proposed GRIP Rate
Increases.
Section 4. That the City is authorized to intervene in any administrative proceedings or
litigation associated with the proposed GRIP Rate Increases.
Section 5. That Atmos Mid-Tex shall promptly reimburse the City's reasonable costs
associated with the City's activities related to the proposed GRIP Rate Increases.
Section 6. That a copy of this Resolution shall be sent to Atmos Mid- Tex, care of Charles
R. Yarbrough, II, at 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, 816
Congress Avenue, Suite 1900, Austin, Texas 78701.
Section 7. That this resolution shall be effective from and after its date of passage.
11"~ ''"T
ATMOS
energy
Charles R. Yarbrough, 1\
Vice President
Rates & Reaulatorv Affairs
June 5, 2007
City Official
Re: Rider GCR - Rate Filing under Docket No. 9670
Enclosed is a Revised Atmos Energy Corp., Mid- Tex Division's Statement of Rider
GCR applicable for the June 2007 billing periods. The original Statement of Rider
GCR contained an incorrect estimated gas cost in Part A. This Revised Statement of
Rider GCR contains the correct estimated gas cost for June 2007. There are no
changes in Part B except for the flow through of the corrected estimated gas cost. No
customers were billed under the original Statement of Rider GCR.
This filing is for informative proposes only and no action is required on your city's part.
Should you have any questions, please let me know.
Sincerely,
Attachment
Atmos Energy Corporation
5420 LBJ Freeway, Suite 1800
Dallas, TX 75240
P 214-206-2809 F 214-206-2126 charles.yarbrough@atmosenergy.com
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ATMOS ENERGY CORP., MID-TEX DIVISION
STATEMENT OF RIDER GCR
JUNE 2007 (REVISED)
PREPARED IN ACCORDANCE WITH
GAS UTILITIES DOCKET NO. 9670
Line Part (a) - Mid- Tex Commodity Costs
1
2
3
Estimated Gas Cost per Unit:
Estimated City Gate Deliveries:
Estimated Gas Cost:
$10.0680
4,135,329
$41,634,496
4
5
6
Lost and Unaccounted For Gas %
Estimated Lost and Unaccounted tor Gas
Total Estimated City Gate Gas Cost:
2.5932%
$1,079,660
$42,714,156
7
Estimated Sales Volume:
4,881,638
8
Estimated Gas Cost Factor - (EGCF)
$8.7500
9
10
11
Reconciliation Factor - (RF):
Taxes (TXS):
Adjustment - (ADJ):
$!!JJOOOO
W 1(J)lJOO
rooooo
Btu Factor
1.024
Per MMBtu
$8.5449
12
Gas Cost Recovery Factor - (GCRF)
$8.7500 per Met
Part (b) - Pipeline Services Costs
Rate I - Industrial Service
Total Rate R - Residential Rate C - Commercial Rate T - Transportation I
100.0000% 62.7262% 29.7022% 7.5717%
$3,015,736 $1,891,656 $895,739 $228,342
$0 $0 $0 $0
$3,015,736 $1,891,656 $895,739 $228,342
$1,679,268 $374,293 $462,871 $842,103
($1.689.156) ($1.520.639) ($531.587) $363.070
($9,888) ($1,146,346) ($68,716) $1,205,173
$3,005,849 $745,310 $827,023 $1,433,516
1,990,301 Mct 2,643,518 Mct 4,016,052 MMBtu
$0.3745 Met $0.3128 Mct $0.3569 MMBtu
$8.7500 Met $8.7500 Mct $8.5449
$9.1245 Mct $9.0628 Met Rate 1- $8.9018 MMBtu
Rate T - $0.3569 MMBtu
Fixed Costs
13 Fixed Costs Allocation Factors [Set in GUD 9670]
14 a. Current Month Fixed Costs ot Pipeline Services
15 b. Plus: Second Prior Month Recovery Adjustment
16 Net Fixed Costs
Commoditv Costs
17 a. Estimated Commodity Cost ot Pipeline Services
18 b. Plus: Second Prior Month Recovery Adjustment
19 Net Commodity Cost ot Pipeline Services
20 Total Estimated Pipeline Costs (Line 16 + Line 19)
21 Estimated Billed Volumes
22 Pipeline Cost Factor (PCF) [Line 20/ Line 21]
23 Gas Cost Recovery Factor - (GCRF) [Line 12]
24 Rider GCR
1 Industrial Service and Transportation are reported in MMBtu. An MMBtu conversion tactor ot 1.024 is used.