2009-028-ORD APPROVING A RESOLUTION WITH ATMOS ENERGYORDINANCE NO. 2009 -028
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF PARIS, TEXAS,
( "CITY ") APPROVING A NEGOTIATED RESOLUTION BETWEEN THE
ATMOS CITIES STEERING COMMITTEE ( "ACSC" OR "STEERING
COMMITTEE ") AND ATMOS ENERGY CORP., MID -TEX DIVISION ( "ATMOS
MID -TEX" OR "COMPANY ") REGARDING THE COMPANY'S RATE REVIEW
MECHANISM FILING IN ALL CITIES EXERCISING ORIGINAL
JURISDICTION; DECLARING EXISTING RATES TO BE UNREASONABLE;
REQUIRING THE COMPANY TO REIMBURSE CITIES' REASONABLE
RATEMAKING EXPENSES; ADOPTING TARIFFS THAT REFLECT RATE
ADJUSTMENTS CONSISTENT WITH THE NEGOTIATED SETTLEMENT
AND FINDING THE RATES TO BE SET BY THE ATTACHED TARIFFS TO BE
JUST AND REASONABLE; APPROVING ATMOS' PROOF OF REVENUES;
DETERMINING THAT THIS ORDINANCE WAS PASSED IN ACCORDANCE
WITH THE REQUIREMENTS OF THE TEXAS OPEN MEETINGS ACT;
MAKING OTHER FINDINGS AND PROVISIONS RELATED TO THE
SUBJECT; PROVIDING A REPEALER CLAUSE, A SEVERABILITY CLAUSE, A
SAVINGS CLAUSE; DECLARING AN EFFECTIVE DATE; AND REQUIRING
DELIVERY OF THIS ORDINANCE TO THE COMPANY AND THE STEERING
COMMITTEE'S LEGAL COUNSEL.
WHEREAS, the City of Paris, Texas ( "City ") is a gas utility customer of Atmos Energy
Corp., Mid -Tex Division ( "Atmos Mid -Tex" or " Company "), and a regulatory authority with
an interest in the rates and charges of Atmos Mid -Tex; and
WHEREAS, the City is a member of the Atmos Cities Steering Committee ( "ACSC" or
"Steering Committee "), a coalition of more than 150 similarly situated cities served by
Atmos Mid -Tex that have joined together to facilitate the review and response to natural
gas issues affecting rates charged in the Atmos Mid -Tex service area (such participating
cities are referred to herein as "ACSC Cities "); and
WHEREAS, pursuant to the terms of the agreement settling the Company's 2007
Statement of Intent to increase rates, ACSC Cities and the Company worked collaboratively
to develop the Rate Review Mechanism ( "RRM ") tariff that allows for an expedited rate
review process controlled in a three year experiment by ACSC Cities as a substitute to the
current GRIP process instituted by the Legislature; and
WHEREAS, the City took action in 2008 to approve a Settlement Agreement with
Atmos Mid -Tex resolving the Company's 2007 rate case and authorizing the RRM Tariff,
and
WHEREAS, the 2008 Settlement Agreement contemplates reimbursement of ACSC
Cities' reasonable expenses associated with RRM applications; and
Atmos RRM Ordinance 1
WHEREAS, on or about March 6, 2009, Atmos Mid -Tex filed with the City its second
application pursuant to the RRM tariff to increase natural gas rates by approximately $20.2
million, such increase to be effective in every municipality that has adopted the RRM tariff
within its Mid -Tex Division; and
WHEREAS, ACSC Cities coordinated its review of Atmos' RRM filing and designated
a Settlement Committee made up of ACSC representatives and assisted by ACSC attorneys
and consultants to resolve issues identified by ACSC in the Company's RRM filing; and
WHEREAS, the Company has filed evidence that existing rates are unreasonable and
should be changed; and
WHEREAS, independent analysis by ACSC's rate expert concluded that Atmos Mid -
Tex is able to justify a slight rate increase over current rates; and
WHEREAS, the Steering Committee has advocated in other proceedings that Atmos
Mid -Tex hedge natural gas futures in order to mitigate the volatility of natural gas prices,
which are a flow through to customers; and
WHEREAS, the ACSC Executive Committee, as well as ACSC lawyers and consultants,
recommend that ACSC members approve the attached rate tariffs ( "Attachment A" to this
Ordinance), which will increase the Company's revenue requirement by $2.6 million; and
WHEREAS, the attached tariffs implementing new rates and Atmos' Proof of
Revenues ( "Attachment B" to this Ordinance) are consistent with the negotiated resolution
reached by ACSC Cities and are just, reasonable, and in the public interest; and
WHEREAS, it is the intention of the parties that if the City determines any rates,
revenues, terms and conditions, or benefits resulting from a Final Order or subsequent
negotiated settlement approved in any proceeding addressing the issues raised in the
Company's RRM filing would be more beneficial to the City than the terms of the attached
tariff, then the more favorable rates, revenues, terms and conditions, or benefits shall
additionally accrue to the City; and
WHEREAS, the negotiated resolution of the Company's RRM filing and the resulting
rates are, as a whole, in the public interest.
NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF
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 City Council finds that the existing rates for natural gas service
provided by Atmos Mid -Tex are unreasonable and new tariffs and Atmos' Proof of
Revenues, which are attached hereto and incorporated herein as Attachments A and B, are
just and reasonable and are hereby adopted.
Atmos RRM Ordinance
Section 3. That Atmos Mid -Tex shall reimburse the reasonable rate making
expenses of the ACSC Cities in processing the Company's rate application.
Section 4. That to the extent any resolution or ordinance previously adopted by the
Council is inconsistent with this Ordinance, it is hereby repealed.
Section S. That the meeting at which this Ordinance was approved was in all things
conducted in strict compliance with the Texas Open Meetings Act, Texas Government Code,
Chapter 551.
Section 6. That if any one or more sections or clauses of this Ordinance is adjudged
to be unconstitutional or invalid, such judgment shall not affect, impair or invalidate the
remaining provisions of this Ordinance and the remaining provisions of the Ordinance shall
be interpreted as if the offending section or clause never existed.
Section 7. That if the City determines any rates, revenues, terms and conditions, or
benefits resulting from a Final Order or subsequent negotiated settlement approved in any
proceeding addressing the issues raised in the Company's RRM filing would be more
beneficial to the City than the terms of the attached tariff, then the more favorable rates,
revenues, terms and conditions, or benefits shall additionally accrue to the City.
Section 8. That the Company's Gas Cost Recovery tariff is revised to permit
recovery of certain costs associated with hedging natural gas futures.
Section 9. That all provisions of the ordinances of the City of Paris, Texas in conflict
with the provisions of this ordinance are hereby repealed, and all other provisions of the
ordinances of the City of Paris not in conflict with the provisions of this ordinance shall
remain in full force and effect.
Section 10. That the repeal of any ordinance or part of ordinances affected by the
enactment of this ordinance shall not be construed as abandoning any action now pending
under or by virtue of such ordinance or as discontinuing, abating, modifying, or altering
any penalty accruing or to accrue, or as affecting any rights of the municipality under any
section or provisions of any ordinance at the time of passage of this ordinance.
Section 11. That it is the intention of the City Council of the City of Paris that this
ordinance, and every provision hereof, shall be considered severable, and the invalidity or
partial invalidity of any section, clause, or provisions of this ordinance shall not affect the
validity of any other portion of this ordinance.
Section 12. That any person violating any provision of this ordinance shall be guilty
of a Misdemeanor, and upon conviction, shall be subject to a fine in accordance with
provisions of Sec. 1 -6 of Chapter One of the City of Paris Code of Ordinances, and each and
every day's continuance of any violation of the above - enumerated sections shall constitute
and be deemed a separate offense.
Atmos RRM Ordinance 3
Section 13. That by a supermajority vote of 7 ayes and 0 nays, the City Council
voted to suspend the rule requiring two readings before adoption of this ordinance.
Section 14. That this Ordinance shall become effective from and after its passage
with rates authorized by attached Tariffs to be effective for bills rendered on or after
August 1, 2009.
Section 15. That a copy of this Ordinance shall be sent to Atmos Mid -Tex, care of
David Park, Vice President Rates and Regulatory Affairs, at Atmos Energy Corporation,
5420 LBJ Freeway, Suite 1800, Dallas, Texas 75240, and to Geoffrey Gay, General Counsel to
ACSC, at Lloyd Gosselink Rochelle & Townsend, P.C., P.O. Box 1725, Austin, Texas 78767-
1725.
PASSED AND ADOPTED on first and final reading this 10th day of August, 2009.
Freelen, Mayor
ATTEST:
�_v (a L2
ice Ellis, City Clerk
APPROVED AS T RM:
W. Kent McIlya , Ci Attorney
Atmos RRM Ordinance 4