26. Atmos Mid-Tex Service Area
CITY COUNCIL AGENDA ITEM BRIEFING SHEET
Submittal Date: Originating Department: Presented By: Agenda Item No.:
2-5-12
Council Date: City Manager Gene Anderson 26.
2-27-12
RECOMMENDED MOTION
To approve a resolution suspending the effective date of Atmos Energy's proposed rate increase.
POLICY ISSUE(S):
Fiscal management
See staff report.
BOARD/COMMISSION RECOMMENDATION:
None
EXHIBITS:
Resolution; Staff report
ACTION: BUDGET INFO:
❑ Financial Report ❑ Minute Order Expense $NA
❑ Department Report ® Resolution Budgeted Amt. $NA
❑ Presentation ❑ Ordinance YTD Actual $NA
❑ Public Hearing ❑ Other Acct. Name NA
Acct. Number NA
FISCAL NOTES:
None
REVIEWED AND APPROVED BY:
® Administration ® City Clerk ❑ Community Development ❑ EMS/IT ❑ Finance ❑ Fire
❑ Municipal Court ® Legal ❑ Library ❑ Police ❑ Eng./Public Works ❑ Utilities
City of Paris 1 70 Revised 2/04/08
DRAFT
RESOLUTION NO.
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PARIS, TEXAS;
SUSPENDING THE MARCH 6, 2012, EFFECTIVE DATE OF ATMOS ENERGY
CORP., MID-TEX DIVISION ("ATMOS MID-TEX") REQUESTED RATE
CHANGE TO PERMIT THE CITY TIME TO STUDY THE REQUEST AND TO
ESTABLISH REASONABLE RATES; APPROVING COOPERATION WITH
ATMOS CITIES STEERING COMMITTEE ("ACSC") AND OTHER CITIES IN
THE ATMOS MID-TEX SERVICE AREA TO HIRE LEGAL AND CONSULTING
SERVICES AND TO NEGOTIATE WITH THE COMPANY AND DIRECT ANY
NECESSARY LITIGATION AND APPEALS; REQUIRING REIMBURSEMENT
OF CITIES' RATE CASE EXPENSES; FINDING THAT THE MEETING AT
WHICH THIS RESOLUTION IS PASSSED IS OPEN TO THE PUBLIC AS
REQUIRED BY LAW; REQUIRING NOTICE OF THIS RESOLUTION TO THE
COMPANY AND ACSC'S LEGAL COUNSEL; MAKING OTHER FINDINGS AND
PROVISIONS RELATED TO THE SUBJECT; AND DECLARING AN
EFFECTIVE DATE.
WHEREAS, on or about January 31, 2012, Atmos Energy Corp., Mid-Tex Division
("Atmos Mid-Tex" or "Company"), pursuant to Gas Utility Regulatory Act § 104.102 filed
with the City of Paris, Texas ("City") a Statement of Intent to change gas rates in all
municipalities exercising original jurisdiction within its Mid-Tex Division service area,
effective March 6, 2012; and,
WHEREAS, the City is a regulatory authority under the Gas Utility Regulatory Act
("GURA") and under Chapter 104, §104.001 et seq. of GURA has exclusive original
jurisdiction over Atmos Mid-Tex's rates, operations, and services within the City; and,
WHEREAS, in order to maximize the efficient use of resources and expertise, it is
reasonable for the City to maintain its involvement in the Atmos Cities Steering
Committee ("ACSC") and to cooperate with the more than 150 similarly situated city
members of ACSC and other city participants in conducting a review of the Company's
application and to hire and direct legal counsel and consultants and to prepare a common
response and to negotiate with the Company and direct any necessary litigation; and
WHEREAS, it is not possible for the City to complete its review of Atmos Mid-Texas
filing by March 6, 2012; and
WHEREAS, the City will need an adequate amount of time to review and evaluate
Atmos Mid-Tex's rate application to enable the City to adopt a final decision as a local
regulatory authority with regard to Atmos Mid-Tex's requested rate increase; and
171
ATTEST:
Janice Ellis, City Clerk
APPROVED AS TO FORM:
W. Kent McIlyar, City Attorney
17A-W"
STAFF REPORT
The City of Paris, along with approximately 153 other cities served by Atmos Energy
Corp., Mid-Tex Division ("Atmos Mid-Tex" or "Company"), is a member of the Atmos Cities
Steering Committee ("ACSC" or "Steering Committee").
Atmos Mid-Tex filed a Statement of Intent on January 31, 2012, seeking to increase
system-wide base rates (which exclude the cost of gas) by approximately $49 million or 11.94%.
However, the Company is requesting an increase of 13.6%, excluding gas costs, for its
residential customers. Additionally, the application would change the way that rates are
collected, by increasing the residential fixed-monthly (or customer) charge from $7.50 to $18.00
and decreasing the consumption charge from $0.25 per 100 cubic feet ("ccf') to $0.07 per ccf.
The law provides that a rate request made by a gas utility cannot become effective until at
least 35 days following the filing of the application to change rates. Atmos has proposed an
effective date of March 6, 2012. The law permits the City to suspend the rate change for 90 days
after the date the rate change would otherwise be effective. If the City fails to take some action
regarding the filing before the effective date, Atmos' rate request is deemed administratively
approved.
The purpose of the resolution is to extend the effective date of Atmos Mid-Tex's
proposed rate increase to give the City time to review the rate-filing package. The resolution
suspends the March 6, 2012 effective date of the Company's rate increase for the maximum
period permitted by law to allow the City, working in conjunction with the other ACSC cities, to
evaluate the filing, determine whether the filing complies with law, and if lawful, to determine
what further strategy to pursue, including settlement and ultimately to approve reasonable rates.
The City Staff recommends adoption of the resolution suspending the effective date of
Atmos Mid-Tex's proposed rate increase. Representatives from Atmos Mid-Tex have indicated
that they are not opposed to the suspension of the increase at this time.
1790994.1 7311