08-078 - OORDINANCE NO.08-078
AN ORDINANCE OF THE TOWN COUNCIL OF THE TOWN OF
PROSPER, TEXAS, ("TOWN") APPROVING A NEGOTIATED
RESOLUTION BETWEEN THE ATMOS CITIES STEERING
COMMITTEE AND ATMOS ENERGY CORP., MID-TEX
DIVISION ("ATMOS MID-TEX" OR "THE COMPANY")
REGARDING THE COMPANY'S RATE REVIEW MECHANISM
FILING IN ALL CITIES EXERCISING ORIGINAL
JURISDICTION; DECLARING EXISTING RATES TO BE
UNREASONABLE; 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;
ADOPTING A SAVINGS CLAUSE; DETERMINING THAT THIS
ORDINANCE WAS PASSED IN ACCORDANCE WITH THE
REQUIREMENTS OF THE TEXAS OPEN MEETINGS ACT;
DECLARING AN EFFECTIVE DATE; AND REQUIRING
DELIVERY OF THIS ORDINANCE TO THE COMPANY AND
LEGAL COUNSEL.
WHEREAS, the Town of Prosper, Texas ("Town") is a gas utility customer of Atmos Energy
Corp., 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, the Town is a member of the Atmos Cities Steering Committee ("ACSC"), 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, Atmos and ACSC Cities have been in continuing disagreement, dispute, and
litigation over the implementation of GRIP surcharges pursuant to Section 104.301 of the Texas
Utilities Code; and
WHEREAS, as part of the negotiations to resolve Atmos' 2007 rate case, ACSC Cities and the
Company worked collaboratively to develop the Rate Review Mechanism ("RRM") tariff that allows
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for an expedited rate review process controlled by Cities as a substitute to the current GRIP process
instituted by the Legislature; and
WHEREAS, the Town took action earlier this year to approve a Settlement Agreement with
Atmos Mid -Tex resolving the Company's 2007 rate case and authorizing the RRM Tariff; and
WHEREAS, on or about April 14, 2008, Atmos Mid -Tex filed with the Town its first
application pursuant to the RRM tariff to increase natural gas rates by approximately $33.5 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
Negotiation 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 is able to
justify a rate increase of $19.8 million; and
WHEREAS, the ACSC Executive Committee, as well as ACSC lawyers and consultants,
recommends ACSC members approve the attached rate tariffs ("Attachment A" to this Ordinance) that
will increase the Company's revenue requirement by $20 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 (including but not limited to a reduction of the residential customer monthly charge to $7.00 per
month) and are just, reasonable, and in the public interest; and
WHEREAS, it is the intention of the parties that ACSC Cities receive the benefit of any
Settlement Agreement that Atmos enters into with other entities arising out of its RRM or any
associated appeals of a decision entered by the Railroad Commission regarding the Company's request
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to increase rates. The ACSC Cities' acknowledge that the exercise of this right is conditioned upon the
ACSC Cities' acceptance of all rates, revenues, terms and conditions of any other Settlement
Agreement or associated appeals arising out of the Company's RRM filing in toto; and
WHEREAS, the negotiated resolution of the Company's RRM filing and the resulting rates are,
as a whole, is in the public interest.
NOW, THEREFORE, BE IT ORDAINED BY THE TOWN COUNCIL OF THE TOWN OF
PROSPER, TEXAS:
Section 1. That the findings set forth in this Ordinance are hereby in all things approved.
Section 2. That the Town 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.
Section 3. That to the extent any resolution or ordinance previously adopted by the Council is
inconsistent with this Ordinance, it is hereby repealed.
Section 4. 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 5. 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 6. That if ACSC Cities determine 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 Atmos' RRM filing would be more beneficial to the ACSC Cities than
the terms of the attached tariff, then the more favorable rates, revenues, terms and conditions, or
benefits shall additionally accrue to the ACSC Cities. Exercise of this right is conditioned upon ACSC
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Cities' acceptance of all rates, revenues, terms and conditions of any other Settlement Agreement or
associated appeals arising out of the Company's RRM filing in toto.
Section 8. That this Ordinance shall become effective from and after its passage with rates
authorized by attached Tariffs to be effective for customer bills delivered on or after October 1, 2008.
Section 9. 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 APPROVED this 9th day of September, 2008.
C'Ka—ries'&'iswan—ger, Mayor
r
�.ew D. Denton,'
Town Secretary
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