05-80 - O TOWN OF PROSPER ORDINANCE NO. 05-80
AN ORDINANCE OF THE TOWN OF PROSPER,TEXAS, DENYING THE REQUEST OF ATMOS
ENERGY CORP., MID-TEX DIVISION, FOR AN ANNUAL GAS RELIABILITY
INFRASTRUCTURE PROGRAM (GRIP) RATE INCREASE IN THIS MUNICIPALITY, 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 TOWN'S
ACTION TO THE RAILROAD COMMISSION; PROVIDING A REQUIREMENT FOR A PROMPT
REIMBURSEMENT OF COSTS INCURRED BY THE TOWN; FINDING THAT THE MEETING AT
WHICH THIS ORDINANCE IS PASSED IS OPEN TO THE PUBLIC AS REQUIRED BY LAW;
AND PROVIDING FOR NOTICE OF THIS ORDINANCE TO ATMOS ENERGY CORP., MID-TEX
DIVISION.
WHEREAS, on or about September 17, 2005, Atmos Energy Corp., Mid-Tex Division, (the"Company")filed
with the Town of Prosper("Town"), 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 Town has exclusive original jurisdiction to evaluate the Company's request as it pertains to
the distribution facilities located within the Town, pursuant to Texas Utilities Code§§ 102.001(b) and 103.001; and
WHEREAS, it is reasonable for the Town of Prosper 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 Town 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 TOWN COUNCIL OF THE TOWN OF PROSPER,
TEXAS:
C:\Documents and Settings\Shanae Jennings\My Documents\ORDINANCES & RESOLUTIONS\ORDINANCES\2005 Ordinances
and Resolutions\05-80,Ordinance to Deny Atmos GRIP Filing.doc
1
SECTION 1. That the Company's GRIP rate increase request is found to be unreasonable and is therefore
denied in all respects.
SECTION 2. That the Town 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 Town 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 3. That the costs incurred by the Town in reviewing the Company's GRIP request shall be
promptly reimbursed by the Company.
SECTION 4. That the Town is authorized to intervene in any appeal of the town's action filed at the
Commission, and to participate in any such appeal as a member of ACSC.
SECTION 5. This Ordinance shall become effective immediately from and after its passage, as the law and
charter in such cases provide.
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. 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.
DULY PASSED and approved by the Town Council of the Town of Prosper, Texas, on this the 25th day of
October, 2005.
APPROVE
Charles Niswanger, or
ATTY/:
anae Jenning own Secr
C:\Documents and Settings\Shanae Jennings\My Documents\ORDINANCES & RESOLUTIONS\ORDINANCES\2005 Ordinances
and Resolutions\05-80,Ordinance to Deny Atmos GRIP Filing.doc
2