05-81 R - Require Atmos Rate Package TOWN OF PROSPER RESOLUTION NO. 05-81
A RESOLUTION BY THE TOWN OF PROSPER, TEXAS ORDERING ATMOS ENERGY, MID-TEX
DIVISION TO SHOW CAUSE REGARDING THE REASONABLENESS OF ITS EXISTING NATURAL
GAS DISTRIBUTION RATES WITHIN THE TOWN; REQUIRING ATMOS ENERGY, MID-TEX DIVISION
TO SUBMIT A RATE PACKAGE BASED ON A RATE YEAR ENDING JUNE 30, 2005; DIRECTING
THAT SUCH FILING SHALL BE MADE BY DECEMBER 31, 2005; REQUIRING REIMBURSEMENT OF
REASONABLE LEGAL AND CONSULTANT EXPENSES; AND REQUIRING DELIVERY OF THIS
RESOLUTION TO THE COMPANY AND LEGAL COUNSEL.
WHEREAS, the Town is a regulatory authority under the Gas Utility Regulatory Act ("GURA") and has original
jurisdiction over the gas utility rates of Atmos Mid-Tex; and
WHEREAS, the Town has the authority under §§ 103.001 and 104.151, GURA, to initiate a proceeding to
determine whether the existing rates of a gas utility are unreasonable or in any way in violation of any provision of law; and
WHEREAS, upon making a finding of unreasonableness, the Town may determine the just and reasonable rates to
be charged by Atmos Mid-Tex; and
WHEREAS, Atmos Energy Corporation, the parent company of Atmos Mid-Tex has recently experienced system-
wide cost reductions due to the doubling of its nationwide customer base with the acquisition of the assets of TXU Gas, and
has reported to its investors that it has experienced a significant increase in profits related to its Texas divisions;and
WHEREAS, Atmos Mid-Tex is charging rates approved based on the higher expenses and equity-to-debt ratio of
TXU Gas, rather than rates that would be justified based on Atmos' lower expenses and equity-to-debt ratio; and
WHEREAS, ratepayers of Atmos Mid-Tex, including the Town and its residents, will suffer further unreasonable
adverse impact from the GRIP rate increases approved by the Texas Railroad Commission and the second GRIP filing
recently made by Atmos Mid-Tex; and
WHEREAS, the Commission's failure to consider testimony and argument offered by Cities during its consideration
of the Company's piecemeal GRIP rate applications leaves Cities no functional choice but to exercise its statutory right to
exercise original jurisdiction over Atmos' base rates and compel a comprehensive rate review; and
WHEREAS, the Town has reason to believe that Atmos Mid-Tex is over-earning and that its rates are excessive;
and
WHEREAS, Cities and their residents are about to experience unprecedented increases in the cost of natural gas
during the heating season and protection of the public interest requires a comprehensive review of Atmos'cost of service to
determine whether rates and services are just and reasonable; and
WHEREAS,Atmos Mid-Tex should be required to justify its rates on a system-wide basis; and
WHEREAS, the coalition of cities formed to review Atmos' GRIP filings (the Atmos Cities Steering Committee, or
"ACSC")can most efficiently review the Atmos filing on behalf of the Town; and
WHEREAS, the reasonable costs associated with the Town's review of the Company's rates are reimbursable from
Atmos Mid-Tex;
NOW, THEREFORE, BE IT RESOLVED BY THE TOWN COUNCIL OF THE TOWN OF PROSPER, TEXAS,
THAT:
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1. That Atmos Mid-Tex is hereby directed to show cause regarding the reasonableness of its existing natural gas
distribution rates within the Town. Atmos shall file with the Town information sufficient to determine the Company's rate
base, expenses, investment, and rate of return. Such filing shall be on a system-wide basis and shall be based upon a rate
year ending June 30, 2005. Atmos Mid-Tex is directed to file its rate filing package to comply, at a minimum, with the
regulations and requirements of the Railroad Commission. The filing shall be made with the Town on or before December
31, 2005. An electronic copy of the filing shall be made with the Town simultaneously with the written filing on December
31, 2005. This filing shall be the same filing as made with the first coalition city to pass the same or similar Show Cause
Resolution.
2. Town's designated representatives shall have the right to obtain additional information from Atmos through the
filing of written requests for information, to each of which Atmos shall respond in writing within fourteen (14) calendar days
from the receipt of each such request for information.
3. A public hearing shall be conducted by the Town. Based upon such hearing, the briefing of staff, and the
consultants'findings, a determination of the reasonableness of the existing rates of Atmos shall be made by the Town and, if
necessary,just and reasonable rates shall be determined to be thereafter observed and enforced for all services of Atmos
within the Town.
4. The Town may, from time to time, amend this procedural schedule and the filing requirements, and enter
additional orders as may be necessary in the public interest and to enforce the provisions hereof.
5. Atmos Mid-Tex shall promptly reimburse the Town's reasonable monthly costs associated with the Town's
activities related to the rate review.
6. A copy of this Resolution shall be sent to Atmos Mid-Tex, care of Richard T. Reis, 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, 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.
APPROVED:
Charles Niswan r, Mayor
ATTE T:
Shanae Jenni , Town Secret
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