Res 135-2007 9/4/2007 t
5
RESOLUTION NO. 135 �'��
A RESOLUTION OF THE CITY OF WICHITA FALLS, 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;
SUPPORTING STATUTORY REFORM OF THE TEXAS GRIP
STATUTE, FINDING THAT THE MEETING AT WHICH THIS
RESOLUTION IS PASSED IS OPEN TO THE PUBLIC; AND PROVIDING
FOR NOTICE OF THIS RESOLUTION TO ATMOS ENERGY CORP.,
MID-TEX DIVISION AND THE CITY'S LEGISLATIVE DELEGATION.
WHEREAS, the City of Wichita Falls, Texas ("City") 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, Atmos Mid-Tex made filings with the City and the Railroad
Commission of Texas ("Railroad Commission") on or about May 31, 2007, proposing to
implement interim rate adjustments ("GRIP rate increases"), pursuant to TExAS UTi�iTiEs
Co�E §104.301, on all customers served by Atmos Mid-Tex, effective July 30, 2007;
and,
WHEREAS, the Gas Reliability Infrastructure Program (GRIP) statute approved
in the 2003 Regular Session of the 78 Legislature changes 100 years of Texas law
and allows a natural gas utility to implement annual surcharges for increases in
investment without having to account for the offsetting decreases in costs or increases
in revenue experienced by the utility; and,
WHEREAS, Texas is the only state out of the finrelve states served by Atmos that
has a GRIP statute that allows for piecemeal recovery for any change to invested
capital; and,
WHEREAS, Atmos has implemented four GRIP surcharges and collected more
than $20 million in GRIP surcharges from customers since the utility acquired the TXU
Gas System in 2004; and,
WHEREAS, the City supports the statutory reform of the GRIP statute to ensure
fairness to ratepayers and to eliminate piecemeal recovery for any change to invested
capital; and,
�
WHEREAS, Atmos Mid-Tex was recently granted a rate increase as a result of
its filing in GUD No. 9670, in which the Final Order was only signed on March 29, 2007;
and,
WHEREAS, in GUD No. 9670, it was determined that Atmos Mid-Tex had
inappropriately included certain expenditures in its prior GRIP rate increases for rate
years 2003, 2004, and 2005; and,
WHEREAS, the City, as a regulatory authority, suspended the July 30, 2007,
effective date to examine this latest GRIP filing to determine its compliance with the
Texas Utilities Code and Railroad Commission final order in the most recent Atmos
Mid-Tex rate case; and,
WHEREAS, the City has joined with other cities to review the Company's filing,
said coalition being known as Atmos Cities Steering Committee ("ACSC"); and,
WHEREAS, the consultant hired by Steering Committee has reviewed the GRIP
surcharge application and has issued a final report finding that the Company has
included millions of dollars of expenses in the current GRIP surcharge that are
inconsistent with the Texas Utilities Code and Railroad Commission final order in the
most recent Atmos Mid-Tex rate case and not related to ensuring the safety and
reliability of the system; and,
WHEREAS, counsel for the Steering Committee, upon review of the Company's
filing and the consultant's report, recommends finding that the Company's proposal is
unjustified and unreasonable; and,
WHEREAS, ratepayers of Atmos Mid-Tex, including the City and its residents,
will be adversely impacted by the proposed GRIP rate increases.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY
OF WICHITA FALLS, TEXAS, THAT:
SECTION 1. The Company's GRIP rate increase request is found to be
unreasonable and inconsistent with the Texas Utilities Code and Railroad Commission
final order in GUD 9670, Atmos Mid-Tex most recent rate case, and is therefore denied
in all respects.
SECTION 2. This Resolution shall become effective immediately from and after
its passage, as the law and charter in such cases provide.
SECTION 3. The City hereby advocates statutory reform of the Texas GRIP
statute to ensure fairness to ratepayers and to eliminate piecemeal recovery for any
change to invested recovery.
SECTION 4. The City calls upon its state representatives and senator to support
legislation in the 81 Regular Session of the Texas Legislature that would reform the
Texas GRIP statute to ensure fairness for ratepayers and eliminate piecemeal recovery
for any changes to invested capital.
SECTION 5. It is hereby officially found and determined that the meeting at
which this Resolution 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 6. A copy of this Resolution, constituting final action on the
Company's application, shall be forwarded to the following:
Charles R. Yarbrough, II
Atmos Energy Corporation
5420 LBJ Freeway, Suite 1800
Dallas, Texas 75240
Lloyd Gosselink Blevins Rochelle & Townsend
c/o Geoffrey Gay
P.O. Box 1725
Austin, Texas 78767-1725.
SECTION 7. A copy of the resolution shall be sent to the elected lawmakers
representing the City's interests in the Texas House and Senate.
PASSED AND APPROVED this the 4 day of September, 2007.
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MAYO R
ATTEST�
City I rk