Res 043-2012 5/15/2012
RESOLUTION NO. _43-2012_
Resolution Of The City Of Wichita Falls Denying Atmos Energy
Corp., Mid-Tex Division’s (“Atmos Mid-Tex”) Requested Rate
Change; Requiring The Company To Reimburse The City’s
Reasonable Ratemaking Expenses; Finding That The Meeting At
Which This Resolution Is Passed Is Open To The Public As Required
By Law; Requiring Notice Of This Resolution To The Company And
ACSC’s Legal Counsel
WHEREAS, the City of Wichita Falls, Texas (“City”) is a gas utility customer of
Atmos Energy Corp., Mid-Tex Division (“Atmos Mid-Tex” or “Company”), and 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, the City is a member of the Atmos Cities Steering Committee
(“ACSC”), a coalition of over 150 similarly situated cities served by the Company that
have joined together to facilitate the review and response to natural gas issues affecting
rates charged in the Atmos Mid-Tex Division; and
WHEREAS, pursuant to the terms of the agreement settling the Company’s 2007
Statement of Intent to increase rates, ACSC and the Company worked collectively to
develop a Rate Review Mechanism (“RRM”) tariff that allows for an expedited rate review
process controlled in a three-year experiment by ACSC as a substitute to the current
GRIP process instituted by the Legislature; and
WHEREAS, ACSC and the Company agreed to extend the RRM process in
reaching a settlement in 2010 on the third RRM filing; and
WHEREAS, in 2011, ACSC and the Company engaged in good faith negotiations
regarding the continuation of the RRM process, but were unable to come to ultimate
agreement; and
WHEREAS, on or about January 31, 2012, the Company filed a Statement of
Intent with the cities retaining original jurisdiction within its Mid-Tex service division to
increase rates by approximately $49 million; and
WHEREAS, Atmos Mid-Tex proposed March 6, 2012, as the effective date for its
requested increase in rates; and
WHEREAS, the City suspended the effective date of Atmos Mid-Tex’s proposed
rate increase for the maximum period allowed by law and thus extended the City’s
jurisdiction until June 4, 2012; and
WHEREAS, on April 25, 2012, the Company extended the effective date for its
proposed rates by one week, which similarly extended the City’s jurisdiction until June 11,
2012; and
WHEREAS, the ACSC Executive Committee hired and directed legal counsel and
consultants to prepare a common response to the Company’s requested rate increase
and to negotiate with the Company and direct any necessary litigation; and
WHEREAS, ACSC’s consultants conducted a review of the Company’s requested
rate increase and found justification that the Company’s rates should be decreased; and
WHEREAS, ACSC and the Company have engaged in settlement discussions but
will be unable according to Company representations to reach settlement in sufficient time
for cities to act before June 11, 2012; and
WHEREAS, failure by ACSC members to take action before June 11, 2012 would
allow the Company the right to impose its full request on residents of said ACSC
members; and
WHEREAS, the ACSC Settlement Committee recommends denial of the
Company’s proposed rate increase in order to continue settlement discussions pending
the Company’s appeal of cities’ denials to the Railroad Commission of Texas; and
WHEREAS, the GURA §103.022 provides that costs incurred by cities in
ratemaking activities are to be reimbursed by the regulated utility.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY
OF WICHITA FALLS, TEXAS, THAT:
1. The rates proposed by Atmos Mid-Tex to be recovered through its gas rates
charged to customers located within the City limits, are hereby found to be unreasonable
and shall be denied.
2. The Company shall continue to charge its existing rates to customers within
the City and that said existing rates are reasonable.
3. The City’s reasonable rate case expenses shall be reimbursed by the
Company.
4. 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 the public notice of the
time, place, and purpose of said meeting was given as required.
5. A copy of this Resolution shall be sent to Atmos Mid-Tex, care of David
Park, Vice President Rates & Regulatory Affairs, at Atmos Energy Corporation, Mid-Tex
Division, 5420 LBJ Freeway, Suite 1862, 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.
th
PASSED AND APPROVED this 15 day of May, 2012.
_________________________________
MAYOR
ATTEST:
_____________________
City Clerk