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HomeMy WebLinkAboutResolution - 2021-R0184 - Settlement Agreement with Atmos Energy 5.11.2021Resolution No. 2021-R0184 Item No. 9.10 May 11, 2021 RESOLUTION NO. 2021-RO184 RESOLUTION BY THE CITY OF LUBBOCK, TEXAS ("CITY") APPROVING THE SETTLEMENT AGREEMENT BETWEEN THE CITIES OF AMARILLO, LUBBOCK, DALHART, AND CHANNING (THE "CITIES" OR "ALDC"), AND ATMOS ENERGY CORPORATION ("ATMOS" OR "THE COMPANY") REGARDING ATMOS'S APPLICATION TO INCREASE RATES FILED WITH THE CITY ON SEPTEMBER 30, 2020; DETERMINING THAT THIS RESOLUTION WAS PASSED IN ACCORDANCE WITH THE REQUIREMENTS OF THE TEXAS OPEN MEETING ACT; REPEALING ANY PRIOR RESOLUTIONS INCONSISTENT WITH THIS RESOLUTION; AND REQUIRING DELIVERY OF THIS RESOLUTION TO THE COMPANY AND LEGAL COUNSEL WHEREAS, Atmos Energy Corporation ("Atmos" or "Company") filed a Statement of Intent with the City on or about September 30, 2020, seeking authority to change its rates within the corporate limits of the City, specifically to increase its annual revenue requirement by approximately $8.3 million, which equates to an increase in annual revenue of approximately 10.8% excluding the cost of gas; and WHEREAS, the City is a regulatory authority under the Gas Utility Regulatory Act ("GURA") and under Chapter 104, §103.001 et seq. of GURA has exclusive original jurisdiction over Atmos's rates, operations, and services within the City; and WHEREAS, the City previously took action to suspend the effective date of the Company's proposed rate increase; to coordinate a response to Atmos's filing with other similarly situated municipalities (comprised of the Cities of Amarillo, Lubbock, Dalhart, and Charming, collectively referred to as the "Cities" or "ALDC"); to require Atmos to reimburse the City for its reasonable rate case expenses in accordance with the Gas Utilities Regulatory Act; and WHEREAS, by agreement, Atmos Energy extended its proposed effective date of its rates such that the suspension period of Atmos Energy's proposed effective date is extended to June 1.2021: and 1 of Atmos West Texas 2020 Statement oflntent-Extension to June P WHEREAS, the City as part of ALDC authorized its attorneys and experts to formulate and review reasonable settlement positions to resolve Atmos's pending request to increase rates; and WHEREAS, ALDC's attorneys met numerous times with the Company to negotiate a Settlement Agreement resolving the issues raised by the Company's Statement of Intent filing; and WHEREAS, ALDC's attorneys and experts have evaluated what a likely outcome from a fully -litigated proceeding would be and are of the opinion that an increase in revenue of $4.55 million increase as noted in the negotiated Settlement Agreement compares favorably with a likely outcome from a fully -litigated proceeding; and WHEREAS, after extensive review and analysis, ALDC's attorneys and experts found a $4.55 million increase in base revenues instead of the $8.3 million increase proposed by Atmos is reasonable; and WHEREAS, ALDC's attorneys and experts recommend that the Cities of Amarillo, Lubbock, Dalhart, and Charming approve the negotiated Settlement Agreement; and WHEREAS, the Settlement Agreement is in the public interest; NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF LUBBOCK, TEXAS THAT: Section 1. The findings set out in the preamble are in all things approved and incorporated herein as if fully set forth. Section 2. That the City Council finds that the Settlement Agreement, which is attached hereto ATTACHMENT A, and incorporated herein, is in the public interest and is hereby approved. 2 of 4 Atmos West Texas 2020 Statement of Intent -Extension to June P Section 3. That the City Council DENIES Atmos's proposed increase in revenue of about $8.3 million and corresponding rates as not being just and reasonable. Section 4. That the City Council APPROVES a change in Atmos's rates reflecting an increase of $4.55 million in Atmos Energy's annual base revenues as just and reasonable. Section 5. That the City Council APPROVES the specific rates and tariffs included in Exhibit A to the Settlement Agreement and finds those rates to be just and reasonable and that such rates shall be effective beginning June 1, 2021, for service rendered on and after that date Section 6. That the rate case expenses incurred by the Cities of Amarillo, Lubbock, Dalhart, and Charming related to review of Atmos Energy's application to increase rates are reasonable and directs Atmos Energy to reimburse the Cities' rate case expenses as reflected in Exhibit A to the Settlement Agreement. Section 7. That to the extent any resolution or ordinance previously adopted by the Council is inconsistent with this Resolution, it is hereby repealed. Section 8. That the meeting at which this Resolution was approved was in all things conducted in strict compliance with the Texas Open Meetings Act, Texas Government Code, Chapter 551. Section 9. That if any one or more sections or clauses of this Resolution is adjudged to be unconstitutional or invalid, such judgment shall not affect, impair or invalidate the remaining provision of this Resolution and the remaining provisions of the Resolution shall be interpreted as if the offending section or clause never existed. Section 10. That this Resolution shall become effective from and after its passage. 3 of 4 Atmos West Texas 2020 Statement of Intent -Extension to June P Section 11. A copy of this Resolution shall be sent to Mr. Alfred R. Herrera, Herrera Law & Associates, PLLC, 4524 Burnet Road, Austin, Texas 78756 and a courtesy copy to Atmos's local representative. PASSED AND APPROVED this 1 lth day of ATTEST: -'ez )�� — Rebe ca Garza, City Sec •et APPROVED AS TO CONTENT: W. Ja ett Atkinson, City Manager APPROVED AS TO FORM: Amy ims, eputy Attorney 4of4 May , 2021. DANIEL M. POPE, MAYOR Atmos West Texas 2020 Statement oflntent-Extension to June P