HomeMy WebLinkAboutResolution - 2013-R0385 - Suspend Atmos Energy Corp.'S Proposed Effective Date For Rate Increase - 11/07/2013Resolution No. 2013-RO385
November 7, 2013
Item No. 5.1
RESOLUTION NO. 2013-RO385
RESOLUTION BY THE CITY OF LUBBOCK, TEXAS ("CITY")
SUSPENDING THE ATMOS ENERGY CORPORATION'S
PROPOSED EFFECTIVE DATE FOR NINETY DAYS IN
CONNECTION WITH THE STATEMENT OF INTENT TO
INCREASE RATES SUBMITTED TO THE CITY ON OR ABOUT
OCTOBER 18, 2013; REQUIRING THE REIMBURSEMENT OF
MUNICIPAL RATE CASE EXPENSES; AUTHORIZING
PARTICIPATION IN RELATED RATE PROCEEDINGS;
AUTHORIZING THE RETENTION OF SPECIAL COUNSEL;
FINDING THAT THE MEETING COMPLIES WITH THE OPEN
MEETINGS ACT; MAKING OTHER FINDINGS AND
PROVISIONS RELATED TO THE SUBJECT; AND DECLARING
AN EFFECTIVE DATE
WHEREAS, Atmos Energy Corporation ("Atmos" or "Company") filed a
Statement of Intent with the City on or about October 18, 2013 to change its rate
schedules within the corporate limits of the City; and
WHEREAS, Atmos' proposed increase in revenue would advance Atmos'
decision to seek uniform rates throughout its West Texas Division, which it pursued in its
previous Statement of Intent by consolidating the Lubbock Rate Jurisdiction, Amarillo
Rate Jurisdiction, and the West Texas Cities Rate Jurisdiction into a single rate division
that Atmos refers to as the "West Texas Division;" and
WHEREAS, previously Atmos regarded the City of Lubbock as a separate rate
division (the "Lubbock Rate Jurisdiction") and calculated rates on that basis; and
WHEREAS, the creation of the consolidated "West Texas Division" remains on
appeal before the Courts; and
WHEREAS, Atmos notes that its proposed rates would increase its annual
revenue in the Lubbock Rate Jurisdiction, Amarillo Rate Jurisdiction, and in the West
Texas Rate Jurisdiction, on a combined basis by approximately $12.4 million, which
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represents a base -rate increase exclusive of the cost of gas and related tax revenue of
approximately 14.64%; and
WHEREAS, Atmos' proposed rate increase would increase the average monthly
bill as follows:
Customer Class
Percent Increase
EXCLUDING Cost of
Gas
Percent Increase
INCLUDING Cost of
Gas
Residential
22.80%
11.26%
Commercial
6.40%
2.35%
Industrial & Transportation
3.79%
0.92%
Public Authority
88.13%
-1.11%
and
WHEREAS, the City continues to have concerns with and disputes Atmos'
decision to depart from its historical practice of determining rates for the City based on
Atmos' specific costs to provide service in the Lubbock Rate Jurisdiction; and
WHEREAS, Atmos' proposal to set rates based on its cost of service for the
entire West Texas Division would increase Atmos' in -city revenues as follows:
Rate Jurisdiction
Base Revenue Percentage Increase
Lubbock Rate Jurisdiction
18.91%
Amarillo Rate Jurisdiction
19.75%
West Texas Cities Rate Jurisdiction
11.94%
and
WHEREAS, Atmos' proposed public notice reflects a base -revenue increase on a
combined basis of 14.64% (that is, for the Lubbock Rate Jurisdiction, the Amarillo Rate
Jurisdiction, and the West Texas Cities Rate Jurisdiction combined); and
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WHEREAS, under the Gas Utility Regulatory Act ("GURA") § 103.021 the City
shall require the utility to submit information to the City as necessary to make a
reasonable determination of Atmos' rate base, expenses, investment, and rate of return in
the City; 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' rates, operations, and services within the municipality; and
WHEREAS, Atmos' rate request consists of a voluminous amount of information
including Atmos' rate -filing package, exhibits, schedules, and workpapers; and
WHEREAS, Atmos proposed November 22, 2013 as the effective date for its
requested increase in rates; and
WHEREAS, it is not possible for the City to complete its review of Atmos' filing
by November 22, 2013; and
WHEREAS, the City will need an adequate amount of time to review and
evaluate Atmos' rate application to enable the City to investigate and determine whether
Atmos has properly invoked the City's rate -setting jurisdiction, including conformance
with any and all ordinances relating to a utility's request to increase rates, and if so,
ultimately to adopt a final decision as a local regulatory authority with regard to Atmos'
requested rate increase; and
WHEREAS, the City will require the assistance of specialized legal counsel and
rate experts to review the merits of Atmos' application to increase rates; and
WHEREAS, to the extent Atmos seeks review at the Railroad Commission of
Texas of the City's final decision regarding Atmos' statement of intent to change rates, or
should Atmos submit a statement of intent to the Railroad Commission to increase rates
in the environs of the City, the decision of the Railroad Commission of Texas could have
an impact on the rates paid by the City and its citizens who are customers of Atmos and
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in order for the City's participation to be meaningful it is important that the City
promptly intervene in any such proceeding at the Railroad Commission of Texas.
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. Atmos' proposed effective date for its proposed increase in rates is hereby
SUSPENDED for ninety days beyond November 22, 2013.
Section 3. The statutory suspension period may be further extended or its Statement
of Intent dismissed if Atmos does not provide adequate data from which the City may
make a reasonable determination of Atmos' rate base, expenses, investment, and rate of
return in the City, or if Atmos does not provide timely, meaningful, and proper public
notice of its request to increase rates and revenue, or if its rate -filing package is otherwise
materially deficient.
Section 4. The City authorizes the Special Counsel to intervene on its behalf in
proceedings related to Atmos' Statement of Intent before the Railroad Commission of
Texas, if any, and related proceedings in courts of law.
Section 5. The City hereby orders Atmos to reimburse the City's rate case expenses
as provided in the Gas Utility Regulatory Act and that Atmos shall do so on a monthly
basis and within 30 days after submission of the City's invoices for the City's reasonable
costs associated with the City's activities related to this rate review or to related
proceedings involving Atmos before the City, the Railroad Commission of Texas, or any
court of law.
Section 6. Subject to the right to terminate employment at any time, the City retains
and authorizes the law firm of Herrera & Boyle, PLLC to act as Special Counsel with
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regard to rate proceedings involving Atmos before the City, the Railroad Commission of
Texas, or any court of law and to retain such experts as may be reasonably necessary for
review of Atmos' rate application subject to approval by the City.
Section 7. The City shall review the invoices of the lawyers and rate experts for
reasonableness before submitting the invoices to Atmos for reimbursement.
Section 8. A copy of this resolution shall be sent to Atmos Energy, care of Mr.
Jeffrey Foley, Vice President Rates and Regulatory Affairs, Atmos Energy Corporation,
5110 801h Street, Lubbock, Texas 79424; and to Mr. Alfred R. Herrera, Herrera & Boyle,
PLLC, 816 Congress Ave., Suite 1250, Austin, Texas 78701.
Section 9. 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 10. This resolution shall become effective from and after its passage.
PASSED AND APPROVED this 7th day of November , 2013.
GLEN rROBff. SON, MAYOR
ATTEST:
a11 -
-)X-
Re cca Garza, City Sec t
APPROVED AS TO CONTENT:
i
Pamela Moon, Executive Director of Finance
AV D O O
Al d Herrera, Utility Counsel
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