HomeMy WebLinkAboutResolution - 2012-R0089 - Suspend Atmos Effective Date For Rate Increase - 03/06/2012Resolution No. 2012-R0089
March 5, 2012
Item No. 5.5
RESOLUTION
RESOLUTION BY THE CITY OF LUBBOCK, TEXAS
("CITY") SUSPENDING THE EFFECTIVE DATE FOR
NINETY DAYS IN CONNECTION WITH THE RATE
INCREASE FILING OF ATMOS ENERGY CORPORATION
ON OR ABOUT FEBRUARY 7, 2012; 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 February 7, 2012 to change its rate
schedules within the corporate limits of the City; and
WHEREAS, Atmos' proposed increase on revenue would establish a uniform rate
among all cities within its newly proposed rate division that Atmos refers to as the "West
Texas Division;" and
WHEREAS, previously Atmos regarded the City of Lubbock as a separate
Division (the "Lubbock Rate Division") and calculated rates based on such basis; and
WHEREAS, Atmos notes that its proposed rates would increase its annual
revenue in the Amarillo Rate Division, the Lubbock Rate Division, and in the West Texas
Cities Rate Division on a combined basis, by approximately $11.6 million, which
represents a base -rate increase exclusive of the cost of gas of approximately 14.8%n; and
WHEREAS, for ratepayers in the City of Lubbock, Atmos' proposed rate increase
would increase the average monthly bill for Residential customers by 12.35% including
the cost of gas, or 30.79% excluding the cost of gas; and Commercial customers by
4.79% including the cost of gas, or 16.62% excluding the cost of gas, while providing a
decrease in average monthly bills for Industrial, Public Authority, and State Institution
customers; and
WHEREAS, the City has grave concerns with Atmos' proposal to depart from the
determination of rates on the basis of the costs to provide service in the Lubbock Rate
Division; and
WHEREAS, under Atmos' proposal to consolidate the Lubbock Rate Division
with the West Texas Cities Rate Division and the Amarillo Rate Division, the base -rate
revenue increase in the Lubbock Rate Division would be an increase of 20.34%, while
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the increase in base -rate revenue for customers in the West Texas Cities Rate Division
would be only about 2.05%; and
WHEREAS, Atmos' proposed public notice reflects an increase on a combined
basis, that is, for the Lubbock Rate Division, the Amarillo Rate Division, and the West
Texas Cities Rate Division, showing an increase of 14.8%, the City has serious concerns
with the sufficiency of Atmos' proposed public notice; and
WHEREAS, neither Atmos' Statement of Intent nor its Public Notice state what
its proposed increase would be under Atmos' prior practice of developing rates based on
the costs of service for each of the three distinct rate divisions, that is, the Amarillo Rate
Division, the Lubbock Rate Division, and the West Texas Cities Rate Division, thereby
bringing into question the City's ability to exercise its duty as a regulatory authority 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 March 13, 2012 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 March 13, 2012; and
WHEREAS, the City will need an adequate amount of time to investigate and
determine whether Atmos has properly invoked the City's rate -setting jurisdiction, and if
so, ultimately to review and evaluate Atmos' rate application to enable the City 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
in order for the City's participation to be meaningful it is important that the City
promptly intervene in such proceeding at the Railroad Commission of Texas.
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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 March 13, 2012.
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 intervention in proceedings related to Atmos'
Statement of Intent before the Railroad Commission of Texas 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
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 either city in the joint
representation.
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 8& 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.
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PASSED AND APPROVED this 6th
ATTEST:
Reber Garza, City Secretary
APPROVE AS TO CONTENT:
An tL bYLQ��
Andy Burcham, Chief Financial Officer
APPROVE AS TO FORM:
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Alfred R. Herrera, Counsel
day of March , 2012.
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Torn Martin, Mayor