HomeMy WebLinkAboutResolution - 2012-R0259 - Deny Rate Increase - Atmos Energy - 06/21/2012Resolution No. 2012-80259
June 21, 2012
Item No. 6.1
RESOLUTION NO.
A RESOLUTION BY THE CITY OF LUBBOCK, TEXAS,
("CITY") DENYING A RATE INCREASE REQUESTED BY
ATMOS ENERGY CORPORATION ON OR ABOUT FEBRUARY
7, 2012; DETERMINING THAT THE MEETING COMPLIED
WITH THE TEXAS OPEN MEETINGS ACT; AND MAKING
OTHER FINDINGS AND PROVISIONS RELATED TO THE
SUBJECT.
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 uniform rates
among all cities within its newly proposed single rate division that Atmos refers to as the "West
Texas Division;" and
WHEREAS, previously Atmos regarded the City 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%; and
WHEREAS, for ratepayers in the City, Atmos' proposed rate increase would increase
the average monthly bill for Residential customers by approximately 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 believes that Atmos' proposal to depart from the determination of
rates on the basis of the cost to provide service in the Lubbock Rate Division is without merit;
and
1 of 3
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 approximately 25.3%, while the increase
in base -rate revenue for customers in the West Texas Cities Rate Division would be only about
1.9%; and
WHEREAS, Atmos' departure from developing rates for ratepayers in the City of
Lubbock on the basis of the cost to serve those ratepayers results in an inequitable and
unwarranted shift in costs to ratepayers 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, the City approved a Resolution suspending Atmos' proposed effective
date for its rate increase ninety days beyond Atmos' proposed effective date; and
WHEREAS, the statutory deadline for responding to Atmos' proposed rate structure is
June 22, 2012, subject to the City's right to continue a hearing in progress; and
WHEREAS, the City has concluded that the revenue increase that results from
consolidation of the historical rate divisions of the Lubbock Rate Division, the Amarillo Rate
Division, and the West Texas Cities Rate Division, and the attendant rate increases proposed by
Atmos are unreasonable and Atmos has not consented to appropriate adjustments to its
proposal and that Atmos has failed to prove that is requests are reasonable;
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.
2 of 3
Section 2. The City denies the rate increase Atmos requested in its Statement of Intent
submitted to the City on or about February 7, 2012.
Section 3. 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 80th
Street, Lubbock, Texas 79424; and to Mr. Alfred R. Herrera, Herrera & Boyle, PLLC, 81 b
Congress Avenue, Suite 1250, Austin, Texas 78701.
Section 4. This 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 5. This Resolution shall become effective from and after its passage.
PASSED AND APPROVED on .lune 21, 2012 Of
G obertson, Mayor
ATTEST:
Rebe ca Garza, City Secret
APPROVE AS TO CONTENT:
aC O(3r -
Pamela Moon, Director of Finance
APP OVETAS FORM:
()k_
Alfred R. Herrera, Attorney
Q:ICITYATnSAMIRESOLUTIONS\RES-ATMOS ENERGY CORP -Denial Resolution
June 21. 2012
3 of 3