R-08-02-28-11E3 - 2/28/2008 RESOLUTION NO. R-08-02-28-11E3
A RESOLUTION OF THE CITY OF ROUND ROCK, TEXAS
DETERMINING THE CURRENT RATES OF THE ATMOS
ENERGY CORPORATION, MID-TEX DIVISION TO BE UNJUST
AND UNREASONABLE; PROVIDING FOR A REASONABLE
NOTICE AND HEARING; FINDING THAT THE MEETING
COMPLIED WITH THE OPEN MEETINGS ACT; AND
DECLARING AN EFFECTIVE DATE.
WHEREAS, Atmos Energy Corporation - Mid-Tex Division ("'Atmos")
filed a Statement of Intent with the City of Round Rock, Texas
( "City" ) on September 20, 2007 to increase its system-wide, annual
revenue requirement, by approximately $51 . 9 million; and
WHEREAS, the City is a regulatory authority under the Gas
Utility Regulatory Act ( "GURA" ) and under § 103 . 001 of GURA has
exclusive original jurisdiction over Atmos' rates, operations, and
services of a gas utility within the municipality; and
WHEREAS, the City has, by previous ordinance or resolution,
denied the requested rate increase, authorized participation in a
coalition of cities known as Atmos Texas Municipalities ( "ATM") and
authorized the hiring of lawyers and rate experts; and
WHEREAS, Atmos has appealed the previous ordinance or
resolution to the Railroad Commission of Texas, which has docketed
the appeal along with other appeals as Gas Utilities Docket No.
9762; and
WHEREAS, ATM has conducted extensive discovery upon Atmos and
has engaged in extensive negotiations regarding the appropriate
rates and rate structure for Atmos; and
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WHEREAS, Atmos and ATM have entered into a settlement
agreement resolving all disputes regarding the appropriate rates,
terms and conditions for Atmos; and
WHEREAS, Atmos and ATM have determined that the best method
to implement such settlement agreement is to have it approved by
each ATM city; and
WHEREAS, in order for City to examine the settlement
agreement, it must reestablish its original jurisdiction over the
rates of Atmos; and
WHEREAS, the Gas Utilities Regulatory Act authorizes
municipalities exercising original jurisdiction over gas utilities
to issue a Show Cause as to their rates, terms and conditions; Now
Therefore
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF ROUND ROCK,
TEXAS:
Section 1. That the statements set out in the preamble to
this resolution are hereby in all things approved and adopted.
Section 2. Pursuant to Utilities Code Section 104 . 151, the
City finds that the existing rates, terms and conditions of Atmos
are unreasonable and determines that Atmos should Show Cause why
such rates, terms and conditions should not be changed.
Section 3 . In light of the fact that a settlement agreement
has been reached between Atmos and ATM resolving all issues, it is
reasonable to proceed to a hearing on the settlement agreement
without additional notice to Atmos and it is reasonable to hold such
hearing at the same city council meeting as the meeting at which
this resolution is adopted.
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Section 4 . This resolution shall become effective from and
after its passage.
The City Council hereby finds and declares that written notice
of the date, hour, place and subject of the meeting at which this
Resolution was adopted was posted and that such meeting was open to
the public as required by law at all times during which this
Resolution and the subject matter hereof were discussed, considered
and formally acted upon, all as required by the Open Meetings Act,
Chapter 551, Texas Government Code, as amended.
RESOLVED this 28th day of February 2 8 .
011
WELL ayor
Ci of Round Rock, Texas
ATTEST:
SARA L. WHITE, City Secretary
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AGENDA INFORMATION SHEET
ITEM NO.
BACKGROUND FOR
SHOW CAUSE RESOLUTION
REASON FOR SHOW CAUSE
Atmos appealed the Council's denial of its request for a $52 million increase
rates to the Railroad Commission of Texas. Thea appeal was con in
GUD Docket No. 9762. While at the Commission,
consolidated with
fission, ATM and Atmos were able
to work out a settlement of their differences. Part of the Settlement included
matters not appropriate to the jurisdiction of the Railroad Commission, like the
agreement to allow ATM Cities to increase the municipal franchise compensation
rate to 5% of gross receipts.
Also, by continuing with the Settlement at the Commission, it was felt b 1
counsel for ATM that there was some risk that the delicateY legal
benefits resulting from the Settlement balance of costs and
might be undone. For these reasons, it was
felt that it is prudent to re-establish jurisdiction before each ATM municipality.
Jurisdiction can be re-established through the ad
option
g of the Show Cause
Resolution.
RECOMMENDATION
ATM recommends adoption of the Show Cause Resolution so that the C
re-establish jurisdiction over the rates of Atmos Ener C City may
in order to be able to consider the Settlement Agreement which is before the
Council later in this agenda.
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DATE: February 21, 2008
SUBJECT: City Council Meeting - February 28, 2008
ITEM: 11E3. Consider a resolution determining the current rates of the Atmos
Energy Corporation.
Department: Administration
Staff Person: David Kautz, Assistant City Manager/CFO
Steve Sheets, City Attorney
Justification:
Funding:
Cost: N/A
Source of funds: N/A
Outside Resources: Jim Boyle, Attorney
Background Information:
Atmos appealed the Council's denial of its request for a $52 million increase in rates to the
Railroad Commission of Texas. At the Commission, the Alliance of Texas Municipalities
(ATM) ,representing Round Rock, and Atmos were able to work out a settlement of the rate
case differences. Part of the Settlement included matters not appropriate to the jurisdiction
of the Railroad Commission, like the agreement to allow ATM Cities to increase the
municipal franchise compensation rate to 5% of gross receipts. Also, by continuing with the
Settlement at the Commission, it was felt by legal counsel for ATM that there was some risk
that the balance of costs and benefits resulting from the Settlement might be undone. For
these reasons, it was believed prudent to re-establish jurisdiction before each ATM
municipality. Jurisdiction can be re-established through the adoptions of the Show Cause
Resolution. This action establishes jurisdiction over the rates of Atmos Energy Corp in order
to be able to consider the Settlement Agreement which is before the Council later in this
meeting agenda.
Public Comment: N/A