R-05-10-27-13B1 - 10/27/2005RESOLUTION NO. R -05-10-27-13B1
RESOLUTION OF THE CITY OF ROUND ROCK, TEXAS AUTHORIZING
THE SUSPENSION OF THE EFFECTIVE DATE UNTIL JANUARY 2, 2005
FOR THE GAS RELIABILITY INFRASTRUCTURE PROGRAM ("GRIP")
ADJUSTMENTS PROPOSED BY ATMOS ENERGY CORPORATION'S
MID-TEX DIVISION FOR CALENDAR YEAR 2004; AUTHORIZING
PARTICIPATION IN A COALITION OF CITIES KNOWN AS ATMOS TEXAS
MUNICIPALITIES ("ATM"); AUTHORIZING THE HIRING OF LAWYERS
AND RATE EXPERTS; AUTHORIZING THE CITY'S PARTICIPATION TO
THE FULL EXTENT PERMITTED BY LAW AT THE RAILROAD
COMMISSION OF TEXAS WITH REGARD TO THE GAS RELIABILITY
INFRASTRUCTURE PROGRAM ADJUSTMENTS FOR CALENDAR YEAR
2004 PROPOSED BY ATMOS PIPELINE; REQUIRING THE
REIMBURSEMENT OF MUNICIPAL RATE CASE EXPENSES; FINDING
THAT THE MEETING COMPLIED WITH THE OPEN MEETINGS ACT;
MAKING OTHER FINDINGS AND PROVISIONS RELATED TO THE
SUBJECT; AND DECLARING AN EFFECTIVE DATE.
WHEREAS, on or about September 19, 2005 the Atmos Energy
Corporation's Mid -Tex Division ("Atmos Energy") filed an application
with the City to increase gas rates for its Gas Reliability
Infrastructure Program ("GRIP") for calendar year 2004 pursuant to
Section 104.301 of the Gas Utility Regulatory Act("Act"), and
WHEREAS, due to the ratemaking complexity of Section 104.301 of
the Act and the fact thatthis is the first application for recovery
under that section of the Act; it is therefore necessary to engage the
expertise of lawyers and consultants who specialize in ratemaking
proceedings before regulatory authorities to assist the City as
provided for in . Section 103.022 of the Act, and
WHEREAS, given the complexity and the need to carefully review
the proposed GRIP adjustment it is necessary to suspend the effective
date forimplementing the GRIP adjustment until at least January 2,
2006 in order to allow the City's rate experts sufficient time to
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determine the merits of Atmos Energy's proposed GRIP adjustment for
calendar year 2004, and
WHEREAS, in order to maximize the efficient use of resources and
expertise in reviewing, analyzing and investigating Atmos Energy's
request for a GRIP adjustment it makes sense to coordinate the City's
efforts with a coalition of similarly situated municipalities, and
WHEREAS,a coalition of municipalities, known as the Atmos Texas
Municipalities ("ATM") has been active in gas utility ratemaking
proceedings, and
WHEREAS, . the City will join with other cities participating in
ATM in a steering committee in order to coordinate the hiring and
directionof legal counsel and .consultants working on behalf of ATM and
the City, and
WHEREAS, Atmos Energy, doing ' business as Atmos Pipeline - Texas
("Atmos Pipeline"), has also filed on September 19, 2005, for a GRIP
adjustment at the Railroad Commission of Texas, and
WHEREAS, the filing made at .the Railroad Commission of Texas by
Atmos Pipeline could affect the,gas rates which have to be paid by
Atmos Energy customers located within the City, and
WHEREAS, .it is important that the City and other similarly
situated municipalities participate .to the extent allowed by law in the
GRIP proceeding initiated by Atmos Pipeline to insure the proper
implementation of the GRIP adjustment by Atmos Pipeline, Now Therefore
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BE IT RESOLVED BY THE COUNCIL OF THE CITY OF ROUND ROCK, TEXAS
THAT,
Section 1. The statements set out in the preamble to this
resolution are hereby in all things approved and adopted.
Section 2. The effective date for the proposed GRIP adjustments
by Atmos Energy, and the tariffs related thereto, are hereby suspended
for an additional forty-five days or until January 2, 2006.
Section 3. The City is authorized to join with other cities in a
coalition of citiesknown as the Atmos Texas Municipalities ("ATM")
with the understanding that the steering committee of ATM will provide
.direction and . guidance to . the lawyers who are representing said cities.
Section 4. The City employs the Lawton Law Firm and the Law
Offices. of Jim Boyle, PLLC to represent the City with regard to the
proposed GRIP adjustments of Atmos Energy and Atmos Pipeline before
local and state regulatory authorities and any court of law and
authorizes . the law firms to employ such rate experts as are recommended
by the ATM Steering Committee.
Section 5. -The City is authorized to participate to the full
extent permitted by law in the GRIP proceeding initiated by Atmos
Pipeline at the Railroad Commission of Texas and any court action
related thereto.
Section .6 . The City, in coordination with the Steering Committee,
shall reviewthe invoices of thelawyers and rate experts for
reasonableness -before submitting the invoices to Atmos Energy or Atmos
Pipeline for reimbursement.
Section. 7. City's legal representatives shall have the right to
obtain additional information from Atmos Energy through the service of
requests forinformation, which shall be responded to within twenty
(20) days of receipt of such requests for information. This is in
addition to other forms of discovery.
Section. 8. Atmos Energy shall reimburse the City, through the
designated representative city of the Steering Committee, for the
reasonable costs of attorneys and consultants and expenses related
thereto, upon the presentation of invoices reviewed by the Steering
Committee.
Section 9. The City Secretary is hereby directed to send a true
and correct copy of this resolution to Douglas C. Walther, Senior
Counsel, Atmos Energy Corporation, 5430 LBJ Freeway, Suite 1800,
Dallas, Texas 75240-2601.
Section 10. 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 wasadopted 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 27th day of October, 005.
, Mayor
City of Round Rock, Texas
CHRISTINE R. MARTINEZ, City Secr_'ary
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DATE: October 20, 2005
SUBJECT: City Council Meeting - October 27, 2005
ITEM: 13.B.1. Consider a resolution authorizing the City to suspend the
effective date for a gas rate increase filed by Atmos Energy
Corporation until January 2, 2006.
Department: Administration/Legal
Staff Person: David Kautz, Assistant City Manager/CFO
Steve Sheets, City Attorney
Justification:
On September 19, 2005, Atmos Energy filed its 2004 Gas Reliability Infrastructure Program
(GRIP) filing with the Alliance of Texas Municipalities (ATM) cities and other cities in the
Atmos service area. This is the second annual filing by Atmos to charge ratepayers for a
return on certain pipeline investments. The Railroad Commission is still considering the
2003 GRIP filing of which ATM has a number of concerns that may require some
guidance from the courts. At this point Jim Boyle (ATM attorney) believes it is appropriate
to suspend the rates in regards to this new filing but will advise as to an appropriate
strategy once the ATM Steering Committee has met to make a recommendation.
Staff recommends suspending the rate increase request, allowing more time to evaluate the
rate increase and devise an appropriate response.
Funding:
Cost: N/A
Source of funds: N/A
Outside Resources: Jim Boyle, Attorney
Background Information: N/A
Public Comment: N/A