R-06-05-11-13B2 - 5/11/2006RESOLUTION NO. 06-05-11-13B2
RESOLUTION OF THE CITY OF ROUND ROCK, TEXAS AUTHORIZING
THE SUSPENSION OF THE EFFECTIVE DATE UNTIL JULY 14, 2006 FOR
THE GAS RELIABILITY INFRASTRUCTURE PROGRAM ("GRIP")
ADJUSTMENTS PROPOSED BY ATMOS ENERGY CORPORATION' S
MID-TEX DIVISION FOR CALENDAR YEAR 2005; 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
2005; 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 March 31, 2006 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 2005 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 that this 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 for implementing the GRIP adjustment until at least July 14, 2006
in order to allow the City's rate experts sufficient time to determine
the merits of Atmos Energy's proposed GRIP adjustment, and
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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 Alliance for
TXU Municipalities ("ATM") has been active in gas utility ratemaking
proceedings, and
WHEREAS, in light of the sale of TXU Gas to Atmos Energy, the
coalition known as the Alliance of TXU Municipalities is now known as
the Atmos Texas Municipalities ("ATM"), and
WHEREAS, the City will join with other cities participating in
ATM in a steering committee in order to coordinate the hiring and
direction of legal counsel and consultants working on behalf of ATM and
the City, Now Therefore
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
until July 14, 2006 in order to complete the review and investigation
by the City's experts.
Section 3. The City is authorized to join with other cities in a
coalition of cities known 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.
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Section 4. The City employs Jim Boyle, Alfred Herrera and Daniel
Lawton as special counsel to represent the City with regard to the
proposed GRIP adjustments of Atmos Energy before local and state
regulatory authorities and any court of law and authorizes special
counsel to employ such rate experts as are recommended by the ATM
Steering Committee
Section 5. The City, in coordination with the Steering Committee,
shall review the invoices of the lawyers and rate experts for
reasonableness before submitting the invoices to Atmos Energy for
reimbursement.
Section 6. City's legal representatives shall have the right to
obtain additional information from Atmos Energy through the service of
requests for information, which shall be responded to within twenty
(20) days of receipt of such requests for information.
Section 7. 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 8. The City Secretary is hereby directed to send a true
and correct copy of this resolution to Mr. Richard Reis, Atmos Energy
Corporation, 5420 LBJ Freeway, Suite 1823, Dallas, Texas 75240-2601 and
to the ATM by sending a true and correct copy of this resolution to Mr.
Jim Finley, City Attorney for the City of Longview by fax to (903) 239-
5539.
Section 9. This resolution shall become effective from and after
its passage.
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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 llth day of May, 2006.
WELL, ayor
Ci y of Round Rock, Texas
A TEST:
CHRISTINE R. MARTINEZ, City Sretary
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DATE: May 5, 2006
SUBJECT: City Council Meeting - May 11 2006
ITEM: 13.B.2. Consider a resolution authorizing the City to suspend the
effective date for implementing the Gas Reliability
Infrastructure Program (GRIP) adjustment until at least July
14, 2006.
Department: Administration
Staff Person: David Kautz, Assistant City Manager/CFO
Steve Sheets, City Attorney
Justification:
This resolution will to suspend the effective date for implementing the Gas Reliability
Infrastructure Program (GRIP) adjustment until at least July 14, 2006 in order to
allow the City's rate experts sufficient time to determine the merits of Atmos
Energy's proposed rate adjustment.
Funding:
Cost: N/A
Source of funds: N/A
Outside Resources: Jim Boyle, Attorney
Background Information:
The infrastructure adjustment sought by Atmos goes under the name of "Gas
Reliability Infrastructure Program" (GRIP). The adjustments for 2003 are now on
appeal before a Travis County District Court. The adjustments for 2004 will also be
before a Travis County District Court in the next two months. A decision on the 2003
adjustments is expected by October. The Railroad Commission has not allowed cities
to intervene or participate in a contested proceeding at the Commission dealing with
the GRIP adjustments. ATM believes this is fundamental error. ATM believes that
Atmos has seriously overstated the amount is allowed to collect under the GRIP
statute.
Public Comment: N/A