R-07-06-28-11D2 - 6/28/2007 RESOLUTION NO. R-07-06-28-11D2
RESOLUTION OF THE CITY OF ROUND ROCK, TEXAS AUTHORIZING
THE DENIAL OF ATMOS ENERGY CORPORATION'S MID-TEX
DIVISION'S ("ATMOS MID-TEX") GAS RELIABILITY
INFRASTRUCTURE PROGRAM ADJUSTMENTS FOR CALENDAR
YEAR 2006; 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 IN
GUD DOCKET NOS. 9734 AND 9726; 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 May 31, 2007 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 2006 pursuant to Section 104 .301 of the
Gas Utility Regulatory Act ("Act") ; and
WHEREAS, Atmos Pipeline-Texas filed at the Railroad Commission
for a GRIP adjustment for calendar year 2006; and
WHEREAS, due to the ratemaking complexity of Section 104 . 301 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 deny the GRIP
adjustment 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 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
direction of legal counsel and consultants working on behalf of ATM
and the City; Now Therefore
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF ROUND ROCK,
TEXAS THAT:
Section 1. That the statements set out in the preamble to
this resolution are hereby in all things approved and adopted.
Section 2. The City hereby denies Atmos Mid-Tex' s request
for GRIP adjustments for fiscal year 2006, in all respects.
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.
Section 4. The City employs Jim Boyle, and Alfred Herrera 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
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employ such rate experts as are recommended by the ATM Steering
Committee.
Section S. The City authorizes special counsel to intervene
on behalf of the City and other members of ATM before the Railroad
Commission of Texas in GUD Docket Nos. 9734 and 9726.
Section 6. 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 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 S. The City Secretary shall notify Atmos Energy of this
resolution by sending a copy of same to Ms. Barbara Myers, Atmos
Energy Corporation, 5420 LBJ Freeway, Suite 1824, Dallas, Texas 75240
and ATM shall be notified by sending a copy of this resolution to Mr.
Jim Finley, City Attorney for the City of Longview by fax to (903)
239-5539.
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.
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 was adopted was posted and that such meeting was open to
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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 June, 2
NY L Mayor
y of Round Rock, Texas
AT E T:
CHRISTINE R. MARTINEZ, City Secret
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DATE: June 21, 2007
SU63ECT: City Council Meeting - June 28, 2007
ITEM: 11D2. Consider a resolution authorizing the denial of Atmos Energy
Corporation's Mid-Tex Division's Gas Reliability Infrastructure Program
adjustments for calendar year 2006.
Department: Administration
Staff Person: David Kautz, Assistant City. Manager/CFO
,justification:
Two more Gas Reliability Infrastructure Program ("GRIP") filings were made by Atmos Energy
on May 31, 2007. The filing by Atmos Mid-Tex Division with the City Secretary calls for a
monthly increase of: (a) 59 cents for residential customers; (b) $1.48 for commercial
customers and $28.90 for industrial customers. The filing by Atmos' Pipeline Division was
made at the Railroad Commission of Texas. In that filing Atmos is requesting that an
additional $89 million be placed in its rate base. This is for cost allegedly related to the
investment.in transmission pipe or pipe which is not included in the Mid-Tex distribution
system.
Funding:
Cost: N/A
Source of funds: N/A
Outside Resources: Jim Boyle, Attorney
Backaround Information•
The Railroad Commission found in the last Atmos general rate case that the Company had
improperly included inappropriate expenses in its GRIP filings.
At this point, the most appropriate action is to deny the requested GRIP adjustment by the
Mid-Tex Division of Atmos. The current law does not allow enough time for thorough discovery
before local regulatory authorities (municipalities).
In the past the Railroad Commission has refused to allow municipalities the opportunity to
intervene. Alliance of Texas Municipalities (ATM) believes that the position taken by the RRC
on this issue is in error. Prior GRIP rulings to this effect are on appeal. In order to avoid any
inconsistency with its appellate position, ATM recommends that it be authorized to intervene in
the GRIP proceedings which are pending at the Commission.
The ATM Cities recommend that the Council deny the requested increase in rates by the Mid-
Tex Division and that the Pipeline Division of Atmos be required to prove that the increase in
invested capital is consistent with Section 104.301 of the Gas Utility Regulatory Act, as well as
other pertinent provisions.
Public Comment: N/A