Loading...
HomeMy WebLinkAboutRes 14-19 Denying the Rate Increase Request by Atmos Energymin 1 i 1' RESOLUTION Ti THE COMPANY1; THE STEERING COUNSEL. WHEREAS, the Town of Westlake Texas ("Town") is a gas utility customer of Atmos Energy Corp., Mid -Tex Division ("Atmos Mid -Tex" or "Company"), and a regulatory authority with an interest in the rates and charges of Atmos Mid -Tex; and WHEREAS, the Town is a member of the Atmos Cities Steering Committee ("ACSC"), a coalition of approximately 164 similarly situated cities served by Atmos Mid -Tex that have joined together to facilitate the review of and response to natural gas issues affecting rates charged in the Atmos Mid -Tex service area; and WHEREAS, pursuant to the terms of the agreement settling the Company's 2007 Statement of Intent to increase rates, ACSC Cities and the Company worked collaboratively to develop a Rate Review Mechanism ("RRM") tariff that allows for an expedited rate review process controlled in a three-year experiment by ACSC Cities as a substitute to the current Gas Reliability Infrastructure Program ("GRIP") process instituted by the Legislature; and WHEREAS, the City took action in 2008 to approve a Settlement Agreement with Atmos Mid - Tex resolving the Company's 2007 rate case and authorizing the RRM tariff, and WHEREAS, in 2013, ACSC and the Company negotiated a renewal of the RRM tariff process for an additional five (5) years; and WHEREAS, the City passed an ordinance renewing the RRM tariff process for the Town for an additional five (5) years; and WHEREAS, the RRM renewal tariff contemplates reimbursement of ACSC Cities' reasonable expenses associated with RRM applications; and WHEREAS, on or about February 28, 2014, the Company filed with the Town its second annual RRM filing under the renewed RRM tariff, requesting to increase natural gas base rates by $45.7 million; and Resolution 14-19 Page 1 of 3 WHEREAS, ACSC coordinated its review of Atmos Mid-Tex's RRM filing through its Executive Committee, assisted by ACSC attorneys and consultants, to investigate issues identified by ACSC in the Company's RRM filing; and WHEREAS, ACSC attorneys and consultants have concluded that the Company is unable to justify a rate increase of the magnitude requested in the RPM filing; and WHEREAS, ACSC's consultants determined the Company is only entitled to a $19 million increase, approximately 42% of the Company's request under the 2014 RRM filing; and WHEREAS, the Company would only be entitled to approximately $31 million if it had a GRIP case; and WHEREAS, the Company's levels of operating and maintenance expense have dramatically risen without sufficient justification; and WHEREAS, the Company has awarded its executives and upper management increasing and unreasonable levels of incentives and bonuses, expenses which should be borne by shareholders who received a 23% total return on investment in 2013; and WHEREAS, the Company requested a drastically high level of medical expense that is unreasonable and speculatively based upon estimates; and WHEREAS, ACSC and the Company were unable to reach a compromise on the amount of additional revenues that the Company should recover under the 2014 RRM filing; and WHEREAS, the ACSC Executive Committee, as well as ACSC's counsel and consultants, recommend that ACSC Cities deny the requested rate increase; and WHEREAS, the Company's current rates are determined to be just, reasonable, and in the public interest. NOW, THEREFORE, BE IT RESOLVED BY THE TOWN COUNCIL OF THE TOWN OF Section 1: That the findings set forth in this Resolution are hereby in all things approved. Section 2: That the Town Council finds that Atmos Mid -Tex was unable to justify the appropriateness or the need for the increased revenues requested in the 2014 RRM filing, and that existing rates for natural gas service provided by Atmos Mid -Tex are just and reasonable. Section 3: That Atmos Mid -Tex shall reimburse the reasonable ratemaking expenses of the ACSC Cities in processing the Company's RPM application. Section 4: That in the event the Company files an appeal of this denial of rate increase to the Railroad Commission of Texas, the Town is hereby authorized to intervene in such appeal, and shall participate in such appeal in conjunction with the ACSC membership. Further, in such event Atmos Mid - Tex shall reimburse the reasonable expenses of the ACSC Cities in participating in the appeal of this and other ACSC City rate actions resulting from the 2014 RRM filing. Resolution 14-19 Page 2 of 3 Section 5: That 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 6: That if any one or more sections or clauses of this Resolution is adjudged to be unconstitutional or invalid, such judgment shall not affect, impair, or invalidate the remaining provisions of this Resolution and the remaining provisions of the Resolution shall be interpreted as if the offending section or clause never existed. Section 7: That a copy of this Resolution shall be sent to Atmos Mid -Tex, care of Chris Felan, Manager of Rates and Regulatory Affairs, at Atmos Energy Corporation, 5420 LBJ Freeway, Suite 1862, Dallas, Texas 75240, and to Geoffrey Gay, General Counsel to ACSC, at Lloyd Gosselink Rochelle & Townsend, P.C., P.O. Box 1725, Austin, Texas 78767-1725. ATTEST: I nx 0. Kelly Edws, Town Secretary o „ -L. St' tinLo A*, Town Attorney yr a4ld�' / A,405ez Laura L. Wheat, Mayor Nomas E. Brymer�Tanager Resolution 14-19 Page 3 of 3