Resolution 2005-26
RESOLUTION NO. 2005-26(R)
A RESOLUTION BY THE CITY COUNCIL OF WYLIE, TEXAS
ORDERING ATMOS ENERGY, MID-TEX DIVISION, TO SHOW
CAUSE REGARDING THE REASONABLENESS OF ITS
EXISTING NATURAL GAS DISTRIBUTION RATES WITHIN
THE CITY; REQUIRING ATMOS ENERGY, MID-TEX
DIVISION, TO SUBMIT A RATE PACKAGE BASED ON A RATE
YEAR ENDING JUNE 30, 2005; DIRECTING THAT SUCH
FILING SHALL BE MADE BY DECEMBER 31, 2005;
REQUIRING REIMBURSEMENT OF REASONABLE LEGAL
AND CONSULTANT EXPENSES; AND REQUIRING DELIVERY
OF THIS RESOLUTION TO THE COMPANY AND LEGAL
COUNSEL.
WHEREAS, the City is a regulatory authority under the Gas Utility Regulatory Act
("GURA") and has original jurisdiction over the gas utility rates of Atmos Mid- T ex; and
WHEREAS, the City has the authority under SS 103.001 and 104.151, GURA, to initiate
a proceeding to determine whether the existing rates of a gas utility are unreasonable or in any
way in violation of any provision of law; and
WHEREAS, upon making a finding of unreasonableness, the City may determine the
just and reasonable rates to be charged by Atmos Mid- Tex; and
WHEREAS, Atmos Energy Corporation, the parent company of Atmos Mid- Tex has
recently experienced system-wide cost reductions due to the doubling of its nationwide customer
base with the acquisition of the assets of TXU Gas, and has reported to its investors that it has
experienced a significant increase in profits related to its Texas divisions; and
WHEREAS, Atmos Mid- Tex is charging rates approved based on the higher expenses
and equity-to-debt ratio of TXU Gas, rather than rates that would be justified based on Atmos'
lower expenses and equity-to-debt ratio; and
WHEREAS, ratepayers of Atmos Mid- Tex, including the City and its residents, will
suffer further unreasonable adverse impact from the GRIP rate increases approved by the Texas
Railroad Commission and the second GRIP filing recently made by Atmos Mid- Tex; and
WHEREAS, the Commission's failure to consider testimony and argument offered by
Cities during its consideration of the Company's piecemeal GRIP rate applications leaves Cities
no functional choice but to exercise its statutory right to exercise original jurisdiction over
Atmos' base rates and compel a comprehensive rate review; and
WHEREAS, the City has reason to believe that Atmos Mid- Tex is over-earning and that
its rates are excessive; and
Resolution No. 2005-26(R)
Atrnos Show Cause
WHEREAS, Cities and their residents are about to experience unprecedented increases
in the cost of natural gas during the heating season and protection of the public interest requires a
comprehensive review of Atmos' cost of service to determine whether rates and services are just
and reasonable; and
WHEREAS, Atmos Mid- Tex should be required to justify its rates on a system-wide
basis; and
WHEREAS, the coalition of cities formed to review Atmos' GRIP filings (the Atmos
Cities Steering Committee, or "ACSC") can most efficiently review the Atmos filing on behalf
of the City; and
WHEREAS, the reasonable costs associated with the City's review of the Company's
rates are reimbursable from Atmos Mid- Tex;
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Wylie,
Texas, that:
1. That Atmos Mid- Tex is hereby directed to show cause regarding the reasonableness
of its existing natural gas distribution rates within the City. Atmos shall file with the
City information sufficient to determine the Company's rate base, expenses,
investment, and rate of return. Such filing shall be on a system-wide basis and shall
be based upon a rate year ending June 30, 2005. Atmos Mid- Tex is directed to file
its rate filing package to comply, at a minimum, with the regulations and
requirements of the Railroad Commission. The filing shall be made with the City on
or before December 31, 2005. An electronic copy of the filing shall be made with the
City simultaneously with the written filing on December 31, 2005. This filing shall
be the same filing as made with the first coalition city to pass the same or similar
Show Cause Resolution.
2. City's designated representatives shall have the right to obtain additional information
from Atmos through the filing of written requests for information, to each of which
Atmos shall respond in writing within fourteen (14) calendar days from the receipt of
each such request for information.
3. A public hearing shall be conducted by the City. Based upon such hearing, the
briefing of staff, and the consultants' findings, a determination of the reasonableness
of the existing rates of Atmos shall be made by the City and, if necessary, just and
reasonable rates shall be determined to be thereafter observed and enforced for all
services of Atmos within the City.
4. The City may, from time to time, amend this procedural schedule and the filing
requirements, and enter additional orders as may be necessary in the public interest
and to enforce the provisions hereof.
5. Atmos Mid- T ex shall promptly reimburse the City's reasonable monthly costs
associated with the City's activities related to the rate review.
Resolution No. 2005-26(R)
Atrnos Show Cause
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6. A copy of this Resolution shall be sent to Atmos Mid-Tex, care of Richard T. Reis, at
Atmos Energy Corporation, 5420 LBJ Freeway, Suite 1800, Dallas, Texas 75240,
and to Geoffrey Gay, legal counsel to the coalition of cities, at Lloyd Gosselink, P.O.
Box 1725, Austin, Texas 78767-1725.
DULY PASSED AND APPROVED by the City Council of the City of Wylie, Texas on
this the 25th day of October, 2005.
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ATTEST:
Resolution No. 2005-26(R)
Atrnos Show Cause
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