Ordinance 2005-33
ORDINANCE NO. 2005-33
AN ORDINANCE OF THE CITY OF WYLIE, TEXAS, DENYING THE
REQUEST OF A TMOS ENERGY CORP., MID- TEX DIVISION, FOR AN
ANNUAL GAS RELIABILITY INFRASTRUCTURE PROGRAM (GRIP)
RATE INCREASE IN THIS MUNICIPALITY, AS A PART OF THE
COMPANY'S STATEWIDE GAS UTILITY DISTRIBUTION SYSTEM;
APPROVING COOPERATION WITH OTHER CITIES WITHIN THE
ATMOS ENERGY CORP., MID-TEX DIVISION DISTRIBUTION SYSTEM
AS PART OF THE ATMOS CITIES STEERING COMMITTEE (ACSC);
AUTHORIZING ACSC TO HIRE LEGAL AND CONSULTING SERVICES
AND TO NEGOTIATE WITH THE COMPANY AND DIRECT ANY
NECESSARY LITIGATION; AUTHORIZING INTERVENTION AS PART
OF ACSC IN ANY APPEAL OF THE CITY'S ACTION TO THE RAILROAD
COMMISSION; APPROVING COSTS INCURRED AS REASONABLE AND
PROVIDING A REQUIREMENT FOR PROMPT REIMBURSEMENT OF
COSTS; FINDING THAT THE MEETING AT WHICH THIS ORDINANCE
IS PASSED IS OPEN TO THE PUBLIC AS REQUIRED BY LAW; AND
PROVIDING FOR NOTICE OF THIS ORDINANCE TO A TMOS ENERGY
CORP., MID-TEX DIVISION.
WHEREAS, on or about December 17, 2004, Atmos Energy Corp., Mid-Tex Division,
(the "Company") filed with the City of Wylie ("City"), a request pursuant to Texas Utilities
Code S 104.301 for an annual gas reliability infrastructure program (GRIP) rate increase for
customers on the Company's statewide gas utility system to be effective February 15, 2005, and
subsequently extended that effective date until March 4, 2005, for some cities on its system; and
WHEREAS, the City has exclusive original jurisdiction to evaluate the Company's
request as it pertains to the distribution facilities located within the City, pursuant to Texas
Utilities Code SS 102.001(b) and 103.001; and
WHEREAS, the City timely acted to suspend the effective date of Atmos' proposed rate
increase; and
WHEREAS, it is reasonable for the City of Wylie to cooperate with other cities in a
coalition of cities in opposition to the Company's filing at the Railroad Commission
("Commission"), said coalition being known as Atmos Cities Steering Committee ("ACSC"), in
any appeal of the cities' actions to the Commission; and
WHEREAS, the Gas Utility Regulatory Act grants local regulatory authorities the right
to intervene in rate proceedings filed at the Railroad Commission; and
WHEREAS, the Texas Utilities Code S 103.022 provides that costs incurred by the City
in ratemaking activities are to be reimbursed by the regulated utility; and
Ordinance 2005-2005-33
Denying ATMOS Energy Rate Increase (GRIP)
1
WHEREAS, ACSC's rate case expenses incurred in this proceeding are reasonable and
should be reimbursed by the Company; and
WHEREAS, counsel for ACSC, upon review of the Company's filing and upon
consultation with various consultants, recommends finding that the Company's proposal is
unjustified, unreasonable and is not in compliance with the GRIP statute (Texas Utilities Code
S 104.301) either in fact or in law; and
WHEREAS, information provided by the Company in response to ACSC's requests for
information indicates that the Company actually decreased per-customer investment in
infrastructure during calendar year 2003; and
WHEREAS, the Company has publicly stated that it will receive substantial profit in
2005 over that approved by the Commission in GUD No. 9400; and
WHEREAS, the Company's GRIP request fails to account for growth in numbers of
customers, thereby undercounting the revenues it will receive from its proposed GRIP rate
increase; and
WHEREAS, the Company's GRIP request fails to recognize that GUD No. 9400 rates
included profit based on TXU Corporation's capital structure rather than Atmos Energy Corp.'s
current capital structure, which justifies a lower rate of return; and
WHEREAS, the information reviewed by the ACSC consultants indicates that
implementation of the Company's GRIP request would result in further over-earning by the
Company above that approved by the Commission in GUD No. 9400; and
WHEREAS, in consideration of the city taking action before August 12, 2005, on the
currently pending GRIP request, the Company has agreed not to file any additional GRIP
requests before September 15,2005.
NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE
CITY OF WYLIE, TEXAS:
SECTION 1. That the Company's GRIP rate increase request is found to be unjustified,
unreasonable and in violation of the GRIP statute and is therefore denied in all respects. The
defects in the request include, but are not limited to, the following: (a) the Company improperly
calculated its 2003 rate base; (b) the Company included in its calculation projects unrelated to
system improvement; (c) the Company failed to recognize the increased revenues it is now
receiving due to increased rates approved by the Commission in GUD No. 9400 and due to
customer growth; (d) information supplied by the Company indicated that the Company actually
decreased its per-customer investment in infrastructure in calendar year 2003; (e) approval of the
Company's GRIP request would result in over-earning by the Company in the year of
implementation; and (f) the Company has failed to demonstrate that it meets the statutory
prerequisites to qualify for a GRIP rate increase or that its proposed method of implementation
of the GRIP statute constitutes a constitutional application of the statute.
Ordinance 2005-2005-33
Denying ATMOS Energy Rate Increase (GRIP)
2
SECTION 2. That the City is authorized to cooperate with other Cities within the
Company's Distribution System that have formed ACSC to hire and direct legal counsel and
consultants, negotiate with the Company, make recommendations to the City regarding
reasonable rates and to direct any necessary litigation associated with an appeal of this ordinance
to the Commission.
SECTION 3. That the costs incurred by ACSC in reviewing the Company's GRIP
request and representing ACSC in this proceeding are hereby found to be reasonable and, upon
submission to the Company, shall be promptly reimbursed by the Company.
SECTION 4. That the City is authorized to intervene in any appeal of the city's action
filed at the Commission, and to participate in any such appeal as a member of ACSC.
SECTION 5. That this Ordinance shall become effective immediately from and after its
passage, as the law and charter in such cases provide.
SECTION 6. That it is hereby officially found and determined that the meeting at which
this Ordinance is passed is open to the public as required by law and that public notice of the
time, place and purpose of said meeting was given as required.
SECTION 7. That a copy of this ordinance, constituting final action on the Company's
application, shall be forwarded to the appropriate designated representative of the Company
within 10 days as follows: Richard Reis, Manager, Gas Regulation, Atmos Energy Corp., Mid-
Tex Division, Lincoln Center II, 18th Floor, 5420 LBJ Freeway, Dallas, Texas, 75240.
DULY PASSED AND APPROVED by the City Council of the City of Wylie, Texas, on
this the 12th day of July, 2005.
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ATTEST:
Date of Publication in The Wvlie News - July 13,2005
Ordinance 2005-2005-33
Denying A TMOS Energy Rate Increase (GRIP)
3
* C~S Media, Inc.
\!r:be j/'armerljuiUe IJimelj . Murphy Monitor. The Princeton Herald · The Sachse News. THE WYLIE NEWS
STATE OF TEXAS
COUNTY OF COLLIN
Before me, the undersigned authority, on this day personally appeared Chad Engbrock,
publisher of The Wylie News, a newspaper regularly published in Collin County, Texas and
having general circulation in Collin County, Texas, who being by me duly sworn, deposed and
says that the foregoing attached
City of Wylie
Ord. No. 2005-31, Ord. No. 2005-32, Ord. No. 2005-33
was published in said newspaper on the following dates, to-wit: July 27, 2005
()Jj?
Chad Engbrock, Publisher
Subscribed and sworn before me on this, the ~
day of
~.
, 2005
to certify which witness my hand and seal of office.
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(/-;'1:i~~\~\.. ADrfo~r~~.~g~~Y ,
.1 ~. H State of! ilxaS
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"~;o.':'; '7 My Comm [,:p. '11-02-07
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Notary Public in and for
The State of Texas
My commission expires 01/02/07
Murphy/SachselWylie Office. 110 N. Ballard. P.O. Box 369. Wylie, TX 75098.972-442-5515. fax 972-442-4318
FarmersvilleIPrinceton Office. 101 S. Main. P.O. Box 512 . Farmersville, TX 75442 . 972-784-6397 . fax 972-782-7023
r
July 20-21, 2005 - C&S Media Publications - Section C - Page 7
iified Advertising
TexSCAN Order Form ~ The Classifieds
SELECT REGION(S) AD IS TO RUN
o Statewide ($400) 0 North Region ($175) 0 South Region ($175) CJ West Region ($175)
(Extra words '14 each) (Extra words '6 each) (Extra words '6 each) (Extra words '6 each)
o Combination of 2 regions ($300) (extra words $10 each) Specify regions: _+_
Use lines below to write your classified ad. Company name, phone numbers, street address, city, state
and ZIP Code each count as one word. Count words and cost, placing totals in blanks provided:
Words: Cost:
16 (CONSOLIDATED
FEES AND CHARGES
/FEE SCHEDULE ORDI-
NANCE); PROVIDING
FOR REPEALING, SAV-
INGS AND SEVERABIL-
ITY CLAUSES; AND
PROVIDING FOR AN
EFFECTIVE DATE OF
THIS ORDINANCE.
ORDINANCE
NO. 2005-33
AN ORDINANCE OF
THE CITY OF WYLIE,
TEXAS, DENYING THE
REQUEST OF ATMOS
ENERGY CORP., MID-
TEX DIVISION, FOR AN
ANNUAL GAS RELIA-
BILITY INFRASTRUC-
TURE PROGRAM
(GRIP) RATE
INCREASE IN THIS
MUNICIPALITY, AS A
PART OF THE COMPA-
NY'S STATEWIDE GAS
UTILITY DISTRIBU-
TION SYSTEM;
APPROVING COOPER-
ATION WITH OTHER
CITIES WITHIN THE
tising
VERTISING
I
leek payable to
K75098
ATMOS ENERGY FOR NOTICE OF THIS
CORP., MID-TEX DIVI- ORDINANCE TO
SION DISTRIBUTION ATMOS ENERGY
SYSTEM AS PART OF CORP., MID-TEX DIVI-
THE ATMOS CITIES SION.
STEERING COMMIT-
TEE (ACSC); AUTHO- John Mondy, Mayor
RIZING ACSC TO HIRE ATTEST:
LEGAL AND CONSULT-Carole Ehrlich,
ING SERVICES AND TO City Secretary
NEGOTIATE WITH THE~ 9-lt-339-108Ii
COMPANY AND NOTICE TO BIDDE
DIRECT ANY NECES-
SARY LITIGATION; THE CITYOF
AUTHORIZING INTER- SACHSE IS ACCEPT.
VENTION AS PART OF ING SEALED BIDS
ACSC IN ANY APPEAL FOR A CONTRACT OF
OF THE CITY'S SERVICES:
ACTION TO THE RAIL- WRECKER SERVICES
ROAD COMMISSION; CONTRACT
APPROVING COSTS
INCURRED AS REA- The City of Sachse desires
SONABLE AND PRO- to pursue a three (3) year
VIDING A REQUlRE- contract (or Wrecker
MENT FOR PROMPT Services. bid specific a-
REIMBURSEMENT OF tions and a draft contract
COSTS; FINDING THAT may be obtained at the
THE MEETING AT Sachse Police Department,
WHICH THIS ORDI- 3815 Sachse Road,
NANCE IS PASSED IS Sachse, Texas 75048.
OPEN TO THE PUBLIC
AS REQUIRED BY Successful bidders must
LAW; AND PROVIDING comply with all sections of
the proposed contract and
provide a list of fee's
which will be used to
establish the City's fee
schedule. Failure to pro-
vide service fees will be
cause for rejection.
Proposed fee's are subject
to City Council approval.
Sealed bids Addressed to
the City Manager of the
City of Sachse, 5560 Hwy
78 Sachse, Texas 75048,
must be received no later
than 9:59 a.m. August 2,
2005.
All sealed bids received by
the city will be opened in
the City Hall Council
Chambers, 5560 Hwy 78,
Sachse, Texas 75048 at
10:00 a.m. August 2,
2005. Late bids will not be
accepted.
The City of Sachse
reserves the right to reject
any and all bids at its dis-
cretion.
9-2t-1370-54 Ii
_Exp_
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