RE 2007-0911.2
RESOLUTION NO. ~7-tJ9//. 'Z
A RESOLUTION OF THE CITY OF COPPELL, TEXAS, DENYING THE
REQUEST OF ATMOS 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;
SUPPORTING STATUTORY REFORM OF THE TEXAS GRIP
STATUTE, FINDING THAT THE MEETING AT WHICH TillS
RESOLUTION IS PASSED IS OPEN TO THE PUBLIC; AND
PROVIDING FOR NOTICE OF THIS RESOLUTION TO ATMOS
ENERGY CORP., MID- TEX DIVISION AND THE CITY'S LEGISLATIVE
DELEGATION.
WHEREAS, the City of Coppell, Texas ("City") is a gas utility customer of Atmos
Energy Corp., Mid- Tex Division ("Atmos Mid- Tex" or "the Company"), and a regulatory
authority with an interest in the rates and charges of Atmos Mid- Tex; and
WHEREAS, Atmos Mid- Tex made filings with the City and the Railroad Commission of
Texas ("Railroad Commission") on or about May 31, 2007, proposing to implement interim rate
adjustments ("GRIP rate increases"), pursuant to Texas Utilities Code S 104.301, on all
customers served by Atmos Mid- Tex, effective July 30, 2007; and
WHEREAS, the Gas Reliability Infrastructure Program (GRIP) statute approved in the
2003 Regular Session of the 78th Legislature changes 100 years of Texas law and allows a
natural gas utility to implement annual surcharges for increases in investment without having to
account for the offsetting decreases in costs or increases in revenue experienced by the utility;
and
WHEREAS, Texas is the only state out of the twelve states served by Atmos that has a
GRIP statute that allows for piecemeal recovery for any change to invested capital; and
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WHEREAS, Atmos has implemented four GRIP surcharges and collected more than $20
million in GRIP surcharges from customers since the utility acquired the TXU Gas system in
2004;
WHEREAS, the City supports the statutory reform of the GRIP statute to ensure fairness
to ratepayers and to eliminate piecemeal recovery for any change to invested capital; and
WHEREAS, Atmos Mid- Tex was recently granted a rate increase as a result of its filing
in GUD No. 9670, in which the Final Order was only signed on March 29,2007; and
WHEREAS, in GUD No. 9670, it was determined that Atmos Mid- Tex had
inappropriately included certain expenditures in its prior GRIP rate increases for rate years 2003,
2004, and 2005; and
WHEREAS, the City, as a regulatory authority, suspended the July 30, 2007, effective
date to examine this latest GRIP filing to determine its compliance with the Texas Utilities Code
and Railroad Commission final order in the most recent Atmos Mid- Tex rate case; and
WHEREAS, the City has joined with other cities to review the Company's filing, said
coalition being known as Atmos Cities Steering Committee ("ACSC");
WHEREAS, the consultant hired by Steering Committee has reviewed the GRIP
surcharge application and has issued a final report finding that the Company has included
millions of dollars of expenses in the current GRIP surcharge that are inconsistent with the Texas
Utilities Code and Railroad Commission final order in the most recent Atmos Mid- Tex rate case
and not related to ensuring the safety and reliability of the system;
WHEREAS, counsel for the Steering Committee, upon review of the Company's filing
and the consultant's report, recommends finding that the Company's proposal is unjustified and
unreasonable; and
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WHEREAS, ratepayers of Atmos Mid- Tex, including the City and its residents, will be
adversely impacted by the proposed GRIP rate increases.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY
OF COPPELL, TEXAS:
SECTION 1. That the Company's GRIP rate increase request is found to be
unreasonable and inconsistent with the Texas Utilities Code and Railroad Commission final
order in GUD 9670, Atmos Mid- Tex most recent rate case, and is therefore denied in all
respects.
SECTION 2. This Resolution shall become effective immediately from and after its
passage, as the law and charter in such cases provide.
SECTION 3. That the City hereby advocates statutory reform of the Texas GRIP statute
to ensure fairness to ratepayers and to eliminate piecemeal recovery for any change to invested
recovery.
SECTION 4. That the City calls upon its state representatives and senator to support
legislation in the 8151 Regular Session of the Texas Legislature that would reform the Texas
GRIP statute to ensure fairness for ratepayers and eliminate piecemeal recovery for any changes
to invested capital.
SECTION 5. That it is hereby officially found and determined that the meeting at which
this Resolution 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 6. A copy of this Resolution, constituting final action on the Company's
application, be forwarded to the following:
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Charles R. Yarbrough, II
Atmos Energy Corporation
5420 LBJ Freeway, Suite 1800
Dallas, Texas 75240
Lloyd Gosselink Blevins Rochelle & Townsend
c/o Geoffrey Gay
P.O. Box 1725
Austin, Texas 78767-1725.
SECTION 7. A copy of the resolution shall be sent to the elected lawmakers
representing the City's interests in the Texas House and Senate.
DULY PASSED and approved by the City Council of the City ofCoppell, Texas, on this
the 11th day of September, 2007.
ATTEST:
APPROVED AS TO FORM:
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