O487L91Z091►F=11 1 :4LA lo :
AN ORDINANCE of THE CITY COUNCIL of THE CITY of
I ENNEDALE, TEXAS, ("CITY") APPROVING A NEGOTIATED
RESOLUTION BETWEEN THE ATMOS CITIES STEERING
C OMMITTEE ("ACSC" OR "STEERING COMMITTEE") AND ATMOS
ENERGY CORP., MID-TEX DIVISION ( "ATMOS MID -TEX" OR
"COMPANY") PANY ") REGARDING THE COMPANY'S FOURTH ANNUAL
BATE REVIEW MECHANISM ( "RRM ") FILING IN ALL CITIES
EXERCISING ORIGINAL JURISDICTION; DECLARING EXISTING
RATES To BE UNREASONABLE; ADOPTING TARIFFS THAT
REFLECT RATE ADJUSTMENTS CONSISTENT WITH THE
NEGOTIATED SETTLEMENT AND FINDING THE RATES To BE SET
BY THE ATTACHED TARIFFS To BE JUST AND REASONABLE;
REQUIRING THE COMPANY To REIMBURSE CITIES' REASONABLE
RATEMAI IN EXPENSES; REPEALING CONFLICTIN
RESOLUTIONS OR ORDINANCES; DETERMINING THAT THIS
ORDINANCE WAS PASSED IN ACCORDANCE WITH THE
REQUIREMENTS of THE TEXAS OPEN MEETINGS ACT; ADOPTING
A SAVINGS CLAUSE; DECLARING AN EFFE BATE; AND
REQUIRING DELIVERY of THIS ORDINANCE To THE COMPANY
AND THE STEERING COMMITTEE' LEGAL OUNSEL�
WHEREAS, the City of I ennedale, Texas ("City") 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 City is a member of the Atmos Cities Steering Committee
("ACSC" or "Steering Committee"), a coalition of approximately 154 similarly situated
cities seared 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 (such participating cities are referred to herein as "A CSC Cities "); and
WHEREAS, pursuant to the terms of the agreement settling the C ompany's 2 007
Statement of Intent to increase rates, ACSC C ities ACS and the Company worked
collaboratively to develop a Rate Review Mechanism `iRRM" tariff that allows for an
expedited rate review process controlled in a three -year experiment by ACS ACSC Cities as
a substitute to the current GRIP process instituted by the Legislature; and
WHEREAS, the City book 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, the 2008 Settlement Agreement contemplates reimbursement of
ACSC Cities' reasonable expenses associated with RRM applications; and
WHEREAS, the Steering Committee and Atnmos Mid -Tex agreed to extend the
RRM process in reaching a settlement in 2010 on the third RRM filing; and
WHEREAS, on or about April 1, 201 I the Company filed with the city its fourth
annual RRM filing, requesting to increase natural gas base rates by $15.7 million; and
WHEREAS, ACSC coordinated its review of Atmos Mid -Tea's RRM filing by
designating a Settlement Committee made up of ACSC representatives, assisted by
ACSC attorneys and consultants, to resolve issues identified by Ac in the
Company's RRM filing; and
WHEREAS, independent analysis by A 's rata expert concluded that Atmos
Mid -Tex is unable to justify an increase over current rates except for undisputed costs of
$6.6 million to cover the steel service lire replacement program initiated in 010; and
WHEREAS, the ACSC Settlement Committee, as well as ACSC lawyers and
consultants, recommend that ACSC Cities approve the attached rate tariffs
( "Attachment A" to this ordinance), which will increase the company's revenue
requirement by $6.6 million to extend current recovery of incremental direct costs of the
steel service line replacement program authorized by ACSC cities in ordinances
passed in 010 and
WHEREAS, the attached tariffs implementing new rates are consistent with the
negotiated resolution readied by Acc cities and are just, reasonable, and in the
public interest.
NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL of THE CITY
OF KENNEDALE, TEXAS:
Section 1.
That the findings set forth in this Ordinance are hereby in all things approved.
Section 2.
That the City Council finds the existing rates for natural gas service provided by
Atmos Mid -Tex are unreasonable and new tariffs which are attached hereto and
I
ncorporated herein as Attachment A, are just and reasonable and are hereby adopted,
Section 3.
That Atmos Mid -Tex shall reimburse the reasonable ratemaking expenses of the
ACSC Cities In processing the Company's rate application.
Section 4t
0)
That to the extent any resolution or ordinance previously adopted by the Council
is inconsistent with this Ordinance, it is hereby repealed.
Section 5.
That the meeting at which this Ordinance was approved was in all things
conducted in strict compliance with the Texas Open Meetings Act, Texas Government
Code, Chapter 551.
Se ction 6.
That if any one or more sections or clauses of this Ordinance is adjudged to be
unconstitutional or invalid, such judgment shall not affect, impair or invalidate the
remaining provisions of this ordinance and the remaining provisions of the Ordinance
shall be interpreted as if the offending section or clause never existed.
Section 7.
That this Ordinance shall become effective from and after its passage with rates
authorized by attached Tariffs to he effective for hills rendered on or after September 1,
2011,
Section 8.
That a copy of this ordinance shall be sent to Atmo Mid -Tex, care of David
Park, Vice President Rates and Regulatory Affairs, at Atmos Energy Corporation, 5420
LBO! Freeway, Suite 1862, Dallas, Texas 75240, and to Geoffrey Gay, General Counsel
to ACSC, at Lloyd Go plink Rochelle & Townsend, P.C., P.O. Box 1725, Austin, Texas
78767-1725.
PASSED AND APPROVED this 'ilfh day of August, 2011.
Mayor Bryan LaniChorst
ATTE T:
(2,
City Secretar JAmethyst G. Cirmo
APPROVED AS TO FORM:
City Attorney, Wayne K. Olson
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