Title
Approving a resolution with the caption reading: A RESOLUTION BY THE CITY OF PFLUGERVILLE, TEXAS, ("CITY") DENYING A RATE INCREASE REQUESTED BY ATMOS ENERGY CORPORATION ON OR ABOUT JANUARY 31, 2012; DETERMINING THAT THE MEETING COMPLIED WITH THE TEXAS OPEN MEETINGS ACT; AND MAKING OTHER FINDINGS AND PROVISIONS RELATED TO THE SUBJECT.
Summary
On February 14, 2012, the City Council passed a resolution suspending the effective date of the rate increase filing by Atmos Energy. This suspension allowed the Atmos Texas Municipalities (ATM) time to review the rate application. The ATM's legal counsel, Herrera & Boyle, PLLC are recommending that the rates that are proposed by Atmos be denied due to discovery that has indicated a number of issues that do not support the rate increase. In summary, discovery indicates that a number of revenue, tax and depreciation assumptions made by Atmos in the documentation for its rate increase are subject to dispute. An information sheet that lists these reasons in detail is attached to this agenda item.
The special counsel for the ATM will continue settlement efforts through negotiations. Once the City denies Atmos' request through this proposed action, Atmos will submit an appeal to the Railroad Commission who will then consider the rate increase. ATM will continue to participate in those proceedings.
Deadline for City Council Action
The City must take action to deny the proposed rates by June 11, 2012. If the City does not take action by that date, Atmos' proposed rates will be deemed approved by operation of law, subject to the City's right to continue a hearing individually to address Atmos' rate application.
Projected Future City Council Action
Consideration to approve a settlement agreement at such time as recommended.
Fiscal Impact
As proposed by Atmos, the proposed rates have not changed since Council's consideration in February. Residential customers would see a 13.6% increase in the average monthly bill. The proposed increase in the fixed customer charge in relation to the usage charge would result in a steeper percentage increase for those customers using less than the average amount each month.
Staff Recommendation
Approve the resolution denying the rate increase requested by Atmos Energy.
Drafter
Brandon Wade
City Manager