Title
Approving a resolution denying an increase in rates requested by Atmos Energy Corporation - MidTex Division, submitted on or about February 28, 2014 under the rate review mechanism; finding Atmos' request unreasonable; directing Atmos Energy to reimburse the City's rate-case expenses; authorizing the City's participation in the appeals Atmos may take denying its requested increase; requiring delivery of the resolution to the Company and the City's special counsel; finding that the meeting complied with the Open Meetings Act; declaring an effective date; and making other findings and provisions related to the subject
Summary
The City of Pflugerville has participated in prior rate cases as a member of the Atmos Texas Municipalities (ATM) coalition. This coalition consists of 53 Texas cities who are able to address their concerns with Atmos rate proposals as a group. Herrera & Boyle, PLLC has provided representation for the ATM. The last rate case in 2012 resulted in a rate increase that was reduced from Atmos' original request of $49.1 million to $24.1 million.
The proposed resolution denies the Atmos rate increase that would increase their revenues by $45.6 million. The Atmos retail customer's base rate would increase 9.96% with this proposed increase. A rate review on behalf of ATM recommends an increase of no more than $26.6 million. Negotiations between Atmos and ATM failed to produce an agreement. It is anticipated that Atmos will appeal the rate increase denial and this process will move to the Railroad Commission for resolution. Pflugerville's participation in the appeals process is also proposed in this resolution. Additional background information is included in the Agenda Information Sheet attached to this agenda item.
Deadline for City Council Action
Action is requested by May 31, 2014 in order to participate in the ATM denial of the requested Atmos rate increase.
Fiscal Impact
The fiscal impact of any rate increase by Atmos would be reflected in the Atmos bills for city facilities. The total for fiscal year 2013 was approximately $28,000.
Staff Recommendation
Approve the resolution.
Drafter
Lauri Gillam
Assistant City Manager