ORD 2010-27TOWN OF TROPHY CLUB
ORDINANCE NO. 2010 - 27
A ORDINANCE OF THE TOWN COUNCIL OF THE TOWN OF
TROPHY CLUB TEXAS, ("TOWN") APPROVING A CHANGE 1N THE
TARIFFS OF ATMOS ENERGY CORPORATION, MID-TEX DIVISION
("ATMOS"), AS A RESULT OF A SETTLEMENT BETWEEN ATMOS
AND THE ATMOS TEXAS MUNICIPALITIES ("ATM"); FINDING THE
RATES SET BY THE ATTACHED TARIFFS TO BE JUST AND
REASONABLE; FINDING THAT THE ADDITIONAL COST FOR
REPLACING STEEL SERVICE LINES IS APPROPRIATE AND IS
APPROVED SUBJECT TO A PRUDENCE REVIEW: FINDING THAT
THE CONTINUATION OF THE RATE REVIEW MECHANISM ("RRM"),
AS AMENDED, FOR TWO YEARS IS REASONABLE; REQUIRING
DELIVERY OF THE ORDINANCE TO THE COMPANY AND LEGAL
COUNSEL; DETERMINING THAT THE MEETING AT WHICH THIS
ORDINANCE WAS APPROVED COMPLIED WITH THE OPEN
MEETINGS ACT; MAKING OTHER FINDINGS AND PROVISIONS
RELATED TO THE SUBJECT; AND DECLARING AN EFFECTIVE
DATE.
WHEREAS, the Town is a regulatory authority under the Gas Utility Regulatory
Act ("GURA") and under §103.001 of GURA has exclusive original jurisdiction over
Atmos Energy Corporation — Mid -Tex Division ("Atmos") rates, operations, and services
as a gas utility within the municipality; and,
WHEREAS, the Town has participated in prior cases regarding Atmos as part of
a coalition of cities known as the Atmos Texas Municipalities ("ATM"), and,
WHEREAS, on or about April 15, 2010 Atmos filed for an increase in rates,
pursuant to the Rate Review Mechanism ("RRM"), of approximately $70 million; and,
WHEREAS, almost one-half of the increase for RRM this year is the result of the
rate of return true -up component of RRM; and
WHEREAS, the rate of return true -up component of RRM has been controversial
and difficult to apply; and
WHEREAS, over the past few years there have been explosions of Atmos' steel
service lines in the Mid -Tex Division which have caused serious property damage and
loss of life; and
WHEREAS, the most at -risk steel service lines need to be replaced over the next
two years; and
Ordinance 2010-27 (File ID 2010-529)
WHEREAS, after months of negotiations and after months of reviewing Atmos'
books and records by ATM's experts , a settlement was agreed to by Counsel for ATM,
acting on behalf of ATM's Executive Committee, with Atmos, which provides for: (1) the
replacement of the most at -risk steel service lines, to be paid for with a small increase in
the customer charge for residential and commercial customers; (2) a reduction of 61%
of Atmos' requested increase in rates for 2010; (3) the continuation of RRM for two
more years but without the rate of return true -up and (4) the filing of a general rate case
by Atmos on or before June 1, 2013; and
WHEREAS, the Executive Committee of ATM and its lawyers recommend that
Council approve the attached settlement as set forth in Attachment A along with the
attached tariffs which are set forth as Attachment B.
NOW, THEREFORE, BE IT ORDAINED BY THE TOWN COUNCIL OF THE
TOWN OF TROPHY CLUB, TEXAS THAT:
Section 1. That the findings set out in the preamble to this Ordinance are
hereby in all things approved and adopted.
Section 2. That the settlement agreement, Attachment A, on balance is in the
public interest and is approved.
Section 3. The rates contained in the attached tariffs, Attachment B, are just
and reasonable and are hereby approved subject to a prudence review of the steel pipe
replacement expenditures in the next general rate proceeding.
Section 4. That a copy of this Ordinance shall be sent to Mr. David Park, Vice
President for Rates and Regulation, Mid -Tex Division, Atmos Energy Corporation, 5420
LBJ Freeway, Suite 1800, Dallas, Texas 75204, and to Jim Boyle, Counsel for ATM, at
Herrera & Boyle, PLLC, 816 Congress Avenue, Suite 1250, Austin, TX 78701,
Section 6. 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.
Section 7. That this Ordinance shall become effective immediately from and
after its passage.
PASSED and APPROVED this 27th day of September 2010.
ATTEST-
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Ordinance 2010-27 (Fife ID 2010-529)
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G�onnie White, Mayor