HomeMy WebLinkAboutRES 032718-Q - Atmos Tax ChangeRESOLUTION NO. C "5 c- 1 —a
A RESOLUTION BY THE CITY OF GEORGETOWN,
TEXAS ("CITY"), APPROVING A REDUCTION IN RATES
CHARGED BY ATMOS ENERGY CORPORATION, MID-
TEX DIVISION ("ATMOS") AND AUTHORIZING
CONSENT TO A REDUCTION IN RATES CHARGED BY
ATMOS PIPELINE TEXAS ("APT"), ALL RELATED TO
THE REDUCTION IN THE FEDERAL CORPORATE TAX
RATE; FINDING THE REDUCTION IN ATMOS' RATES TO
BE JUST AND REASONABLE; FINDING THAT THE
MEETING COMPLIED WITH THE OPEN MEETINGS
ACT; DECLARING AN EFFECTIVE DATE; AND
REQUIRING DELIVERY OF THE RESOLUTION TO THE
COMPANY AND SPECIAL COUNSEL.
WHEREAS, the City of Georgetown, Texas ("City") 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
service of a gas utility within the municipality; and
WHEREAS, the City has participated in prior cases regarding Atmos as part of a coalition
of cities known as the Atmos Texas Municipalities ("ATM"); and
WHEREAS, pursuant to the Rate Review Mechanism ("RRM") for 2017 filed with the
City on or around March 1, 2017, the City approved an increase in annual revenue of about $48
million; and
WHEREAS, the City, as part of ATM participated in APT's general rate case at the
Railroad Commission of Texas in Gas Utility Docket No. 10580 ("GUD No. 10580"); and
WHEREAS, the corporate tax rate on federal income included in Atmos' current rates and
made part of the $48 million increase in revenue approved via the RRM, was based on a federal -
income -tax rate of 35%; and
RESOLUTION NUMBER: 0'!72)-7 t$ -a
Page 1 of 4
DESCRIPTION: ATMOS_- ReSdLdion Tax ,Chan ge Reduction
DATE APPROVED: 03-27-1 s
WHEREAS, the corporate tax rate on federal income included in APT's current rates and
approved by the Railroad Commission of Texas in GUD No. 10580, was based on a federal -
income -tax rate of 35%; and
WHEREAS, effective January 1, 2018, the corporate tax rate on income is 21%; and
WHEREAS, Atmos seeks administrative approval under Utilities Code § 104.111 to
reduce its annual revenue by approximately $29 million; and
WHEREAS, APT seeks the City's consent to a decrease in rates for APT's rates to be
approved by the Railroad Commission of Texas, which decrease would reduce APT's annual
revenue by about $29 million; and
WHEREAS, ATM's Special Counsel and consultants engaged to review Atmos' and
APT's calculation of the effect of the reduction in the corporate federal -income-tax rate from 35%
to 21% has on Atmos' and APT's rates, have confirmed Atmos' and APT's calculation of the
reduction in Atmos' and APT's revenue is mathematically accurate; and
WHEREAS, the reduction in Atmos' annual revenue is limited to the tax expense related
to the change in the corporate tax rate from 35% to 21% relative to the revenue requirement
established in Atmos' RRM in 2017, and to the revenue requirement established in in GUD No.
10580 for APT, and thus will need to be adjusted further in a future proceeding to account for
excess deferred income taxes resulting from the Tax Cut and Jobs Act of 2017; and
WHEREAS, by approving the reduction in Atmos' rates, and consenting to the reduction
in APT's rates, the City, in future proceedings or in other jurisdictions, is under no obligation to
take the same positions with regard to the methodology resulting in a reduction in rates, as the
methodology underlying the reduction proposed by Atmos or APT, nor shall the City's approval
RESOLUTION NUMBER: 03o)-715 -Q
Page 2 of 4
DESCRIPTION: ATMOS — Resolution Tax Chane Reduction
DATE APPROVED: 03-27-18
of the reduction in Atmos' rates or its consent to the reduction in APT's rates, be used against City
in any future proceeding with respect to different positions the City may take with regard to setting
Atmos' or APT's rates.
NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF
GEORGETOWN, TEXAS THAT:
Section 1. The findings set forth in this Resolution are hereby in all things approved and
incorporated herein. The City Council hereby finds that this resolution implements the Vision Statement
of the City of Georgetown 2030 Comprehensive Plan.
Section 2. Atmos shall submit to the City within fourteen days from the effective date of
this Resolution, amended tariffs reflecting the reduction in revenue noted above.
Section 3. The City's Special Counsel, Mr. Alfred R. Herrera, Herrera Law & Associates,
PLLC, is hereby authorized to consent on behalf of the City as part of ATM in proceedings before
the Railroad Commission of Texas, to the reduction in APT's revenue noted above.
Section 4. To the extent any Resolution previously adopted by the City Council is
inconsistent with this Resolution, it is hereby superseded.
Section 5. The meeting at which this Resolution was approved was in all things conducted
in strict compliance with the Texas Open Meetings Act, Texas Government Code, Chapter 551.
Section 6. If any one or more sections or clauses of this Resolution is judged to be
unconstitutional or invalid, such judgment shall not affect, impair or invalidate the remaining
provisions of this Resolution and the remaining provisions of the Resolution shall be interpreted
as if the offending section or clause never existed.
Section 7. This Resolution shall become effective from and after its passage.
RESOLUTION NUMBER: 5W7� 8 -GL Page 3 of 4
DESCRIPTION: ATMOS - Refplutron Tax Chan a Redo tion
DATE APPROVED: 03-27-18
Section 8. A copy of this Resolution shall be sent to Atmos Mid -Tex, care of Christopher
Felan, Vice President of Rates and Regulatory Affairs, Atmos Energy Corporation, 5420 LBJ
Freeway, Suite 1600, Dallas, Texas 75240 and to Mr. Alfred R. Herrera, Herrera Law &
Associates, PLLC, 816 Congress Avenue, Suite 950, Austin, Texas 78701.
PASSED AND APPROVED this a_i
ATTEST:
Shelley Nowli ny
Secretary
APPROVED S TO FORM:
Charlie McNabb, City Attorney
day of Mo_' "C� 12018.
F�
Dale Ross, Mayor
RESOLUTION NUMBER: 03a%I8-Q_ Page 4 of 4
DESCRIPTION: &TMOS - Resolution Tax Change Reduction
DATE APPROVED: 03-27-18