There's going to be a showdown on Monday. The City Council will vote on rescinding permission for Atmos Energy to raise its rates. The two sides have been negotiating for more than a year. The city council tentatively approved a new rate system in May of this year. But after spending a little time with a consultant, city officials decided Atmos can do better.
For those of you who want to see the exact dollar figures beeing disputed, we have a city statement and an Atmos statement both posted below.
City of Lubbock Special City Council to Rescind Atmos Energy's New Rate Plan
In May 2008, the city council approved Atmos Energy Corporation's intent to implement a new rate plan for gas service within the city limits establishing retail gas utility rates as outlined in Atmos Energy's Statement of Intent filed with the City. The city engaged the services of a rate consultant used throughout Texas on behalf of municipalities to review the anticipated initial rate change filing.
In compliance with the rate plan, the city requested that Atmos implement a customer credit totaling $673,000 to be implemented December 1, 2008, and extended through June 30, 2009. In addition, the city requested a component of the rate plan to limit operation and maintenance expenses to $5,731,725.
Atmos was willing to provide a customer credit of $450,000 and an operation and maintenance expense limit of $6,128,644. The impact of Atmos' proposed operation and expense limit could be an increase of approximately $400,000 annually in additional rates to Atmos' customers.
Due to these recent changes, the City of Lubbock and Atmos Energy have been unable to reach an agreement. As a result, on Monday, December 22, the city council will hold a special city council meeting to consider rescinding their approval of the rate plan and the retail gas utility rates as outlined in the Statement of Intent.
The following is a copy of the e-mail that the city received from Atmos:
After careful consideration of the latest proposed settlement to the CCVP filing before you, Atmos must reject the offer. The long term effects of the additional stipulations included by the consultant are contrary to the approved tariff and erode the company's ability to earn the agreed upon rate of return. As you know, the company moved a long way in order to craft the tariff that was ultimately approved by council. The CCVP was a win for all parties and in our opinion the proposed changes puts Atmos in a losing position.
While we are certainly open to further discussions, perhaps we have to professionally agree to disagree and start anew. Because of the length of time that has passed, the financial data being evaluated is almost an entire year old and is therefore stale. We will evaluate our options and inform you as soon as a determination of our best course of action is available I anticipate that our determinations will be complete before the end of December.
Regardless of the decision made by council, we want to keep our lines of communication open and continue the professional relationship that we have built.
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