Title
Consider a memorandum/resolution approving a negotiated settlement between the Atmos Cities Steering Committee and Atmos Energy Corp, Mid-Tex Division regarding the 2021 Atmos Rate Review Mechanism Filing.
Summary
DATE: August 17, 2021
TO: Kent Cagle, City Manager
FROM: Traci Briggs, City Attorney
SUBJECT: Approving a negotiated settlement between the Atmos Cities Steering Committee and Atmos Energy regarding the 2021 Atmos Rate Review Mechanism
BACKGROUND AND FINDINGS:
The City, along with 171 other cities served by Atmos, Mid-Tex Division (Atmos), is a member of the Atmos Cities Steering Committee (ACSC). In 2007, ACSC and Atmos settled a rate application filed by the company pursuant to Section 104.301 of the Texas Utilities Code for an interim rate adjustment commonly referred to as a GRIP filing (arising out of the Gas Reliability Infrastructure Program legislation). That settlement created an alternate rate review process, referred to as Rate Review Mechanism (RRM), as a substitute for future filings under the GRIP statute. Attached to the staff report for additional background is a frequently asked questions document prepared by attorneys with Lloyd Gosselink, the law firm that represents ACSC.
On or about April 1, 2021, Atmos filed a rate request pursuant to the RRM Tariff adopted by ACSC members. Atmos claimed that its cost-of-service in a test year ending December 31, 2020, entitled it to additional system-wide revenues of $43.4 million. Application of the standards set forth in ACSC’s RRM Tariff reduces Atmos’ request to $40.5 million, $29.3 million of which would be applicable to ACSC members. ACSC’s consultants concluded that the system-wide deficiency under the RRM regime should be $22.34 million instead of the claimed $40.5 million. The amount of the $22.34 million deficiency applicable to ACSC members would be $16.8 million.
After Atmos reviewe...
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