TITLE
Consider an ordinance approving a negotiated settlement between the Atmos Cities Steering Committee and Atmos Energy Corp, Mid-Tex Division, regarding the 2019 Rate Review Mechanism Filing.
SUMMARY
DATE: September 17, 2019
TO: Ronald L. Olson, City Manager
FROM: Kathy Davis, City Attorney
SUBJECT: An ordinance approving a negotiated settlement between the Atmos Cities Steering Committee and Atmos for the 2019 Rate Review Mechanism Filing
BACKGROUND AND FINDINGS:
The City, along with other similarly-situated cities served by Atmos Energy Corp., Mid-Tex Division (“Atmos”), is a member of the Atmos Cities Steering Committee (“ACSC”). The Rate Review Mechanism (“RRM”) was originally adopted by ACSC member cities in 2007 as an alternative to the Gas Reliability Infrastructure Program (“GRIP”), the statutory provision that allows Atmos to bypass the City’s rate regulatory authority and increase its rates annually to recover capital investments.
On April 1, 2019, Atmos filed its RRM with ACSC cities for the year ending on December 31, 2018. The request was for $70 million in additional revenues on a system-wide basis. Set standards in a previously-approved RRM tariff required that request to be reduced to $54 million, $39.3 million of which is applicable to the ACSC cities. (The City of Dallas has a separate review process, which accounts for the remaining $10.7 million.)
ACSC and Atmos have reached an agreement, reflected in the attached ordinance, to reduce Atmos’ request. Atmos will see an increase of $35.4 million, exclusive of the City of Dallas. The increase will be effective for customer bills issued on or after October 1, 2019. The monthly bill impact for the typical residential customer will be $2.05, or about 3.7%. The monthly bill impact for the typical commercial customer will be $6.18, or about 2.31%.
The ACSC Executive Committee and its designated legal counsel and consultants recommend that all Cities adopt the ordinan...
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