TITLE
Consider an ordinance approving a negotiated settlement between the Atmos Cities Steering Committee and Atmos Energy, Corp., Mid-Tex Division, regarding the 2014 and 2015 Rate Review Mechanism Filings.
SUMMARY
AGENDA ITEM
An ordinance approving a negotiated settlement between the Atmos Cities Steering Committee and Atmos Energy, Corp., Mid-Tex Division, regarding the 2014 and 2015 Rate Review Mechanism Filings
ORIGINATING DEPARTMENT
City Attorney's Office
BACKGROUND INFORMATION
By law, cities have original jurisdiction of natural gas rates. The City, along with other cities served by Atmos Energy Mid-Tex Division ("Atmos"), is a member of the Atmos Cities Steering Committee ("ACSC"). State law allows for gas providers to request rate adjustments annually through a process called the Gas Reliability Infrastructure Program ("GRIP"). Finding the GRIP process burdensome and restrictive, Atmos and ACSC agreed in 2007 to an alternate review called the Rate Review Mechanism ("RRM").
DISCUSSION/CONCLUSION
On February 28, 2014, Atmos filed an RRM with the ACSC cities requesting an increase of $45.7 million. When ACSC and Atmos were unable to negotiate a compromise, ACSC cities denied the requested rate increase. Atmos then appealed to the Railroad Commission ("Commission") and revised its requested increase to $43.8 million. On April 28, 2015, the Commission issued a Proposal for Decision that was not favorable to ACSC and recommended an $860,000 reduction of Atmos' request.
On February 27, 2015, Atmos filed another RRM with the Atmos cities requesting an increase of approximately $28 million.
After ACSC experts analyzed the Proposal for Decision and the 2015 filing, ASCS attorneys began negotiating a settlement that would resolve both the 2014 and 2015 RRM filings. The settlement agreement attached to the proposed ordinance approves a rate increase of $65.7 million effective on bills on or after June 1, 2015, a reduction of ...
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