TITLE
Consider a memorandum/resolution approving a negotiated settlement between the Atmos Cities Steering Committee and Atmos Energy Corp., Mid-Tex Division regarding the 2018 Rate Review Mechanism filings.
SUMMARY
DATE: September 18, 2018
TO: Ronald L. Olson, City Manager
VIA: Kathy Davis, City Attorney
FROM: Traci Briggs, Deputy City Attorney
SUBJECT: Resolution approving a negotiated settlement between the Atmos Cities Steering Committee and Atmos Energy Corp., Mid-Tex Division regarding the 2018 Rate Review Mechanism Filings
BACKGROUND AND FINDINGS:
The city is a member of the Atmos Cities Steering Committee (ACSC), a group of 172 Mid-Texas cities served by Atmos Energy Corp., Mid-Tex Division (Atmos). Since 2007, ACSC and Atmos have used a substituted rate review process called Rate Review Mechanism (RRM) instead of the statutory Gas Reliability Infrastructure Program (GRIP) for Atmos to request rate adjustments, with the RRM process allowing for a more comprehensive rate review and annual evaluation of expenses, revenues and capital expenses.
On April 1, 2018, Atmos filed a rate request with the cities pursuant to the RRM. Atmos claimed that its cost-of-service in a test year ending December 31, 2017, entitled it to additional system-wide revenues of $42.0 million. Application of the standards set forth in ACSC’s RRM Tariff required Atmos to reduce its request to $27.4 million. After review of the consultants’ report, Atmos offered to settle for a system-wide increase of $25.9 million. Following further negotiations, ACSC’s Executive Committee agreed to recommend a system-wide rate increase of $24.9 million. The increase, when allocated to ACSC members, results in an increase of $17.8 million. The effective date for new rates is October 1, 2018.
The average residential customer will see an increase of $1.06 or 1.94%. The average commercial customer will see an increase of $3.20 or 1.21%. The average industrial customer will see an i...
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