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July 28, 2022 <br /> MODEL STAFF REPORT FOR RESOLUTION OR ORDINANCE <br /> BACKGROUND AND SUMMARY <br /> The City, along with 181 other Mid-Texas cities served by Atmos Energy Corporation, Mid- <br /> Tex Division ("Atmos Mid-Tex" or "Company"), is a member of the Atmos Cities Steering <br /> Committee ("ACSC"). In 2007, ACSC and Atmos Mid-Tex settled a rate application filed by the <br /> Company pursuant to Section 104.301 of the Texas Utilities Code for an interim rate adjustment <br /> commonly referred to as a GRIP filing (arising out of the Gas Reliability Infrastructure Program <br /> legislation). That settlement created a substitute rate review process, referred to as Rate Review <br /> Mechanism ("RRM"), as a substitute for future filings under the GRIP statute. <br /> Since 2007, there have been several modifications to the original RRM Tariff. The most <br /> recent iteration of an RRM Tariff was reflected in an ordinance adopted by ACSC members in 2018. <br /> On or about April 1, 2022, the Company filed a rate request pursuant to the RRM Tariff adopted by <br /> ACSC members. The Company claimed that its cost-of-service in a test year ending December 31, <br /> 2021, entitled it to additional system-wide revenues of$141.3 million. <br /> Application of the standards set forth in ACSC's RRM Tariff reduces the Company's request <br /> to $115 million, $83.26 million of which would be applicable to ACSC members. ACSC's <br /> consultants concluded that the system-wide deficiency under the RRM regime should be $95.8 <br /> million instead of the claimed $141.3 million. <br /> The Executive Committee recommends a settlement at $115 million. The Effective Date for <br /> new rates is October l,2022. ACSC members should take action approving the Resolution/Ordinance <br /> before September 30, 2022. <br /> 2557i35/8444378 1 <br />