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2018-008 Approving a Tariff-Annual Rate Review-Atmos Energy CorpAN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF PARIS, TEXAS, APPROVING A TARIFF AUTHORIZING AN ANNUAL RATE REVIEW MECHANISM ("RRM") AS A SUBSTITUTION FOR THE ANNUAL INTERIM RATE ADJUSTMENT PROCESS DEFINED BY SECTION 104.301 OF THE TEXAS UTILITIES CODE, AND AS NEGOTIATED BETWEEN ATMOS ENERGY CORP., MID-TEX DIVISION ("ATMOS MID-'TEX" OR "COMPANY"') AND THE STEERING COMMITTEE OF' CITIES SERVED BY ATMOS; REQUIRING THE COMPANY TO REIMBURSE CITIES' REASONABLE RATEMAKING EXPENSES; ADOPTING A SA'V'INGS CLAUSE; DETERMINING THAT THIS ORDINANCE WAS PASSED IN ACCORDANCE WITH THE REQUIREMENTS OF THE OPEN MEETINGS ACT; DECLARING AN EFFECTIVE DATE; AND REQUIRING DELIVERY OF THIS ORDINANCE TO THE COMPANY AND LEGAL COUNSEL FOR THE STEERING COMMITTEE. WHEREAS, the City of Paris, Texas ("City") is a gas utility customer of Atmos Energy Corp., Mid -Tex Division ("Atmos Mid -Tex" or "Company") and a regulatory authority with an interest in the rates and charges of Atmos Mid -Tex; and WHEREAS, the City and similarly -situated Mid -Tex municipalities created the Steering Committee of Cities Served by Atmos to efficiently address all rate and service matters associated with delivery of natural gas; and WHEREAS, the Steering Committee formed an Executive Committee to direct legal counsel and to recommend certain specific actions to all aligned Mid -Tex Cities through resolution or ordinance; and WHEREAS, pursuant to the terms of a November 2007 agreement between the Steering Committee and Atmos Mid -Tex that settled the Company's interim rate filing under Section 104.301 of the Texas utilities Code (a "GRIP" rate case), the Steering Committee and the Company collaboratively developed a Rate Review Mechanism ("RRM"') Tariff", ultimately authorised by the City in 200'8, that allows for an expedited rate review process as a substitute for the GRIP process; and WHEREAS, the City has kept some form of a RRM Tariff in place until 2017.when it adopted an ordinance approving an RRM Tariff' filing settlement and specifically calling for termination of the existing RRM Tariff and negotiation of a replacement RRM Tariff following the Railroad Commission's decision in a then -pending Atmos Texas Pipeline case (GUD No. 10580)'; and WHEREAS, the Steering, Committee's Executive Committee has recently approved a settlement with the Company on the attached RRM Tariff that contains certain notable improvements, from a consumer perspective, over the prior RRM Tariff, including a reduced rate of return on equity, acceptance of certain expense adjustments made by the Railroad Commission in the Order in GUD No. 10580, and the addition of' two months to the time for processing a RRM Tariff application; and WHEREAS, the RRM Tariff contemplates reimbursement of Cities' reasonable expenses associated with RRM Tariff applications; and WHEREAS, the Steering Committee's Executive Committee recommends that all Steering Committee member cities adopt this ordinance and the attached RRM Tariff,! and WHEREAS, the attached RRM Tariff is just, reasonable and in the, public interest, NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY 00 PARIS, TEXAS. Section 1. That the findings set forth in this Ordinance are hereby in all things approved. Section 2. That the attached RRM Tariff re-establishing a form of Rate Review Mechanism is just and reasonable and in the public interest, and is hereby adopted. Section 3. That Atmos Mid -Tex shall reimburse the Cities' reasonable expenses associated with adoption of this Ordinance and the, attached RRM Tariff and in processing future RRM Tariff applications filed pursuant to the attached tariff. Section 4. That to the extent any resolution or ordinance previously adopted by the City is inconsistent with this Ordinance, it is hereby repealed. Section S. That the meeting at which this Ordinance was approved was in all things conducted in strict compliance with the Texas Open Meetings Act, Texas Government Code, Chapter 551. Section 6. That if any one or more sections or clauses of this Ordinance is adjudged to be unconstitutional or invalid, such judgment shall not affect, impair or invalidate the remaining provisions of this Ordinance , and the remaining provisions sions of this Ordinance shall be interpreted as if the offending section or clause never existed. Section 7. That this Ordinance shall become effective from and after its passage, Section 8. That a copy of this Ordinance shall be, sent to Atmos Mid -Tex, care of Chris Felan, Vice President of Rates and Regulatory Affairs, Atmos Energy Corporation, Mid -Tex Division, 5420 LBJ Freeway, Suite 1862, Dallas, Texas 75240, and to Geoffrey Gay, General Counsel to Mid -Tex Cities, at Lloyd Gosselink Rochelle & Townsend, P.C., 816 Congress Avenue, Suite 1900, Austin, Texas 78701,, 2 PASSED AND APPROVED this 12th day ofMarch, 2018, StevV' e6fford, D., Maywor ATTEST: co % S, ice Ellis, City Clerk Stfiahie H. Harris, City Attorney ATMOIS ENERGY CORPORATION MI -T DIVISION .......... . . . ..... . .... . . . . .. . . . .......... . .. . . . ............. RATE SCHEDULE: RR M — Rate Review Mechanism APPLICABLE TO: ALL CITIES IN THE MID-TEX DIVISION AS IDIENTIIFIED IN EXHIBIT A TO THIS RATE SCHEDULE ---------- EFFECTIVE DATE: Bill's Rendered on and after 04/0112018 . . ....... . . . . . .................... . .. ..... . ....... � FFCE 2� ........ ..... . . ..... ........... consistent with the rate making treatments approved in the Final Order. Incentive compenisatioin (Management Incentive Plan, Variable, Pay Plan arf* Long Term Incentive Plan) related to Atmos' Shared Services Unilit will �&-, applied consistent with treatment approved in GUID 10580, Additionally, O&M adjustments will be incorporated and appliedas modified' by a final order, noll subject to appeal, issued by the Railroad Commission of Texas in subsequenit rate cases involving; the Atmos Mid -Tex or West Texas divisionis. Known and measurable adjustments shall be led to those changes that have occurred prior to the Filing Date. 01I may be, adjusted for atypical and non-recurring items. Shar-www rs shall be recal�culated each year based on the latest component factors uised during the Test Period, but the methodology used will be that appIroved in the Final Order in GUD 10580. DEP = depreciation expense calculated at depreciation rates approved by the Finial Order. Additionally, if depreciation rates are approved in a subsequent final oIrder, not subject to appeal, issued by the Railroad Commission of Texas for thie d -Tex division those rates, would be Www w- for subsequent RRM; filings. ATMOS ENERGY CORPORATION MID -TE X DIVISION RATE SCHEDULE: RRM - Rate Revi'ew Mechanism APPLICABLE TO: ALL CITIES IN THE MID-TEX DIVISION AS IDENTIFIED, ISI' EXHIBIT A TO THIS RATE SCHEDULE . ....... . . . . . . . . . . .. . .... . .............. ----- ------- EFFECTIVE DATE: Bills Rendered oin arra after 04/011/2018 3 ...m. and other postemployment benefits recovered in rates. TAX = income tax and taxes other than income tax from the Test Period' adjuisted for known and measurable changes occurring after the Test Period and before the Filing Date, and prepared consistent with the rate making treatments approved ini, the Final Order. Atmos Energy shall comprehensively account for, including establishing a regulatory liability to account for, any statutory change in tax expense that is applicable to months during the Test Period in the calculation to ensure recovery of tax expense under new andold income tax rates. CD - interest on customer deposits. 0=1 ATMOS ENERGY CORPORATION MID-TEX DIVISION RATE SCHEDULE: RRM — Rate Review Mechanisirin APPLICABLE TO. ALL CITIES IN THE MID-TEX DIVISION AS IDENTIFIED IN EXHIBIT A TO THIS RATE SCHEDULE .. . ... ........ . .......... - ... . ....... . - - ---- EFFECTIVE DATE: Bills Rendered on and after 04/01/2018 PAGE: 4 . ... . ...... .......... . ... ..... A sworn statement shall be filed by an Officer of the, Company affirming that the filed schedules, are in compliance with the provisions of this Rate Review Mechanism aind are true and correct to thie we of hiis/her knowledge, information, and belief. No testimony shall be filed', but a brief narrative expilanation, shall be provided of any changes to corporate structure, accounting methodologies, allocation of common costs, or atypical or non- recurring items included' in the filing. The regulatory authooriginal jurisdiction over the Company's rates, shall review and render a decision owany"s proposed rate, adjustmenit prior to the Effective Date, The Company shalil provideall suipP : lemental Information requested to ensure an opportunity for adequate review by the relevant regulatory authority. The Company shall nopose any limits upon the provision of suipplemental t Wo original request. The regulatory authority may propose any adjustments it determines to be required to bring the proposed rate adjustment into compliance with the provisions of this tariff., The regulatory authority may disallow any net plant investment that is not shown to be prudently incurred. Approval by the regulatory authority of net pliant investment pursuant to the provisions of this ta, riff shall constitute a finding that such net plant investment was prudently incurred. Such find'ing of prudence shall' not be subject to further review in a subseq;uient RRM or Statement of Intent filing. During the Review Feriod, the Comipa,ny and the regulatory authority will work collaboratively and seek agreement on the level of rate adjustments, l�f, at the end of the Review Period, the Company and the regulatory authority have not reached agreement, the reority shall take action to miodify or deny the proposed rate adjustments, The Company shall have the right to appeal the rewry authority's action to the Railroad Commission of Texas. Upon the filing of an appeal of the regulatory authority's, order relating to an annual RRM filing withl the Railroad Commission of Texas, the regiulatory authority havinig rlinal junsdiction over the Company"s rates, shall not oppose the implementation of the Company's proposed rates subject 'to refund, nor will the regulatory authority advocate for the imposition of a third party surety bond by the Company, Any refund shall be limited to anid determined based on the resolution of the dlisputed adjustment(s) in a final, non -appealable order issued in the appeal filed by the Company at the Railroad Commission of Texas,. ATMOS ENERGY CORPORATION MID-TEX DIVISION . . . . .... ..... . ..... RATE SCHEDULE: RRM — Rate Review Mechanism APPLICABLE TO: ALL CITIES IN THE MI!D-TEX DIVISION AS IDENTIFIED IN EXHIBIT A TO THIS RATE SCHEDULE .... .... . . . . . ....... . ... . . ........... ___­._...___..___­ ...... . ............ — ----- - EFFECTIVE, DATE: Bills Rendered on and after 04/0112018 [PAGE _-___.__1_-- ...... . .... . . . . ........... .... . ..... ____ __ . . . . .. . ....... In the event that the regulatory authority and Company agree to a rate adj�uistment(sl that is different from the adjustment(s) reqed in the Company's filing, the Compan � y shall file compliance tariffs cons,istenit with the agreement. No action on the part of the regulatory authority shall be required to allow the rate adjuistment(s) to become effective on October 1 . To the ext�ent that the regulatory authority does not take action on the Company's RRM filing by September 30, the rates proposed in the Comipa,ny's filing shall be deemed approved' effective October 1, Notwithstanding the preceding sentenice, a regulatory authority may choose, to take ae action to approve a rate adjustment undier this tariff. In those Instances where such approval cannot reasonably occur by September 30, the rates finally approved by the regulatory authority shall be deemed effective as of October 1. W W 11 111111111:xIII "piplicirr" ATMOlS ENERGY CORPORATION MID-TEX DIVISION ......... . RATE SCHEDULE: RRM —state Review Mechanism APPLICABLE TO: ALL CITIES IN'THE MIS -TE X DIVISION'AS IDENTIFIED IN EXHIBIT A TO THIS RATE SCHEDULE . ........... EFFECTIVE DATE: Bills Rendered on and after 0l4/01/2018 PAGE. 6 ____ - ------ . . . .. . ............ ........ ........ . ..... Orders issued pursuant to thiis mechanism are, ratemaking orders and shall be subject to appeal' under Sections 102.001(b) and 103,021, et seq., of the Texas Utilities Code (Vernon 2007). oil• Notice of each annual RRM filling shall be provided!, by inclulding the notice, in conspicuous form, in the, bill of each directly affected customer no later than forty-five (45l) days after the Company makes its annual filing pursuant to this tariff, The notice to custolmiers shall include the following information- b) the effect the proposed revision, of rates is expected to have on the rat applicable to each customer class, and on an average bill for each affect customer', I c) the service area or areas in which the proposed rates would apply, d) the date the annual RRM filing was made with thle regulatory authority; ani' e) the Company's address, telephone number and website where info concerning the proposed rate adjustment can be obitained. I ATMOS ENERGY CORPORATION MID-TEX DIVISION . . ...... . ..... RATE SCHEDULE: RR M — Rate Review Mechanism APPLICABLE TO: ALL CITIES IN THE MID-TE X DI ISI N AS IDENTIFIED IN EXHIBIT A TO THIS RATE SCHEDULE ..... ..... .. . .... . ........ ___ .. . . .............. EFFECTIVE DATE: Bills Rendered on and after 041011/2018 PACE 7 --- - . . . .... . . ....... ------- . . . . ........ . .... . . Exhibit A ACSC Cities Abilene Cleburne Frost Lincoln Park Addison Clyde Gainesville Little Elm Albany College Station Garland Lorena Allen C0eyville Garrett Madisonville Alvarado Colorado City Grand Prairie Malakoff Angus Comanche Grapevine Mansfield Anna Commerce Groesbeck Mckinney Argyle Coolidge Gunter Melissa Arlington Coppefl Haltom City Mesquite Aubrey Copperas Cove Harker Heights Micllothian Azle Corinth Haskell Murphy Bedford Cranc!Mll Haslet Newark Bellmead Crowley Hewitt Nocona Benbrook Dalworthington Gardens Hiighland Park North Richland Hills Beverly Hills Denison Highland Vfllage No�rthliake Blossom Denton Honey Grove Oak Leaf Blue Ridge Desoto Hurst Ovifla Bowie Draper Hutto, Palestine Boyd Duncanville Iowa Park Pantego Bridgeport Eastland Irving Paris Brownwood Edgecliff Village Justin Parker Buffalo Emory Kaufman Pecan Hill Burkburnett Ennis Keene Petrolia Burleson Euless Keller Plano Caddo Mills Everman Kemp Ponder Canton Fairview Keninedale Pottsboro Carrollton Farmers Branch Kerens Prosper Cedar Hill Farmersville Kerrville Quitman Celeste, Fate Killeen Red Oak Celina Flower Mound Krum Reno (Parker County) Centerville Forest Hill Lake Worth Rhome Cisco Forney Lakeside Richardson Clarksville Fort Worth Lancaster Richland Frisco Lewisville Richland Hills ATMOS ENERGY CORPORATION MID-TE X DIVISION . . .......... . ..... . . .......... ......... . RATE SCHEDULE: RRM! — Rate Review, Mechanism APPLICABLE TO: ALL CITIES IN T'H�E MID-TEX DIVISION AS IDENTIFIED IN EXHIBIT A TO THIS RATE SCHEDULE . ............. .. EFFECTIVE DATE: Bills Rendered on and after 0410112018 PAGE: 8 =__ __71- - .. ....... ..... _.. ................ . . . .. River Oaks, Temple Roanoke Terrell Robinson The Colony Rockwall Trophy Club Roscoe Tyler Rowlett University Park Royse City Venus Sachse Vernon Saginaw Waco Sansom, Park Watauga Seagoville Waxahachie Sherman Westlake Snyder Westover Hills Southlake Westworth Village Springtown White Settlement Stamford Whitesboro Stephenville Wichita Falls Sulphur Springs Woodway Sweetwater 'Wylie