2020-034 - Atmos Energy Rate Adjustment - 2020 Rate ReviewORDINANCE NO. 2020-034
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF
PARIS, TEXAS, APPROVING A NEGOTIATED SETTLEMENT
BETWEEN THE ATMOS CITIES STEERING COMMITTEE
("ACSC") AND ATMOS ENERGY CORP., MID-TEX DIVISION
REGARDING THE COMPANY'S 2020 RATE REVIEW
MECHANISM FILING; DECLARING EXISTING RATES TO BE
UNREASONABLE; ADOPTING TARIFFS THAT REFLECT RATE
ADJUSTMENTS CONSISTENT WITH THE NEGOTIATED
SETTLEMENT; FINDING THE RATES TO BE SET BY THE
ATTACHED SETTLEMENT TARIFFS TO BE JUST AND
REASONABLE AND IN THE PUBLIC INTEREST; APPROVING
AN ATTACHED EXHIBIT ESTABLISHING A BENCHMARK FOR
PENSIONS AND RETIREE MEDICAL BENEFITS; APPROVING
AN ATTACHED EXHIBIT REGARDING AMORTIZATION OF
REGULATORY LIABILITY; REQUIRING THE COMPANY TO
REIMBURSE ACSC'S REASONABLE RATEMAKING EXPENSES;
DETERMINING THAT THIS RESOLUTION WAS PASSED IN
ACCORDANCE WITH THE REQUIREMENTS OF THE TEXAS
OPEN MEETINGS ACT; ADOPTING A SAVINGS CLAUSE;
DECLARING AN EFFECTIVE DATE; AND REQUIRING
DELIVERY OF THIS RESOLUTION TO THE COMPANY AND
THE ACSC'S LEGAL COUNSEL.
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, charges, and services of Atmos Mid -Tex; and
WHEREAS, the City is a member of the Atmos Cities Steering Committee ("ACSC"), a
coalition of similarly -situated cities served by Atmos Mid -Tex ("ACSC Cities") that have joined
together to facilitate the review of, and response to, natural gas issues affecting rates charged in
the Atmos Mid -Tex service area; and
WHEREAS, ACSC and the Company worked collaboratively to develop a Rate Review
Mechanism ("RRM") tariff that allows for an expedited rate review process by ACSC Cities as a
substitute to the Gas Reliability Infrastructure Program ("GRIP") process instituted by the
Legislature, and that will establish rates for the ACSC Cities based on the system -wide cost of
serving the Atmos Mid -Tex Division; and
WHEREAS, the current RRM tariff was adopted by the City in a rate ordinance in
2018; and
WHEREAS, on about March 31, 2020, Atmos Mid -Tex filed its 2020 RRM rate request
with ACSC Cities based on a test year ending December 31, 2019; and
WHEREAS, ACSC coordinated its review of the Atmos Mid -Tex 2020 RRM filing
through its Executive Committee, assisted by ACSC's attorneys and consultants, to resolve issues
identified in the Company's RRM filing; and
WHEREAS, the Executive Committee, as well as ACSC's counsel and consultants,
recommend that ACSC Cities approve an increase in base rates for Atmos Mid -Tex of $90 million
applicable to ACSC Cities with an Effective Date of December 1, 2020; and
WHEREAS, ACSC agrees that Atmos plant -in-service is reasonable; and
WHEREAS, with the exception of approved plant -in-service, ACSC is not foreclosed from
future reasonableness evaluation of costs associated with incidents related to gas leaks; and
WHEREAS, the two month delayed Effective Date from October 1 to December 1 will
save ACSC ratepayers approximately $9 million off new rates imposed by the attached tariffs
(Exhibit A), the impact on ratepayers should approximate the reasonable value of the rate filing
found by the ACSC Consultants' Report, which was $81 million; and
WHEREAS, the attached tariffs (Exhibit A) implementing new rates are consistent with
the recommendation of the ACSC Executive Committee, are agreed to by the Company, and are
just, reasonable, and in the public interest; and
2
WHEREAS, the settlement agreement sets a new benchmark for pensions and retiree
medical benefits (Exhibit B); and
WHEREAS, the settlement agreement establishes an amortization schedule for regulatory
liability prepared by Atmos Mid -Tex (Exhibit C); and
WHEREAS, the RRM Tariff contemplates reimbursement of ACSC's reasonable
expenses associated with RRM applications;
NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF
THE CITY OF PARIS, TEXAS:
Section 1. That the findings set forth in this Ordinance are hereby in all things approved.
Section 2. That, without prejudice to future litigation of any issue identified by ACSC,
the City Council finds that the settled amount of an increase in revenues of $90 million for ACSC
Cities represents a comprehensive settlement of gas utility rate issues affecting the rates,
operations, and services offered by Atmos Mid -Tex within the municipal limits arising from
Atmos Mid-Tex's 2020 RRM filing, is in the public interest, and is consistent with the City's
authority under Section 103.001 of the Texas Utilities Code.
Section 3. That despite finding Atmos Mid-Tex's plant -in-service to be reasonable, ACSC
is not foreclosed in future cases from evaluating the reasonableness of costs associated with
incidents involving leaks of natural gas.
Section 4. That the existing rates for natural gas service provided by Atmos Mid -Tex are
unreasonable. The new tariffs attached hereto and incorporated herein as Exhibit A, are just and
reasonable, and are designed to allow Atmos Mid -Tex to recover annually an additional $90
million from customers in ACSC Cities, over the amount allowed under currently approved rates.
Such tariffs are hereby adopted.
3
Section 5. That the ratemaking treatment for pensions and retiree medical benefits in
Atmos Mid-Tex's next RRM filing shall be as set forth on Exhibit B, attached hereto and
incorporated herein.
Section 6. That subject to any future settlement or decision regarding the balance of Excess
Deferred Income Tax to be refunded to ratepayers, the amortization of regulatory liability shall be
consistent with the schedule found in Exhibit C, attached hereto and incorporated herein.
Section 7. That Atmos Mid -Tex shall reimburse the reasonable ratemaking expenses of
the ACSC in processing the Company's 2020 RRM filing.
Section 8. That to the extent any resolution or ordinance previously adopted by the Council
is inconsistent with this Ordinance, it is hereby repealed.
Section 9. That the meeting at which this Ordinance was adopted was in all things
conducted in strict compliance with the Texas Open Meetings Act, Texas Government Code,
Chapter 5 51.
Section 10. 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 of the Ordinance shall be interpreted
as if the offending section or clause never existed.
Section 11. That consistent with the City Ordinance that established the RRM process,
this Ordinance shall become effective from and after its passage with rates authorized by attached
tariffs to be effective for bills rendered on or after December 1, 2020.
Section 12. That a copy of this Ordinance shall be sent to Atmos Mid -Tex, care of Chris
Felan, Vice President of Rates and Regulatory Affairs Mid -Tex Division, Atmos Energy
Corporation, 5420 LBJ Freeway, Suite 1862, Dallas, Texas 75240, and to Geoffrey Gay, General
0
Counsel to ACSC, at Lloyd Gosselink Rochelle & Townsend, P.C., 816 Congress Avenue,
Suite 1900, Austin, Texas 78701.
DULY PASSED AND APPROVED BY THE CITY COUNCIL OF THE CITY OF
PARIS, TEXAS, BY A VOTE OF 5 TO 0 , ON THIS THE 14TH DAY OF SEPTEMBER,
2020.
1"PROVED AS TO FORM:
Harris, City Attorney
2557/32/8108360
Paula Portugal, or
g � Ma �.�. y 1j�,,��-Tem �,........
5
Exhibit A
to 2020 RRM Resolution or Ordinance
Mid -Tex Tariffs
Effective December 1, 2020
MID.- D t t Tri No -
ATMOS ENERGY
TIO
RPPLICABLE TO:
EFFECTIVE DATE: Bills Rendered on or after 1210112020
Application
Applicable to Residential Customers for all natural gas provided at one Point of (Delivery and measured
through one meter.
Monthly Rate
uustomer's monthly hlll will be Ilcullat by adding the following Customer and Ccf charges to the
amounts duce under the riders listed below;
Charge Amount
.._....... __ ..........................
Customer Charge per Bill 20.25 per month
Rider C IE Surcharge 0.05 per month N
Total Customer Charge $ 20.30 per month
Commodity Charge — All cf $0,26651 per Ccf
"TaxAdjustment: lulus an amount for tax calculated in accordance with (Rider TAX
Surcharges: Plus an amount for surcharges cWcullated in accordance with the appllicablle dder(s)
Agreement
An Agreement for Gas Service may be required,
Notice
Service hereunder and the rates for services provided are subject to the orders of regulatory bodies
having .ju dsdiotion and to the onnpany's Tariff for Gas Service.
�Refbiren e Ridei CIIEE , ConservaMon and II'nei y Efficiency as aappir raed hi GUD 101'70. SurclimVe bp'Nfing effecUve Jully 1, 200
MID-TEX DIVISION RRC Tariff No:
ATMOS ENERGY CORPORATION
RATE SCHEDULE: C - COMMERCIAL SALES
APPLICABLE TO: ALLCUSTOMERS I THE I EX DIVISION UNDER THE RRM TARIFF
--- ------ , w.., m....._ ._. _ ......., n,,...., .
EFF ECTIIVE DAT E B ills Renders on or a fter I V 0 1/ 20 20 PAGE:
Application
ApplicaMe to Commercial Custorners for all natural gas provided at one IPOnt of Delivery .and measured
through one meter and to Industrial Customers with an average annual usage of less than 50,000 CCf„
Type of Service
Where service of the type desired by Customer is not already available at the Point of Delivery, additional
charges and special contract arrangements between Company and Customer may be required prior to
service (being furnished.
Charge Amount
Customer Charge per Sill 54.50 per month
Rider CEE Surcharge $ 0,02 per month b
Total Customer Charge $ 54.52 per month
Commodity Charge .- All Cof $ 011728 1725 (per Cof
Tax Adjustmnent. Plus an amount for tax calculated in accordance with Rider TAX.
SurchargesPlus an amount for surcharges calculated in accordance with the applicable riider(s).
Agreement
An Agreement for Gas Service may The it „aired.
Notice
Service hereunder and the rates for services provided are subject to the orders of regulatory bodies
having jurisdiction and to the Company's Tadff -for Gas Service.
} Reference Rider CEE Conservation and Energy Efficiency as approved in GUD 10170. Surcharge billing effective July 1, 2020.
MID-TEX DIVISION
ATMOS ENERGY CORPORATION
RATE SCHEDULE: II®INDUSTRIAL SALES
RRC Tariff No:
APPLICABLE T :LL CUSTOMERS IN TN IID-TEX DIVISION I
DER THE RRM TARIFF
............. .................. ..........
EFFECTIVE DATE:
ills Rendered on or after 1210112020 PAGE-.
Application
Applicable to Industrial Customers with a maximum dally usage (MDI) of less than 3,500 MMStu per day
for all natural gas provided at one Point of Delivery and measured through one meter. Service for
Industrial Customers with an MDU equal to or greater than 3,500 MMBtu per day will be provided at
Company's sole option and will require special contract arrangements between Company and Customer,
Typo of Service
Where service of the type desired by Customer is not already available at the Point of Delivery, additional
charges and special contract amrangernents between Company and Customer may Ibe required prior to
service being furmnished.
Monthly Rate
Custorrnees monthly bill) wilt be calculated by adding the following Customer and MMStu charges to the
amounts due under the riders listed below:
Charge Amount
Customer Charge per I eter 1,014.50 per month
First tl MMIBtu to 1,500 MI IEtu 0.4157 per MMIEtu
Next 3,500 MMEtu 0.3044 per MMI to
AVl MMltu oeU MMStu 0.0553 per MMI3tu — , -- — -- . .. ........ -- , - -l' --- -- : -- -,.'
Tax Adjustmeft Plus an amount for tai calculated in accordance with Rider TAX.
Surcharges, Plus an amount for surcharges calculated in accordance ith the applicable rider(s).
Curtailment Overpull Pee
Upon notification by Company of an event of curtailment or interruption of Customer's deliveries,
Customer will, for each MMl to delivered in excess of the stated level of curtailment or inteirrupbomn„ pay
Company 00% of the midpoint price for time batty point listed in Pdatts Gas Daily published for the
applicable Gas Day in time table entitled Daily Price Survey."
Replacement Index
In the event the "midpoint" or "common" price for the Katy point listed in Ptatts Gas Daily in the table
entitled "Dailly Price Survey°` is no longer published, Company wilt calculate the applicable imbalance fees
utilizing a daily price index recognized as authoritative by the natural gas industry and most closely
approximating time applicable index.
MID-TEK DIVISION RRC Tariff No:
ATMOS ENERGY CORPORATION
RATE SCHEDULE: I — INDUSTRIAL SALES
APPI-ICAEII,,B TO- ALL CUSTOMERS IN THE MID-TEX DIVISION UNDER THI; RRM "TARIFF
._ .. _ _.. ... ................
EFFECTIVE DATE: Bills Rendered Tri or after 12JO112020 � PAGE;
Agreementllll
An Agreement for Gas Service may be required.
Notice
Service hereunder and the rales for services provided are subject to the orders of (regulatory bodies
having jurisdiction and to the C mpany"s Tariff for Gas Service.
Special Conditions
In order to receive service sander Rale I„ Customer must have the type of meter required by Company.
Customer merit pay Company all costs associated with the acquisition and installahion of the meter,
Application
Applicable, in the event that Company has entered into a 'Transportation Agreement, to a customer
*ectly connected to the Atmos Energy CorpMid-Tex Division Distribution System (Customer) for the
transportation of all natural gas supplied by Custorner or Customees agent at rine Point of I ellvery for
use in Customeft facility,
Type e to
Where service of the type desired by Customer is not already available at the point Of Delivery, additional
charges and special contract arrangements between Company and Customer may be required prior to
service elrng furnished,
Monthly ate
Customer's bill will be callculated by adding the following Customer and MMBtu charges to the amounts
and quanfifies, due under the riders listed below:
Imbalance Fees
All fees charged to Customer under this Rate Schedule nuvull be charged based on the quantities
determined under the applicable Transportation Agreement and quantities will not be aggregated for any
Customer with multiple Transportation Agreements for the purposes of such fees,
Monthly Imbalance IFee
Customer shall pay Company the greater of (l) $0.10 per MMBtu, or Oi) 150% of the dlfference per MMBtu
between the highest and lowest "midpoint"" price for the Katy point listed in Platts Gas Daily M the table
entitled "Daily Price Survey" duuriurog such month, for the MMBtu of Customer's monthly Cumulative
Imbalance, as defined lin the applicable Transportation Agreement, at the end of each month that exceeds
10% of Customer's receipt p,uaarnfiitie for the month.
MID.-TEX DIVISION RRC Tariff No:
ATMOS ENERGY CORPORATION
. . ._ ... �__
RATE SCHEDULE: T —TRANSPORTATION
APPLICABLE L CUSTOMERS IN THEUID- DIVISION UNDIEf THE RRM TARIFF
_.. ............... ...... .. .. ...._ ..... ___. m--.
EFFECTIVE .... Bills Rendered on or after 1210112020 PAGE.
Curtailment Overpull Fee
Upon rn toficabon Iby Company of an event of curtailiment or interruption of Customer's deliveries,
Customer will, for each MMBtu d iv r d lin excess of the stated level of curtailment or interruption, pay
Company 0% of the imidpoint price. for the tufty point listed lin Plans Gas Daily pub0shed for the
applicable Gas Day lin the table entitled °'Dally Price Survey."
Replacement trade
In the event the 'midpoint" or " mrn on" price for the IKaty poOt listed In Platts Gas Daily in the table
entitled "Daily Price Survey" is no longer published, Company will calculate the appflcable imbWance ffaa
utlUU gng a dallly price index recognized a authoritative by the natural gas industry aind in closely
approximating the applicable index.
Agreement
trainsportation agreement is required,,
Notice
Service hereunder and the rates for services provided are subject to the orders of regulatory bodies
having jurisdiction and to the Cornpany'sTariff ffor Gas Serve
Special Conditions
In order to receive service under luta T, customer er mut have the type of meter requiired by Company
Customer rust pay Company aIII costs associated with the acquisition and installation of the meter.
Provisions for.AO-Mkot
The Commodity Charge per Ccf (100 cubic feet.) for gas service set forth In any Rate Schedules utilized
by the cities of theMid-Tex Division service area for determining normalized winter period revenues shall
be adjusted by ain amount hereinafter described„ which amount is referred to as the 'Weather
Normalization dpustirnent." The Weather Normalization Adjustment shall apply to all temperature
sensitive residential and commercial bills based on meters read during the revenue months of November
through April. The five regional 'weather stations are Abilene, Austin, Dallas, Waco, and Wichita Falls„
m ut tgLn ct eatheir N 2 , tionAdjustment
The Weather INormalkation Adjustment Factor shall be computed to the nearest one-haundiredth cent
per Ccf by the following tormun as
l Commodity Charge rate of temperature sensitive sales for the lth schedule or
classification.
H IFI = beat sensitive factor for the Nth schedule or classification divided by the
average bull count In that Mass
NIDD _ bllllrng cycle normal heating degree days calcuWed as the sliraplle tern -year
average of actual heating degree days,
ADD bllliing cycle actual heating degree days..
loll _ base load sales for the Nth schedule or classification divided by the average
bill count fru that class
The Weather I orrimall ation Adjustment for the jth custor ner in lth rate schedule is computed as:
Where % is the relevant sales quantity for the jth customer !in lth irate schedule.
Base Use/Heat Use Factors
Weather Noirrirroaai fiord Ad°uLstrr ent i Ise rt
On or Met re June 1 of each year, the company posts on its website at atrnosenergy,.com/nntx-wna, in
Excell format„ a Weather Normalization Adjustment (WNW) Repod to showy how the comparsy cMcu fated
!its s factor during the (preceding winter season„ Additionally„ on or before ,Dene 1 of each year, the
company fifes one hard copy and an Excel l wersiion of the INNA Report with the Railroad Cornmission of
"texas" upas Beuvices Division, addressed to the Directoir of that; Division,
Residential
Cornrineirdai
Base use
Meat tze
Base use
Meat use
Weather Station
Cef
ccf/HD
f
CM-11DID
Abilene
10.73
01545
9439
0,7284
Austin
9.53
01489
211,76
0..940 a
Dallas
15.77
0.1792
19914 9. 4
0..9385
Waco
9,99
0.1341
'145.27
g„ 't 10
MoNta
1 't . 't
0.1-402
'120.34
0.5147
Falis
Weather Noirrirroaai fiord Ad°uLstrr ent i Ise rt
On or Met re June 1 of each year, the company posts on its website at atrnosenergy,.com/nntx-wna, in
Excell format„ a Weather Normalization Adjustment (WNW) Repod to showy how the comparsy cMcu fated
!its s factor during the (preceding winter season„ Additionally„ on or before ,Dene 1 of each year, the
company fifes one hard copy and an Excel l wersiion of the INNA Report with the Railroad Cornmission of
"texas" upas Beuvices Division, addressed to the Directoir of that; Division,
Exhibit B
to 2020 RRM Resolution or Ordinance
Mid -Tex
2020 Benchmark for Pensions
and Retiree Benefits
ig
o
a V5 1 —0
CA
-0 O,t� -0 k
-0
....... . ........
0 004#8
. .....
+
CL
W 0
0
CX
45
W
<0
M. 11111
xID)
CD
r.— X
+
fA
Td)
W
CL m
V0 -n
Pr AV
Oa
KKM X0
ED
a
z
6
C,
��
71
C.x
0
W
0
P.3
0 0
0
a- low
x
0
I•D
fn
to
in
fA
to
0
E0 0
c
Tjos
r_
.,,;r CD :.:V
69
40
69
ra
tl�
to
:4
0-18
-0 6
a LO
go
40
0
40
to
(0
Cl
CT
CL
0
< I
S�
lid
8
Z cr
'"
8 �3
824
C)
6,,
cc
40 (0
C) 0 m
M
co
co
W
,Cm
4
Al
-4
Ot
10 A,
ro
S6
'Ile 10
rM
P,O W
to
Exhibit C
to 2020 RRM Resolution or Ordinance
Mid -Tex 2020 Schedule for
Amortization for Regulatory Liability
311E BASE T III:::IIIMT
ST YEAR ENIIDIINGDECEMBER 31, 2019
AMORTIZATION F" REGULATORY LIABILITY
29 Revenue Related'Tax Factor
Revenue IFIelated "Taxes on Annual
345 Amortizatiorh
31 Amorfization Including Fleveinue
716% See WP_II' -5.1
mm orfize uomm Tax
79595,924 F:: actor
11,971,4597 Amortlization r° "8"axes
32
33 Note :
34 1. The annual arnorlJ7.aflon of a 26 year recoveTy 1per6om1 its based on the
35 Rover r1,u49m Georgia Method.
36 2.. The Re u lath. Liab8U81y us recorded to FERC Account 253, Sub Account 27909,
37 1 This is the final Mid -Tex 99 9uillty Lmlaince 1au9mug the Rscal Year 2018 tax return,
Beginning f Year
Eind of Year
Rats Base
Rate Base
Corrected Balance
Uno
YearEndedjm,m
trrrment
Anniwal
Adjustment
for December 31,
NO.
Dec 31
Amount
Amortization 1
rnourit2L_____2017
()
(b)
()
()
(e)
1
2617
-
262,266,531
292,2691,691
2
26316
292,266,9961
12,9575,562
29995,193,319
3
29519
266 ,193,3 99
12,085,165
268,j 08,1 5
4
29526
266,165,155
11,171,173
256,936,9912
5
2021
256,936,982
11„171„173
245j65,809
6
2522
245,765,9865
11,171,173
234 94,635
7
29523
234,5954,635
11,171,173
223,423,462
6
29524
223,423,462
11,171,173
212,252,2693
29525
212.,252,2989
18,'871,173
2.451,63981,186
16
24526
261,061,116
11,171,173
169,64595,943
11
24527
1693,9939 943
11„171„173
176,7398,7745
12
245298
176,736,7745
11,17-1,173
167,567, 597
13
2626
'197,567,597
11,171,173
156,396,424
14
2030
154 ,396,424
11,171,173
145;,225,251
15
2631
145„225,251
11,171,173
134,654®977'
16
2632
134,4554,4577
11,171,173
122,9862,9454
17
2633
122,662,904
11,171,173
111,711,731
13
24534
111,711,"7»31
11,171, 173
1450.54 5, 58
195
24535
1456,” 445,5598
11,171,173
989,369,3985
20
2036
989„3159, 3985
11,17 814173
76„ 1998,212
2.1
2637
793,19398,212
11,171,173
67m627,0393
22
2036
67,627,45395
11,1 "71,173
55,855,866
23
24539
55,655,9866
11,171,173
44„664,692
24
245443
44,684,692
11,171,173
33,513,5195
25
204„1
33,583,5193
11„171,173
22,342,346
26
24542
22,342,346
11,171,173
11,1 "71,173
27
2043
11,171,17,3
11,171,173
(6)
298
29 Revenue Related'Tax Factor
Revenue IFIelated "Taxes on Annual
345 Amortizatiorh
31 Amorfization Including Fleveinue
716% See WP_II' -5.1
mm orfize uomm Tax
79595,924 F:: actor
11,971,4597 Amortlization r° "8"axes
32
33 Note :
34 1. The annual arnorlJ7.aflon of a 26 year recoveTy 1per6om1 its based on the
35 Rover r1,u49m Georgia Method.
36 2.. The Re u lath. Liab8U81y us recorded to FERC Account 253, Sub Account 27909,
37 1 This is the final Mid -Tex 99 9uillty Lmlaince 1au9mug the Rscal Year 2018 tax return,
August 17, 2020
MODEL STAFF REPORT
BACKGROUND AND SUMMARY
The City, along with 171 other Mid -Texas cities served by Atmos Energy Corporation, Mid -
Tex Division ("Atmos Mid -Tex" or "Company"), is a member of the Atmos Cities Steering
Committee ("ACSC"). In 2007, ACSC and Atmos Mid -Tex settled a rate application filed by the
Company pursuant to Section 104.301 of the Texas Utilities Code for an interim rate adjustment
commonly referred to as a GRIP filing (arising out of the Gas Reliability Infrastructure Program
legislation). That settlement created a substitute rate review process, referred to as Rate Review
Mechanism ("RRM"), as a substitute for future filings under the GRIP statute.
Since 2007, there have been several modifications to the original RRM Tariff. The most
recent iteration of an RRM Tariff was reflected in an ordinance adopted by ACSC members in
2018. On or about March 31, 2020, the Company filed a rate request pursuant to the RRM Tariff
adopted by ACSC members. The Company claimed that its cost -of -service in a test year ending
December 31, 2019, entitled it to additional system -wide revenues of $141.2 million. Application
of the standards set forth in ACSC's RRM Tariff required Atmos to reduce its request to $136.3
million, $98.7 million of which would be applicable to ACSC members. ACSC's consultants
concluded that the system -wide deficiency under the RRM regime should be $111.5 million instead
of the claimed $136.3 million. The amount of the $111.5 million deficiency applicable to ACSC
members would be $80.8 million.
After the Company reviewed ACSC's consultants' report, ACSC's Executive Committee
and the Company negotiated a settlement whereby the Company would receive an increase of $90
million from ACSC Cities, but with a two-month delay in the Effective Date until December 1,
1
2020. This should save ratepayers approximately $9 million such that the case is functionally
equivalent to ACSC's consultants' recommendation of $80.8 million.
The Executive Committee recommends a settlement at $90 million. The Effective Date for
new rates is December 1, 2020. ACSC members should take action approving the Resolution
before November 1, 2020.
PROOF OF REVENUES
Atmos generated proof that the rate tariffs attached to the Resolution will generate $90
million in additional revenues from ACSC Cities. That proof is attached as Attachment 1 to this
Staff Report. ACSC consultants have agreed that Atmos' Proof of Revenues is accurate.
BILL IMPACT
The impact of the settlement on average residential rates is an increase of $5.15 on a
monthly basis, or 9.9 percent. The increase for average commercial usage will be $15.48 or 6.56
percent. A bill impact comparison is attached as Attachment 2.
SUMMARY OF ACSC'S OBJECTION TO THE UTILITIES CODE SECTION 104.301
GRIP PROCESS
ACSC strongly opposed the GRIP process because it constitutes piecemeal ratemaking by
ignoring declining expenses and increasing revenues while rewarding the Company for increasing
capital investment on an annual basis. The GRIP process does not allow any review of the
reasonableness of capital investment and does not allow cities to participate in the Railroad
Commission's review of annual GRIP filings or allow recovery of Cities' rate case expenses. The
Railroad Commission undertakes a mere administrative review of GRIP filings (instead of a full
hearing) and rate increases go into effect without any material adjustments. In ACSC's view, the
GRIP process unfairly raises customers' rates without any regulatory oversight. In contrast, the
RRM process has allowed for a more comprehensive rate review and annual evaluation of expenses
and revenues, as well as capital investment.
2
RRM SAVINGS OVER GRIP
While residents outside municipal limits must pay rates governed by GRIP, there are some
cities served by Atmos Mid -Tex that chose to remain under GRIP rather than adopt RRM.
Additionally, the City of Dallas adopted a variation of RRM which is referred to as DARR. When
new rates become effective on December 1, 2020, ACSC residents will maintain a slight economic
monthly advantage over GRIP and DARR rates. See Attachment 3.
EXPLANATION OF "BE IT RESOLVED" PARAGRAPHS:
1. This section approves all findings in the Resolution.
2. This section adopts the RRM rate tariffs and finds the adoption of the new rates to be just,
reasonable, and in the public interest.
3. This section makes it clear that Cities may challenge future costs associated with gas leaks
like the explosion in North Dallas or the evacuation in Georgetown.
4. This section finds that existing rates are unreasonable. Such finding is a necessary predicate
to establishment of new rates. The new tariffs will permit Atmos Mid -Tex to recover an
additional $90 million from ACSC Cities.
5. This section approves an exhibit that establishes a benchmark for pensions and retiree
medical benefits to be used in future rate cases or RRM filings.
6. This section approves an exhibit to be used in future rate cases or RRM filings regarding
recovery of regulatory liabilities, such as excess deferred income taxes.
7. This section requires the Company to reimburse the City for expenses associated with
review of the RRM filing, settlement discussions, and adoption of the Resolution approving
new rate tariffs.
8. This section repeals any resolution or ordinance that is inconsistent with the Resolution.
3
9. This section finds that the meeting was conducted in compliance with the Texas Open
Meetings Act, Texas Government Code, Chapter 551.
10. This section is a savings clause, which provides that if any section is later found to be
unconstitutional or invalid, that finding shall not affect, impair, or invalidate the remaining
provisions of this Resolution. This section further directs that the remaining provisions of
the Resolution are to be interpreted as if the offending section or clause never existed.
11. This section provides for an effective date upon passage. December 1, 2020 represents a
two month delay in the Effective Date established by the RRM tariff.
12. This section directs that a copy of the signed Resolution be sent to a representative of the
Company and legal counsel for ACSC.
CONCLUSION
The Legislature's GRIP process allowed gas utilities to receive annual rate increases
associated with capital investments. The RRM process has proven to result in a more efficient and
less costly (both from a consumer rate impact perspective and from a ratemaking perspective) than
the GRIP process. Given Atmos Mid-Tex's claim that its historic cost of service should entitle it to
recover $141.2 million in additional system -wide revenues, the RRM settlement at $90 million for
ACSC Cities reflects substantial savings to ACSC Cities. ACSC's consultants produced a report
indicating that Atmos had justified increased revenues for ACSC Cities of at least $81 million.
Settlement at $90 million (equivalent to $81 million with a two-month delay) is fair and reasonable.
The ACSC Executive Committee consisting of city employees of 18 ACSC members urges all
ACSC members to pass the Resolution before November 1, 2020. New rates become effective
December 1, 2020.
2557/32/8105318
4
Attachment 1 to
Model Staff Report
2020 RRM
Proof of Revenues
NNN NN -----+ —�� SOW V OCnA W N�
A W N O O O V O O A wCD N 0
m �mococC CD0 mocrn
7
m n W N y N y O N u=) a n CD of rn CCL
D
(D y c c c 0 �. 0 3 m 0
cn a a a m m 3 m n ai m m r.
eo a -0 -0 -0 cn 'a CD � tv m
m a N CD 0 0 0 0 CD (D o (7 o 0
> > � s :3 =r
CL CD m nn(�w m m 0v iv nm
O a m � s � ca w � i
Attachment 2
to 2020 RRM Staff Report
Bill Impact
0 W fAl
a N CA th UP
4'. :N "t. IN �� 4
cl 0
z
N N;Ill
w 2 ba 0 ED rh -4
0j
h, .-%
— I
'a) (yw 'N
-L &
W PJ 0
U.) CD -4 M
W 4% W 1" 0
01
m -n -n
x
x X
all
m
CL cx 0
m X 0
cx ?s: ri
C)
m
CL
;Dm 0 0
X
m ;0 0 0
0 C.
3 U)
--I cj)
U) -M, T,
x
x x x
CD
c 0
m
0
0 m
"% ", 0
n c 3
R 1 n
R Roo (WA
0 w" c G) 10 -3
"11 cr C) 0
C"
Roo
j 5
..
0
-n
.........
0 Og CD
0—
9
"Mn.. l
go
.
73
0, 4".
roo St
;u 0, n
C> 411�
iii n
W
=1r
a A %(2
CL
(D a r fQ
q
Ch
W
=r ria
> CID
-1
Q
to 0 W
C
8V VV VV
VV
VII VV VII
VA
(D
0 W fAl
a N CA th UP
4'. :N "t. IN �� 4
1111, �PA t
-N 4h,
to
cl 0
Ono
(100
000
00s,
001r)
0 () C)
01
m -n -n
x
x X
P
04
x
x X x
x
x x x
CD
K�
N1 0
C)
0 LO
9
W
00
aw to
C> 411�
W
69
A-19
s zi V
Ch
W
Ul qA h.)
0
Q
to 0 W
C
8V VV VV
VV
VII VV VII
VA
low (WA
5.
-4 0
CA
8
4 -4 (0
WIC
W
0
W CA) 0 (A CA
0
69
t9 ffl
-A
0
9)
UW
CD
14
00 W OW
01)
CAI
ir..A) (D CD IQ
49
C)
7
91
RD
io
1111, �PA t
-N 4h,
to
Ono
000
0 C) 0
0 () C)
01
m -n -n
x
x X x
x
x x x
0
4A to fA
4.0 (A ce
C)
9
W
s zi V
Ch
W
Ul qA h.)
Q
to 0 W
pN
8V VV VV
VV
VII VV VII
VA
CA
8
4 -4 (0
WIC
W
0
W CA) 0 (A CA
69
t9 ffl
0
01)
CAI
ir..A) (D CD IQ
49
91
RD
io
m
.4 >
M M
M Irn
Z
ini
m
0
.90
xg
Wg
M 0
5: z
M
M>
to
M
'63
II0
z
"4
L" W IIQ
J
0 (0 -4
(A
N
Ul s m T m al riw En
0 (D OD 4
0 in bai
a) r.A c
W CD (A W.
w IW CD
�IIA
(A 4A w CIA
W CO CD
0 cn
U) ul ED
3: c
.••
W 0 0 00
;u
A 10 0 0 0
;u T x 0 0 0 C)
m MMOOOO!
6)
0 00 c
CL
RX 0 0 10 r.
hy
a n..
CL 1.1. CL
(0
9
9 9 9
cccc
cccc
fa w w
ccccc
ccc:cc
U)
;
-n
90
0
M-%
"In cf�
9,
() � 3 3 0
-aaq
A
0
m 0 0 0)
a
0.
x x
x
P,
43
-u 0 83 S
5' a, 0
-0 :3 = 3
ic
w C3 In 0 21
M
0 �O
=r
-c
W.D
CL w 0) 1 -
C)
w w
a 0 0 0
ID (0
ic
M
.-4
:7 �::Y' =F
M w
m (D (D
ED 01 fi) a)
ta (a ca
ED M Q
p p p 0
LO > 0 m 0
0 U3 (a
(D 0 CD
ca > 0 IND 0
ta (a (a
(D m m
q p p pw
PJ
k7l
N
.Pl
0 in bai
a) r.A c
W CD (A W.
w IW CD
�IIA
(A 4A w CIA
W CO CD
0 cn
U) ul ED
3: c
K c
.b. ic ic E: 9:
SAW
K K
9
6)
19
hy
p
9
9 9 9
cccc
cccc
ccccc
ccc:cc
x x
x
x x
0
VO fa 'bq 40
..'4
.-4
-4
p p p 0
p p p p
M
q p p pw
p p
b.
ch (B 0
b. 10
-b� Sl 0
En w 0)
-lj a
Gq
w Ln
all
) T -4
H It H 0 111
H 0 H 0 111
It
11 U IIIU H H
11 fil 1111 H III UR
40
40
fo
4.9
40
vp
14
c
19.0
Ch
OD 0) Ul at
to w
CA'n
ISI
(0
-4
0 cn <R
W
co G)
Mi n in in
bo
CD
'm ('..A) im bD iA
CA
-14 OD
th b, 0 'O
M
'.4 to
4. -A JhQ
iqlI 'wl w
II
k7l
w (A) CO co 0) Q
0 in bai
a) r.A c
W CD (A W.
iro 0 0
II
L
W CD (A W.
iro 0 0
�IIA
0)
0 cn
U) ul ED
Attachment 3
to 2020 RRM Staff Report
RRM Monthly Savings Over GRIP and DARR Rates
ATMOS ENERGY CORP., MID-TEX DIVISION
RESIDENTIAL AVERAGE RATE COMPARISON
TEST YEAR ENDING DECEMBER 31, 2019
ACSC
DARR
ATM
Environs
Settled
Filing
Filin
Filin
Cust Charge
$20.25
$23.75
$26.40
$24.60
Monthly Cd
44.5
44.5
44.5
44.5
Cons Charge
$0.26651
$0.19336
$0.14846
$0.18653
Average Mo Bill
$32.11
$32.35
$33.01
$32.90
SO, 2411,';