2024-034 - approving a negotiated settlement between ATMOS Cities Steering Committee and Atmos Energy Corp regarding the 2024 rate studyORDINANCE N0. 2024-034
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 2024 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 ATTACHMENT ESTABLISHING A
BENCHMARK FOR PENSIONS AND RETIREE MEDICAL BENEFITS;
REQUIRING THE COMPANY TO REIMBURSE ACSC'S REASONABLE
RATEMAKING EXPENSES; DETERMINING THAT THIS ORDINANCE 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 ORDINANCE 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 April 1, 2024 Atmos Mid -Tex filed its 2024 RRM rate request
with ACSC Cities based on a test year ending December 31, 2023; and
WHEREAS, ACSC coordinated its review of the Atmos Mid -Tex 2024 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 $164.7
million on a system -wide basis with an Effective Date of October 1, 2024; 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 attached tariffs (Attachment 1) 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
WHEREAS, the settlement agreement sets a new benchmark for pensions and retiree
medical benefits (Attachment 2); 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
PARIS, TEXAS:
Section 1. That the findings set forth in this Ordinance are hereby in all things
approved and incorporated herein for all purposes.
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 $164.7 million on
a system -wide basis 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 2024 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 Attachment
1, are just and reasonable, and are designed to allow Atmos Mid -Tex to recover annually an
additional $164.7 million on a system -wide basis, over the amount allowed under currently
approved rates. Such tariffs are hereby adopted.
Section S. That the ratemaking treatment for pensions and retiree medical benefits
in Atmos Mid-Tex's next RRM filing shall be as set forth on Attachment 2, attached hereto
and incorporated herein.
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Section 6. That Atmos Mid -Tex shall reimburse the reasonable ratemaking expenses
of ACSC in processing the Company's 2024 RRM filing.
Section 7. That to the extent any resolution or ordinance previously adopted by the
Council is inconsistent with this Ordinance, it is hereby repealed.
Section 8. 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 9. 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 10. 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 October 1, 2024.
Section 11. 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 Thomas Brocato,
General 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 23rd DAY OF SEPTEMBER, 2024.
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ATTEST:
i
ice Ellis, Ci
1 ty Cler
AS TO FORM:
q
H�-a r is, City Attorney
Mihir Pankaj, Mayor
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