15-Proposed rate changes with Atmos EnergyCITY COUNCIL AGENDA ITEM BRIEFING SHEET
Submittal Date:
Originating Department:
Presented By:
Agenda Item No.:
07/29/2009
Council Date:
Finance
Gene Anderson
15.
08/ 10/2009
RECOMMENDED MOTION:
Not an action item - first reading.
POLICY ISSUE(S):
Fiscal Management
In March 2009, Atmos Energy filed an application with the City to increase natural gas rates. The City is
one of the 150 cities that comprise the Atmos Cities Steering Committee (ACSC). One of the purposes
of this committee is to review and analyze any proposed rate changes. Meeting with Atmos, the ACSC
was able to reduce the proposed $20.2 million rate request to $2.6 million. The ACSC believes this
negotiated resolution is consistent with or better than a litigated outcome. It is therefore recommended
that the Council approved the prepared ordinance and exhibits.
BOARD/COMMISSION RECOMMENDATION:
NONE
EXHIBITS:
Ordinance, Attachments A& B, Staff Report
ACTION:
BUDGET INFO:
❑ Financial Report ❑ Minute Order
Expense
$NA
❑ Department Report ❑ Resolution
Budgeted Amt.
$NA
❑ Presentation Z Ordinance
y'I'D Actual
$NA
❑ Public Hearing ❑ Other
Acct. Name
NA
Acct. Number.
NA
FISCAL NOTES:
None
REVIEWED AND APPROVED BY:
Z Administration E City Clerk ❑ Community Development ❑ EMS/IT N Finance ❑ Fire
❑ Municipal Court Z Legal ❑ Library ❑ Police ❑ Eng./Public Works ❑ Utilities
City of Paris Revised 2/04/08
-125
D RAFT
ATTORNEY\ORDWORK\CURRENT\ATMOS RRM ORD 2009
ORDINANCE NO.
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF PARIS, TEXAS,
("CITY") APPROVING A NEGOTIATED RESOLUTION BETWEEN THE
ATMOS CITIES STEERIIVG COMMITTEE ("ACSC" OR "STEERING
COMMITTEE") AND ATMOS ENERGY CORP., MID-TEX DIVISION ("ATMOS
MID-TEX" OR "COMPANY") REGARDIIVG THE COMPAIVY'S RATE REVIEW
MECHANISM FILING IN ALL CITIES EXERCISING ORIGINAL
JURISDICTION; DECLARING EXISTING RATES TO BE UNREASONABLE;
REQUIRING THE COMPANY TO REIMBURSE CITIES' REASONABLE
RATEMAKING EXPENSES; ADOPTING TARIFFS THAT REFLECT RATE
ADJUSTMENTS CONSISTENT WITH THE NEGOTIATED SETTLEMENT
AND FINDING THE RATES TO BE SET BY THE ATTACHED TARIFFS TO BE
JUST AND REASONABLE; APPROVIIVG ATMOS' PROOF OF REVENUES;
DETERMINING THAT THIS ORDINANCE WAS PASSED IN ACCORDANCE
WITH THE REQUIREMENTS OF THE TEXAS OPEN MEETINGS ACT;
MAKING OTHER FINDIIVGS AND PROVISIONS RELATED TO THE
SUBJECT; PROVIDING A REPEALER CLAUSE, A SEVERABILITY CLAUSE, A
SAVINGS CLAUSE; DECLARING AN EFFECTIVE DATE; AND REQUIRING
DELIVERY OF THIS ORDINANCE TO THE COMPANY AND THE STEERING
COMMITTEE'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 and charges of Atmos Mid-Tex; and
WHEREAS, the City is a member of the Atmos Cities Steering Committee ("ACSC" or
"Steering Committee"), a coalition of more than 150 similarly situated cities served by
Atmos Mid-Tex that have joined together to facilitate the review and response to natural
gas issues affecting rates charged in the Atmos Mid-Tex service area (such participating
cities are referred to herein as "ACSC Cities"); and
WHEREAS, pursuant to the terms of the agreement settling the Company's 2007
Statement of Intent to increase rates, ACSC Cities and the Company worked collaboratively
to develop the Rate Review Mechanism ("RRM") tariff that allows for an expedited rate
review process controlled in a three year experiment by ACSC Cities as a substitute to the
current GRIP process instituted by the Legislature; and
WHEREAS, the City took action in 2008 to approve a Settlement Agreement with
Atmos Mid-Tex resolving the Company's 2007 rate case and authorizing the RRM Tariff;
and
Atmos RRM Ordinance 1
Im yy y1i/V
WHEREAS, the 2008 Settlement Agreement contemplates reimbursement of ACSC
Cities' reasonable expenses associated with RRM applications; and
WHEREAS, on or about March 6, 2009, Atmos Mid-Tex filed with the City its second
application pursuant to the RRM tariff to increase natural gas rates by approximately $20.2
million, such increase to be effective in every municipaliry that has adopted the RRM tariff
within its Mid-Tex Division; and
WHEREAS, ACSC Cities coordinated its review of Atmos' RRM filing and designated
a Settlement Committee made up of ACSC representatives and assisted by ACSC attorneys
and consultants to resolve issues identified by ACSC in the Company's RRM filing; and
WHEREAS, the Company has filed evidence that existing rates are unreasonable and
should be changed; and
WHEREAS, independent analysis by ACSC's rate expert concluded that Atmos Mid-
Tex is able to justify a slight rate increase over current rates; and
WHEREAS, the Steering Committee has advocated in other proceedings that Atmos
Mid-Tex hedge natural gas futures in order to mitigate the volatility of natural gas prices,
which are a flow through to customers; and
WHEREAS, the ACSC Executive Committee, as well as ACSC lawyers and consultants,
recommend that ACSC members approve the attached rate tariffs ("Attachment A" to this
Ordinance), which will increase the Company's revenue requirement by $2.6 million; and
WHEREAS, the attached tariffs implementing new rates and Atmos' Proof of
Revenues ("Attachment B" to this Ordinance) are consistent with the negotiated resolution
reached by ACSC Cities and are just, reasonable, and in the public interest; and
WHEREAS, it is the intention of the parties that if the City determines any rates,
revenues, terms and conditions, or benefits resulting from a Final Order or subsequent
negotiated settlement approved in any proceeding addressing the issues raised in the
Company's RRM filing would be more beneficial to the City than the terms of the attached
tariff, then the more favorable rates, revenues, terms and conditions, or benefits shall
additionally accrue to the City; and
WHEREAS, the negotiated resolution of the Company's RRM filing and the resulting
rates are, as a whole, in the public interest.
NOW, THEREFORE, BE IT ORDAIIVED BY THE CITY COUNCIL OF THE CITY OF
PARIS, TEXAS:
Section 1. That the findings set out in the preamble to this ordinance are hereby in
all things approved.
Atmos RRM Ordinance 2
" 130
Section 2. That the City Council finds that the existing rates for natural gas service
provided by Atmos Mid-Tex are unreasonable and new tariffs and Atmos' Proof of
Revenues, which are attached hereto and incorporated herein as Attachments A and B, are
just and reasonable and are hereby adopted.
Section 3. That Atmos Mid-Tex shall reimburse the reasonable rate making
expenses of the ACSC Cities in processing the Company's rate application.
Section 4. That to the extent any resolution or ordinance previously adopted by the
Council 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 of the Ordinance shall
be interpreted as if the offending section or clause never existed.
Section 7. That if the City determines any rates, revenues, terms and conditions, or
benefits resulting from a Final Order or subsequent negotiated settlement approved in any
proceeding addressing the issues raised in the Company's RRM filing would be more
beneficial to the City than the terms of the attached tariff, then the more favorable rates,
revenues, terms and conditions, or benefits shall additionally accrue to the City.
Section B. That the Company's Gas Cost Recovery tariff is revised to permit
recovery of certain costs associated with hedging natural gas futures.
Section 9. That all provisions of the ordinances of the City of Paris, Texas in conflict
with the provisions of this ordinance are hereby repealed, and all other provisions of the
ordinances of the City of Paris not in conflict with the provisions of this ordinance shall
remain in full force and effect.
Section 10. That the repeal of any ordinance or part of ordinances affected by the
enactment of this ordinance shall not be construed as abandoning any action now pending
under or by virtue of such ordinance or as discontinuing, abating, modifying, or altering
any penalty accruing or to accrue, or as affecting any rights of the municipality under any
section or provisions of any ordinance at the time of passage of this ordinance.
Section 11. That it is the intention of the City Council of the City of Paris that this
ordinance, and every provision hereof, shall be considered severable, and the invalidiry or
partial invalidity of any section, clause, or provisions of this ordinance shall not affect the
validity of any other portion of this ordinance.
Atmos RRM Ordinance 3
__-131
Section 12. That any person violating any provision of this ordinance shall be guilty
of a Misdemeanor, and upon conviction, shall be subject to a fine in accordance with
provisions of Sec. 1-6 of Chapter One of the City of Paris Code of Ordinances, and each and
every day's continuance of any violation of the above-enumerated sections shall constitute
and be deemed a separate offense.
Section 13. That by a supermajority vote of _ ayes and _ nays, the City Council
voted to suspend the rule requiring two readings before adoption of this ordinance.
Section 14. That 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
August 1, 2009.
Section 15. That a copy of this Ordinance shall be sent to Atmos Mid-Tex, care of
David Park, Vice President Rates and Regulatory Affairs, at Atmos Energy Corporation,
5420 LBJ Freeway, Suite 1800, Dallas, Texas 75240, and to Geoffrey Gay, General Counsel to
ACSC, at Lloyd Gosselink Rochelle & Townsend, P.C., P.O. Box 1725, Austin, Texas 78767-
1725.
PASSED AND ADOPTED on first and final reading this 10th day of August, 2009.
Jesse James Freelen, Mayor
ATTEST:
Janice Ellis, City Clerk
APPROVED AS TO FORM:
W. Kent McIlyar, City Attorney
Atmos RRM Ordinance 4
« 13 2
Attachment A
ATMOS ENERGY CORPORATION
MID TEX DIVISION
REVISION NO: 0
RATE SCHEDULE:
R- RESIDENTIAL SALES
APPIICABLE TO:
All Cittes designated as "Group A" on the Cities Served List
EFFECTNE DATE:
Bills Rendered on or after 0810112008
PAGE: 28
Application
Applicable to Residential Customers for all natural gas provided at one Point of Delivery and measured
through one meter.
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.
Monthty Rate
Customer's monthly bill will be calculated by adding the following Customer and Mcf charges to the
amounts due under the riders listed below:
Gharge
AmQWd
Customer Charge per Bill
$ 7.00 per month
Commodity Charge - All Mcf
$2.2707 per Mcf
Gas Cost Recovery: Plus an amount for gas costs and upstream transportation costs calculated
in accordance with Part (a) and Part (b), respectivefy, of Rider GCR.
Weather Normalization Adjustment: Plus or Minus an amount for weather normalizafion
calculated in accordance with Rider WNA.
Rate Review Mechanism: Plus or Minus an amount for rates as calculated in accordance with
Rider RRM.
Franchise Fee Adjustment Plus an amount for franchise fees calculated in accordance with Rider
FF. Rider FF is only applicable to customers inside the corporate limits of any incorporated
municipality.
Tax Adjustment: Plus an amount for tax calculated in accordance with Rider TAX.
Surcharges: Plus an amount for surcharges calculated in accordance with the applicable rider(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 jurisdiction and to the Company's Tariff for Gas Sen+ice.
Issued By: David J. Park
Date Issued:
Vice President, Rates and Reguiatory Affairs
. ---133
Attachment A
ATMOS ENERGY CORPORATION
MID-TEX DNIStON
REVISION NO: 0
RATE SCHEDULE:
C- COMMERCIAL SALES
APPLICABLE T0:
All Cities designated as "Group A" on the Cities Served List
EFFECTNE DATE:
Bllls Rendered on or after 0810112009
PAGE: 30
Application
Applicable to Commerciai Customers for all natural gas provided at one Point of Delivery and measured
through one meter and to Industriai Customers with an average annual usage of less than 3,000 Mcf.
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 fumished.
Monthty Rate
Customers monthly bill will be calculated by adding the following Customer and Mcf charges to the
amounts due under the riders listed below:
Charge
Amount
Customer Charge per Bill
$ 13.50 per month
Commodity Charge - All Mcf
$ 0.9877 per AAcf
Gas Cost Recovery: Plus an amount for gas costs and upstream transportation costs calculated
in accordance with Part (a) and Part (b), respectively, of Rider GCR.
Weather Normalization Adjustment: Plus or Minus an amount for weather normalization
calculated in accordance with Rider WNA.
Rate Review Mechanism: Plus or Minus an amount for rates as calculated in accordance with
Rider RRM.
Franchise Fee Adjustment: Plus an amount for franchise fees calculated in accordance with Rider
FF. Rider FF is only applicable to customers inside the corporate limits of any incorporated
municipality.
Tax Adjustment: Plus an amount for tax calculated in accordance with Rider TAX.
Surcharges: Plus an amount for surcharges calculated in accordance with the applicable rider(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 regutatory bodies
having jurisdiction and to the Company's Tariff for Gas Service.
Issued By: David J. Park Vice President, Rates and Regulatory Affairs
Date Issued:
•M "4 -134
Attachment A
ATMOS ENERGY CORPORATION
MID TEX DNISION
REVISION NO: 0
RATE SCHEDULE:
I- INDUSTRIAL SALES
APPLICABLE T0:
Atl Cities deslgnated as "Group A" on the Cities Served List
EFFECTIVE DATE:
Bilis Rendered on or after 0810112009
TPAGE: 31
Application
Applicable to Industrial Customers with a maximum daily usage (MDU) of less than 3,500 MMBtu 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 anangements between Company and Customer.
Type of Servlce
Where service of the type desired by Customer is not already available at the Point of Delivery, additional
charges and special contract anangements between Company and Customer may be required prior to
service being furnished.
Monthly Rate
Customers monthly bill will be calculated by adding the following Customer and MMBtu charges to the
amounts due under the riders listed below:
Gharge
Amount
Customer Charge per Meter
$ 425.00 per month
First 0 MMBtu to 1,500 MMBtu
$ 0.2583 per MMBtu
Next 3,500 MMBtu
$ 0.1884 per MMBtu
All MMBtu over 5,000 MMBtu
$ 0.0404 per MMBtu
Gas Cost Recovery: Plus an amount for gas costs and upstream transportation costs calculated
in accordance with Part (a) and Part (b), respectively, of Rider GCR.
Rate Review Mechanism: Plus or Minus an amount for rates as calculated in accordance with
Rider RRM.
Franchise Fee Adjustment Plus an amount for franchise fees calculated in accordance with Rider
FF. Rider FF is only applicable to customers inside the corporate limits of any incorporated
municipality.
Tax Adjustment: Plus an amount for tax calculated in accordance with Rider 7AX.
Surcharges: Plus an amount for surcharges calculated in accordance with the applicable rider(s).
Curtailment Overpull Fee
Upon notification by Company of an event of curtailment or interruption of Customer's deliveries,
Customer will, for each MMBtu delivered in excess of the stated level of curtailment or interruption, pay
Company 200°/a of the midpoint price for the Katy point listed in Platts Gas Daily published for the
applicable Gas Day in the table entitled "Daily Price Survey."
Issued By: David J. Park
Date Issued:
Vice President, Rates and Regulatory Affairs
- - -1.35)
Attachment A
ATMOS ENERGY CORPORATION
MID TEX DNISION
REVISION NO: 0
RATE SCHEDULE:
i- INDUSTRIAL SALES
APPLICABLE T0:
All Citiea designated as "Group A" on the Cities Served List
EFFECTIVE DATE:
Bilis Rendered on or after 0810112009
PAGE: 32
Replacement Index
in the event the "midpoinY' or "common" price for the Katy point listed in Platts Gas Daily in the table
entitled "Daily Price Survey" is no longer pubtished, Company will calculate the applicable imbalance fees
utilizing a daily price index recognized as authoritative by the natural gas industry and most closely
approxima6ng the applicable index.
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 jurisdiction and to the Company's Tariff for Gas Service.
Special Conditions
In order to receive service under Rate I, Customer must have the type of ineter required by Company.
Customer must pay Company all costs associated with the acquisition and installation of the meter.
Issued By: David J. Park Vice President, Rates and Regulatory Affairs
Date Issued:
b -v r 1V 6
Attachment A
ATMOS ENERGY CORPORATION
MID-TEX DNISION
REVISION NO: 0
RATE SCHEDULE:
T - TRANSPORTATION
APPLICABLE T0:
Ap Cities designated as "Group A" on the Cities Served List
EFFECTIVE DATE:
Bills Rendered on or after 0810112008
PAGE: 33
Application
Applicable, in the event that Company has entered into a Transportation Agreement, to a customer
directly connected to the Atmos Energy Corp., Mid-Tex Division Distribution System (Customer) for the
transportation of all natural gas supplied by Customer or CustomePs agent at one Point of Delivery for
use in Customers facility.
Type of Seroice
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.
Monthly Rate
Customers bill will be calculated by adding the following Customer and MMBtu charges to the amounts
and quantities due under the riders listed below:
Charge
Amaunt
Customer Charge per Meter
$ 425.00 per month
First 0 MMBtu to 1,500 MMBtu
$ 0.2583 per MMBtu
Next 3,500 MMBtu
$ 0.1884 per MMBtu
All MMBtu over 5,000 MMBtu
$ 0.0404 per MMBtu
Upstream Transportation Cost Recovery: Plus an amount for upstream transportation costs in
accordance with Part (b) of Rider GCR.
Rate Review Mechanism: Plus or Minus an amount for rates as calculated in accordance with
Rider RRM.
Retention Adjustment: Plus a quantity of gas as calculated in accordance with Rider RA.
Franchise Fee Adjustment: Plus an amount for franchise fees calculated in accordance with Rider
FF. Rider FF is only applicable to customers inside the corporate limits of any incorporated
municipality.
Tax Adjustment: Plus an amount for tax calculated in accordance with Rider TAX.
Surcharges: Plus an amount for surcharges calculated in accordance with the applicable rider(s).
Imbalance Fees
All fees charged to Customer under this Rate Schedule will 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.
Issued By: David J. Park
Date Issued:
Vice President, Rates and Regulatory Affairs
Attachment A
ATMOS ENERGY CORPORATION
MID-TEX DNISION
REVISION NO: 0
RATE SCHEDULE:
T - TRANSPORTATION
APPIICABLE TO:
Alt Cities designated as "Group A" on the Cftiea Served List
EFFECTNE DATE:
Bills Rendered on or after 0810112009
TPAGE: 34
Monthly Imbalance Fees
Customer shali pay Company the greater of (i) $0.10 per MMBtu, or (ii) 150% of the difference per MMBtu
between the highest and lowest "midpoinY' price for the Katy point listed in Platts Gas Daily in the table
entitled "Daily Price Survey" during such month, fvr the MMBtu of Customer's monthly Cumulative
Imbalance, as defined in the applicable Transportation Agreement, at the end of each month that exceeds
10% of Customers receipt quantities for the month.
Curtailment Overpull Fee
Upon notification by Company of an event of curtailment or interruption of Customer's deliveries,
Customer will, for each MMBtu delivered in excess of the stated level of curtailment or interruption, pay
Company 200% of the midpoint price for the Katy point listed in Pfatts Gas Daily published for the
applicable Gas Day in the table entitled "Daily Price Survey."
Replacement Index
In the event the "midpoinY or "common" price for the Katy point listed in Platts Gas Daily in the table
entitled "Daily Price Survey° is no longer published, Company will calculate the applicable imbalance fees
utilizing a daily price index recognized as authoritative by the natural gas industry and most closely
approximating the applicable index.
Agreement
A transportation agreement is required.
Notice
Seroice hereunder and the rates for services provided are subject ta the orders of regulatory bodies
having jurisdiction and to the Company's Tariff for Gas Service.
Special Conditions
In order to receive service under Rate T, customer must have the type of ineter required by Company.
Customer must pay Company all costs associated with the acquisition and installation of the meter.
Issued By: David J. Park Vice President, Rates and Regulatory AfFairs
Date Issued:
" 4--138
Attachment A
ATMOS ENERGY CORPORATION
MID-TEX DNISION
REVISION NO: 0
RIDER:
WNA - WEATHER NORMALIZATION ADJUSTMENT
APPLICABLE T0:
All Cities deslgnated as "Group A" on the Cities Served List
EFFECTIVE DATE:
Bills Rendered on or after 08101/2009
PAGE: 45
Provisions for Adiustment
The base rate per Mcf (1,000,000 Btu) for gas service set forth in any Rate Schedules utilized by the
cities of the Mid-Tex Division service area for determining normalized winter period revenues shall be
adjusted by an amount hereinafter described, which amount is referred to as the "Weather Normalizabon
Adjustment." 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.
Computation of Weather Normalizabon Adjustment
The Weather Normalizabon Adjustment Factor shall be computed to the nearest one-hundredth cent
per Mcf by the following formula:
(HSFi x (NDD-ADD) )
WNAFi = Ri
(BLi + (HSFi x ADD) )
Where
i = any particular Rate Schedule or billing classification within any such
particular Rate Schedule that contains more than one billing classification
WNAFi = Weather Normalizabon Adjustment Factor for the ith rate schedule or
classification expressed in cents per Mcf
Ri = base rate of temperature sensitive sales for the ith schedule or
classification approved by the entity exercising original jurisdiction.
HSFi = heat sensitive factor for the ith schedule or classification calculated as the
siope of the linear regression of average sales per bill (Mcfl and actual
heating degree days by month for the test year by schedule or classification
and weather station as part of the RRM fiting.
NDD = billing cycle normal heating degree days calculated as the simple ten-year
average of actual heating degree days.
ADD = billing cycle actual heating degree days.
Bli = base load sales for the ith schedule or classification calculated as the y-
intercept of the tinear regression of average sales per bill (Mcfl and actual
heating degree days by month for the test year by schedule or classification
and weather station as part of the RRM fifing.
The Weather Normalization Adjustment for the jth customer in ith rate schedule is computed as:
Issued By: David J. Park
Date Issued:
Vice President, Rates and Regulatory Affairs
- ---139
Attachment A
ATMOS ENERGY CORPORATfON
MID TEX DNISION
REVISION NO: 0
RIDER:
WNA - WEATHER NORMALIZATION ADJUS7MENT
APPLICABLE TO:
All Cities designated as "Group A" on the Cities Served List
EFFECTNE DATE:
Bills Rendered on or after 08/0112009
PAGE: 46
WNAi = WNAFi x qq
Where qy is the relevant sales quantity for the jth customer in ith rate schedule.
Filings with Entities Exercising,Original Jurisdiction
As part of its annual RRM filing the Company will file (a) a copy of each computation of the Weather
Normalization Adjustment Factor, (b) a schedule showing the effective date of each such Weather
Normalization Adjustment, (c) a schedule showing the factors of values used in calculating such
Weather Normalization Adjustment and (d) a random sample and audit of thirty (30) actual customer
bills, with customer information deleted, for each rate schedule or classification to which the WNA was
applied in the preceding 12 month period. To the extent that source data is needed to audit the WNA
application, such data will be provided by the Company as part of the annual RRM filing.
If the RRM is discontinued, as provided in the Rider RRM tariff, the information required herein to be
filed with the entities exercising original jurisdiction shall be filed on March 1 of each year.
Base Use/Heat Use Factors
Residential Commercial
Base use Heat use Base use Heat use
1A1cf3+hor C1=+inn IUg-f Mrtf/H1117 MCf Mcf/HDD
Abilene
0.98
.0140
9.64
.0629
Austin
1.30
.0161
20.00
.0815
Dallas
1.60
.0212
20.12
.1018
Waco
1.12
.0139
11.69
.0608
Wichita
Falls
1.12
.0159
11.67
.0649
Sample WNAFj Calculation:
.3393 per Mcf =
Where
i =
Ri =
(.0140
2.2707 x
(0.98
Residential Single Block Rate Schedule
22707 per MCF
x (30-17) )
+ (.0140 x 17) )
HSFi = .0140 (Residential - Abilene Area)
Issued By: David J. Park Vice President, Rates and Regulatory Affairs
Date Issued:
w 4 --14O
Attachment A
ATMOS ENERGY CORPORATION
MID TEX DIVISION
REVISION NO: 0
RIDER:
WNA - WEATHER NORMALIZATION ADJUSTMENT
APPLICABLE T0:
Ail Cities designated as "Group A" on the Cities Served List
EFFECTIVE DATE:
Biils Rendered on or after 08/0112009
PAGE: 47
NDD = 30 HDD (Simpte ten-year average of Actual HDD for Abilene Area - 9/15/06
-10/14/06)
ADD = 17 HDD (Actual HDD for Abilene Area - 9/15/06 -10/14/06)
Bli = 0.98 Mcf (Residential - Abilene Area)
Issued By: David J. Park Vice President, Rates and Regulatory Affairs
Date Issued:
- W - -141
Attachment A
ATMOS ENERGY CORPORATION
MfD TEX DNISION
REVISION NO: 0
RIDER:
GCR - GAS COST RECOVERY
APPLICABLE T0:
All Cities Except Dallas
EFFECTIVE DATE:
Bilis Rendered on or after 81112009
PAGE: 68
Applicable to Rate R, Rate C, and Rate I for ail gas sales made by Company, and applicable to Rate R,
Rate C, Rate I, and Rate T for recovery of Pipeline System costs. The totat gas cost recovery amount
due is determined by adding the gas cost calculated in Section (a) below and the pipeline cost catculated
in Section (b) below.
The amount due for gas cost (Section (a)) is determined by multiplying the Gas Cost Recovery Factor
(GCRF) by the Customer's monthly volume. For Customers receiving service under Rate R and Rate C,
monthly volume will be calculated on a Mcf basis. For Customers receiving service under Rate I, monthly
volume will be calculated on an MMBtu basis and the quantities will be adjusted as necessary to recover
actual gas costs.
The amount due for pipeline cost (Section (b)) is determined by multiplying the Pipeline Cost Factor
(PCF) by the Customers monthly volume. For Customers receiving service under Rate R and Rate C,
monthly volume will be calculated on an Mcf basis. For Customers receiving service under Rate I and
Rate T, monthly volume will be calculated on an MMBtu basis and the quantities will be adjusted as
necessary to recover actual gas costs.
(a) Gas Cost
Method of Calculation
The monthly gas cost adjustment is calculated by the application of a Gas Cost Recovery Factor (GCRF),
as determined with the following formula:
GCRF = Estimated Gas Cost Factor (EGCF) + Reconcitiation Factor (RF) + Taxes (TXS)
EGCF = Estimated cost of gas, including lost and unaccounted for gas attributed to residential,
commercial, and industrial sales, and any reconciliation balance of unrecovered gas costs, divided
by the estimated total residential, commercial, and industrial sales. Lost and unaccounted for gas is
limited to 5%.
RF = Calculated by dividing the difference between the Actual Gas Cost Incurred, inclusive of
interest over the preceding twelve-month period ended June 30 and the Actual Gas Cost Billed
over that same twelve-month period by the estimated total residential, commercial, and industrial
sales for the succeeding October through June billing months. The interest rate to be used is the
annual interest rate on overcharges and under charges by a utility as published by the Public Utility
Commission each December. The interest rate for calendar year 2009 is 2.09%.
Actual Gas Cost Incurred = The sum of the costs booked in Atmos Energy Corp., Mid-Tex Division
account numbers 800 through 813 and 858 of the FERC Uniform System of Accounts, including the
net impact of injecting and withdrawing gas from storage. Also includes a credit or debit for any
out-of-period adjustments or unusual or nonrecurring costs typically considered gas costs and a
credit for amounts received as Imbalance Fees or Curtailment Overpull Fees. Also includes any
Issued By: David J. Park Vice President, Rates and Regulatory Affairs
Date Issued:
M 4 14 2
Attachment A
ATMOS ENERGY CORPORATION
MID TEX DNISION
REVISION NO: 0
RIDER:
GCR - GAS COST RECOVERY
APPLICABLE T0:
Ail Citiea Except Dallas
EFFECTNE DATE:
Biils Rendered on or after 81112009
PAGE: 69
prudently incurred transaction-related fees, gains or losses and other transaction costs associated
with the use of various financial instruments that are executed by the Company for the purpose of
price volatiliry mitigation.
Actual Gas Cost Billed = EGCF multiplied by the monthly volumes billed to Residential, Commercial
and Industrial Sales customers, less the total amount of gas cost determined to have been
uncollectible and written off which remain unpaid for each month of the reconciliation period.
Any amount remaining in the reconciliation balance after the conclusion of the period of amortization
will be maintained in the reconciliation balance and included in the collection of the next RF.
Atmos Energy shall file annual reports with the Commission, providing by month the following
amounts: Gas Cost Written Off. Margin Written Off, Tax and Other Written Off, Total Written Off,
Gas Cost Collected and Margin Collected.
TXS = Any statutorily imposed assessments or taxes applicable to the purchase of gas divided by
the estimated total residential, commercial, and industrial sales.
ADJ = Any surcharge or refund ordered by a regulatory authority, inclusive of interest, divided by the
estimated total residential, commercial, and industrial sales is to be included as a separate line item
surcharge.
(b) Pipeline Cost
Method of Calculation
Each month, a Pipeline Cost Factor (PCF) is calculated separately for each Pipeline Cost Rate Class
listed below. The formula for the PCF is:
PCF = PP / S, where:
PP =(P - A) x D, where:
P= Estimated monthly cost of pipeline service calculated pursuant to Rate CGS
D= Pipeline service allocation factor for the rate class as approved in the Company's most recent
rate case, as follows:
Issued By: David J. Park vce President, Rates and Regulatory Affairs
Date Issued:
-143
Attachment A
ATMOS ENERGY CORPORATION
MID TEX DNISION
REVISION NO: 0
RIDER:
GCR - GAS COST RECOVERY
APPLICABLE T0:
All Cities Except Dallas
EFFECTIVE DATE:
Bilis Rendered on or after 81112008
PAGE: 70
Pi eline Cost Rate Class
Allocation Factor D
Rate R - Residential Service
.634698
Rate C - Commercia! Service
.302824
Rate I- Industrial Service and Rate T- Trans ortation Senrice
.062478
A= Adjustment applied in the current month to correct for the difference between the actual and
estimated pipeline cost revenue of the second preceding month, calculated by the formula:
A = R - (C - A2), where:
R= Actual revenue received from the application of the PP component in the second preceding
month.
C= Actual pipeline costs for the second preceding month.
A2 = The adjustment (A) applied to the PP component in the second preceding month.
S= Estimated Mcf or MMBtu for the rate class for the current billing month.
The PCF is calculated to the nearest 0.0001 cent.
The Pipeline Cost to be billed is determined by multiplying the Mcf or MMBtu used by the appropriate
PCF. The Pipeline Cost is determined to the nearest whole cent.
Issued By: David J. Park Vice President, Rates and Regulatory Affairs
Date Issued:
- -144
Attachment A
ATMOS ENERGY CORPORATION
MID-TEX DIVISION
REVISION NO: 0
RIDER:
CEE - CONSERVATION & ENERGY EFFICIENCY
APPLICABLE T0:
Ail Cities except Dallas
EFFECTIVE DATE:
Bills Rendered on or atter 81112008
PAGE: 84
Purpose
Atmos Energy Mid-Tex is proposing to institute a complete Conservation & Energy Efficiency program
which will offer assistance to qualified customer segments in reducing energy consumption and lowering
energy utility bills. The proposal is one where Atmos Energy shareholders will fund a percentage of the
allowable expenses incurred annually, with a customer rate component providing the remainder of the
funding. Following is a high-level, concept summary of the proposal. Atmos Energy Mid-Tex Division
proposes to work with the communities it serves to develop the detaits of a new tariff and programs
addressing conservation and energy efficiency.
Svnopsis:
Voucher system to provide free energy savings materials and supplies to qualifying customers of Atmos
Mid-Tex. Qualified Customers will receive up to one thousand five hundred dollars ($1,500.00) worth of
caulking, weather-stripping, sheathing, sealing, water heater blankets, related gas plumbing, and like
materials, other energy saving devices such as clock-thermostats, set-back devices ("covered items")
from approved suppliers / retailers including necessary labor.
Company will undertake efforts to enlist support from community groups, including its own Employee
Action Program, to assist customers with installation. If it is determined that professional installation
capabilities are necessary, the parties will agree on labor assistance amounts.
Eli ibili
Low Income - Low-income rate-payers that qualify for heating bill assistance through LIHEAP and
other government energy efficiency program agencies and all agencies that distribute Atmos "Share the
Warmth" funds. Agencies that allocate assistance funds denote customer as Low Income, a status that
lasts for one year.
Senior Citizen - Primary account holder can request eligibility through ATM call center or web-site.
Customer provides primary SSN which is verified through Social Security Administration. And account
holder that is or turns 65 years old in that year becomes eligible.
Fundin
Initial annual program funding will be at two million dollars ($2,000,000). Atmos Energy shareholders will
contribute one million doltars ($1,000,000.00) to this initiative annually with ratepayers providing one
million dollars ($1,000,000.00) per year. It is proposed that the program operate on an October 1 through
September 30 year, with regulatory asseUliability accounting employed by Atmos to track the difference
between program funding and qualifying program expenditures. No Atmos employee labor will be
charged as a program expenditure.
Administration:
A third-party administrator will coordinate qualiflcation of customers, voucher distribution, subsequent
verification and reimbursement of eligible expenditures and general program administration. Program
administration expenses will be funded from the annual approved budget.
Issued By: David J. Park Vice President, Rates and Regulatory Affairs
Date Issued:
- - - -145
Attachment A
ATMOS ENERGY CORPORATION
MID TEX DIVISION
REVISION N0: 0
RIDER:
CEE - CONSERVATION 8 ENERGY EFFICIENCY
APPLICABLE TO:
All Cities except Dallas
EFFECTNE DATE:
Bills Rendered on or after 81112009
TPAGE: 85
Audits will be provided all interested parties within 120 days of the end of each program year to determine
effectiveness.
Reaort
Atmos shall file an annual report detailing cost to administer the program including the amounts paid out
of the program for energy conversation assistance. The report shall also detail the number of applicants
and expenditures by geographic location, including the numbers of applications rejected and accepted
and reason if rejected. The report shall be filed with the Director of the Gas Services Division of the
Railroad Commission within 120 days of the end of each program year and with counsel of record for
municipalities senred by the Mid-Tex Division.
Issued By: David J. Park Vice President, Rates and Regulatory Affairs
Date Issued:
ATTACHMENT B
ATMOS ENERGY CORP., MID-TEX DIVISION
PROOF OFREVENUES
TEST YEAR ENDING DECEMBER 31, 2008
(2009 RRM SETTLEMENT PROPOSAL)
Line
No
Description
Prospective
Rate increase
2008 True-up
Total change from
current rates
(a)
(b)
(c)
(d)
1
Rate R
2
Consumption Charge per MCF
3
Change from Current Rate
$0.1047
$0.0060
$0.0297
4
Billing Units for Specified Period
82,321,960
82,321,960
82,321,960
5
Total Change in Base Revenue
$8,619,109
$493,932
$2,444,962
6
Associated Revenue Taxes
532 144
30 495
150 952
7
Total Rate Impact
$9,151,253
$524,427
$2,595,914
8
Number of Bills for Specified Period
17,244,058
17,244,058
17,244,058
9
Average Impact per Bill
$0.53
$0.03
$0.15
10
Rate C
11
Consumption Charge per MCF
12
Change from Current Rate
$0.0383
$0.0052
$0.0068
13
Billing Units for Specified Period
52,439,100
52,439,100
52,439,100
14
"Total Change in Base Revenue
$2,008,418
$272,683
$356,586
15
Associated Revenue Taxes
124 000
16 835
22 016
16
Total Rate Impact
$2,132,417
$289,519
$378,601
17
Number of Bills for Specified Period
1,452,943
1,452,943
1,452,943
18
Average Impact per Bill
$1.47
$0.20
$0.26
19
Rates I&T -1st block
20
Consumption Charge per MCF
21
Change from Current Rate
$0.0144
$0.0087
($0.0150)
22
Billing Units for Specified Period
9,681,181
9,681,181
9,681,181
23
Total Change in Base Revenue
$139,409
$84,226
($145,218)
24
Associated Revenue Taxes
8 607
5 200
8 966
25
Total Rate Impact
$148,016
$89,426
($154,183)
26
Rates 1&T - 2nd block
27
Consumption Charge per MCF
28
Change from Current Rate
$0.0105
$0.0064
($0.0109)
29
Billing Units for Specified Period
10,782,882
10,782,882
10,782,882
30
Total Change in Base Revenue
$113,220
$69,010
($117,533)
31
Associated Revenue Taxes
6 990
4 261
7 257
32
Total Rate Impact
$120,210
$73,271
($124,790)
33
Rates I&T - 3rd block
34
Consumption Charge per MCF
35
Change from Current Rate
$0.0023
$0.0014
($0.0023)
36
Billing Units for Specified Period
19,798,632
19,798,632
19,798,632
37
Total Change in Base Revenue
$45,537
$27,718
($45,537)
38
Associated Revenue Taxes
2 811
1 711
2 811
39
Total Rate Impact
$48,348
$29,429
($48,348)
40
Rates t&T - Total
41
Total Rate Impact
$316,575
$192,127
($327,322)
42
Number of Bills for Specified Period
11,571
11,571
11,571
43
Average Impact per Bill
$12.79
$7.73
($13.32)
44
45
Total Change in Base Revenue
$10,925,693
$947,570
$2,493,260
46
Total Rate Impact (Inc. Rev. Taxes)
$11,600,245
$1,006,073
$2,647,194
10
STAFF REPORT
The City of Paris, along with 150 other cities served by Atmos Energy Mid-Tex Division,
is a member of the Atmos Cities Steering Committee (ACSC). On March 6, 2009, Atmos Mid-
Tex filed with the City of Paris an application to increase natural gas rates pursuant to the Rate
Review Mechanism (RRM) tariff approved by the City as part of the settlement of the Atmos
Mid-Tex 2007 Statement of Intent to increase rates.
The Atmos Mid-Tex March RRM filing soup-ht a$20.2 million rate increase. The City
worked with ACSC to analyze the schedules and evidence offered by Atmos Mid-Tex to support
its request to increase rates. The Ordinance and attached RRM tariff are the result of negotiation
between ACSC and Atmos to resolve issues raised by ACSC during the review and evaluation of
Atmos' RRM filing. The Ordinance and RRM tariffs approve rates that will increase the
Coinpanv's revenues by $2.6 million effective for bills rendered on or after August l, 2009. The
monthly bill impact for the average residential customer will be a$0.15 increase (about a 0.22%
increase in the total bill).
Please note that current rates contain a true-up component ($9 million to be collected
over twelve months) from the first RRM in 2008. Collection of the 2008 true-up amount is
scheduled to end on November 1, 2009. The rate impact of that 2008 true-up amount for the
period August l- October 31, 2009 is $1,006,073. To simplify the process and to reduce rate
fluctuations, the parties have agreed to eliminate collection of the 2008 true-up on August 1,
2009 rather than November 1, 2009. The remaining $1,006,073 that is still owed from the 2008
true-up will be recovered as part of the 2009 true-up over 12 months rather than 3 months. This
change related to the 2008 true-up amount is revenue and rate impact neutral.
RR1V1 Background•
The RRM tariff was approved by ACSC Cities as part of the settlement agreement to
resolve the Atmos Mid-Tex 2007 rate increase case. Atmos Mid-Tex's current action represents
the second filing pursuant to the three-year trial project known as the RRM process. The RRM
process was created collaboratively by ACSC and Atmos Mid-Tex as an alternative to the GRIP
surcharge process. The RRM process allows for a more comprehensive rate review and annual
adjustment that will function as a substitute for future GRIP filings during the three-year trial
period specified by the tariff.
There are two components to the RRM adjustment. The prospective component adjusts
rates for known and measurable changes in O&M and net plant investment. Atmos Mid-Tex and
ACSC agreed to cap changes to expenses and invested capital at no more than 5%. The true-up
component evaluates whether the Company has over or underrecovered its earnings for the
previous year. For purposes of the RRM true-up component, the Atmos Mid-Tex rate of return
on equity and its capital structure are frozen to avoid the parent company from manipulating the
overall rate of return. Costs expressly prohibited from recovery through the RRM include first-
class air fare, travel, meals or entertainment for an employee's spouse, alcohol, sports events,
entertainment, arts and cultural events, sponsorship of sports, arts or cultural events, and social
club membership dues.
Atmos RRM Ordinance Staff Report 1
. - . 148
Purpose of the Ordinance:
The purpose of the Ordinance is to approve rate tariffs ("Attachment A") and Proof of
Revenues ("Attachment B") that reflect the negotiated rate change pursuant to the RRM process.
ln addition to the RRM tariffs, the Ordinance also approves a revision to the Atmos Mid-Tex
current Gas Cost Recovery ("GCR") tariff to allow the Company to recover certain hedging costs
associated with natural gas futures through the GCR tariff.
As a result of the negotiations, ACSG was able to reduce the Company's requested $20.2
million RRM increase by more than 70%. Approval of the Ordinance will result in rates that
implement a$2.6 million increase in Atmos' revenues effective August 1, 2009.
Reasons Justifvin2 Apuroval of the Negotiated Resolution:
During the time that the City of Paris has retained original jurisdiction in this case,
consultants working on behalf of ACSC cities have investigated the support for the Company's
requested rate increase. While the evidence does not support the $202 million increase
requested by the Company, ACSC consultants agree that the Company can justify a slight
increase in revenues. The agreement on'$2.6 million is a compromise between the positions of
the parties.
The alternative to a settlement of the RRM filing would be a contested case proceeding
before the Railroad Commission of Texas (RRC) on the Company's current application, would
take several months and cost ratepayers millions of dollars in rate case expenses and would not
likely produce a result more favorable than that to be produced by the settlement. The ACSC
Executive Cominittee recommends that ACSC members take action to approve the Ordinance
authorizing new rate tariffs.
With regard to the revision to the GCR tariff, ACSC has advocated that the Company use
hedging as a risk management tool to help mitigate volatile natural gas prices. The tariff change
is consistent with ACSC's prior position.
Atmos RRM Ordinance Staff Report 2
4- I Ixj
Rate Review Mechanism
Fact Sheet
*The Rate Review Mechanism (RRM) was created in 2008 as part of a collaborative agreement
between ACSC and Atmos. It replaces the unworkable and contentious Gas Reliability
Infrastructure Program (GRIP) surcharge process.
*The RRM authorizes cities to meaningfully review and dispute the company's annual rate
filings in an expedited rate proceeding at the city level. This authority was lacking under the
GRIP process.
*The RRM is a substitute for GRIP filings during the three-year trial period (2008 - 2010).
*The RRM permits the Company to seek an annual review of its revenues, estimated cost of
operations, and capital investments. In most cases, the company cannot seek rate adjustments
greater than 5 percent. The Company must provide evidence as part of the annual review
process that cities can assess and, if necessary, challenge.
*The RRM process allows Atmos to seek a surcharge from ratepayers if its anticipated expenses
exceed its anticipated revenues for a 12 month period. However, if the Company's revenues
exceed its authorized rate of return, it must issue refunds.
Costs Expresslv Prohibited from Recoverv Under the RRM:
First class airfare, travel, meals or entertainment for an employee's spouse, alcohol, sports
events, entertainment, arts and cultural events, sponsorship of sports, arts or cultural events, and
social club membership dues.
The RRM is applicable only to the Company's base rates - the cost of delivering natural
gas to customers. The commodity price of natural gas is a pass-through cost to customers
that can change monthly based upon the price of natural gas.
RRM Bill Impacts:
Pursuant to the negotiated agreement between Atmos and the Steering Committee, the
tariffs implementing the RRM will increase rates by $2.6 million. The average monthly
customer impact by class will be:
Residential (4.7 Mcf/month) -$0.15/month increase (0.22% overall increase)
Commercial (36.1 Mcf/month) -$0.26/month increase (0.06% overall increase)
Industrial (3480 MMBtu/month) -$46.80/month decrease (1.96% overall decrease)
150
Lloyd 816 Congress Avenue, Suite 1900
Austin, Texas 78701
Gosselink Telephone: (512) 322-5800
~ Facsimile: (512) 472-0532
ATTORNEYS AT LAW
www.iglawfirm.com
R4
Ms. Doyle's Direct Line: (512) 322-5820
EmaiL• kdoyle@Iglawfirm.com
MEMORANDUM
TO: Atmos City Steering Committee (ACSC) Members
FROM: Geoffrey Gay
Kristen Doyle
DATE: July 8, 2009
RE: Atmos RRM Settlement - FINAL ACTION NEEDED BY AUGUST 31, 2009
The ACSC Settlement Committee (Jay Doegey - Arlington, Danny Reed - Fort Worth,
Mark Israelson - Plano, Phil Boyd - Lewisville, Odis Dolton - Abilene), with the advice and
input of ACSC consultants and lawyers, has worked to resolve the Company's pending $20.2
million Rate Review Mechanism ("RRM") rate increase request without the necessity of a
protracted and costly contested case proceeding. The attached tariff that reflects rates that will
increase Atmos' revenues by $2.6 million. The negotiated result reduces Atmos' requested rate
increase by more than 85%. The monthly bill impact for an average residential customers will
be $0.15. The ACSC Executive Committee recommends approval of the negotiated resolution
because it represents an outcome that is equal to or better than the outcome expected from a
lengthy contested case proceeding, and maintains cities' role as a regulator of natural gas rates.
Please schedule consideration of the Ordinance at your next available council
meeting. Final council action to approve the Ordinance must take place by August 31,
2009. To assist you, several documents are attached:
• An ordinance setting new rates. The approved Ordinance should include the
attached Tariffs ("Attachment A" to the Ordinance) and Proof of Revenues
("Attachment B")
• A model staff report
• A RRM fact sheet with customer impacts by class
Please contact Kristen (512/322-5820, kdoyle@lglawf'irm.com) immediately if your city
is unable to meet the August 31St deadline for final action. Once final action has been taken by
your city, please forward a copy of the Ordinance to Atmos Mid-Tex and to our paralegal,
Barbara Kimmell (fax number: 512/472-0532, bkimmell@lglawfirm.com).
Lloyd Gosselink Rochelle & Townsend, P.C.
- - _ 151