The URL can be used to link to this page

Home My WebLink AboutOrdinances (Ordinance O-20-2138)-09/15/2020ORDINANCE 0-20-2138 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 ORDINANCE WAS PASSED IN ACCORDANCE WITH THE REQUIREMENTS OF THE TEXAS OPEN MEETINGS ACT; ADOPTING A SAVINGS CLAUSE; AND DECLARING AN EFFECTIVE DATE WHEREAS, the City of Colleyville, 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 by Resolution R- 18-4306 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 Ordinance 0-20-2138 Page 2 of 4 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 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). NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF COLLEYVILLE, TEXAS: Sec. 1 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 Ordinance 0-20-2138 Page 3 of 4 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. Sec. 2 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. Sec. 3 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. Sec. 4 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. Sec. 5 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. Sec. 6 THAT Atmos Mid -Tex shall reimburse the reasonable ratemaking expenses of the ACSC in processing the Company's 2020 RRM filing. Sec. 7 THAT to the extent any resolution or ordinance previously adopted by the Council is inconsistent with this Ordinance, it is hereby repealed. Sec. 8 THAT if any section, paragraph, subdivision, clause, phrase or provision of this ordinance shall be judged invalid or unconstitutional, the same shall not affect the validity of this ordinance as a whole or any portion thereof other than that portion so decided to be invalid or unconstitutional. Ordinance 0-20-2138 Page 4 of 4 Sec. 9 THAT this ordinance shall take effect immediately from and after its passage with rates authorized by attached tariffs to be effective for bills rendered on or after December 1, 2020. AND IT IS SO ORDERED. The first reading and public hearing being conducted on the 1st day of September 2020. The second reading and public hearing being conducted on the 15th day of September 2020. APPROVED BY A VOTE OF 7 AYES, 0 NAYS ON THIS THE 15TH DAY OF SEPTEMBER 2020. Mayor Richard Newton Aye Mayor Pro Tern Bobby Lindamood Aye Place 1, Tammy Nakamura Aye Place 3, Kathy Wheat Aye Place 4, George Dodson Aye Place 5, Chuck Kelley Aye Place 6, Callie Rigney Aye ATTEST: ' Christine Loven, TRMC City Secretary APPROVED AS TO FORM: Whitt Wyatt City Attorney OIOF'CO�LLEYVILLE Richard Newton Mayor Exhibit A to 2020 RRM Resolution or Ordinance Mid -Tex Tariffs Effective December 1, 2020 MID-TEX DIVISION ATMOS ENERGY CORPORATION RRC Tariff No: RATE SCHEDULE: R— RESIDENTIALSALES APPLICABLE TO: ALL CUSTOMERS IN THE MID-TEX DIVISION UNDER THE RRM TARIFF EFFECTIVE DATE: Bills Rendered on or after 12101/2020 PAGE: 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. Monthly Rate Customer's monthly bill will be calculated by adding the following Customer and Ccf charges to the amounts due under the riders listed below: Charge Amount Customer Charge per Bill $ 20.25 per month Rider CEE Surcharge $ 0.05 per month' Total Customer Charge $ 20.30 per month Commodity Charge —All Ccf $0.26651 per Ccf 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. 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 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 RRC Tariff No: RATE SCHEDULE: C — COMMERCIAL SALES APPLICABLE TO: ALL CUSTOMERS IN THE MID-TEX DIVISION UNDER THE RRM TARIFF EFFECTIVE DATE: Bills Rendered on or after 1210112020 PAGE: Application Applicable to Commercial Customers for all natural gas provided at one Point of Delivery and measured through one meter and to Industrial Customers with an average annual usage of less than 30,000 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. Monthly Rate Customer's monthly bill will be calculated by adding the following Customer and Ccf charges to the amounts due under the riders listed below: Charge Amount Customer Charge per Bill $ 54.50 per month Rider CEE Surcharge $ 0.02 per month' Total Customer Charge $ 54.52 per month Commodity Charge —All Ccf $ 0.11728 per Ccf 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. 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 Service. 1 Reference Rider CEE -Conservation and Energy Efficiency as approved in GUD 10M. Surcharge billing effective July 1, 2020. MID-TEX DIVISION RRC Tariff No: ATMOS ENERGY CORPORATION RATE SCHEDULE: I — INDUSTRIAL SALES APPLICABLE TO: ALL CUSTOMERS IN THE MID-TEX DIVISION UNDER THE RRM TARIFF EFFECTIVE DATE: Bills Rendered on or after 1210112020 PAGE: Application Applicable to Industrial Customers with a maximum daily usage (MDU) 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. 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. Monthly Rate Customer's monthly bill will be calculated by adding the following Customer and MMBtu charges to the amounts due under the riders listed below: Charge Amount Customer Charge per Meter $ 1,014.50 per month First 0 MMBtu to 1,500 MMBtu $ 0.4157 per MMBtu Next 3,500 MMBtu $ 0.3044 per MMBtu All MMBtu over 5,000 MMBtu $ 0.0653 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. 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). 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 Platts Gas Daily published for the applicable Gas Day In the table entitled "Daily Price Survey." Replacement Index In the event the "midpoint' 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. MID-TEX DIVISION ATMOS ENERGY CORPORATION RRC Tariff No: RATE SCHEDULE: I — INDUSTRIAL SALES APPLICABLE TO: ALL CUSTOMERS IN THE MID-TEX DIVISION UNDER THE RRM TARIFF EFFECTIVE DATE: Bills Rendered on or after 12101/2020 PAGE: 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 meter required by Company. Customer must pay Company all costs associated with the acquisition and installation of the meter. MID-TEX DIVISION ATMOS ENERGY CORPORATION RRC Tariff No: RATE SCHEDULE: T—TRANSPORTATION APPLICABLE TO: ALL CUSTOMERS IN THE MID-TEX DIVISION UNDER THE RRM TARIFF EFFECTIVE DATE: Bills Rendered on or after 1210112020 PAGE: 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 Customer's agent at one Point of Delivery for use in Customer's facility. 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. Monthly Rate Customer's bill will be calculated by adding the following Customer and MMBtu charges to the amounts and quantities due under the riders listed below, Charge Amount Customer Charge per Meter $1,014.50 per month First 0 MMBtu to 1,500 MMBtu $ 0.4157 per MMBtu Next 3,500 MMBtu $ 0.3044 per MMBtu All MMBtu over 5,000 MMStu $ 0.0653 per MMBtu Upstream Transportation Cost Recovery: Plus an amount for upstream transportation costs in accordance with Part (b) of Rider GCR. 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. Monthly Imbalance Fees Customer shall pay Company the greater of (i) $0.10 per MMBtu, or (ii) 150% of the difference per MMBtu between the highest and lowest "midpoint" price for the Katy point listed in Plaits Gas Daily in the table entitled "Daily Price Survey" during such month, for 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 Customer's receipt quantities for the month. MID-TEX DIVISION ATMOS ENERGY CORPORATION RRC Tariff No: RATE SCHEDULE: T — TRANSPORTATION APPLICABLE TO: ALL CUSTOMERS IN THE MID-TEX DIVISION UNDER THE RRM TARIFF EFFECTIVE DATE: Bills Rendered on or after 1210112020 PAGE: 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 Plaits Gas Daily published for the applicable Gas Day In the table entitled "Daily Price Survey." Replacement Index In the event the "midpoint" or "common" price for the Katy point listed in Plaits 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 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 T, customer must have the type of meter required by Company. Customer must pay Company all costs associated with the acquisition and installation of the meter. MID-TEX DIVISION ATMOS ENERGY CORPORATION RIDER: WNA - WEATHER NORMALIZATION ADJUSTMENT APPLICABLE TO: ALL CUSTOMERS IN THE MID-TEX DIVISION UNDER THE RRM TARIFF EFFECTIVE DATE: Bills Rendered on or after 1210112020 PAGE: Provisions for Adiustment The Commodity Charge per Ccf (100 cubic feet) 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 Normalization 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 Normalization Adiustment The Weather Normalization Adjustment Factor shall be computed to the nearest one -hundredth cent per Ccf by the following formula: WNAFi - Ri Where (HSFi x (NDD-ADD) ) (BLi + (HSFi x ADD) ) = any particular Rate Schedule or billing classification within any such particular Rate Schedule that contains more than one billing classification WNAFi = Weather Normalization Adjustment Factor for the ith rate schedule or classification expressed in cents per Ccf Ri = Commodity Charge rate of temperature sensitive sales for the ith schedule or classification. HSFI = heat sensitive factor for the ith schedule or classification divided by the average bill count in that class 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 divided by the average bill count in that class The Weather Normalization Adjustment for the jth customer in ith rate schedule is computed as: WNAt = WNAFi x qp Where q; is the relevant sales quantity for the jth customer in ith rate schedule. MID-TEX DIVISION ATMOS ENERGY CORPORATION RIDER: WNA — WEATHER NORMALIZATION ADJUSTMENT APPLICABLE TO: ALL CUSTOMERS IN THE MID-TEX DIVISION UNDER THE RRM TARIFF EFFECTIVE DATE: Bills Rendered on or after 12101/2020 PAGE: Base Use/Heat Use Factors Residential Commercial Base use Heat use Base use Heat use Weather Station Ccf Ccf/HDD Ccf CcflHDD Abilene 10.73 0.1545 94.79 0.7284 Austin 9.53 0.1489 211.76 0.9405 Dallas 15.77 0.1792 199.74 0.9385 Waco 9.99 0.1341 145.27 0.7110 Wichita 11.61 0.1402 120.34 0.5747 Falls Weather Normalization Adiustment (WNA) Report On or before June 1 of each year, the company posts on its website at atmosenergy.com/mtx-wna, in Excel format, a Weather Normalization Adjustment (WNA) Report to show how the company calculated its WNAs factor during the preceding winter season. Additionally, on or before June 1 of each year, the company files one hard copy and an Excel version of the WNA Report with the Railroad Commission of Texas' Gas Services Division, addressed to the Director of that Division. Exhibit B to 2020 RRM Resolution or Ordinance Mid -Tex 2020 Benchmark for Pensions and Retiree Benefits W NNOfDw V w (PAWN> Ow W V a) (TA W N> w N>Z En5'KZ 2@� -i -I-I -I mmmQ Q W MO V�� M °_ Y'. 3 N 00 Cc n wMo ry�rym S 9-0 �om w09 w B.n m M J0 p O w 0. W m O > O w O Mu W �m ox m�� myD S-000NXi �O rapn r�f�n1�0 w mOwK=� NW jCs2 dN x D � T w e a w is is p' 01 f p M V v O n C N m w aim N v O O a0. O ❑. C N m N W ri mmo0° ZQ 5 x01 g 5 o m _ o � y Nw a w ry x X o_m N a w to fA EA EA (A o E F. to � 3 tp O N c A (�P +0�� p O W N O O N o V A o A W a N o Vn 9 N O N w N (pWp� C N C N N N (°OOp(pwp� W NWW >•01T N N ON (NDa A w pQay� �O pAp�� O tp � V W 0 Q po o prnp� o� N m W o N o N O A W N gv fp1 �p9 A C W N N > O pNW NW O p a 5C 'sk J °i 40 O Q � O CSI I a W�to aW o � O ry N J J c A o A o t0 [Oy tlj S fD fA M fA NN f�NN W>W 0 0 9 y N A 0 Exhibit C to 2020 RRM Resolution or Ordinance Mid -Tex 2020 Schedule for Amortization for Regulatory Liability Line Year Ended No. Dec. 31 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 ATMOS ENERGY CORP., MID-TEX DIVISION RATE BASE ADJUSTMENTS TEST YEAR ENDING DECEMBER 31, 2019 AMORTIZATION OF REGULATORY LIABILITY Beginning of Year End of Year Rate Base Rate Base Adjustment Annual Adjustment Amount Amortization (1) Amount (2) Corrected Balance for December 31, 2017 (3) 2017 $ - $ 292,268,881 $ 2018 292,268,881 12,075,562 280,193,319 2019 280,193,319 12,085,165 268,108,155 2020 268,108,155 11,171,173 256,936,982 2021 256,936,982 11,171,173 245,765,809 2022 245,765,809 11,171,173 234,594,635 2023 234,594,635 11,171,173 223,423,462 2024 223,423,462 11,171,173 212,252,289 2025 212,252,289 11,171,173 201,081,116 2026 201,081,116 11,171,173 189,909,943 2027 189,909, 943 11,171,173 178,738, 770 2028 178,738, 770 11,171,173 167, 567, 597 2029 167,567,597 11,171,173 156,396,424 2030 156,396,424 11,171,173 145,225,251 2031 145,225,251 11,171,173 134,054,077 2032 134,054,077 11,171,173 122,882,904 2033 122,882,904 11,171,173 111,711,731 2034 111,711,731 11,171,173 100,540, 558 2035 100,540,558 11,171,173 89,369,385 2036 89,369,385 11,171,173 78,198,212 2037 78,198,212 11,171,173 67,027,039 2038 67,027,039 11,171,173 55,855,866 2039 55,855,866 11,171,173 44,684,692 2040 44,684,692 11,171,173 33,513,519 2041 33,513,519 11,171,173 22,342,346 2042 22,342,346 11,171,173 11,171,173 2043 11,171,173 11,171,173 (0) Revenue Related Tax Factor 7.16% See WP F-5.1 Revenue Related Taxes on Annual Amortization * Tax Amortization $ 799,924 Factor Amortization Including Revenue $ 11,971,097 Amortization + Taxes Notes: 1. The annual amortization of a 26 year recovery period Is based on the Reverse South Georgia Method. 2. The Regulatory Liability is recorded to FERC Account 253, Sub Account 27909. 3. This is the final Mid -Tex liability balance filing the Fiscal Year 2018 tax return. 292,268,881