OR 2019-1522 ATMOSORDINANCE NO. 2019-1522
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF
COPPELL, TEXAS, APPROVING A NEGOTIATED SETTLEMENT
BETWEEN THE ATMOS CITIES STEERING COMMITTEE
("ACSC") AND ATMOS ENERGY CORP., MID-TEX DIVISION
REGARDING THE COMPANY'S 2019 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;
DECLARING AN EFFECTIVE DATE; AND REQUIRING
DELIVERY OF THIS ORDINANCE TO THE COMPANY AND THE
ACSC'S LEGAL COUNSEL.
WHEREAS, the City of Coppell, 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"), 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 new 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
1
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, 2019, Atmos Mid -Tex filed its 2019 RRM rate request with
ACSC Cities based on a test year ending December 31, 2018; and
WHEREAS, ACSC coordinated its review of the Atmos Mid -Tex 2019 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 $35.4
million applicable to ACSC Cities; 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 (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
COPPELL, TEXAS:
2
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 $35.4 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 2019 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 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 $35.4
million from customers in ACSC Cities, over the amount allowed under currently approved rates.
Such tariffs are hereby adopted.
Section 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.
Section 5. That amortization of regulatory liability shall be consistent with the schedule
found in attached Exhibit C attached hereto and incorporated herein.
Section 6. That Atmos Mid -Tex shall reimburse the reasonable ratemaking expenses
including attorneys' fees of the ACSC in processing the Company's 2019 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.
3
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, 2019.
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 LJB Freeway, Suite 1862, Dallas, Texas 75240, and to Geoffrey Gay, General
Counsel to ACSC, at Lloyd Gosselink Rochelle & Townsend, P.C., 816 Congress Avenue,
Suite 1900, Austin, Texas 78701.
PASSED AND APPROVED this
ATTEST:
Christel Pettinos, City Secretary
2557/31/7897503
APPROVED AS TO FORM:
d (I zm
Robert E. Hager, City Attey
.19
2019.
Attachment 1
Proof of Revenues
ATMOS ENERGY CORP., MID-TEX DIVISION
RRM CITIES RATE REVIEW MECHANISM
PROOF OF REVENUES - SYSTEMWIDE
TEST YEAR ENDING DECEMBER 31, 2018
Line No. Customer Class Current Proposed Bills Ccf/MmBtu
(a) (b) (c) (d) (e)
1 Residential
2
Customer Charge
$
18.85
$
19.55
18,572,400
3
Consumption Charge
0.14846
0.17423
876,575,629
4
Revenue Related Taxes
5
Total Class Revenue
6
7
Commercial
8
Customer Charge
$
43.50
$
46.50
1,492,740
9
Consumption Charge
0.09165
0.09924
576,758,305
10
Revenue Related Taxes
11
Total Class Revenue
12
13
Industrial & Transportation
14
Customer Charge
$
784.00
$
845.50
9,804
15
Consumption Charge Tier 1
$
0.3312
$
0.3572
10,724,328
16
Consumption Charge Tier 2
$
0.2425
$
0.2616
12,346,302
17
Consumption Charge Tier 3
$
0.0520
$
0.0561
22,335,700
18
Revenue Related Taxes
19
Total Class Revenue
20
21
Total Excluding Other Revenue
22
23
24
Revenue Related Tax Factor
6.7078%
Current Proposed
Revenues Revenues Increase
(f) (9) (h)
$ 350,089,740 $ 363,090,420
130,136,418 152,725,772
32,212,790 34,600,111
$ 512,438,948 $ 550,416,303 $ 37,977,356
$ 64,934,190 $ 69,412,410
52,859,899 57,237,494
7,901,436 8,495,470
$ 125,695,525 $ 135,145,374 $ 9,449,849
$ 7,686,336 $
8,289,282
3,551,897
3,830,730
2,993,978
3,229,793
1,161,456
1,253,033
1,032,582
1,113,691
$ 16,426,250 $
17,716,529 $ 1,290,278
$ 654,560,722 $ 703,278,206 $ 48,717,483
Attachment 2
Bill Impact
ATMOS ENERGY CORP., MID-TEX DIVISION
AVERAGE BILL COMPARISON - BASE RATES
TEST YEAR ENDING DECEMBER 31, 2018
Line
1
Rate R (aD 47.5 Ccf
CURRENT
PROPOSED
CHANGE
2
Customer charge
$
18.85
3
Consumption charge
47.5
CCF
X $ 0.14846
=
7.05
4
Rider GCR Part A
47.5
CCF
X $ 0.27375
=
13.00
5
Rider GCR Part B
47.5
CCF
X $ 0.27485
=
13.06
6
Subtotal
$
51.96
7
Rider FF & Rider TAX
$
51.96
X 0.06708
=
3.49
8
Total
$
55.45
9
10
Customer charge
$
19.55
11
Consumption charge
47.5
CCF
X $ 0.17423
=
8.28
12
Rider GCR Part A
47.5
CCF
X $ 0.27375
=
13.00
13
Rider GCR Part B
47.5
CCF
X $ 0.27485
=
13.06
14
Subtotal
$
53.89
15
Rider FF & Rider TAX
$
53.89
X 0.06708
=
3.61
16
Total
$
57.50
$ 2.05
17
3.70%
18
19
Rate C (a) 367.6 Ccf
CURRENT
PROPOSED
CHANGE
20
Customer charge
$
43.50
21
Consumption charge
367.6
CCF
X $ 0.09165
=
33.69
22
Rider GCR Part A
367.6
CCF
X $ 0.27375
=
100.62
23
Rider GCR Part B
367.6
CCF
X $ 0.19927
=
73.25
24
Subtotal
$
251.06
25
Rider FF & Rider TAX
$
251.06
X 0.06708
=
16.84
26
Total
$
267.90
27
28
Customer charge
$
46.50
29
Consumption charge
367.6
CCF
X $ 0.09924
=
36.48
30
Rider GCR Part A
367.6
CCF
X $ 0.27375
=
100.62
31
Rider GCR Part B
367.6
CCF
X $ 0.19927
=
73.25
32
Subtotal
$
256.85
33
Rider FF & Rider TAX
$
256.85
X 0.06708
=
17.23
34
Total
$
274.08
$ 6.18
35
2.31%
WP J-3.1
Page 1 of 2
ATMOS ENERGY CORP., MID-TEX DIVISION
AVERAGE BILL COMPARISON - BASE RATES
TEST YEAR ENDING DECEMBER 31, 2018
Line
36
Rate I na 4066 MMBTU
CURRENT
PROPOSED
CHANGE
37
Customer charge
$
784.00
38
Consumption charge
1,500
MMBTU
X
$ 0.3312
=
496.80
39
Consumption charge
2,566
MMBTU
X
$ 0.2425
=
622.14
40
Consumption charge
0
MMBTU
X
$ 0.0520
=
-
41
Rider GCR Part A
4,066
MMBTU
X
$ 2.6733
=
10,868.51
42
Rider GCR Part B
4,066
MMBTU
X
$ 0.4491
=
1,825.85
43
Subtotal
$
14,597.30
44
Rider FF & Rider TAX
$ 14,597.30
X
0.06708
=
979.16
45
Total
$
15,576.46
46
47
Customer charge
$
845.50
48
Consumption charge
1,500
MMBTU
X
$ 0.3572
=
535.80
49
Consumption charge
2,566
MMBTU
X
$ 0.2616
=
671.14
50
Consumption charge
0
MMBTU
X
$ 0.0561
=
-
51
Rider GCR Part A
4,066
MMBTU
X
$ 2.6733
=
10,868.51
52
Rider GCR Part B
4,066
MMBTU
X
$ 0.4491
=
1,825.85
53
Subtotal
$
14,746.80
54
Rider FF & Rider TAX
$ 14,746.80
X
0.06708
=
989.19
55
Total
$
15,735.99
$ 159.53
56
1.02%
57
Rate T A 4066 MMBTU
CURRENT
PROPOSED
CHANGE
58
Customer charge
$
784.00
59
Consumption charge
1,500
MMBTU
X
$ 0.3312
=
496.80
60
Consumption charge
2,566
MMBTU
X
$ 0.2425
=
622.14
61
Consumption charge
0
MMBTU
X
$ 0.0520
=
-
62
Rider GCR Part B
4,066
MMBTU
X
$ 0.4491
=
1,825.85
63
Subtotal
$
3,728.79
64
Rider FF & Rider TAX
$ 3,728.79
X
0.06708
=
250.12
65
Total
$
3,978.91
66
67
Customer charge
$
845.50
68
Consumption charge
1,500
MMBTU
X
$ 0.3572
=
535.80
69
Consumption charge
2,566
MMBTU
X
$ 0.2616
=
671.14
70
Consumption charge
0
MMBTU
X
$ 0.0561
=
-
71
Rider GCR Part B
4,066
MMBTU
X
$ 0.4491
=
1,825.85
72
Subtotal
$
3,878.29
73
Rider FF & Rider TAX
$ 3,878.29
X
0.06708
=
260.15
74
Total
$
4,138.44
$ 159.53
75
4.01%
WP J-3.1
Page 2 of 2
Attachment 3
RRM Monthly Savings Over GRIP and DARR Rates
ACSC Margin Advantage Over GRIP and DARR Residential Customers
Effective October 1, 2019
Average Monthly
Customer
Consumption
Average
Group
Consumption
Charge
Charge
Average Bill
Monthly Savings
ACSC/RRM
47.5 CCF
$19.55
$0.17423
$27.83
X
Environs
47.5 CCF
$19.84
$0.18653
$28.70
$0.87
GRIP
ATM GRIP
47.5 CCF
$21.69
$0.14846
$28.74
$0.92
DARR
47.5 CCF
$21.25
$0.14924
$28.34
$0.51