RE 2020-0908.1 2020 Atmos Mid-Tex RRM SettlementRESOLUTION NO. 2020-0908.1
A RESOLUTION 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 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 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, 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
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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 RESOLVED BY THE CITY COUNCIL OF THE CITY
OF Coppell, TEXAS:
Section 1. That the findings set forth in this Resolution 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.
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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 Resolution, it is hereby repealed.
Section 9. That the meeting at which this Resolution was approved was in all things
conducted in strict compliance with the Texas Open Meetings Act, Texas Government Code,
Chapter 551.
Section 10. That if any one or more sections or clauses of this Resolution is adjudged to
be unconstitutional or invalid, such judgment shall not affect, impair, or invalidate the remaining
provisions of this Resolution, and the remaining provisions of the Resolution 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 Resolution 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 Resolution 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
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Counsel to ACSC, at Lloyd Gosselink Rochelle & Townsend, P.C., 816 Congress Avenue,
Suite 1900, Austin, Texas 78701.
DULY PASSED AND APPROVED BY THE
COPJ!ELL, TEXAS, BY A VOTE OF � TO , O
P.1nn Pte, 2020.
A T:
hristel Pettinos, Cit Secretary
APP ROV S TO FORM:
Robert E. Hager, Attorney
2557/32/8108360
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Hunt,
COUNCIL OF THE CITY OF
' THE j VA DAY OF