City Council Meeting


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  F.2.f.       
Meeting Date: 09/21/2021  
Contact: Trivinio Posley, Facilities Manager
Also Contact: Crystal Owens, Managing Director or Development Services
Phone: 972-230-9672  

COUNCIL ACTION
Motion by Councilmember Marks with a second by Councilmember Brown-Patrick to approve as presented. Motion passes 7-0.
AGENDA ITEM:
Consider a Resolution approving the negotiated settlement between the Atmos Cities Steering Committee and Atmos Energy Corporation, Mid-Tex Division regarding the company's 2021 Rate Review Mechanism (RRM) Filing
BACKGROUND:
The City, along with 171 other Mid-Texas cities served by Atmos Energy Corporation, Mid-Tex Division (“Atmos Mid-Tex” or “Company”), is a member of the Atmos Cities Steering Committee (“ACSC”).  In 2007, ACSC and Atmos Mid-Tex settled a rate application filed by the Company pursuant to Section 104.301 of the Texas Utilities Code for an interim rate adjustment commonly referred to as a GRIP filing (arising out of the Gas Reliability Infrastructure Program legislation). That settlement created a substitute rate review process, referred to as Rate Review Mechanism (“RRM”), as a substitute for future filings under the GRIP statute.

Since 2007, there have been several modifications to the original RRM Tariff. The most recent iteration of an RRM Tariff was reflected in an ordinance adopted by ACSC members in 2018. On or about April 1, 2021, the Company filed a rate request pursuant to the RRM Tariff adopted by ACSC members. The Company claimed that its cost-of-service in the test year ending December 31, 2020, entitled it to additional system-wide revenues of $43.4 million. Application of the standards set forth in ACSC’s RRM Tariff reduces the Company’s request to $40.5 million, $29.3 million of which would be applicable to ACSC members. ACSC’s consultants concluded that the system-wide deficiency under the RRM regime should be $22.34 million instead of the claimed $40.5 million. The amount of the $22.34 million deficiency applicable to ACSC members would be $16.8 million.

After the Company reviewed ACSC’s consultant's report, ACSC’s Executive Committee and the Company negotiated a settlement whereby the Company would receive an increase of $22.78 million from ACSC Cities, but with a two-month delay in the effective date until December 1, 2021. This should save ACSC cities approximately $3.8 million. The Executive Committee recommends a settlement at $22.78 million. The effective date for new rates is December 1, 2021. ACSC members should take action approving the Resolution before October 1, 2021.
FINDINGS:
The purpose of this Resolution is to approve the negotiated settlement between the Atmos Cities Steering Committee and Atmos Energy Corporation.
FINANCIAL IMPACT:
The impact of the settlement on average residential rates is an increase of $1.28 on a monthly basis, or 2.2 percent. The increase for average commercial monthly usage will be $4.03 or 1.6 percent.
RECOMMENDATION:
Staff recommends that the City Council approve the Resolution approving a negotiated settlement between the Atmos Cities Steering Committee and Atmos Energy Corporation, Mid-Tex Division regarding the company's 2021 Rate Review Mechanism
(RRM) filing.
MANAGEMENT REVIEW
Attachments
20210830-DESOTO Resolution Approving Atmos Settlement (September-124525


    

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