HomeMy WebLinkAboutOrdinance 22205-05-2016 ORDINANCE NO. 22205-05-2016
AN ORDINANCE APPROVING A NEGOTIATED SETTLEMENT
BETWEEN THE ATMOS CITIES STEERING COMMITTEE
("ACSC") AND ATMOS ENERGY CORPORATION, DB/A
ATMOS ENERGY CORPORATION, MID-TEX DIVISION,
REGARDING THE COMPANY'S 2016 RATE REVIEW
MECHANISM FILINGS; DECLARING EXISTING RATES TO BE
UNREASONABLE; ADOPTING TARIFFS THAT REFLECT RATE
ADJUSTMENTS CONSISTENT WITH THE NEGOTIATED
SETTLEMENT; FINDING THE RATES SET BY THE
SETTLEMENT TARIFFS TO BE JUST AND REASONABLE AND
IN THE PUBLIC INTEREST; ESTABLISHING PARAMETERS
FOR TREATMENT OF CERTAIN EMPLOYEE BENEFITS IN
SUBSEQUENT FILING; REQUIRING THE COMPANY TO
REIMBURSE ACSC'S REASONABLE RATEMAKING
EXPENSES; REPEALING PRIOR ORDINANCES IN CONFLICT
HEREWITH; DETERMINING THAT THIS ORDINANCE WAS
PASSED IN ACCORDANCE WITH THE REQUIREMENTS OF
THE TEXAS OPEN MEETINGS ACT; PROVIDING A
SEVERABILITY AND SAVINGS CLAUSE; DECLARING AN
EFFECTIVE DATE; AND REQUIRING DELIVERY OF THIS
ORDINANCE TO COMPANY AND ACSC'S LEGAL COUNSEL
WHEREAS, the City of Fort Worth, Texas ("City") is a gas utility customer of Atmos
Energy Corporation d/b/a Atmos Energy Corporation, Mid-Tex Division ("Atmos Mid-Tex,"
"Atmos," or "Company"), and a regulatory authority with an interest in the rates and charges of
Atmos; 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
Ordinance No.22205-05-2016
Page I of 4
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, on March 1, 2016, Atmos Mid-Tex filed its 2016 RRM rate request with
ACSC Cities; and
WHEREAS, ACSC coordinated its review of the Atmos 2016 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 of$29.9 million on a
system-wide basis; and
WHEREAS, the attached tariffs 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 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 FORT WORTH, TEXAS:
SECTION 1.
That the findings set forth in this Ordinance are hereby in all things approved.
SECTION 2.
That the City Council finds that the settled amount of an increase in revenues of$29.9
million on a system-wide basis represents a comprehensive settlement of gas utility rate issues
affecting the rates, operations, and services offered by Atmos within the municipal limits arising
Ordinance No.22205-05-2016
Page 2 of 4
from Atmos's 2016 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 are unreasonable. The
new tariffs attached hereto and incorporated herein as Attachment A, are just and reasonable, and
are designed to allow Atmos to recover annually an additional $29.9 million in revenue over the
amount allowed under currently approved rates, as shown in the Proof of Revenues attached
hereto and incorporated herein as Attachment B; such tariffs are hereby adopted.
SECTION 4.
That the ratemaking treatment for pensions and other post-employment benefits in Atmos
Mid-Tex's next RRM filing shall be as set forth on Attachment C, attached hereto and
incorporated herein.
SECTION 5.
That Atmos Mid-Tex shall reimburse the reasonable ratemaking expenses of the ACSC in
processing the Company's 2016 RRM filing.
SECTION 6.
That to the extent any resolution or ordinance previously adopted by the Council is
inconsistent with this Ordinance, it is hereby repealed.
SECTION 7.
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.
Ordinance No.22205-05-2016
Page 3 of 4
SECTION 8.
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 9.
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 June 1, 2016.
SECTION 10.
That a copy of this Ordinance shall be sent to Atmos, 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 Counsel to ACSC, at
Lloyd Gosselink Rochelle & Townsend, P.C., 816 Congress Avenue, Suite 1900, Austin, Texas
78701.
PASSED AND APPROVED this 17t
ATTEST: APPRO AS TO FORM:
Yary . Kayser, City S c tary Sarah Fullen ider, City Attorney
2557/2617087606
Ordinance No.22205-05-2016
Page 4 of 4
Attachment A
MID-TEX DIVISION RRC Tariff No:
ATMOS ENERGY CORPORATION
RATE SCHEDULE: R—RESIDENTIAL SALES
APPLICABLE TO: ALL CUSTOMERS IN THE MID-TEX DIVISION EXCEPT THE CITY OF
DALLAS AND UNINCORPORATED AREAS
EFFECTIVE DATE: Bills Rendered on or after 06/01/2016 PAGE: 12
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 $ 19.10 per month
Rider CEE Surcharge $ 0.02 per month'
Total Customer Charge $ 19.12 per month
Commodity Charge—All Ccf $0.11378 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 1,2015.
Attachment A
MID-TEX DIVISION RRC Tariff No:
ATMOS ENERGY CORPORATION
RATE SCHEDULE: C—COMMERCIAL SALES
APPLICABLE TO: ALL CUSTOMERS IN THE MID-TEX DIVISION EXCEPT THE CITY OF
DALLAS AND UNINCORPORATED AREAS
EFFECTIVE DATE: Bills Rendered on or after 06/01/2016 PAGE: 13
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 $41.75 per month
Rider CEE Surcharge $ 0.02 per month'
Total Customer Charge $41.77 per month
Commodity Charge—All Ccf $0.08494 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 10170. Surcharge billing effective July 1,2015.
Attachment A
MID-TEX DIVISION RRC Tariff No:
ATMOS ENERGY CORPORATION
RATE SCHEDULE: I—INDUSTRIAL SALES
APPLICABLE TO: ALL CUSTOMERS IN THE MID-TEX DIVISION EXCEPT THE CITY OF
DALLAS AND UNINCORPORATED AREAS
EFFECTIVE DATE: Bills Rendered on or after 06/01/2016 PAGE: 14
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 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 $738.00 per month
First 0 MMBtu to 1,500 MMBtu $0.3096 per MMBtu
Next 3,500 MMBtu $0.2267 per MMBtu
All MMBtu over 5,000 MMBtu $0.0486 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.
Attachment A
MID-TEX DIVISION RRC Tariff No:
ATMOS ENERGY CORPORATION
RATE SCHEDULE: I—INDUSTRIAL SALES
APPLICABLE TO: ALL CUSTOMERS IN THE MID-TEX DIVISION EXCEPT THE CITY OF
DALLAS AND UNINCORPORATED AREAS
EFFECTIVE DATE: Bills Rendered on or after 06/01/2016 PAGE: 15
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.
Attachment A
MID-TEX DIVISION RRC Tariff No:
ATMOS ENERGY CORPORATION
RATE SCHEDULE: T—TRANSPORTATION
APPLICABLE TO: ALL CUSTOMERS IN THE MID-TEX DIVISION EXCEPT THE CITY OF
DALLAS AND UNINCORPORATED AREAS
EFFECTIVE DATE: Bills Rendered on or after 06/01/2016 PAGE: 16
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 $738.00 per month
First 0 MMBtu to 1,500 MMBtu $ 0.3096 per MMBtu
Next 3,500 MMBtu $ 0.2267 per MMBtu
All MMBtu over 5,000 MMBtu $ 0.0486 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 Platts 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.
Attachment A
MID-TEX DIVISION RRC Tariff No:
ATMOS ENERGY CORPORATION
RATE SCHEDULE: T—TRANSPORTATION
APPLICABLE TO: ALL CUSTOMERS IN THE MID-TEX DIVISION EXCEPT THE CITY OF
DALLAS AND UNINCORPORATED AREAS
EFFECTIVE DATE: Bills Rendered on or after 06/01/2016 PAGE: 17
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.
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.
Attachment A
MID-TEX DIVISION
ATMOS ENERGY CORPORATION
RIDER: WNA—WEATHER NORMALIZATION ADJUSTMENT
APPLICABLE TO: ALL CUSTOMERS IN THE MID-TEX DIVISION EXCEPT THE CITY OF
DALLAS AND UNINCORPORATED AREAS
EFFECTIVE DATE: Bills Rendered on or after 11/01/2016 PAGE: 41
Provisions for Adjustment
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 Adjustment
The Weather Normalization Adjustment Factor shall be computed to the nearest one-hundredth cent
per Ccf 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 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:
WNA;= WNAFi x q;;
Where q;; is the relevant sales quantity for the jth customer in ith rate schedule.
Attachment A
MID-TEX DIVISION
ATMOS ENERGY CORPORATION
RIDER: WNA—WEATHER NORMALIZATION ADJUSTMENT
APPLICABLE TO: ALL CUSTOMERS IN THE MID-TEX DIVISION EXCEPT THE CITY OF
DALLAS AND UNINCORPORATED AREAS
EFFECTIVE DATE: Bills Rendered on or after 11/01/2016 PAGE: 42
Base Use/Heat Use Factors
Residential Commercial
Base use Heat use Base use Heat use
Weather Station Ccf Ccf/HDD Ccf Ccf/HDD
Abilene 10.09 0.1392 98.01 0.6440
Austin 11.21 0.1551 203.36 0.8564
Dallas 13.72 0.2048 189.83 0.9984
Waco 9.89 0.1411 129.75 0.6695
Wichita 11.49 0.1506 122.35 0.5967
Falls
Weather Normalization Adjustment(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.
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ATMOS ENERGY CORP.,MID-TEX DIVISION
AVERAGE BILL COMPARISON-BASE RATES
TEST YEAR ENDING DECEMBER 31,2015
Line June 1,2016
1 Rate R Cal 46.8 Cc f CURRENT PROPOSED CHANGE
2 Customer charge $ 18.60
3 Consumption charge 46.8 CCF X $ 0.09931 = 4.65
4 Rider GCR Part A 46.8 CCF X $ 0.31375 = 14.68
5 Rider GCR Part B 46.8 CCF X $ 0.21977 = 10.29
6 Subtotal $ 48.22
7 Rider FF&Rider TAX $ 48.22 X 0.07853 - 3.79
8 Total $ 52.01
9
10 Customer charge $ 19.10
11 Consumption charge 46.8 CCF X $ 0.11378 = 5.32
12 Rider GCR Part A 46.8 CCF X $ 0.31375 = 14.68
13 Rider GCR Part B 46.8 CCF X $ 0.21977 = 10.29
14 Subtotal $ 49.39
15 Rider FF&Rider TAX $ 49.39 X 0.07853 = 3.88
16 Total $ 53.27 $ 1.26
17 2.43%
18
19 Rate C Cal 376.4 Cc f CURRENT PROPOSED CHANGE
20 Customer charge $ 40.00
21 Consumption charge 376.4 CCF X $ 0.08020 = 30.19
22 Rider GCR Part A 376.4 CCF X $ 0.31375 = 118.10
23 Rider GCR Part B 376.4 CCF X $ 0.15789 = 59.43
24 Subtotal $ 247.72
25 Rider FF&Rider TAX $ 247.72 X 0.07853 - 19.45
26 Total $ 267.17
27
28 Customer charge $ 41.75
29 Consumption charge 376.4 CCF X $ 0.08494 = 31.97
30 Rider GCR Part A 376.4 CCF X $ 0.31375 = 118.10
31 Rider GCR Part B 376.4 CCF X $ 0.15789 = 59.43
32 Subtotal $ 251.25
33 Rider FF&Rider TAX $ 251.25 X 0.07853 = 19.73
34 Total $ 270.98 $ 3.81
35 1.43%
36 Rate I Cal 4379 MMBTU CURRENT PROPOSED CHANGE
37 Customer charge $ 700.00
38 Consumption charge 1,500 MMBTU X $ 0.2937 = 440.55
39 Consumption charge 2,879 MMBTU X $ 0.2151 = 619.19
40 Consumption charge 0 MMBTU X $ 0.0461 = -
41 Rider GCR Part A 4,379 MMBTU X $ 0.3213 = 1,406.76
42 Rider GCR Part B 4,379 MMBTU X $ 0.3746 = 1,640.11
43 Subtotal $ 4,806.61
44 Rider FF&Rider TAX $ 4,806.61 X 0.07853 - 377.44
45 Total $ 5,184.05
46
47 Customer charge $ 738.00
48 Consumption charge 1,500 MMBTU X $ 0.3096 = 464.40
49 Consumption charge 2,879 MMBTU X $ 0.2267 = 652.58
50 Consumption charge 0 MMBTU X $ 0.0491 = -
51 Rider GCR Part A 4,379 MMBTU X $ 0.3213 = 1,40636
52 Rider GCR Part B 4,379 MMBTU X $ 0.3746 = 1,640.11
53 Subtotal $ 4,901.85
54 Rider FF&Rider TAX $ 4,901.85 X 0.07853 = 384.92
55 Total $ 5,286.77 $ 102.72
56 1.98%
57 Rate T Cal 4379 MMBTU CURRENT PROPOSED CHANGE
58 Customercharge $ 700.00
59 Consumption charge 1,500 MMBTU X $ 0.2937 = 440.55
60 Consumption charge 2,879 MMBTU X $ 0.2151 = 619.19
61 Consumption charge 0 MMBTU X $ 0.0461 = -
62 Rider GCR Part B 4,379 MMBTU X $ 0.3746 = 1,640.11
63 Subtotal $ 3,399.85
64 Rider FF&Rider TAX $ 3,399.85 X 0.07853 - 266.97
65 Total $ 3,666.82
66
67 Customer charge $ 738.00
68 Consumption charge 1,500 MMBTU X $ 0.3096 = 464.40
69 Consumption charge 2,879 MMBTU X $ 0.2267 = 652.58
70 Consumption charge 0 MMBTU X $ 0.0491 = -
71 Rider GCR Part B 4,379 MMBTU X $ 0.3746 = 1,640.11
72 Subtotal $ 3,495.09
73 Rider FF&Rider TAX $ 3,495.09 X 0.07853 = 274.45
74 Total $ 3,769.54 $ 102.72
75 2.80%
City of Fort Worth, Texas
Mayor and Council Communication
COUNCIL ACTION: Approved on 5117/2016 -Ordinance No. 22205-05-2016
DATE: Tuesday, May 17, 2016 REFERENCE NO.: **G-18733
LOG NAME: 21ADOPTION OF ATMOS 2016 RRM
SUBJECT:
Adopt Ordinance Approving Negotiated Settlement and Establishing Maximum Permitted Rates and
Charges that Atmos Energy Corporation d/b/a Atmos Energy Corporation, Mid-Tex Division, May Assess
Customers in the City of Fort Worth Effective June 1, 2016 (ALL COUNCIL DISTRICTS)
RECOMMENDATION:
It is recommended that the City Council adopt the attached ordinance establishing maximum permitted
rates and charges that Atmos Energy Corporation, d/b/a Atmos Energy Corporation, Mid-Tex Division,
may assess customers in the City of Fort Worth, effective June 1, 2016, pursuant to a negotiated
settlement and resolution of Atmos' proposed rate increase under its 2016 Rate Review Mechanism filing.
DISCUSSION:
The purpose of this Mayor and Council Communication (M&C) is to approve a settlement with Atmos
Energy Corporation, d/b/a Atmos Energy Corporation, Mid-Tex Division (Atmos or Company), regarding
the Company's 2016 filing under the Rate Review Mechanism (RRM). The settlement was negotiated and
is recommended by the Executive Committee of the Atmos Cities Steering Committee (ACSC), which is a
coalition of more than 150 cities, including Fort Worth, that work cooperatively to provide members with
more effective and efficient representation on gas-related issues.
The RRM Tariff was most recently re-adopted in 2013 (M&C G-17912) and serves as an alternative rate
adjustment mechanism to the default process outlined in state law. Like the state-law adjustment
mechanism, the RRM allows a company to adjust rates to recover capital improvement costs, but unlike
state law, the RRM takes into account the company's overall financial situation, including operating costs
and revenues and allows cities, as regulatory entities, to review filings and identify expenses or
investments considered to be unreasonable or unnecessary that should be reduced or disallowed. Since it
was originally adopted, the RRM process has generally resulted in rate increases that are less than Atmos
would have been entitled to implement under the default state-law adjustment mechanism.
On March 1, 2016, Atmos filed its rate increase request under the RRM Tariff. That filing sought additional
revenues in the amount of$35.4 million systemwide. The City worked with and through ACSC to analyze
the schedules and evidence offered by Atmos to support its request to increase rates.
The attached ordinance reflects the terms of a settlement negotiated between ACSC and the Company to
resolve issues raised by ACSC during the review and evaluation of Atmos's filing. Under the ordinance
the Company's revenues would increase by $29.9 million. This figure represents a reduction of
approximately five and a half million dollars from the amount Atmos requested in its RRM filing and is
substantially less than the approximately $41 million increase the Company would have been entitled to
implement under the default state-law adjustment mechanism.
On approval of the attached ordinance, the rates shown in Attachment A of the ordinance would be
Logname: 21 ADOPTION OF ATMOS 2016 RRM Page 1 of 3
effective for bills rendered on or after June 1, 2016. Key elements of the rate changes are as follows:
Residential Present recommended
Customer Charge $ 18.60 $ 19.10
Rider CEE Surcharge* $ 0.02 $ 0.02
Total Customer Charge $ 18.62 $ 19.12
II Ccf $ 0.09931 $ 0.11378
Commercial
Customer Charge $ 40.00 $ 41.75
Rider CEE Surcharge* $ 0.00 $ 0.02
Total Customer Charge $ 40.00 $ 41.77
II Ccf $ 0.0802 $0.08494
Industrial
Customer Charge $ 700.00 $ 738.00
First 1,500 MMBtu $ 0.2937 $ 0.3096
Next 3,500 MMBtu $ 0.2151 $ 0.2267
II over percent,000 MMBtu $ 0.0461 $ 0.0486
Transportation
Customer Charge $ 700.00 $ 738.00
First 1,500 MMBtu $ 0.2937 $ 0.3096
Next 3,500 MMBtu $ 0.2151 $ 0.2267
II over 5,000 MMBtu $ 0.0461 $ 0.0486
*Surcharge imposed under the Conservation and Energy Efficiency Rider(Rider CEE) as approved by the
RRC in Gas Utility Docket No. 10170.
The monthly bill impact for the average residential customer in the Atmos system consuming 46.8 Ccf will
be an increase of$1.26, or about 2.43%. Within the City of Fort Worth, the average residential customer
impact is projected to be $1.21, which also equates to 2.43%. The dollar amount is slightly lower than the
systemwide average because the typical Fort Worth residential customer consumes slightly less (43.2
Ccf) than the systemwide average. The average Atmos system commercial customer will see an increase
of$3.81, or 1.43%. Within the City of Fort Worth, the average commercial customer impact is projected to
be $4.24, but a somewhat lower percentage increase of 1.34% compared to the typical customer. This
dollar amount is higher than the average Atmos customer increase because the average consumption for
a Fort Worth commercial customer is about 22% greater than the average Atmos consumption. The lower
percentage increase is attributable to the impact of having fixed and variable components (customer
charge and consumption charge) in the rate.
The Executive Committee of ACSC as well as its consultants and legal advisors recommend that all
ACSC members find the proposed rates to be just, reasonable, and in the public interest and adopt the
ordinance and its attachments, thereby approving the negotiated rate settlement which resolves the 2016
RRM filing and implementing the rate change.
This M&C does not request approval of a contract with a business entity.
FISCAL INFORMATION / CERTIFICATION:
The Director of Finance certifies that this action will have no material effect on City Funds.
FUND IDENTIFIERS (FIDs):
TO
Fund Department ccoun Project Program ctivity Budget Reference # moun
ID ID Year (Chartfield 2)
Logname: 21ADOPTION OF ATMOS 2016 RRM Page 2 of 3
CERTIFICATIONS:
Submitted for City Manager's Office by: Jay Chapa (5804)
Originating Department Head: Steve Cooke (5134)
Additional Information Contact: Steve Cooke (5134)
Logname: 21ADOPTION OF ATMOS 2016 RRM Page 3 of 3