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HomeMy WebLinkAboutOrdinance 18333-10-2008ORDINANCE NO. 18333-10-2008 AN ORDINANCE APPROVING A NEGOTIATED SETTLEMENT AND RESOLUTION BETWEEN THE ATMOS CITIES STEERING COMMITTEE AND ATMOS ENERGY CORP., MID-TEX DIVISION REGARDING ATMOS'S RATE REVIEW MECI]MISM FILING; FINDING THAT RATES ORIGINALLY PROPOSED IN SUCH FILING ARE UNREASONABLE; ADOPTING TARIFFS THAT REFLECT RATE ADJUSTMENTS CONSISTENT WITH THE NEGOTIATED SETTLEMENT AND RESOLUTION BETWEEN THE ATMOS CITIES STEERING COMMITTEE AND ATMOS ENERGY CORP., MID-TEX DIVISION; FINDING THAT THE RATES ESTABLISHED BY SUCH TARIFFS ARE JUST AND REASONABLE; APPROVING ATMOS ENERGY CORP., MID-TEX DIVISION'S PROOF OF I2EVEl\iITES; PROVIDING FOR A RESERVATION OF RIGHTS; REPEALING ANY PREVIOUSLY ADOPTED ORDINANCES IN CONFLICT HEREWITH; PROVIDING FOR SEVERABILITY; FINDING THAT THIS ORDINANCE WAS ADOPTED IN ACCORDANCE WITH THE REQUIREMENTS OF THE TEXAS OPEN MEETINGS ACT; ESTABLISHING AN EFFECTIVE DATE; AND REQUIRING DELIVERY OF THIS ORDINANCE TO ATMOS ENERGY CORP., MID-TEX DIVISION AND LEGAL COUNSEL FOR THE ATMOS CITIES STEERING COMMITTEE. WHEREAS, on May 16, 2006 the City Council adopted Resolution No. 3348-OS-2006 authorizing participation by the City of Fort Worth (the "City") in the Atmos Cities Steering Committee (the "Steering Committee") for assistance in rate cases involving Atmos Energy Corp., Mid-Tex Division ("Atmos"), including the retention of consultants and outside legal counsel associated with such assistance ;and WHEREAS, on September 20, 2007, Atinos filed with the City Secretary a "Statement of Intent to Increase Gas Utility Rates" (the "2007 Rate Filing") under which proposed increased rates charged by Atmos would go into effect in the City on October 25, 2007; and WHEREAS, on February 19, 200$ the City Council adopted Ordinance No. 179$9-02- 2008 approving a Settlement Agreement between Atmos and the Steering Agreement as to disputed matters in the 2007 Rate Filing and certain other matters identified in that Ordinance, Page 1 of 6 Atmos RItM Ordinance including, but not limited to, two previous rate cases (styled GUD No. 9400 and GUD No. 9670), which were then pending on appeal in the Travis County District Court from orders by the Railroad Commission, as well as continuing disagreement, disputes, and litigation over the application of and basis for Gas Reliability Infrastructure Program (GRIP) surcharges, as provided in Section 104.301 of the Texas Utilities Code (the "Settlement Agreement"); and WHEREAS, in accordance with the Settlement Agreement, pursuant to Ordinance No. 17989-02-2008, the City Council established maximum permitted rates and charges that Atmos could charge customers in the City in lieu of the then-existing rates and the rates proposed in the 2007 Rate Filing and approved an expedited rate review mechanism ("RR1VI") for future rate proceedings involving Atmos for at least the next three (3) years; and WIIEREAS, in accordance with the process outlined in the Settlement Agreement, on or about April 14, 2008 Atmos filed with the City its first application pursuant to the RRM tariff to increase natural gas rates by approximately $33.5 million (the "2008 T12M Filing"), such increase to be effective in every municipality that adopted the RRM tariff as part of their approval of the Settlement Agreement; and WHEREAS, the Steering Committee and its lawyers and consultants have reviewed the 2008 R:RM Filing and concluded that the evidence provided by Atmos in support of its 2008 RRM Filing does not justify the proposed rate increase; and WHEREAS, on the basis of the review and analysis of Atmos's 2008 RRM Filing undertaken by the Steering Committee's lawyers and consultants, the Steering Committee's executive committee has recommended that the City Council adopt the rate tariffs attached hereto as Attachment "A", which is hereby made a part of this Ordinance for all purposes, Page 2 of 6 Atmos RRM Ordinance resulting in an increase of $20 million in Atmos's revenue requirements in all municipalities that adopted the p;RM tariff as part of their approval of the Settlement Agreement; and WHEREAS, the attached tariffs implementing new rates (including but not limited to a reduction of the customer monthly charge to $7.00 per month) and Atmos's proof of revenues, as set forth in Attachment "B", which is hereby made a part of this Ordinance for all purposes, are consistent with the Settlement Agreement and negotiated resolution reached by and between Atmos and the Steering Committee; and WHEREAS, it is the intention of the parties to the Settlement Agreement that the City receive the benefit of any settlement agreement that Atmos enters into with other entities arising out of its RRM filing or any associated appeals entered by the Railroad Commission of Texas regarding Atmos's request to increase rates, with acknowledgment by the City that the exercise of this right is conditioned upon the City's acceptance of all rates, revenues, terms and conditions of any other settlement agreement or associated appeals arising out of such filing in toto; and WHEREAS, the negotiated resolution of the 2008 R]EZM Filing and the resulting rates are, as a whole, in the public interest; NOW, THEREFORE, BE IT ORI~AINEI) BY THE CITY COUNCIIL OF THE CITY OF FORT WORTH, TEXAS: Section 1. FINI3INGS. That the City Council, pursuant to its exclusive original jurisdictional authority over the rates, operations, and services of Atmos within the City and in the exercise of its sound legislative discretion, makes the following findings of fact: Page 3 of 6 Atmos RRM Ordinance 1.1. The statements set forth in the Recitals above are true and correct and are hereby incorporated as part of the findings herein. X.2. Based on all information previously provided to and before the City Council, the City Council hereby finds that the rates proposed by Atmos in its 2008 RRM Filing are unreasonable. 1.3. The tariffs attached hereto as Attachment "A" and Atmos's proof of revenues attached hereto as Attachment "B" are just and reasonable and in the public interest. Section 2. RATES AND CHARGES ORDERED. That based on the findings of fact set forth in Section 1 of this Ordinance, Atmos is hereby authorized and ordered to implement the tariffs attached hereto as Attachment "A". Section 3. RESERVATION OF RIGHTS. That if the City determines any rates, revenues, terms and conditions, or benefits resulting from a final order or subsequent negotiated settlement approved in any proceeding involving Atmos's RRM filing would be more beneficial to the City than the terms of the attached tariff, then the more favorable rates, revenues, terms and conditions, or benefits shall additionally accrue to the City. Exercise of tlus right is conditioned upon the City's acceptance of all rates, revenues, terms, and conditions of any other settlement agreement or associated appeals arising Page 4 of 6 Atmos RRM Ordinance out of such RRM filing in toto. Section 4. REPEAL OF ORDINANCES IN DIRECT CONFLICT. That if any provisions or conditions of this Ordinance directly conflict with any provisions or conditions of other Ordinances previously adopted by the City Council, the conflicting provisions of such previously adopted Ordinances are hereby repealed. Section 5. COMPLIANCE WITH OPEN MEETINGS ACT REQUIREMENTS. That the meetnlg in which this Ordinance was adopted was in all things conducted in strict compliance with the Texas Open Meetings Act, as codified at Chapter 551, Texas Government Code. Section 6. SEVERABILITY. That if any portion, section or part of a section of this Ordinance is subsequently declared invalid, inoperative or void for any reason by a court of competent jurisdiction, the remaining portions, sections or parts of sections of this Ordinance shall be and remain in full force and effect and shall not in any way be impaired or affected by such decision, opinion or judgment. Page 5 of 6 Atmos 1tRM Ordinance Section 7. EFFECTIVE DATE. That this Ordinance shall take effect and be in full force and effect from and after the date of its adoption. The City Secretary is hereby directed to deliver a certified copy of this Ordinance to Atmos, care of David Park, Vice President Rates and Regulatory Affairs, Atmos Energy Corporation, 5420 LBJ Freeway, Suite 1800, Dallas, TX 75240, and to the Steering Committee's outside legal counsel, Geoffrey Gay, Lloyd Gosselink Rochelle & Townsend, P.C., P.O. Box 1725, Austin, TX 78767-1725. AND IT IS S® ®RDAINED. ADOPTED AND EFFECTIVE: October 14, 2008 APPROVED AS TO FORM AND LEGALITY: By: ~..~:~~_~ Peter Vaky Assistant City Attonley Date: /D-/~f -Dfl (r -1~O.320 Page 6 of 6 Atmos RRM Ordinance ATTACHMENT A ORDINANCE NO. 18333-10-2008 ATM05 ENERGY CORPORATION RRG TARIFF NO: 19843 MID-TEX DIVISION REVISEON NO: 0 RATE SCHEDULE: R-RESIDENTIAL. SALES APPLICABLE TO: Entire Division (except Environs areas and the City of Dallas} EFFEGTNE DATE: 90/01I20Q8 PAGE: 23 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 Mcf charges to the amounts due under the riders listed below: Charge Amount Customer Charge per Bill. $ 7.00 per month Commodity Charge -.All Mcf $2:2410 per Mcf 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. Rate Review Mechanism: Commodity Charge includes an amount calculated in accordance with Rider RRM. Franchise Fee Adjustment: Plus an amounf for franchise fees calculated in accordance with Rider FF. Franchise Fees are to be assessed solely to customers within municipal limits. This does not apply to Environs Customers. 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. Issued By: David J. Park Vice President, Rates and Regulatory Affairs Dafe Issued: 08/13/2008 ATTACHMENT A ATMOS ENERGY CORPORATION M(D-TEX DIVISION RRC TARIFF NO: 1984Q~ REVISION NO: 0 RATE SCHEDULE: C -COMMERCIAL SALES APPLICABLE TO: Entire Division (except Environs areas and the City of Dapas} EFFECTIVE DATE: 10/0112008 PAGE: Z4 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 3,000 Mcf. 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 Mcf charges to the amounts due under the riders listed below: Charge Amount Customer Charge per [3ill ~ 13.50 per month Commodity Charge -All Mcf $ 0.9809 per Mcf 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. Rate Review Mechanism: Commodity Charge includes an amount calculated in accordance with Rider RRM. Franchise Fee Adjustment: Plus an amount for franchise fees calculated in accordance with Rider FF. Franchise Fees are to be assessed solely to customers within municipal limits. This does not apply to Environs Customers. 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. Issued By: David J. Park Vice President, Rates and Regulatory Affairs Date Issued: 08/13/2008 ATTACHMENT A ATMOS ENERGY CORPOF2ATION RRC TARIFF NO: 19842 MID-TEX DlvlstoN REVtstoN No: o RATE SCHEDULE: t -INDUSTRIAL SALES APPLICABLE TO: Entire Division (except Environs areas and the City of Dattas} EFFECTIVE DATE: 10/0112008 PAGE: 25 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 ~ 425.00 per month First 0 MMBtu to 1,500 MMBtu $ 0.2733 per MMBtu Next 3,500 MMBtu $ 0.1.993 per MMBtu All MMBtu over 5,000 MMBtu ~ 0.0427 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. Rate Review Mechanism: Commodity Charge includes an amount calculated in accordance with Rider RRM. Franchise Fee Adjustment: Plus an amount for franchise fees calculated in accordance with Rider FF. Franchise Fees are to be assessed solely to customers within municipal limits. This does not apply to Environs Customers. 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." Issued By: David J. Park Vice President, Rates and Regulatory Affairs Date Issued: 08/13/2008 ATTACHMENT A ATMOS ENERGY CORPORATtC?N MID-TEX DfV[SlON RRC TARIFF NO: 18842 REVIStON NO: 0 RATE SCHEDULE: f -INDUSTRIAL 5ALE5 APPLICABLE TO: Entire Division (except Environs areas and the City of Dallas) EFFECTIVE DATE: 10/01/2008 PAGE: 26 Replacement Index In the event the "midpoint" or "common" price for the Katy point listed in Piaffs 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 An Agreement for Gas Service may be required. fdotice 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. Issued By: David J. Park Vice President, Rates and Regulatory Affairs Date Issued: 08/13/2008 Al-fACHMENT A ATMOS ENERGY CORPORATIOPd MID-TEX DIVfSfO1`d RRC TARIFF NO: 19845 REVISIO(~ NO: 0 RATE SCHEDULE: T -TRANSPORTATION APPLECABLE TO: Entire Divisiot (except Environs areas and the City of Dallas} EFFECTIVE DATE: 1Q/0112008 PAGE: 27 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 Arrtount Customer Charge per Meter $425.00 per month FirstD MMBtu to 1,500 MMBtu $ 0:2733 per MMBtu Next 3,500 MfYIBtu $ 0.1993 per MMBtu All MMBtu over 5,000 MMBtu $ 0.0427 per MMBtu Upstream. Transportation Cost Recovery: Plus an amount for upstream transportation cos#s in accordance with Part (b) of Rider GCR. Rate Review Mechanism: Commodity Charge includes an amount calculated in accordance with Rider RRM. 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. Franchise Fees are to be assessed solely to customers within municipal limits. This does not apply to Environs Customers. 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 Rafe 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. Issued By: David J. Parlc Vice President, Rates and Regulatory Affairs Date Issued: 08/13/2008 ATTACHMENT A ATMOS ENERGY CORPORATION MID-TEX DIVISION RRC TARIFF NO: '19845 REVISION NO: 0 RATE SCHEDULE: T -TRANSPORTATION APPLICABLE TO: Entire Division (except Environs areas and the City of Dallas) EFFECTIVE DATE: 10/01/2008 PAGE: 28 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 P/atfs Gas Daily in the table entitled "Daily Price Survey" during such month, for the MMBtu of Gustomer's monthly Cumulative Imbalance, as defined in the applicab-e Transportation Agreement, at the end of each month that exceeds 10% of Customer's receipt quantities for the month. 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 P/a#fs 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 Platfs 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. Issued By: David J. Park Vice President, Rates and Regulatory Affairs Date Issued: 08/13/2008 ATTACHMENT A ATMOS ENERGY CORPORATION MID-TEX DIVISION REVISION NO: 0 R[DER: ( GCR -GAS COST RECOVERY APPLICABLE TO: Entire Division EFFECTIVE DATE: 10/01/2008 PAGE: 40 Applicable to Rate R, Rate C, and Rate I for all gas sales made by Company, and applicable to Rate R, Rate C, Rate I, and Rate T for recovery of Pipeline System costs. The total gas cost recovery amount due is determined by adding fhe gas cost calculated in Section (a) below and the pipeline cost calculated in Section (b) below. The amount due for gas cost (Section (a)) is determined by multiplying the Gas Cost Recovery Factor {GGRF) by the Customer's monthly volume. For Customers receiving service under Rate R and Rate C, monthly volume will be calculated on a Mcf basis. For Customers receiving service under Rate I, monthly volume will be calculated on an MMBtu basis and the quantities will be adjusted as necessary to recover actual gas costs. The amount due for pipeline cost (Section (b)} is determined by multiplying the Pipeline Cast Factor (PCF) by the Customer's monthly volume. For Customers receiving service under Rafe R and Rate C, monthly volume will be calculated on an Mcf basis. For Gustomers receiving service under Rate I and Rate T, monthly volume will be calculated on an MMBtu basis and the quantities will be adjusted as necessary to recover actual gas costs. (a) Gas Cost Method of Caleu[ation The monthly gas cost adjustment is calculated by the application of a Gas Cost Recovery Factor (GGRF), as determined with the following formula: GGRF =Estimated Gas Cost Factor (EGCF) + Reconciliation Factor (RF) + Taxes (TXS) EGGF =Estimated cost of gas, including lost and unaccounted for gas attributed to residential, commercial, and industrial sales, and any reconciliation balance of unrecovered gas costs, divided by the estimated total residential, commercial, and .industrial sales. Lost and unaccounted for gas is limited to 5%. RF =Calculated by dividing the difference between the Actual Gas Cost Incurred, inclusive of interest over the preceding twelve-month period ended June 30 and the Actual Gas Cost Billed over that same twelve-month period by the estimated total residential, commercial, and industrial. sales for the succeeding October through June billing months. The interest rate to be used is the annual interest rate published by the PUC every December. The interest rate of 2008 is 4.69%. Actual Gas Cost Incurred =The sum of the costs booked in Atmos Energy Corp., Mid-Tex Division account numbers 800 through 813 and 858 of the FERC Uniform System of Accounts, including the net impact of injecting and withdrawing gas from storage. Also includes a credit or debit for any out-of-period adjustments or unusual or nonrecurring costs typically considered gas costs and a credit for amounts received as Imbalance Fees or Curtailment Overpull Fees. Actual Gas Cost Billed =EGCF multiplied by the monthly volumes billed to Residential, Commercial and Industrial Sales customers, less the total amount of gas cost determined to have been uncollectible and written off which. remain unpaid for each month of the reconciliation period. Issued By: David J. Park Vice President, Rates and Regulatory Affairs Date [ssued: 08/13/2008 ATTACHMENT A ATf~IOS ENERGY CORPORATEON MID-TE?C DIVISION REVISION NO: 0 RIDER: GCR -GAS COST RECOVERY APPLICABLE TO: Entire Division EFFECTIVE DATE: 10(01I20D8 PAGE: 41 Any amount remaining in the reconciliation balance after the conclusion of the period of amortization will be maintained in the reconciliation balance and included in the collection of the next RF. Atmos Energy shall file annual reports with the Commission, providing by month the following amounts: Gas Cost Written Off. Margin Written Off, Tax and Other Written Off, Total Written Off, Gas Cost Collected and Margin Collected. TXS =Any statutorily imposed assessments or taxes applicable to the purchase of gas divided by the estimated total residential, commercial, and industrial sales. ADJ =Any surcharge or refund ordered by a regulatory authority, .inclusive of interest, divided by the estimated total residential, cammercial, and industrial sales is to be included as a separate line item surcharge. (b) Pipeline Cost Method of Calculation Each month, a Pipeline Cost Factor (PCF) is calculated separately for each Pipeline Gost Rate Class listed below. The formula for the PCF is: PCF = PP / S, where: PP = (P - A) x D, where: P =Estimated monthly cost of pipeline service calculated pursuant to .Rate GGS D =Pipeline. service allocation factor for the rate class as approved in the Company's most recent rate case, as follows: Pi eline Cost Rate Class ~ Allocation Factor D Rate R -Residential Service ~ .634698. Rate G -Commercial Service ~ .302824 Rate I -Industrial Service and Rate T -Transportation Service ~ .062478 A =Adjustment applied in the current month to correct for the difference between the actual and estimated pipeline cost revenue of the second preceding month, calculated by the formula: A = R - (C - A2), where: R =Actual revenue received from the application of the PP component in the second preceding month. C =Actual pipeline costs for the second preceding month. A2 =The adjustment (A) applied to the PP component in the second preceding month. Issued By: David J. Park Vice President, Rates and Regulatory Affairs Date Issued: 08/13/2008 ATTACHMENT A ATMOS ENERGY CORPORATIQhI MID-TEX DIVISION REVISION NQ: 0 RIDER: ( GCR -GAS COST RECOVERY APPl.iCABLE TO: Entire Division EFFECTIVE DATE: 10/01/2008 PAGE: 42 S =Estimated Mcf or MMBtu for the rate class for the current billing month. The PCF is calculated to the nearest 0.0001 cent. The Pipeline Cost to be billed is determined by multiplying the Mcf or MMBtu used by the appropriate PCF. The Pipeline CosYis determined to the nearest whole cent. issued By: David J. Park Vice President, Rates and Regulatory Affairs Date Issued: 08/13/2008 ATTACHMENT A ATIVIOS ENERGY CORPORATEON M1D-TEX D{VISION REVISION NO: 0 RIDER: CEE -CONSERVATION $~ ENERGY EFFICIENCY APPLICABLE TO: Entire Division EFFECTIVE DATE: 10(01/2008 PAGE: 58 Purpose Atmos Energy Mid-Tex is proposing to institute a complete Conservation & Energy Efficiency program which will offer assistance to qualified customer segments in reducing energy consumption and lowering energy utility bills. The proposal is one where Atmos .Energy shareholders will fund a percentage of the allowable expenses incurred annually, with a customer rate component providing the remainder of the funding. Following is ahigh-level, concept summary of the proposal. Atmos Energy Mid-Tex Division proposes to work with the communities it serves to develop the details of a new tariff and programs addressing conservation and energy efficiency. Synopsis: Voucher system to provide free energy savings materials and supplies to qualifying customers of Atmos Mid-Tex. Qualified Customers will receive up fo two hundred dollars ($200.00} worth of caulking, weather-stripping, sheathing, sealing, water heater blankets, and like materials, other energy saving devices such as clock-thermostats, set-back devices ("covered items"} from approved suppliers /retailers. Company will undertake efforts to enlist support from community groups, including its own Employee Action Program, to assist customers with installation. If it is determined that professional installation capabilities are necessary, the parties will agree on labor assistance amounts. Eli ibili Low Income -Low-income rate-payers that qualify for heating bill assistance through LINEAP agencies and all agencies that distribute Atmos "Share the Warmth" funds. Agencies that allocate assistance funds denote customer as Low Income, a status that lasts for one year. Senior Citizen -Primary account holder can request eligibility through ATM call center or web-site. Customer provides primary SSN which is verified through Social Security Administration. And account holder that is or turns 65 years old in that year becomes eligible. Funding Initial program funding will be at two million dollars ($2,000,000). Atmos Energy shareholders will contribute one million dollars ($1,000,000.00) to this initiative annually with ratepayers providing one million dollars ($1,000,000.00) per year. It is proposed that the program operate on an October 1 through September 30 year, with benefits being capped at the two million dollar level for the initial program period. Administration: A third-party administrator will coordinate qualification of customers, voucher distribution, subsequent verification and reimbursement of eligible expenditures and general program administration. Program administration expenses will be funded from the annual approved budget. Audits will be provided all interested parties within 120 days of the end of each program year to determine effectiveness. Issued By: David J. Park Vice President, Rates and Regulatory Affairs Date Issued: 08/13/2008 ATTACHMENT A ATMOS ENERGY CORPORATION MID-TEX DIVISION REVISION NO: 0 RIDER: CEE - CONSERVATION ~ ENERGY EFFICIENCY APPL6CABLE TO: Entire Division EFFECTIVE DATE: 10/01/2008 PAGE: 59 Report Atmos shall file an annual report detailing cost to administer the program with details of the amounts paid out of program for energy conversation assistance. The report shall .also detail number of applicants, number rejected and accepted and reason .rejected. The report shall be filed with the Gas Service Director. Issued By: David J. Park Vice President, Rates and Regulatory Affairs Date [sued: 08/13/2008 ATTACHMENT A ATMOS ENERGY CORPORATION MID-TEX DIVISION REVISION NO: 0 RIDER: FF -FRANCHISE FEE ADJUSTMENT APPLICABLE TO: Entire Division EFFECT[VE DATE: 10/0112008 PAGE: 43 Application Applicable to Customers inside the corporate limits of an incorporated municipality that imposes a municipal franchise fee upon Company for the Gas Service provided to Customer. Franchise Fees to be assessed solely to customers within the municipal limits. This does not apply to Environs customers. Monthly Adjustment Company will adjust Customer's bill each month in an amount equal to the municipal franchise fees payable for the Gas Service provided to Customer by Company. Municipal franchise fees are determined by each municipality's franchise ordinance.. Each municipality's franchise ordinance will specify the percentage and applicability of franchise fees. From time to time, Company will make further adjustments to Customer's bill to account for any over- or under-recovery of municipal franchise fees by Company. Issued By: David J. Park Vice President, Rates and Regulatory Affairs Date Issued: 08/1312008 ATTACHMENT A TARIFF FOR GAS SERVICE ATMOS ENERGY GORP., MID-TEX DIVISION RIDER: Rider WNA -Weather Normalization Adjustment APPLIGABLE TO: Entire System (except Environs areas and the City of Dallas) REVISION: DATE: EFFECTIVE DATE: 11/0112D08 PAGE: 1 OF 2 RIDER l~UNA - l~ea~her formalization Adjustment Provisions for Adjustment The base rate per Mcf {1,000,000 Btu) 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 Mcf 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 itli rate schedule or classification expressed in cents per Mcf Ri = base rate of temperature sensitive sales for the ith schedule or classificatioh approved by the entity exercising original jurisdiction. HSFi = heat sensitive factor for the ith schedule or classification calculated as the slope of the linear regression of average sales per bill (Mcf) and actual heating degree days by month for the test year by schedule or classification and weather station as part of the RRM filing. 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 calculated as the y- intercept of the linear regression of average sales per bill (Mcf) and actual heating degree days by month for the test year by schedule or classification and weather station as part of the RRM filing. The Weather Normalization Adjustment for the jth customer in ith rate schedule is computed as: WNA, = WNAF; x q;~ ATTACHMENT A TARIFF FOR GAS SERVICE. ATM05 ENERG'tr CORP., tUtID-TEX DIVISION RATE SCHEDULE: Rate WNA -Weather Normalization Adjustment. APPLICABLE TO: Entire System {except Environs areas and the Gity of Dallas) REVISION: DATE: EFFEGTiVE DATE: 1'1/0'1/2008 PAGE: 2 OF 2 Where q;~ is the relevant sales quantity for the jth customer in ith rate schedule. Filings with Entities Exercising Original Jurisdiction As part gf its annual RRM. filing the Company will file (a} a copy of each computation of the Weather Normalization Adjustment Factor, (b) a schedule showing the effective date of each such Weather Normalization Adjustment, (c) a schedule showing the factors of values used in calculating such Weather Normalization Adjustment and (d) a random sample and audit of thirty (30) actual customer bills, with customer information deleted, for each rate schedule or classification to which the WNA was applied in the preceding 12 month period. To the extent that source data is needed to audit the WNA application, such data will be provided by the Company as part of the annual RRM filing. If the RRM is discontinued, as provided in the Rider RRM tariff, the information required herein to be filed with the entities exercising original jurisdiction shall be filed on March 1 of each year. Base Use/Heat. Sensitivity (HSF) Factors Residential Commercial Base use HSF Base use HSF 1/1/aafhar ~tatinn Mrf Mcf/Hr~t~ Mrf MCf/HDD Abilene 1.27 ~ .0130 10.93 ( .0638 Austin ( 1.29 .0133 18.47 .0641 Dallas 1.79 .0186 20.83 ~ .0878 Waco ~ 1.30 .0141 11.41 .0617 Wichita 1.35 Falls .0143 11.62 I .0540 Sample WNAF~ Calculation: .1533 per Mcf = Where i = Ri = 1.2267 x Residential Single Block Rate Schedule 1.2267 per MCF (Rate R -Final Order GUD No. 9670) (.0131 x (30-17) ) (1.14 + {.0131 x 17) ) HSFi - .0131 (Residential -Abilene Area) NDD = 30 HDD (Simple ten-year average of Actual HDD for Abilene Area - 9!15/06 - 10114/06) ADD = 17 HDD (Actual HDD for Abilene Area - 911 5/06 -1 0/14106) BLi = 1.14 Mcf (Residential -Abilene Area) ORDINANCE NO. 18333-10-2008 Rate Characteristics: ATN10S ENERGY CORP., filitD-TEX DIV[SION SU~i11f1ARY PROOF OF REVENUE AT PROPOSED RATES TEST YEAR ENDING DECE~lIBER 31, 2007 Line Description Total Reference (a) (b) {c) Rate R 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Customer Charge Consumption Charge ($/Mcf) 2007 RRM True-up ($/Mcf) Rider GCR Part A Rider GCR Part B Billing Units (1): Bills Total MCF Proposed Revenue: Customer Charge Consumption Charge Base-Revenue Rider GCR Part A Rider GCR Part B Subtotal Revenue Related Taxes Total Proposed Revenue- Rate R ATTACHMENT B RRM Settlement Agreement, $7.00 Pg 2, Item 5 $2.1600 $0.0810 $8.1244 $0.6243 17,069,679 78, 708, 921 $ 119,487,753 176, 385,175 $ 295,872,928 639,460,135 49,140,231 $ 984,473,295 59,244,614 $ 1,043,717,909 Settlement Allocation Settlement Allocation Schedule H Schedule I Note 1: See Billing Determinants Study for details. WP_J-1.1 W P_J-1.1 ATTACHMENT B ATIUtOS ENERGY CORP., IVIID-TEX DltlISION SUMf~1ARY PROOF OF REVENUE AT PROPOSED RATES TEST YEAR ENDING DEGEf~BER 3'I, 2007 Line Description Total Reference {a) {b) {c) Rate C 1 Rate Characteristics: 2 Customer Charge- $13:50 3 4 Consumption Charge ($IMcf) $0.9442 5 2007 RRM True-up {$/Mcf) $0.0367 6 Rider GCR Part A $8..1244 7 Rider GCR Part B $0.5228 8 9 Billing Units (1): 10 Bills 1,434.,516 11 Total MCF 50,233,642 12 13 Proposed Revenue: 14 Customer Gharge $ 19,365,966 15 Consumption Charge 49,273,373 16 Base Revenue $ 68,639,339 17 Rider GCR Part A 408,116,524 18 -Rider GCR Part B 26,261,046 19 Subtotal $ 503,016,909 20 Revenue Related Taxes 30,271,052 21 22 Total Proposed Revenue- Rate C $ 533,287,962 RRM Settlement Agreement, Pg 2, Item 5 Settlement Allocation Settlement Allocation Schedule H Schedule WP_J-1.2 W P_J-1.2 23 24 Note 1: See Billing Determinants Study for details. ATTACHMENT B ATIl1OS ENERGY CORP., IUIID-TEX DIVISION SUN11iflARY PROOF OF REVENUE AT PROPOSED RATES TEST YEAR ENDING DECEMBER 31, 2007 Line Description Total Reference (a) (b) (c) Rate 1 ~T 1 Rate Characteristics: 2 Customer Charge $ 425.00 Settlement Allocation 3 4 Block 1 ($/MMBTU) $0.2352 Settlement Allocation 5 Block 2 ($/MMBTU) $0.1715 Settlement Allocation 6 Block 3 ($/MMBTU) $0.0367 Settlement Allocation 7 2007 RRM True-up ($/MMBTU): Settlement Allocation 8 Block 1 ($/MMBTU) $0.0381 9 Block 2 ($/MMBTU) $0.0278 10 Block 3 ($/MMBTU) $0.0060 11 Rider GCR Part A $8.1244 Schedule H 12 Rider GCR Part B $0.2938 Schedule I 13 14 Consumption Characteristics: 15 Block 1 (First 1,500 MMBTU) 0.23502 (1) 16 Block 2 (Next 3,500 MMBTU) 0.26655 (1) 17 Block 3 (Over 5,000 MMBTU) 0.49843 (1) 18 19 Billing Units (1): 20 Bills 10,052 WP_J-1 21 Block 1 9,522,217 WP_J-1 22 Block 2 10,799,921 WP J-1 23 Block 3 20,195,218 WP_J-1 24 Total MMBTU 40,517,356 25 28 Sales Volumes 2,331,063 WP_J-1 27 28 Proposed Revenue: 29 Customer Charge $ 4,272,100 30 Block 1 2,602,422 31 Block 2 2,152,424 32 Block 3 862,336 33 Base Revenue $ 9,889,282 34 Rider GCR Part A 18,494,542 35 Rider GCR Part B 11,902,411 36 Subtotal $ 40,286,235 37 Revenue Related Taxes 2,424,385 38 39 Total Proposed Revenue- Rate I&T $ 42,710,620 40 41 Note 1: See Billing Determinants Study for details. C®~r ®f F®~ ~/®rfh, Texas Mayor and Council Communication COUNCIL- ACTION: Approved on 10/14/2008 -Ord. No. 18333-10-2008 DATE: Tuesday, October 14, 2008 LOG NAME: 13ATMOSRRM REFERENCE NO.: G-16320 SUBJECT: Adopt Ordinance Approving a Negotiated Settlement Between the Atmos Cities Steering Committee and Atmos Energy Corporation, Mid-Tex Division, Regarding the Atmos Rate Review Mechanism Filing and Ordering Authorized Gas Rates RECOMMENDATION: It is recommended that the City Council adopt the attached ordinance which approves a settlement between the Atmos Cities Steering Committee and Atmos Energy Corporation, Mid-Tex Division, regarding Atmos' April 14, 2008, Rate Review Mechanism Filing and authorizes new rates that are consistent with such settlement. DISCUSSION: On May 16, 2006, the City Council approved Resolution No. 3348-05-06, which authorized participation with other cities in the Atmos Energy Corporation (Atmos) service area to form a standing steering committee with the authority to act on behalf of its members in any proceeding relating to gas utility regulation (M&C G-15202). This committee is known as the Atmos Cities Steering Committee (ACSC). On September 20, 2007, Atmos filed with the City of Fort Worth ("City") a Statement of Intent to Increase Gas Utility Rates within the Incorporated Areas Served by the Mid-Tex Division. ACSC and Atmos representatives held numerous meetings to explore options that would address the request to increase rates and to resolve other outstanding issues. They reached an agreement to reduce Atmos' requested increase by more than 80 percent and ensure that Atmos is able to provide safe and reliable natural gas service. The Settlement Agreement also provided rate certainty for customers by eliminating piecemeal ratemaking, and creating a new process called the Rate Review Mechanism (RRM) for expedited rate review by the cities without costly litigation. On February 19, 2008, the City Council adopted Ordinance No. 17989-02-2008 approving the Settlement Agreement and authorizing the RRM tariff. Atmos filed its first application to increase natural gas rates pursuant to the RRM tariff with the cities which approved the Settlement Agreement on or about April 14, 2008. The application requested approximately $33.5 million in additional revenue. ACSC's rate expert concluded that Atmos would be able to justify a rate increase of $19.8 million in a contested rate filing. ACSC designated a Negotiation Committee made up of City representatives and assisted by ACSC's attorneys and consultants to resolve issues identified in the Company's RRM filing. The Negotiating Committee and Atmos reached an agreement to increase Atmos' revenue requirement by $20 million as reflected in the rate tariffs in Attachment A to the attached ordinance. The rate tariffs also reflect a reduction in the minimum monthly charges in compliance with the previous Settlement Agreement. The ACSC Executive Committee recommends members approve the attached rate tariffs (including but not Logname: 13ATMOSRRM Page 1 of 2 limited to a reduction of the residential customer monthly charge to $7.00 per month) and find that the rates therein are just, reasonable, and in the public interest. The following table shows the current and recommended rates: RESIDENTIAL PRESENT RECOMMENDED Customer Charge $10.69 $7.00 All Mcf $1.27 $2.24 COMMERCIAL PRESENT RECOMMENDED Customer Charge $20.28 $13.50 All Mcf $0.71 $0.98 INDUSTRIAL PRESENT RECOMMENDED Customer Charge $344.75 $425.00 First 1,500 MMBtu $0.22 $0.27 Next 3,500 MMBtu $0.16 $0.20 All over 5,000 MMBtu $0.16, $0.04 TRANSPORTATION PRESENT RECOMMENDED Customer Charge $344.75 $425.00 First 1,500 MMBtu $0.22 $0.27 Next 3,500 MMBtu $0.16 $0.20 All over 5,000 MMBtu $0.16 $0.04 Bill comparisons of current, proposed and recommended residential and commercial rates are attached (Exhibits A-1 and A-2). Upon adoption of the attached ordinance, the rate schedules set forth in Attachment A of the ordinance will take effect with bills rendered after October 1, 2008. FISCAL INFORMATION/CERTIFICATION: The Financial Management Services Director certifies that this action will have no material effect on City funds. TO Fund/Account/Centers FROM Fund/Account/Centers Submitted for City Manager's Office b~ Originating Department Head: Additional Information Contact: Karen Montgomery (6222) Lena Ellis (8517) Danny Reed (8334) Logname: 13ATMOSRRM Page 2 of 2