HomeMy WebLinkAbout(0046) 2020 Atmos Mid-Tex RRM Settlement Ordinance - 9.15.20.PDFORDINANCE NO.
ORDINANCE APPROVING A NEGOTIATED SETTLEMENT
BETWEEN THE ATMOS CITIES STEERING COMMITTEE
("ACSC") AND ATMOS ENERGY CORP., MID-TEX DIVISION
("COMPANY") 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 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 Fort Worth, Texas ("City") is a gas utility customer of Company,
and a regulatory authority with an interest in the rates and charges of the Company; and
WHEREAS, the City is a member of the ACSC, a coalition of similarly -situated cities
served by the Company ("ACSC Cities") that have joined together to facilitate the review of, and
response to, natural gas issues affecting rates charged in the Company 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 Company; and
Ordinance No. Page 1 of 5
WHEREAS, on about March 31, 2020, the Company 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 Company's 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 the Company of $90 million
applicable to ACSC Cities with an Effective Date of December 1, 2020; and
WHEREAS, ACSC agrees that Company's 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
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
Ordinance No. Page 2 of 5
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, 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 Company'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 Company are
unreasonable. The new tariffs attached hereto and incorporated herein as Exhibit A, are just and
reasonable, and are designed to allow Company 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.
SECTION 5. That the ratemaking treatment for pensions and retiree medical benefits in
Company's next RRM filing shall be as set forth on Exhibit B, attached hereto and incorporated
herein.
Ordinance No. Page 3 of 5
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 Company shall reimburse the reasonable ratemaking expenses of the
ACSC in processing the Company's 2020 RRM filing.
SECTION 8. That to the extent any ordinance previously adopted by the Council is
inconsistent with this Ordinance, it is hereby repealed.
SECTION 9. 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 10. 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 11. 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 December 1, 2020.
SECTION 12. 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 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.
(signature page follows)
Ordinance No. Page 4 of 5
PASSED AND APPROVED this day of
Mayor
ATTEST:
Mary J. Kayser, City Secretary
2020.
APPROVED AS TO FORM
Sarah Fullenwider, City Attorney