HomeMy WebLinkAboutOrdinance 25051-09-2021 ORDINANCE NO. 25051-09-2021
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF
FORT WORTH, TEXAS, APPROVING A NEGOTIATED
SETTLEMENT BETWEEN THE ATMOS CITIES STEERING
COMMITTEE("ACSC")AND ATMOS ENERGY CORP.,MID-TEX
DIVISION ("COMPANY") REGARDING THE COMPANY'S 2021
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, charges, and services of 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. 25051-09-2021
WHEREAS, the current RRM tariff was adopted by the City in a rate ordinance in
2020; and
WHEREAS, on about April 1, 2021, the Company filed its 2021 RRM rate request with
ACSC Cities based on a test year ending December 31, 2020; and
WHEREAS, ACSC coordinated its review of the Company 2021 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$22.78 million
applicable to ACSC Cities with an Effective Date of December 1, 2021; and
WHEREAS, ACSC agrees that the 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 $3.8 million off new rates imposed by the attached tariffs
(Exhibit A); 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 prepared by the Company(Exhibit C); and
2557/33/8275931 2
ORDINANCE NO. 25051-09-2021
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$22.78 million for
ACSC Cities represents a comprehensive settlement of gas utility rate issues affecting the rates,
operations, and services offered by the Company within the municipal limits arising from the
Company's 2021 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 the 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 the Company are
unreasonable. The new tariffs attached hereto and incorporated herein as Exhibit A, are just and
reasonable, and are designed to allow the Company to recover annually an additional $22.78
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
the Company's next RRM filing shall be as set forth on Exhibit B, attached hereto and
incorporated herein.
2557/33/8275931 3
ORDINANCE NO. 25051-09-2021
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 the Company shall reimburse the reasonable ratemaking expenses of
ACSC in processing the Company's 2021 RRM filing.
SECTION 8. That to the extent any resolution or 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, 2021.
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 Thomas Brocato,
General Counsel to ACSC,at Lloyd Gosselink Rochelle&Townsend,P.C., 816 Congress Avenue,
Suite 1900,Austin, Texas 78701.
2557/33/8275931 4
ORDINANCE NO. 25051-09-2021
PASSED AND APPROVED THIS 21St DAY OF SEPTEMBER 2021.
APPROVED AS TO FORM AND LEGALITY ATTEST:
'�wssto u c9w s� �.rr„v`,p Ct,
Christopher Austria /Ronald P. Gonzales
Assistant City Attorney Acting City Secretary
M&C: 21-0716
G, O
:Z
2557/33/8275931 5
Exhibit A
to 2021 RRM Ordinance
Mid-Tex Tariffs
Effective December 1,2021
MID-TEX DIVISION RRC Tariff No:
ATMOS ENERGY CORPORATION
RATE SCHEDULE: R—RESIDENTIAL SALES
APPLICABLE TO: ALL CUSTOMERS IN THE MID-TEX DIVISION UNDER THE RRM TARIFF
EFFECTIVE DATE: Bills Rendered on or after 12/01/2021 PAGE:
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 $ 20.85 per month
Rider CEE Surcharge $ 0.05 per month'
Total Customer Charge $20.90 per month
Commodity Charge—All Ccf $0.27979 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 1,2021.
MID-TEX DIVISION RRC Tariff No:
ATMOS ENERGY CORPORATION
RATE SCHEDULE: C—COMMERCIAL SALES
APPLICABLE TO: ALL CUSTOMERS IN THE MID-TEX DIVISION UNDER THE RRM TARIFF
__JEFFECTIVE DATE: Bills Rendered on or after 12/01/2021 PAGE: Page
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 $ 56.50 per month
Rider CEE Surcharge $ 0.01 per month'
Total Customer Charge $ 56.51 per month
Commodity Charge—All Ccf $0.12263 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 1,2021.
MID-TEX DIVISION RRC Tariff No:
ATMOS ENERGY CORPORATION
RATE SCHEDULE: I—INDUSTRIAL SALES
APPLICABLE TO: ALL CUSTOMERS IN THE MID-TEX DIVISION UNDER THE RRM TARIFF
EFFECTIVE DATE: Bills Rendered on or after 12/01/2021 PAGE:
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 $ 1,054.75 per month
First 0 MMBtu to 1,500 MMBtu $ 0.4330 per MMBtu
Next 3,500 MMBtu $0.3171 per MMBtu
All MMBtu over 5,000 MMBtu $ 0.0680 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 P/atts 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 P/atts 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.
MID-TEX DIVISION RRC Tariff No:
ATMOS ENERGY CORPORATION
RATE SCHEDULE: I—INDUSTRIAL SALES
APPLICABLE TO: ALL CUSTOMERS IN THE MID-TEX DIVISION UNDER THE RRM TARIFF
EFFECTIVE DATE: Bills Rendered on or after 12/01/2021 PAGE:
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.
MID-TEX DIVISION RRC Tariff No:
ATMOS ENERGY CORPORATION
RATE SCHEDULE: T—TRANSPORTATION
APPLICABLE TO: ALL CUSTOMERS IN THE MID-TEX DIVISION UNDER THE RRM TARIFF
EFFECTIVE DATE: Bills Rendered on or after 12/01/2021 PAGE:
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 $ 1,054.75 per month
First 0 MMBtu to 1,500 MMBtu $0.4330 per MMBtu
Next 3,500 MMBtu $0.3171 per MMBtu
All MMBtu over 5,000 MMBtu $ 0.0680 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.
MID-TEX DIVISION RRC Tariff No:
ATMOS ENERGY CORPORATION
RATE SCHEDULE: T—TRANSPORTATION
APPLICABLE TO: ALL CUSTOMERS IN THE MID-TEX DIVISION UNDER THE RRM TARIFF
EFFECTIVE DATE: Bills Rendered on or after 12/01/2021 PAGE:
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.
MID-TEX DIVISION
ATMOS ENERGY CORPORATION
RIDER: WNA—WEATHER NORMALIZATION ADJUSTMENT
APPLICABLE TO: ALL CUSTOMERS IN THE MID-TEX DIVISION UNDER THE RRM TARIFF
EFFECTIVE DATE: Bills Rendered on or after 12/01/2021 PAGE:
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; = WNAF; x q;j
Where q;j is the relevant sales quantity for the jth customer in ith rate schedule.
MID-TEX DIVISION
ATMOS ENERGY CORPORATION
RIDER: WNA—WEATHER NORMALIZATION ADJUSTMENT
APPLICABLE TO: ALL CUSTOMERS IN THE MID-TEX DIVISION UNDER THE RRM TARIFF
EFFECTIVE DATE: Bills Rendered on or after 12/01/2021 PAGE:
Base Use/Heat Use Factors
Residential Commercial
Base use Heat use Base use Heat use
Weather Station Ccf Ccf/HDD Ccf Ccf/HDD
Abilene 11.88 0A459 85.39 0.6996
Austin 10.34 0.1452 194.82 0.9398
Dallas 15.21 0.1915 148.19 1.0986
Waco 10.63 0.1373 130.39 0.7436
Wichita 12.63 0.1398 109.17 0.5803
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.
Exhibit B
to 2021 RRM Ordinance
Mid-Tex
2021 Benchmark for Pensions
and Retiree Benefits
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Exhibit C
to 2021 RRM Ordinance
Mid-Tex 2021 Schedule for
Amortization for Regulatory Liability
ATMOS ENERGY CORP.,MID-TEX DIVISION
RATE BASE ADJUSTMENTS
TEST YEAR ENDING DECEMBER 31,2020
AMORTIZATION OF REGULATORY LIABILITY
Total Total
Beginning Protected& Protected&
Line Year Ended Beginning Protected Ending Protected Unprotected Unprotected Ending Unprotected Unprotected Unprotected
No. Dec.31 Protected Balance Amortization Balance Balance Amortization Balance Amortization Balance
(a) (b) (c) (d) (e) (f) (g) (h) (i)
1 2017(3) $ - $ - $ (51,477,654) $ - $ - $ 343,746,535 $ - $ 292,268,881
2 2018 (51,477,654) 494,977 (50,982,677) 343,746,535 (3,513,868) 340,232,667 (3,018,891) 289,249,991
3 2019 (50,982,677) 1,979,910 (49,002,767) 340,232,667 (14,057,872) 326,174,795 (12,077,963) 277,172,028
4 2020 (49,002,767) 1,979,910 (47,022,857) 326,174,795 (13,988,908) 312,185,886 (12,008,999) 265,163,029
5 2021 (47,022,857) 3,464,842 (43,558,015) 312,185,886 (26,390,127) 285,795,760 (22,925,284) 242,237,745
6 2022 (43,558,015) 1,979,910 (41,578,105) 285,795,760 (60,167,528) 225,628231 (58,187,619) 184,050,126
7 2023 (41,578,105) 1,979,910 (39,598,195) 225,628,231 (60,167,528) 165,460,703 (58,187,619) 125,862,508
8 2024 (39,598,195) 1,979,910 (37,618,286) 165,460,703 (60,167,528) 105,293,175 (58,187,619) 67,674,889
9 2025 (37,618,286) 1,979,910 (35,638,376) 105,293,175 (60,167,528) 45,125 646 (58,187,619) 9,487,270
10 2026 (35,638,376) 1,979,910 (33,658,466) 45,125,646 (45,125,646) (0) (43,145,737) (33,658,466)
11 2027 (33,658,466) 1,979,910 (31,678,556) (0) 0 1,979,910 (31,678,556)
12 2028 (31,678,556) 1,979,910 (29,698,647) - - 1,979,910 (29,698,647)
13 2029 (29,698,647) 1,979,910 (27,718,737) - - 1,979,910 (27,718,737)
14 2030 (27,718,737) 1,979,910 (25,738,827) - - 1,979,910 (25,738,827)
15 2031 (25,738,827) 1,979,910 (23,758,917) - - 1,979,910 (23,758,917)
16 2032 (23,758,917) 1,979,910 (21,779,007) - - 1,979,910 (21,779,007)
17 2033 (21,779,007) 1,979,910 (19,799,098) - - 1,979,910 (19,799,098)
18 2034 (19,799,098) 1,979,910 (17,819,188) - - 1,979,910 (17,819,188)
19 2035 (17,819,188) 1,979,910 (15,839,278) - - 1,979,910 (15,839,278)
20 2036 (15,839,278) 1,979,910 (13,859,368) - - 1,979,910 (13,859,368)
21 2037 (13,859,368) 1,979,910 (11,879,459) - - 1,979,910 (11,879,459)
22 2038 (11,879,459) 1,979,910 (9,899,549) - - 1,979,910 (9,899,549)
23 2039 (9,899,549) 1,979,910 (7,919,639) - - 1,979,910 (7,919,639)
24 2040 (7,919,639) 1,979,910 (5,939,729) - - 1,979,910 (5,939,729)
25 2041 (5,939,729) 1,979,910 (3,959,820) - - 1,979,910 (3,959,820)
26 2042 (3,959,820) 1,979,910 (1,979,910) - - 1,979,910 (1,979,910)
27 2043 (1,979,910) 1,979,910 0 - - 1,979,910 0
28
29 Revenue Related Tax Factor See WP_F-5.1 6.79
30 Revenue Related Taxes on Annual Amortization Amortization'Tax Factor $ 3,949,355
31 Amortization Including Revenue Related Taxes Amortization+Taxes $ 62,136,973
32
33 Notes:
34 1.The annual amortization of the protected balance is a 26 year recovery period based on the Reverse South Georgia Method. The annual amortization of the unprotected balance is 5 years.
35 2.The Regulatory Liability is recorded to FERC Accounts 253 and 242,Sub Account 27909.
36 3.This is the final Mid-Tex liability balance fling the Fiscal Year 2018 tax return.
City of Fort Worth, Texas
Mayor and Council Communication
DATE: 09/21/21 M&C FILE NUMBER: M&C 21-0716
LOG NAME: 21 ADOPTION OF ATMOS 2021 RRM
SUBJECT
(ALL)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 December 1,2021
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 December 1,2021,
pursuant to a negotiated settlement of Atmos'proposed rate increase under its 2021 Rate Review Mechanism filing.
DISCUSSION:
The purpose of this Mayor and Council Communication(M&C) is to approve a negotiated settlement with Atmos Energy Corporation,d/b/a Atmos
Energy Corporation, Mid-Tex Division (Atmos or Company), regarding Atmos'2021 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),a coalition of
175 cities including Fort Worth (ACSC Members),which works cooperatively to provide members with more effective and efficient representation
on natural gas-related issues.
The RRM Tariff was most recently re-adopted in 2020(M&C 20-0753)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 Atmos to adjust rates to recover capital improvement
costs, but unlike state law,the RRM takes into account Atmos'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 or about April 1,2021,Atmos filed a rate request under the RRM Tariff. Given Atmos'claim that its cost-of-service in at test year ending
December 31,2020 entitled it to 43.4 million in additional system-wide revenues.The ACSC's RRM Tariff reduces Atmos's request to 40.5 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 of which 16.8 million would be applicable to ACSC Members. After the Atmos reviewed ACSC's consultants'report,ACSC's
Executive Committee and Atmos negotiated a settlement wherebyAtmos 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. The two-month effective date delay results in an approximate savings of 3.8
million for ACSC Members.
The City of Fort Worth worked with and through ACSC to analyze the schedules and evidence offered by Atmos to support its request to increase
rates. City staff concur with the ACSC Executive Committee in their recommendation that the City take action to approve the negotiated
settlement's rates and charges before October 1,2021; new rates become effective December 1,2021.
The attached Ordinance reflects the terms of a negotiated settlement between ACSC and Atmos to resolve issues raised by ACSC during the
review and evaluation of Atmos'filing. Under the Ordinance,Atmos will generate 22.78 million in additional revenues from ACSC Cities. Given
Atmos Mid-Tex's claim that its historic cost of service should entitle it to recover 43.4 million in additional system-wide revenues,the RRM
settlement at 22.78 million for ACSC Cities reflects substantial savings to ACSC Cities. Settlement at 22.78 million (plus 3.8 of additional savings
due to the two-month delay)is fair and reasonable.
The monthly bill impact for the average residential customer in the Atmos system consuming 44.3 Ccf will be an increase of$1.28,or about
2.20%. Within the City of Fort Worth,the average residential customer impact is projected to be$1.23,or about 2.22%. The amount is slightly
lower than the system-wide average because the typical Fort Worth residential customer consumes slightly less(41.7 Ccf)than the system-wide
average.The average Atmos system commercial customer will see an increase of$4.04,or 1.61%.Within the City of Fort Worth,the average
commercial customer impact is projected to be$4.57,but a somewhat lower percentage increase of 1.50%compared to the typical Atmos
customer.This dollar amount is higher than the average Atmos customer increase because the average consumption for a Fort Worth commercial
customer is about 28%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.
On approval of the attached Ordinance,the rates shown in Exhibit A of the Ordinance will be effective for bills rendered on or after December 1,
2021. Key elements of the rate changes are as follows:
Tariff Rate-Customer Class Current Proposed
R-Residential
Customer Charge $20.25 $20.85
Consumption Charge $0.26651/Cc $0.27979/Cc
C-Commercial
Customer Charge $54.50 $56.50
Consumption Charge $0.11728/Cc $0.12263/Cc
I-Industrial&T-
Transportation
Customer Charge $ 1,014.50 $ 1,054.75
Consumption Charge Tier 1 $0.4157/MMBtu $0.4330/MMBtu
Consumption Charge Tier $0.3044/MMBtu $0.3171/MMBtu
Consumption Charge Tier 3 $0.0653/MMBtu $0.0680/MMBtu
The ACSC staff report includes the Company's Average Bill Comparison regarding the impact of the settlement rates on the average monthly bills
for Atmos Mid-Tex Division customers by Customer Class;Base Rates Test Year Ending December 31,2020:
Tariff Rate- Average Current Proposed Cost- \%-
Customer Class Consumption Change Change
R-Residential 45.2-Ccf $58.30 $59.58 $ 1.28 2.20\%
C-Commercial 332.5-Ccf $250.10 $254.13 $4.03 1.61\%
-Industrial 4,079-MMBtu $ 11,737.14 $ 11,842.81 $ 105.67 0.90\%
Transportation 41079-MMBtu $4,931.09 $5,036.76 $ 105.67 2 14\%
This M&C does not request approval of a contract with a business entity.
A Form 1295 is not required because:This M&C does not request approval of a contract with a business entity.
FISCAL INFORMATION/CERTIFICATION:
The Director of Finance certifies that approval of this recommendation will have no material effect on City funds.
Submitted for City Manager's Office by- Dana Burghdoff 8018
Originating Business Unit Head: Steve Cooke 5134
Additional Information Contact: Juanita Rigsby 8518