Title
Consider/Discuss/Act on an Ordinance Approving a Negotiated Resolution Between the Atmos Cities Steering Committee and Atmos Energy Corporation, Mid-Tex Division Regarding the Company's 2016 Annual Rate Review Mechanism Filing
Summary
COUNCIL GOAL: Financially Sound Government
MEETING DATE: June 7, 2016
DEPARTMENT: Financial Services
CONTACT: Mark Holloway, Acting Chief Financial Officer
RECOMMENDED CITY COUNCIL ACTION:
* Approve the Ordinance.
ITEM SUMMARY:
* The City, along with other similarly situated cities served by Atmos Energy Mid-Tex Division ("Atmos Mid-Tex" or "Company"), is a member of the Atmos Cities Steering Committee ("ACSC"). On or about March 1, 2016, Atmos Mid-Tex filed with the City an application to increase natural gas rates pursuant to the Rate Review Mechanism ("RRM") tariff renewed by the City in 2013 as a continuation and refinement of the previous RRM rate review process. This is the first annual RRM filing under the renewed RRM tariff.
* If the Company had used the GRIP (Gas Reliability Infrastructure Program) process rather than the RRM process, it would have received a $41 million increase, or about $11 million more than will be approved by the Ordinance. ACSC and the Company have reached an agreement, reflected in the Ordinance, to reduce the Company's request by $5.5 million, such that the Ordinance approving new rates reflects an increase of $29.9 million on a system-wide basis, or $21.9 million for Mid-Tex Cities, exclusive of the City of Dallas.
* The Ordinance and Settlement tariffs approve rates that will increase the Company's revenues by $29.9 million for the Mid-Tex Rate Division, effective for bills rendered on or after June 1, 2016. The monthly residential customer charge will be $19.10. The consumption charge will change from $0.09931 per Ccf to $0.11378 per Ccf. The monthly bill impact for the typical residential customer consuming 46.8 Ccf will be an increase of $1.26 (...
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