Title
Consider/Discuss/Act on an Ordinance Approving a Negotiated Resolution Between the Atmos Cities Steering Committee and Atmos Energy Corporation Regarding the Company’s Third Rate Review Mechanism Filing.
Summary
MEETING DATE: September 7, 2010
DEPARTMENT: Finance
CONTACT: Jennifer Fung, Executive Director of Finance
RECOMMENDED CITY COUNCIL ACTION:
· Approve the ordinance.
ITEM SUMMARY:
· The purpose of the Ordinance is to approve rate tariffs (“Appendix A”) and Proof of Revenues (“Appendix B”) that reflect the negotiated rate change pursuant to the Rate Review Mechanism (“RRM”) process and to ratify a Settlement Agreement recommended by the Atmos Cities Steering Committee (“ACSC”) Settlement Committee and Executive Committee.
· As a result of the negotiations, ACSC was able to reduce Atmos Energy Mid-Tex Division’s (“Atmos Mid-Tex” or “Company”) requested $70.2 million RRM increase to $27 million. Approval of the Ordinance will result in the implementation of new rates that increase the company’s revenues effective October 1, 2010. The monthly bill impact for the average residential customer will be a $1.40 increase (about a 3.15% increase in the total bill).
· The Settlement Agreement (“Appendix C”) to be ratified by the Ordinance authorizes an extension of the RRM process, in modified form to eliminate the true-up component, for an additional two annual filings.
· Additionally, the Ordinance authorizes supplemental revenue of $3.4 million to be recovered through the customer charge component of rates to cover direct costs associated with a steel service line replacement program. Current year recovery factors shall be $00.15 for residential customers and $00.41 for commercial customers per month. The rates will be adjusted annually, but shall be capped at $00.44 cents for residential customers and $1.22 for commercial customers.
BACKGROUND INFORMATION:
· The City, along with approximately 148 other cities served by Atmos Energy Mid-Te...
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