HomeMy WebLinkAbout2018-R-11 - Atmos RRM RESOLUTION NO. 2018-R-11
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF STEPHENVILLLE, TEXAS, APPROVING A
NEGOTIATED SETTLEMENT BETWEEN THE ATMOS CITIES STEERING COMMITTEE ("ACSC") AND ATMOS
ENERGY CORP., MID-TEX DIVISION REGARDING THE COMPANY'S 2018 RATE REVIEW MECHANISM
FILINGS; 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 RESOLUTION 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 RESOLUTION TO THE COMPANY AND THE ACSC'S LEGAL COUNSEL.
WHEREAS, the City of Stephenville,Texas ("City") is a gas utility customer of Atmos Energy Corp.,
Mid-Tex Division ("Atmos Mid-Tex"or"Company"),and a regulatory authority with an interest in the rates
and charges of Atmos Mid-Tex; and
WHEREAS, the City is a member of the Atmos Cities Steering Committee ("ACSC"), a coalition of
similarly-situated cities served by Atmos Mid-Tex ("ACSC Cities") that have joined together to facilitate
the review of, and response to, natural gas issues affecting rates charged in the Atmos Mid-Tex service
area; and
WHEREAS, ACSC and the Company worked collaboratively to develop a new 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 Atmos Mid-Tex Division;
and
WHEREAS, the RRM tariff was adopted by the City in a rate ordinance earlier this year; and
WHEREAS,on about April 1, 2018,Atmos Mid-Tex filed its 2018 RRM rate request with ACSC Cities
based on a test year ending December 31, 2017; and
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WHEREAS, ACSC coordinated its review of the Atmos Mid-Tex 2018 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 Atmos Mid-Tex of$24.9 million on a system-wide basis
($17.8 million of which is applicable to ACSC members); 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 Exhibit A rate tariffs incorporate the federal income tax rates that became effective
January 1, 2018; 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
WHEREAS, the RRM Tariff contemplates reimbursement of ACSC's reasonable expenses
associated with RRM applications;
NOW,THEREFORE,BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF STEPHENVILLE,TEXAS:
Section 1. That the findings set forth in this Resolution are hereby in all things approved.
Section 2. That the City Council finds that the settled amount of an increase in revenues of$24.9
million on a system-wide basis 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 2018 RRM filing, is in the public interest,and is consistent with the City's authority under
Section 103.001 of the Texas Utilities Code.
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Section 3. That the existing rates for natural gas service provided by Atmos Mid-Tex are
unreasonable. The new tariffs attached hereto and incorporated herein as Exhibit A, are just and
reasonable, and are designed to allow Atmos Mid-Tex to recover annually an additional $24.9 million in
revenue on a system-wide basis over the amount allowed under currently approved rates. Such tariffs
are hereby adopted.
Section 4. That the ratemaking treatment for pensions and retiree medical benefits in Atmos
Mid-Tex's next RRM filing shall be as set forth on Exhibit B, attached hereto and incorporated herein.
Section 5. That amortization of regulatory liability shall be consistent with the schedule found in
attached Exhibit C attached hereto and incorporated herein.
Section 6. That Atmos Mid-Tex shall reimburse the reasonable ratemaking expenses of the ACSC
in processing the Company's 2018 RRM filing.
"- Section 7. That to the extent any resolution or ordinance previously adopted by the Council is
inconsistent with this Resolution, it is hereby repealed.
Section 8. That the meeting at which this Resolution was approved was in all things conducted in
strict compliance with the Texas Open Meetings Act,Texas Government Code, Chapter 551.
Section 9. That if any one or more sections or clauses of this Resolution is adjudged to be
unconstitutional or invalid, such judgment shall not affect, impair, or invalidate the remaining provisions
of this Resolution, and the remaining provisions of the Resolution shall be interpreted as if the offending
section or clause never existed.
Section 10. That consistent with the City Ordinance that established the RRM process, this
Resolution shall become effective from and after its passage with rates authorized by attached tariffs to
be effective for bills rendered on or after October 1, 2018.
Section 11. That a copy of this Resolution 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 UB
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—"' 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.
PASSED AND APPROVED this 4th day of September, 2018.
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y Doug Svien, Mayor
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ATTEST: :* :r � 1
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Staci L.King, City Secre It
/fi),••---0,Allen L. Barnes, ministrator
Reviewed
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Randy Thomas, City Attorney
Approved as to form and legality
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